Budget Hearing #2 - May 2, 2005
Minutes
BETHLEHEM AREA SCHOOL DISTRICT
BOARD OF SCHOOL DIRECTORS
BUDGET HEARING #2
MAY 2, 2005
BUDGET HEARING #2
The second 2005-2006 budget hearing of the Board of School Directors of the
Bethlehem Area School District was held on Monday, May 2, 2005, beginning at 7:15
p.m., in the Auditorium of East Hills Middle School, 2005 Chester Road,
Bethlehem, Pennsylvania.
MEMBERS PRESENT
Members present: Directors Amato, Haytmanek, Heske, Koch, Leeson, Rowe, Venanzi,
Williams, and Craig - 9.
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 Koch chaired the meeting.
COURTESY OF THE FLOOR
Director Koch offered courtesy of the floor to visitors. Speakers are allowed
three minutes to address the board on budget items. Questions will not
necessarily be answered during the meeting, but will be answered in a future
meeting, or in writing or via telephone. President Craig wanted to clarify that
courtesy of the floor for the finance committee meeting will be held, then open
forum, followed by the public budget hearing. Director Koch stated that is
correct. President Craig asked if there will be a courtesy of the floor session
at the end of the public budget hearing. Director Koch replied that she intended
to offer courtesy of the floor at that time. The following persons addressed the
Board of School Directors:
1. Jody Miller, head rifle coach at Liberty High School, and Eric Hokenson,
rifle coach at Freedom High School introduced themselves. Mr. Miller stated
that they were present because they saw in the newspaper that their programs
might be cut from the budget. He asked if the rifle program is in jeopardy
of not making the cut on the budget.
Dr. Lewis replied that in the original recommendation it was offered as a
potential cut. The board will ultimately decide what is and isn't cut. The
logic is that the PIAA no longer sanctions rifle. Travel to get teams to
matches has increased since less and less Lehigh Valley teams offer the
sport. It is not a philosophic opposition to rifle. Also, with renovation
at Liberty, it may be necessary to search for a range in which to conduct
rifle. All those mitigating factors contribute to the recommendation.
Mr. Miller asked to rebut those factors. He stated there are 11 teams in the
Northeast Pennsylvania Rifle League. Five are close to home: Liberty,
Freedom, Salisbury, Southern Lehigh, and Emmaus. Nearby are Stroudsburg,
East Stroudsburg South, and East Stroudsburg North. A little to the east is
North Pocono, further east are Berwick and Abington Heights. With 33 as a
main route for the majority of matches or the ones close to home, travel
would be every other year to Berwick or Abington Heights. Therefore, the
travel aspect is not a problem.
The sport is governed by the PIAA. In the 2004-2005 handbook, the PIAA
states when rifle can start, finish, how many scrimmages it can have, dates
of the scrimmages, number of practices before a scrimmage, how many meets,
when championship meets must be held. However, PIAA does not offer a state
championship. Some years ago they did. The Pennsylvania Rifle and Pistol
Association has picked up the lack of state competition. Liberty and Freedom
have participated in their competition for the last three years. Also,
Friends of the NRA offers a $5,000 grant that can be applied for yearly. Mr.
Miller has received $9,800 for Liberty High School in the last three years
which he used to purchase equipment. Funds are available from other
organizations that he can access. If he needs to find an alternative site to
shoot at, that is fine as long as he knows that he must find another site.
Dr. Lewis asked if that grant was secured through the district. Mr. Miller
said that he wrote the grant. Dr. Lewis asked if the grant went through Mrs.
Cintron's office. Mr. Miller stated it did not. Dr. Lewis stated that is an
issue that will need to be discussed at another time. Dr. Lewis stated that
administration was totally unaware of such funding. That does not change the
superintendent's position. This is a question about actually what has been
expended in the budget. Mr. Villani stated that the total cost of rifle last
year was $10,185.
Mr. Miller stated he hopes that the district will keep the rifle teams in the
budget. It has been in the school district for 50 years.
2. Eric Hokenson, rifle coach at Freedom High School, asked that as the rifle
program is being considered he hopes the fact will be considered that many of
the students in the program are students who are unable to compete or desire
not to compete in the traditional sports. Some team members have had health
problems, physical problems, who in that sport are able to compete because
there is not a lot of movement. Some students from the teams have graduated
and gone on to West Point. Many team members are routinely on the honor
roll. The program gives those students an opportunity to compete and feel
like they are part of the athletic, as well as academic, functions of the
school.
Director Haytmanek asked how many students are involved in the rifle team.
Mr. Hokenson replied that between 50 and 60 students participate in both high
schools.
3. Jim Kritis, 1904 Livingston Street, Bethlehem, stated that at the last
meeting Director Leeson asked about unfunded mandates. He said that so much
of the argument over Act 72 and the position taken by the school district
centers around the fact that 80 percent of the budget is mandated. He asked
if it is possible to get a listing showing dollar amounts of unfunded
mandates.
Director Koch thanked him for the question, because she has been asking the
same thing.
Dr. Lewis stated there are some clear-cut unfunded mandates. An example is
charter schools for which a dollar figure can be given. Concerning No Child
Left Behind, there is some ambiguity. He stated administration will make its
best effort to provide such a list. Mr. Majewski explained that part of the
way expenditures are accounted for is defined by the state. That does not
allow for complete separation of some of the costs. An example would be
transporting of nonpublic students. It would cost a lot to track how much
additional cost would be just for that one student, but some reasonable
estimates could be made. Dr. Lewis stated it is valuable information and
worthy of pursuing.
Director Koch stated that NSBA had a formula that could be used.
Mr. Kritis said that he had asked the superintendent and Mrs. Kostem to look
into the fact that department chairmen were not teaching a full load at
Liberty and Freedom High School. In the budget, 11 1/2 teachers have been
added at the two high schools.
Dr. Lewis stated the teaching positions don't necessarily fall in this area;
Mrs. Kostem is researching what that impact would be. Administration would
like to proceed with what it has worked on this week to present to the board.
If there is a desire on the part of the board to go further, that may very
well be an area.
Mr. Kritis stated that one thing he has been trying to say is that when you
have a school district as large as Bethlehem and a budget of $149,000,000
projected for next year, there are inefficiencies and at times a waste of tax
dollars. One thing he remembers from when he was teaching is that guidance
counselors were brought in for ten days prior to the school year and were
paid a per diem rate. He thought that was excessive. Another excessive item
is the severance package for administrators. Theoretically, if you have 35
years you would get $1,000 for each year of teaching plus $100 for 150
accumulated days of unused sick leave. That is, potentially, $50,000. Dr.
Lewis interjected that Mr. Majewski has informed him that the severance
package pertains to years in administration, not including teaching years.
Mr. Kritis stated the district has administrators with 25 to 30 years in
administration. That administrative severance package was put into effect
just prior to Mr. Doluisio's and Mr. Villani's retirements. He thinks it is
excessive to provide that kind of package for retiring administrators. He
hopes the school board would look at that.
4. Alan Jennings, of the Community Action Committee of Lehigh Valley, stated
he is unaccustomed to walking into a meeting and not having to sit for two
hours before getting a chance to speak. He was attending the meeting with
Doug Chen, director of the Fowler Children's Technology Center. Mr. Jennings
stated he knows the most thankless job of all public services is school
boards. He congratulated the Bethlehem Area School District on its
technology initiative. The CACLV is working closely with the school district
on extending technology opportunities to children in the Broughal/
Donegan/Fountain Hill neighborhoods and has been working with the school
district on this for some time. The Fowler Children's Technology Center is
located in the Forte building at Fifth and Williams Streets. Mr. Jennings
wanted to tell the board about the program and thanked the board for the
district's participation and its very progressive position on technology. He
deferred to Doug Chen to speak about the Technology Center.
5. Doug Chen, program director of the Fowler Children's Technology Center,
stated they have been working directly in partnership with the Bethlehem Area
School District for about a year and a half. After school and summer
programs are offered in digital photography and graphic design as well as
robotics to students in from grade four through eight. Tomorrow should be
the first day for high school evening classes. The Center has been working
with Donegan, Fountain Hill, Freemansburg, East Hills, Northeast, and
Broughal. The goal is to give a lot of technology training to the students
of the school district including opportunities to do the more interesting
things with technology that the district may not be able to provide during
the daytime hours. Statistics have shown that 78 percent of students
attending the Tech Center programs have received satisfactory or better
grades in their homework grade; 89 percent have increased or maintained their
grades as a result of the program. As a result of the program, 78 percent of
the students have increased or maintained their technology grade. Two-thirds
of the students have attained a technology grade of B or better in the middle
schools. He hoped to continue this great partnership.
Mr. Jennings thanked the Bethlehem Area School District for its technology
initiative. About 28 percent of families having incomes under $25,000 have
computers in their homes. It doubles for families between $25,000 and
$50,000. For families with incomes over $50,000, it is three times more
households, 84 percent have computers. The school district offering the
laptops to all sixth graders is unbelievably progressive. The Tech Center
tries to excite the students with the various things such as robotics,
computer graphics, and really cool stuff like that. When students come in
after school, they get a snack, help with homework which must be current
before they can touch a computer, then go through a formal instruction period
that lasts for eight weeks. When finished, and assuming that they made
progress in measurable outcomes, the Center actually gives computers to take
home. The director of information technologies for the school district
serves on the Fowler Children's Technology Center's advisory board. There is
a very close working relationship. Teachers from the schools are referring
children to the programs. He thanked the district for the relationship and
congratulated it for the technology initiatives that have been taken.
ADMINISTRATION'S RESPONSE TO BOARD
Dr. Lewis explained that the Board of School Directors asked that the cabinet
review what $1,000,000 in adjustments would look like. The board received a
document outlining such adjustments.
Mr. Majewski wanted to clarify an item on page seven to avoid confusing comments
relative to that. He said that a number of folks were confused where it says
"Tuition Orphans Children." It is not a cut in any type of money that would go
towards orphans' programs. The state provides as a subsidy for orphans who are
placed in the private homes. Because the needs are great, he is anticipating
that there will be additional revenue coming to the district from the state for
this purpose. It is not a cut in the program. It is based upon some of the
growth being seen that there may be additional revenue coming from the state for
the placements of orphans to private organizations.
Dr. Lewis stated that budgets are a work in progress. He stated that all cabinet
members were present and are prepared to address their budget areas. No cabinet
area was spared in the reduction process. The net effect is a $1,000,000 budget
reduction as requested, if indeed, the board agrees that all of these reductions
should take place.
Mr. Majewski stated that, as has been stated, part of the value of having an
extended period during the budget year is having more information. He has been
continuing to monitor payment patterns from Lehigh and Northampton County
delinquent tax collections. Based upon the most recent information, he feels
comfortable that the budget can be increased for delinquent real estate tax
collections for next year from $2,750,000 to $3,000,000.
Dr. Lewis stated that in academic interventions Mr. Villani has indicated a
$50,000 reduction is possible in light of the fact that additional state monies
are going into tutoring, more than the reduction.
Dr. Lewis stated that in building allocation a three percent increase was
proposed to all principals at all building levels in instructional allocation.
That has been frozen at last year's level. The rationale is that it was never
100 percent expended in last year's budget. Therefore, administration thinks
that amount will be fine.
Mrs. Lutcher stated that on page 28 - software maintenance - the amount of
service that was going to be paid for the remote access service in data
processing for the new student information system. On page 41 - software object
610 - is reduction of the number of Microsoft Office licenses. On page 41 -
equipment replacement object 760 - is a reduction in the number of servers to be
replaced. On page 41 - technology infrastructure - the expansion of the voice
over IP has been cut back. On page 74 - communications - reduction in tech
services will be a reduction in parts. The reduction in books and periodicals is
exactly that. Equipment replacement is a cut of $4,500 in an upgrade of hardware
for technicians. Dr. Lewis stated that the books and periodicals are technology
related professional books, not textbooks.
Mr. Villani stated that the reduction item 31 - driver education - is the
on-the-road piece, not the classroom portion. It is the contracted portion that
the district pays through the intermediate unit for our students to take on the
road training. By cutting this, students would be allowed to take on the road
training but would pay a larger fee for that training. The classroom program
would be maintained.
Mr. Villani stated that $20,000 will be taken from game personnel which was
increased by a percentage based on the fact that with the advent of the stadium
being turfed there will be more events in the stadium; additional game help will
be needed. Tournament fees were increased because there are more and more
tournaments that all sports seem to be entering, all with entrance fees. That
was also cut back and kept at the same figure as the current budget. That is
reflected in the $20,000.
Mr. Majewski stated he is hopeful that based upon some of the trends projected
into the intersystem payments account that the district can reduce the payments
made for approved private schools by $50,000.
Mr. Wittenberger stated that $10,000 has been deducted from a $60,000 budget for
maintenance contracted services and other professional services. That cut is for
engineering services. With the hiring of the new director of operations, the
district engineer will be cut back from attending the cabinet levels meetings.
It was also believed that $5,000 for snowplowing, lawn care, and grass cutting
could be reduced by $5,000.
Mrs. Kostem spoke on staffing reductions. On the supplemental cleaners, last
year four supplemental cleaning individuals had been approved in the budget who
moved around the district and sometimes filled in as long-term substitutes.
Administration requested an additional 6.5 positions this year because of the
increase in spaces that needed to be cleaned. Two of the positions approved last
year are being cut that were district-wide and letting those two positions fill
in for the 6.5. The reduction results in an overall increase of 4.5.
Mrs. Kostem stated on teacher staffing administration has requested an additional
.4 guidance counselor to continue the initiative at the elementary level of
moving to a full-time counselor at the larger schools. That request has been
eliminated.
Mrs. Kostem stated there will be more retirements this year than anticipated -
ten additional persons.
Dr. Lewis explained that there is a small contingency used to support various
programs throughout the district under object code 840. That has been reduced by
approximately $20,000. The equipment reserve has also been reduced significantly
because it is felt there is no longer a need for furniture in the Education
Center, with the possible exception of seating in the dining area.
Mr. Villani stated that last year, with purchasing the new Terra Nova testing and
the scoring services, now that the district has the testing booklets, it is
believed that continued scoring services can be covered with the balance of the
funding in that account.
Dr. Lewis stated that as mentioned before, there is $850,000 in direct
expenditure cuts. There is an add-back of $125,000. Mrs. Kostem explained that,
as originally budgeted, there was not a settlement with clerical employees. A
figure was used that represented the old numbers. This represents the amount for
next year. The amount to pay for the remainder of this year's raises was in this
year's budgetary reserve. Now, there is a shortfall into next year with the
raises that have been approved.
Dr. Lewis concluded by stating that the list of reductions brings the budget down
to an increase of .97 mills or 2.8 percent in terms of millage increase.
DISCUSSION
Director Leeson stated she will reiterate her frustration with not being able to
at least look at a zero increase budget. Other than driver education, not one
thing is really impacting the children and what the district is able to give to
the students. So, a million dollars in cuts was possible without any real impact
to the educational programs. Dr. Lewis commented that building allocations
impact on students, certain software purchases impact on students, technology
replacement initiative or student systems, the technology infrastructure would
support both students and staff, interscholastic athletics impact on students.
Director Leeson stated they could debate the issue on how much they impact the
students. She thinks by the end of next year the students will probably have
received a more than adequate education with the budget as it is currently being
considered. Director Leeson said that a 2.8 percent millage increase is talked
about, but that is not the increase of the budget. There is an additional
$7,600,000 coming from revenue sources. Mr. Majewski stated that there is a 6.42
percent increase on the expenditure side in the budget from year-to-year.
Director Leeson said that only a small percentage of that is actually coming from
the millage increase. The rest is coming from revenue increase. Mr. Majewski
stated it is coming from revenue increase or from existing fund balances.
Director Leeson said that last year a $3,000,000 fund balance was also used.
This year it is projected that $3,500,000 be used, only a $500,000 increase. The
increase is coming from increased revenue. Mr. Majewski responded that there
were several areas of increased revenue; however, there are a number of various
ways that could happen such as earned income tax, delinquent tax, real estate
transfer, most of which are fairly small in comparison to the total budget.
Director Leeson asked Mr. Majewski if he could tell her the percentage increase
the revenue - $7,600,000 - is of the budget. Mr. Majewski directed her to page
7, eliminate the unreserved fund balance, reduce the $10,113,130 by $2,000,000,
you are looking at $8,113,138 which equates to a 5.99% increase in revenue.
Director Leeson stated that we are considering an additional 2.8 percent millage
increase. Mr. Majewski stated that also there is two year's worth of increase in
basic subsidy because the state passed the budget in December. Not knowing what
increase would be given, that was flatlined in the budget. That is an extra
$500,000 to $600,000. Director Leeson stated she thinks a six percent increase
is more than sufficient to stay within for the school district and that they
should be looking a zero tax increase budget for the taxpayers.
Mr. Majewski stated that when there is a $1,753,000 increase in debt service,
benefit category $2,900,000 increase, $490,000 information technology, $1,121,000
intersystem payments, vo-tech, community college, court ordered payments, the
impact on natural gas, fuel oil, and electric of $763,000, $75,000 for fuel oil,
and the large teaching staff budget increase of $1,300,000, that only leaves a
$471,000 increase in the rest of the budget for several hundred other employees
and their contractual increases as well as some inflationary increases.
Director Amato stated, following along those lines, he still wants to know what
the increase is in spending between this year and last year. He asked if he is
correct that the district will be spending 8.79 percent more than last year to
meet this budget. Mr. Majewski replied that he would look at how much was
budgeted to spend this year versus next year. That is 6.42 percent. Director
Amato stated he does not want people to leave with the thought that the budget is
only being increased by 2.8 percent because that is not true. If you take into
account that there is an increase in revenue of six percent, that is 8.8 percent
the district is spending. He asked if he is correct in that. Mr. Majewski
replied that he is not. There was ongoing discussion on this topic. Director
Amato stated the $7,529,012 has no millage increase and is strictly increase in
revenue one year to the next. Mr. Majewski stated that $2,000,000 must be taken
off that number, so it is really a $5,600,000 increase. That takes into
consideration a .97 mill increase. Director Amato disagreed, stating that it
doesn't. Mr. Majewski pointed out that current real estate, to provide a
balanced budget, included the proposed millage increase and so that does include
a .97 mill increase. Director Amato told Mr. Majewski that he is adding another
2.8% on top of that. Mr. Majewski stated that this includes those numbers.
Director Amato stated that the first line that says "current real estate" is
being increased by $5,800,000 because the revenue on the mill went up from one
year to the next. Mr. Majewski stated that is a part of it. Director Amato
stated that is not a millage increase yet. The mill went up by that amount but
the budget could not be balanced on that alone. Another one mill was added on
top of that to bring the budget to balance. Mr. Majewski stated that is correct.
Director Amato asked for the figure that the district is spending, the percent.
Mr. Majewski replied that it is 6.42 percent increase in spending year-to-year.
Director Amato asked confirmation that the 6.42 percent has the .97 mills
additional in it. Mr. Majewski confirmed that it does. Director Amato stated
that Mr. Majewski is stating that the district is spending at 6.42 percent, yet
that is double the CPI. The economy grew at 3.39 percent in 2004. The
economy grew month-to-month from March 2004 over 2003 by 2.6 percent. Currently,
the economy is growing, the CPI at 3.12 percent. March of this year to March
2004 the economy grew at 2.96 CPI. Yet, the district is spending at 6.42. He
asked, if the district was under Act 72, if the budget would be within the index
of not having to go to referendum. Mr. Majewski stated that the budget would be
under the index. Director Amato commented that the district is spending higher
than what the economy is growing which should be considered not just for senior
citizens who are on a fixed income but for everybody who is a wage earner and
whose salary did not go up to meet what is being spent. Mrs. Kostem added that
one thing the CPI is not doing is accounting for the fact that the district is
planning for 330 more children than last year. She hopes during discussion he
would take into account that the district has grown by 330 children from when the
budget was planned a year ago and now. Director Amato commented that is the
price of doing business. Those costs go up and need to be addressed. In this
environment and in the real world environment, they do not match. That is what
he wants to try to bring forth and have the school district try to put out a
budget with a zero percent tax increase as Director Leeson has been asking for
two years. This budget isn't bad, but still double what is growing. There must
be sensitivity to that. He still thinks we need to address how the district is
spending before somebody else, like the taxpayers or the legislature, mandates
Act 72 to the district. Mr. Majewski stated many of these things were taken into
consideration. He wanted to point out that, unlike the business world, the
district cannot close plants. Students show up at the door whether in need or
just regular students. Director Amato stated he respects this, but the district
does have nonmandated programs that are outstanding programs put in to address
the needs of all students in the district. Some of these programs may not be
meeting the expectations as hoped. There are means by which spending can be
reduced or not increased. He stated that in the next couple years continuing to
go into the full-day kindergarten initiative which currently is being funded by
grants, the district will have a couple million dollars increased expenses for
that program.
Director Heske, with regard to the proposed reductions, asked if any of the items
identified in red will cost more next year because of cutting this year. Dr.
Lewis replied that, with the possible exception of staff which the board may
choose to add later and, as Mr. Majewski has pointed out, technology
infrastructure may have a higher cost, overall there is nothing significant that
would result in paying more down the road.
Director Rowe, concerning Mrs. Kostem's statement about 330 additional students,
stated that she calculated that the additional 330 students, using 14,700 as
current population, is an additional 2.2 percent in our student body. She asked
Mr. Majewski for an estimate of how the increase translates into dollars. Dr.
Lewis stated that roughly it would be $2,380,000 of instructional costs. Other
costs are associated with. Mr. Majewski stated there is a significant impact on
the budget. Ten students can be added and that might require adding some
additional staff. He suggested, if a number wanted to be associated with
increased enrollment, to look at tuition. If this was 330 more students going to
a charter school, it would cost about $2,300,000 as the tuition rate is about
$7,000 per student. He doesn't believe all of those costs would impact the
budget, but it still is significant concerning the number of staff as well as
cost of the program and servicing these students. The cost is probably between
$1,000,000 and $2,000,000. Director Rowe stated that basically the $2,000,000
that has been cut is going to be eaten up by the additional students. Mr.
Majewski stated administration is trying to bring the budget to the bare minimum
in a way to still continue to provide quality service with existing programs.
President Craig stated he understands the state is in the process of passing a
law that will allow instructors to give licenses to student drivers upon passing
a test at the end of their service, to be in effect the beginning of the next
school year. He does not know if the board thinks this is important in
considering the on the road training.
President Craig asked Mr. Majewski if he had any idea how many households in our
school district are taking advantage of the state tax rebate program. Mr.
Majewski stated he is sure more are eligible, but between 840 to 850 individuals
are averaging about $350 in rebates. President Craig stated his understanding is
these people are the poorest of the poorest homeowners that are retired in our
district. Mr. Majewski said that is correct. The tax rebate money comes from
the state, not the school district. President Craig stated part of what he was
hoping to eventually accomplish would be to offer some kind of district relief to
people who qualify for the state tax rebate program and help fixed income persons
who are underneath the cap which is around $17,000. The reason he is bringing
this up at this point is that it would impact the budget. He is thinking in
terms of matching what Act 72 would have given these taxpayers if the district
doesn't opt in or to find some other way of helping people. Some of the
surrounding districts do this. It would be an added lack of tax money coming in.
That is something that should be discussed. Dr. Lewis stated he would like Mr.
Majewski to clarify the fact that it is done in neighboring districts; however,
there are some issues surrounding it. Mr. Majewski stated there is no lawful
basis for a school district to provide a tax rebate program; however, there are a
number of districts that do it. The position they have taken is that as long as
you follow the state's guidelines there would be a reasonable chance to have it
upheld. Instead of having taxpayers apply to the school district, they would
provide proof that the state had approved a rebate of a certain dollar amount and
the district would provide some type of a match. In that way, there is no way to
deviate from what the state's practice has been. It is questionable, but it is
being done. President Craig said one thing in his conversations with people who
called was the amazing fact that many of them do not know about a tax rebate
program on the state's part. He hopes the district would figure a way to let
people know that the state's program is available. Mr. Majewski stated there are
a number of state representatives who will try to get the word out. Before tax
bills are mailed, a significant pack of the rebate forms and instructions are
obtained to be available to the taxpayers. Dr. Lewis stated a rough calculation
is that about $300,000 would be needed for the current requests to give
approximately a $350 match.
Director Williams stated she remembers at the Act 72 hearing one or more
legislators stated they were looking at raising the cap for inclusion in the
Property Tax or Rent Rebate Program. That should eventually provide some aid for
people on fixed incomes who really need it. These considerations would affect
the budget and actually Act 72 is not removed from budgetary considerations this
year because the board has not yet made its decision in Act 72.
Director Venanzi stated that it is bad business to release a budget before we are
able to have proper figures in place. If the district decides not to do
anything, no one knows what scenario will be taking place on the state front.
These are considerations that affect the budget just as voting for the vo-tech
and community college budgets and other payments that must be made. Director
Koch asked that discussion return to the reductions listing and perhaps come back
to this discussion later.
Director Venanzi stated that last year a .4 guidance counselor was added and she
would not want to take away a .4 counselor. Dr. Lewis explained that this is an
additional .4 guidance counselor for Asa Packer. Mrs. Kostem stated that last
year full counselors were placed into the largest elementary schools: Governor
Wolf, Farmersville, Miller Heights. Asa Packer, using the enrollment numbers,
would be the next school. This .4 counselor was to make Asa Packer's .6 guidance
counselor position full-time. Mrs. Kostem stated that elementary principals and
the elementary director have been requesting additional guidance counselors for a
lot of years. It has been one of those budget items that there was always a
reason to fund something else. Last year, counselors were funded. Instead of
fragmenting the positions added, it was decided to make the largest school have
full-time counselors in hopes that the additions would continue. The proposed
increase was to enhance that program by .4 for Asa Packer. Director Haytmanek
said that, in talking to the public, the lack of guidance counselors is one of
the glaring deficiencies in our district. He thinks this item is rather small at
$16,900 and should not be considered for cutting. He is thrilled to see that
there are no cuts on any preschool programs and programs for at-risk children.
Director Venanzi stated this has come up every year. The $87,500 would be that
the district would not do on the road training at all. Dr. Lewis stated that we
don't currently do that. It is contracted to the IU. It would be up to the
student to pursue that either at the IU or with some certified trainer.
Director Leeson referred to page 72 - superintendent's office, $19,618, object
840. Object 840 is a contingency which went from zero to $91,000 and $19,618 is
being removed. Dr. Lewis explained that what happens with a contingency is that
it is distributed as services are needed throughout the year. In the proposed
budget, $6,100 is under 330, for example. Professional services, i.e., speakers,
professional development presenters, a host of professional services, went to
$55,440 when the proposed budget was originally $6,100. It is a dollar amount
that is redistributed. For example, general supplies under 610, all supplies
pertinent to the newsletter, publishing of the calendar come out of that. The
contingency is reallocated to that particular budget area, to the professional
services budgeted area, and also to other areas throughout the budget that a
transfer might be requested to assist. One year at Liberty, for example, money
from this account assisted with development of a software piece. That was
reduced by approximately $20,000. It wasn't zero; it was $91,000 last year and
then redistributed.
Director Amato asked Mr. Majewski if under technology instructions it is set up
so that as the district purchases a license for various programs it takes care of
all of the schools. He stated there is a means by which he has done this with
various licenses he had to buy in his business that would service multiple sites
so that only one license had to be bought and maintained. Mrs. Lutcher stated
that software is not always available in a district license. Some is district
which means you can buy for the entire district with just one license. Some are
site licenses where you buy per building. Some are individual licenses. The
vendor is always contacted for the most appropriate pricing and best volume
discount. Quite often the vendor will come back with a price and the response
from her office will be, "You have to do better," and they will come back better.
Director Amato asked if there are software licenses that vendors will not sell
to the district as a multi-site license that would be strictly as a per site
license. Mrs. Lutcher replied that is correct. It is up to the software vendor.
Some will not sell as a district license, only as a site license.
Director Craig asked what is included under item 330 - other professional
services on page 16 - board expenditures. Mr. Majewski replied it includes audit
services as well as legal services.
Director Williams asked if any of the proposed technology cuts would impact
student data collection and retrieval because the district is trying to finesse
that system. Mrs. Lutcher stated that the performance tracker software is still
in the budget. What is affected is equipment replacement on page 41 object 760.
The department is not going to purchase the number of replacement file servers as
originally projected. A number of the file servers in the district are very old
and really need to be replaced. It is hoped that they will not run into
problems. Director Williams stated that in a sense not having those file servers
could present some issues in terms of proper data retrieval. Mrs. Lutcher said
it could if the servers fail and there is not a replacement. Dr. Lewis asked if
the software cut in 610 impacts on management software, student software. Mrs.
Lutcher replied that the software on 610 involved not purchasing the number of
licenses for Microsoft Office as originally planned. That is not a student
impact. It is a cut in teacher roll out. The software being cut in 28 is really
not software, but is maintenance and was for the new student information system.
That is for remote access from Pentamation which they had asked the district to
take in order to facilitate the process. We do not have to take it but will need
to be better trained from its implementation.
Director Amato asked if there are servers for each site or if the district is
migrating to a system of having one server that services all sites. Mrs. Lutcher
said that now the district has smaller file servers at each site. At the time of
purchase, that made sense. Now, the district is able to purchase larger servers.
Those will be brought to the technical services area in a server farm. For
example, at the elementary schools there will be a one to four ratio.
Director Williams stated she wanted to ascertain as to whether this would affect
the way teachers are able to grade and get information into the system. Mrs.
Lutcher said it would not be affected. The student information system is moving
ahead.
Director Koch asked what the procedure will be on the reductions list and if any
sort of vote would be taken. Dr. Lewis said it was administration's intention to
give the list, which is not prioritized, for the board to reach a consensus and
provide further direction. Director Koch stated she would like to address the
list in the same manner as recommendations of the administration are handled,
allowing people to pull out the items they don't think should be there; then vote
on the list. She asked if anyone had an item to be pulled from the list.
Director Williams stated she would like to see the guidance stay in the budget
($16,900) and the server replacement ($50,000).
Director Rowe stated concern that academic interventions does affect students.
She understands there is additional state money available, but still has a
concern that it is an item on the list directly affecting students' needs. Dr.
Lewis stated the administrative perspective is that it is comfortable with that
reduction in light of the fact that the dollars from the state are substantial.
The state has more than covered what typically was spent at BASD. Director Rowe
said that if Dr. Lewis is comfortable with what will be available for academic
intervention with state money she will drop the request to keep it in the budget.
President Craig asked for more clarification regarding the driver education
reduction and the implications of the new state law. Instructors have been
notified by the state. Dr. Lewis commented that he is surprised driver education
instructors would be notified but not administration. The status of driver
education will be left as is and Dr. Lewis will look into the matter. President
Craig said that if the new law is really happening, then he might think that
maybe it should not be eliminated.
Director Rowe stated she understands that the piece of driver ed listed for
removal has to do with on the road training. She asked if there are enough
driver education slots available that every high schooler wanting to get into a
driver ed classroom can take it. Frances Bentkowski stated that when she checked
last week she had over 230 Freedom students signed up for the classroom section
which is an increase from last year. Mr. Burkhardt stated Liberty had close to
400 students who are signing up for the theory portion. Ms. Bentkowski stated
that the allocation of driver education has been increased to accommodate those
extra students.
Director Leeson stated that four or five years ago driver education was a portion
of the time, not the health class, but was portioned at the same time in the
schedule and every student received the driver ed theory. The district no longer
has every student receiving the driver ed theory, just those who can get it into
their schedule and request it. Ms. Bentkowski stated that the students' programs
are set up so that it should fit. Whether it will fit for every student depends
on what other courses the student has requested. Director Leeson asked if
enrollment was closer to about 1100 or 1200 when the theory portion was offered
to every student. Mr. Burkhardt stated that it was either the junior or the
sophomore class, depending how far back you wish to go. Most recently, it was
the sophomore class, easily a thousand students between the two high schools.
Director Haytmanek remarked that a student elects to take the driver ed theory
and asked what the student's options are regarding on the road training. He
asked if he can pay an additional fee and get that training via the IU. Mr.
Burkhardt stated that students are charged $50 for on the road training. His
assumption is that this will cost the student over $100. Director Haytmanek
remarked that the student will still have the option to pay out of pocket via the
IU and get professional instruction rather than, perhaps, a relative. Dr. Lewis
stated he believes the IU has committed to continuing to offer the program. The
IU is not looking at where the subsidy comes from. They have districts that do
not pay the subsidy.
Director Koch stated two items have been marked as "to be pulled." She asked for
the board's consensus. She asked all those in favor of accepting all reductions
listed except equipment replacement on page 41 and the staffing of teachers for
the guidance to state "aye." President Craig stated that when talking about the
academic interventions administration stated being ok with that. He wanted to
know administration's feelings about those two items. Dr. Lewis stated
administration would like to get the servers. He stated that, frankly,
administration tried to steer clear from cutting programs. One program could
have provided a million dollars. He believes administration would like to see
the servers and, as Director Amato pointed out, they are trying to consolidate,
to get down to larger, quicker servers so that there will not be a multitude of
servers to maintain. On the issue of guidance, Dr. Lewis stated that Mrs. Kostem
spoke to that. Administration looked at the strategic plan, recalled the actions
of the board last year, wanted to improve ratios, especially at the elementary
level. Asa Packer was next in line. He stated administration would like to see
that remain.
Director Amato asked if the $50,000 for servers are for individual servers or
servers that are going to be driving multiple sights. Mrs. Lutcher stated it is
for multiple servers each serving multiple sights. Instead of 16 servers, one
per elementary school, there will be one for each four or four for the 16
schools.
Director Koch stated she has asked which items board members want to pull. She
asked that such items get pulled and then vote on the other items. Director
Leeson moved that all reductions to the proposed budget be accepted except for
those pulled: page 41- equipment replacement $50,000 and page 64 - staffing -
teachers - guidance $16,900. Director Heske seconded the motion. The motion
carried by voice vote.
Director Leeson moved that the equipment replacement reduction be removed from
the proposed budget. Director Heske seconded the motion. (A yes vote will
remove the item from the proposed budget.) The majority voiced no votes. This
item will not be cut from the budget.
Director Heske moved that the guidance position be retained in the proposed
budget. President Craig seconded the motion. (A yes vote will keep it in the
budget.) The majority voted yes. This item will be kept in the budget.
Director Leeson stated that Mr. Kritis has brought up some interesting questions
about department heads. Now that block scheduling is used and two periods
represent half of a day, looking at department heads picking up an additional
period throughout the day is a worthwhile objective. Dr. Lewis asked Mr.
Burkhardt and Ms. Bentkowski, to clarify the question of the current teaching
load of a department chairperson, looking at a typical teacher in the block
teaching six throughout the year. Mr. Burkhardt stated no for English, social
studies, math, and science. The other departments teach a full load one semester
and one semester have one less class than the other. Dr. Lewis commented that
their load would be five. Mr. Burkhardt stated it is considered a ".2" and for
the big four it is considered a ".3." It costs .3 of a staff member for the
department chairs of English, social studies, math, and science. It costs a .2
staff member for the other areas: fine and practical arts, health and physical
education, etc. Dr. Lewis stated that, in essence, they teach five of six. Mr.
Burkhardt stated that is correct. Director Leeson asked if the department heads
also receive a stipend for being the department chair. He replied, "Yes." Mr.
Burkhardt asked the board to remember that department chairs come in during the
summer for interviewing which requires a huge amount of time. Dr. Lewis asked
how many department heads are in the related arts area. Mr. Burkhardt stated
there is one chair for fine and practical arts. There are four in the core:
foreign language, business, fine and practical arts, health and physical
education, special education, and, at Liberty, ESOL. There are 10 department
chairs at Liberty and nine at Freedom. The four: English, social studies, math,
and science have a ".3." The other six at Liberty and five at Freedom have a
".2." Director Leeson asked that administration study this issue and bring a
recommendation and ways to perhaps incorporate an additional teaching period.
Director Leeson stated that Mr. Kritis also brought up the guidance counselors
coming in ten days early on a per diem rate. She wondered if administration
could provide information on that and perhaps a way to work around it.
Director Leeson said that the administrative severance package is something that
has to be looked at later.
Mrs. Kostem stated that guidance counselors coming in ten days prior to the start
of school is bargaining unit work, work that is almost identical to what they do
during the school year. The collective bargaining agreement states that when you
are doing the same work you are to receive per diem for the additional days
worked. That is why per diem rate for the counselors who come in is included in
the budget. Administration has explored who else might do that work, but it is
bargaining unit work. Therefore, a member of the bargaining unit needs to do it.
Director Leeson asked if it is possible to replace those days somewhere
throughout the year. Mrs. Kostem stated she believes the answer is no but that
the principals need to talk about why those days are included in the summer as
opposed to having that work during the 190 days they are contracted to work.
Director Leeson asked if by some way guidance counselors could be given off
during the year so they would be available during the ten days prior to school.
Mrs. Kostem stated it is a collective bargaining item. Dr. Lewis stated there
was talk about enhancing guidance services. Reducing guidance ten days during
the instructional year would be counterproductive. Director Leeson stated she
clearly understands that, but a very serious look needs to be taken at guidance
and the way guidance hours are being spent. Mr. Burkhardt stated that the
critical issues in the summer could be in three areas: resolving schedule
conflicts for students who can't get a full schedule, enrollment of new students
and proper placement in courses, and, especially in the junior and senior office,
the college/career search for which the schools do not have enough resources to
do that item justice. Talking about cutting those things is beyond his
comprehension. Director Leeson stated her comments were not intended to cut such
services, but to look more carefully at where time is spent and get more time
directed to the student. Mr. Burkhardt stated that the one benefit of the summer
is the lack of daily crisis that consume a tremendous amount of counselors' time.
It is the best quality time for talking to students who need help.
Director Koch asked if it is the wish of the board to obtain further information
on the allocation of counselors' working hours. Director Williams felt that
there is no need to scrutinize this. Director Leeson stated she is willing to
pull it off the table for now; however, within the next year there should be a
serious look at guidance.
Director Leeson stated she has talked about student conference travel. She
wondered if a cost could be provided on what this is costing the district and to
look at that policy. Mr. Majewski stated, based upon the last full year in the
curriculum enrichment area for travel including field trips and travel of clubs
using district transportation, the cost was $112,537.75. Director Leeson asked
about the cost of athletic travel. Mr. Majewski stated last year's cost was
$84,962.80. Director Koch asked, whether talking about athletic or other travel,
if the costs include students who have won competitions and are going on to
another level of competition. Mr. Majewski stated that would be included if the
district is providing the transportation. Director Koch remarked that what would
be at stake is when students have won competitions the district would somehow ask
them to find other ways to get there. She asked if the district should not be
supporting those students who won these opportunities. President Craig said his
philosophy is that if the district sponsors or acknowledges the program, it
should adopt a way of getting students to that program. However, he thinks some
areas in field trips should be considered. To his dismay, he hears about some of
the field trips students take. We have to be a little more careful with that.
But if the district supports a program, it ought to get the students there and
back. Director Leeson remarked that, as President Craig said, the problem is the
inequity. A number of programs are funding their own transportation. This
discrepancy is more of a problem to her. She wants to see our students
participate in these events, but she thinks some of these extra curricular
activities should be focused on the Bethlehem Foundation. It is difficult to go
to the taxpayer and say, "We're spending your money to take kids to California."
She asked Mr. Majewski if the figures he supplied are travel expenses only or
total cost. Mr. Majewski stated it is only the cost of transportation. She
asked if there is any idea what the additional costs are. Mr. Majewski will
provide that information.
Director Williams asked Mr. Majewski to explain the original intent of the
original foundation and its function. Mr. Majewski stated that he was actually
its founder. It was designed to provide funding for programs that enhanced those
provided by the Bethlehem Area School District. It provided alternate funding
for opportunities for students that the Bethlehem Area School District did not.
The funding is not that vast at the moment. He is not sure to what extent the
Foundation would be capable of funding a lot of these programs.
Director Amato asked if the district has someone that takes care of the admin
part of the self-insurance for benefits. Mr. Majewski replied, "Yes." He stated
there are several different folks depending on the benefit. With the health
program, basic medical and physicians' care would be Capital Blue Cross. The
dental program is United Concordia, a company of Highmark. The prescription drug
program was Advanced PCS. They were bought out by Care Mark. Director Amato
asked what is spent on that admin per year. Mr. Majewski stated that it varies
from program to program. You are looking at about eight to nine percent.
Director Amato stated if it costs about $7,000 to insure an employee at a
thousand plus, so $7,000,000 or $8,000,000, and then eight or nine percent of
that. Mr. Majewski said that would be included in the number, it would probably
cost about eight percent of that. Director Amato said the reason for asking his
question is, knowing that the district is self-insured, a couple groups that deal
with municipalities and unions told him they could save the district a lot of
money. Mr. Majewski stated he does occasionally go back into the market and try
to find organizations that will have discounts as well as provide the most
favorable administrative rate. The district has been able to successfully
negotiate lower rates. Our administrative rates have been going down because of
some restructuring. The district does try to take a look at the market. He
stated if there is a way to save money without harming the program, the district
is finding it. Mr. Majewski stated he would be glad to have some contact.
Director Koch stated she knows that she was not the only one last time to ask
about showing line items for the unfunded mandates. She asked if she needs a
consensus of the board to be able to receive that. Dr. Lewis stated that is
being done.
Director Koch stated she requested a breakdown of the laptop initiative. In
looking at the budget, it is difficult for her to figure out exactly what is
being paid for the program. Dr. Lewis stated that all the costs are rolled into
the lease - the Applecare, the warranty issues. The two original years are fully
funded and the money has been set aside by Mr. Majewski. The proposed budget
includes the first year of a new four year for incoming sixth grade which is
funded outside the general budget. Dr. Lewis referred Director Koch to page 41,
line 440 - rentals and leases, showing $560,000 now adjusted to $110,000. That
is where the reduction appeared in the general budget. Dr. Lewis reminded
Director Koch that the proposed budget is not changed. The changes are the
adjustments to the proposed budget. At the last hearing, that immediate
reduction was brought forth. If you take that $560,000, cross it out, and reduce
it by $450,000, it now becomes $110,000 which is primarily the replacement
initiative. Director Koch asked if this is the entire amount for all three
years. Dr. Lewis replied that only a year at a time is budgeted. The intention
would be to look for the same funding sources for future years. Director Koch
stated that two years are still being leased. Dr. Lewis stated those are
allocated out of the bond issue and Mr. Majewski will specifically define that.
They are paid for and those dollars are encumbered. Director Koch stated she is
trying to clarify this in her mind. There is another area of money or funding
that is not included that some is coming out of. Mr. Majewski stated that in
years one and two of those leases the district was fortunate with the Northeast
Middle School construction where several million dollars was saved and then used
in order to fund the first two cycles of four years a piece for the laptop
initiative. This is the third cycle. Director Koch stated she is asking again
if it is possible to get a listing of the ones on the bond issue and the ones in
other sources. Dr. Lewis asked Mrs. Lutcher to prepare such a listing for
Friday's mail to the board.
President Craig referred to page 76 - student transportation item 510, asking
what it is, item 170 - salaries operative, and student transportation item 510 -
$567,800. Mr. Majewski confirmed that salaries operative is money paid to
drivers to deliver students on their daily runs. The $567,800 is contract
transportation, primarily payment to intermediate unit as well as LANTA. Mr.
Himmelberger stated that the early intervention program is a large percentage of
that, the cost of transporting to IU programs out of district by IU vehicles.
President Craig asked confirmation that this is where the district pays people
who take some of our residents to programs in Philadelphia or wherever. Mr.
Himmelberger stated he is correct. President Craig asked if field trip
transportation is part of the operative salaries. Mr. Majewski stated that is
part of the $112,000 that will be charged to the instructional programs, not in
transportation. It is in the curriculum enrichment budget.
Director Leeson stated that at the last meeting she asked about the cost of
capital improvements. If she wrote it down correctly, the district has $592,862
coming out of the general fund, a grant of $194,000 for a total of $787,000. She
then asked if that may be the costs of the expanded SPARK program. Dr. Lewis
stated that the capital improvement expenditures that the board approved were
slightly over $1,000,000 for the upcoming year, reduced from approximately
$3,000,000. Mr. Majewski stated that this money will come from the bond fund.
It funds capital improvements for this summer, for the school year. Director
Leeson asked if money would need to be put in next year's budget for the
following summer. Dr. Lewis stated that administration usually brings that
recommendation to the board in October at the Facilitiies Committee meeting. Mr.
Majewski stated that there are no more 2001 bond funds, but there are still bond
funds that will be 2005 and 2007 for projects currently underway or proposed.
That includes Liberty, Freedom, as well as potentially some for Broughal.
Director Leeson stated that funds wouldn't be taken out of that for capital
improvements because there is a shortfall. Dr. Lewis stated, in all probability,
what Mr. Majewski, Mr. Wittenberger and others have shared is that capital
improvements are going to be an area of concern. Director Leeson stated she
thinks it is the expanded SPARK program that is $592,862 and grant money of
$194,000 for a total of $787,000. Mr. Majewski stated that it was in the capital
reserve fund as well as money being transferred from the enterprise fund, which
is the child care program. Director Leeson asked if any money is coming from the
general fund for the entire expanded SPARK program, not just its renovations.
Mr. Majewski stated the SPARK program is a combination of grants as well as the
general fund. Dr. Nelson stated two teachers and four instructional assistants
come from grant funds; the remainder of staff is general fund. Dr. Lewis pointed
out that page 59 shows the general operating budget of SPARK, essentially the
salaries, professional services, general supplies, and energy costs. Director
Leeson asked if it is correct that the increase is $14,900. Dr. Lewis stated
that is correct.
President Craig stated that the recent bids on Freedom High School came in rather
high. He asked Mr. Majewski how that will impact this budget. Mr. Majewski
stated it does not impact the budget for 2005 to 2006. In looking at what
happens with Freedom and Liberty, it is clear that construction prices have gone
up considerably. It was known that additional funding would be needed for the
Broughal program. It may require the district to get some increased financing on
top of that when the Broughal project comes. That is when it will impact the
district. It may be several years budgets before seeing that impact.
Director Venanzi, in light of the coaches speaking about the rifle teams, stated
she would like to see that program not be cut from the budget. Director Leeson
asked if it is possible to consider rifle a club sport, as is done with ice
hockey, and look for grant money to cover the majority of the costs. Dr. Lewis
stated you would have to look at a host of things including facility use. The
district does not provide ice space. Mrs. Kostem stated that rifle is part of
the collective bargaining agreement. It is a stipulated salary. President Craig
pointed out that there never was a hockey team as part of the formal athletic
program at the high schools, so it is not the same as rifle in that sense.
Director Venanzi suggested that some of the things be finessed at the tentative
budget adoption meeting because there are always some final figures coming in at
that time. Director Koch stated it seemed to her that part of the rifle program
problem was not having a proper place for the program, not just the money. Dr.
Lewis stated there would be some added rental costs. Administration will do
further review of the rifle program.
COURTESY OF THE FLOOR TO VISITORS
Director Koch offered courtesy of the floor to visitors. Speakers are allowed
three minutes to address the board on budget items. The following persons
addressed the Board of School Directors:
1. John Soden, 4457 Loraine Lane, Hanover Township, asked for a 90-second
version of how the budget numbers are arrived at.
Mr. Majewski stated that the budget process is a combination of getting
information from many sources, calculating, looking at trends, trying to
extrapolate where the numbers are taking us, looking at existing programs,
looking at contracts. Every department's budget will be investigated
item-by-item, not simply adding a percentage to the prior budget. It is a
time consuming process taking many months in order to come up with the
document.
Dr. Lewis added that every expenditure page is the responsibility of one of
the cabinet members. There are hundreds and hundreds of hours of dialogue
with supervisors, principals, Mrs. Kostem. There is a staffing guideline
driven by the contracts. That comes in on a timeline. Mr. Majewski collates
all the departmental information. Those inputs then come to the full cabinet
for review. This year it was cut tremendously. The first roll-out was well
in the double digits.
Mr. Soden asked what that number was, because the number is $10,000,000 more
than last year. Dr. Lewis stated that it went from 10 to about 2.8 tonight
in terms of the millage impact. Mr. Soden asked about real dollars, stating
there was a $10,000,000 increase from last year to this year's proposed
budget. Two million has been taken off it. He asked what the number was
before coming up with the $149,000,000. Mr. Soden stated he sees the school
district has been taking on more debt, is planning on taking on more debt.
He wants to make sure the district does not hit the debt ceiling. He asked
what is being done about that portion of the budget. Dr. Lewis stated that
the news, as President Craig pointed out on Freedom, is not good news. The
district is not happy about that and has begun the dialogue Friday afternoon,
continuing this morning. Administration is prepared to bring to the board
both Freedom and Liberty bids. There will be some tough decisions.
Construction across the nation has skyrocketed. Mr. Soden stated he was
concerned that Mr. Majewski said there was money left over from one of the
old projects. Dr. Lewis explained that the atmosphere when the Northeast
project went out for bid was the exact opposite of what it is today. There
was a lack of available work, plenty in terms of commodities in steel and
concrete. People were almost giving it away. Essentially, that project came
in at $5,400,000 under bid. That is not the case today.
Mr. Soden stated that is not his concern. His question was that Northeast
came in under budget and it sounded like that money was put toward leasing
computers. Dr. Lewis stated it was used for capital improvements. Some
technology was taken out of that. Mr. Soden asked if some of the money was
used specifically for the leasing of computers because it seems if you are
borrowing money to then lease something, that is not a very appropriate use
of money. Dr. Lewis stated it was money that was realized on the bond issue.
The borrowing had already been completed. Here again, you look for
favorable rates when borrowing.
Mr. Majewski stated that it sounds like a simple question. Programs were
approved, a 1.9 percent rate was negotiated on the lease. The district was
able to invest the money at something higher than that. It made good
business sense to be able to use the funds. It wasn't a case of having some
money and asking what it could be spent on. Mr. Soden asked if it was the
interest portion only that was used. Mr. Majewski replied that you are also
looking at regular bond funding. To try to get financing in order to pay for
the lease would have been at a higher rate. It made sense to use those
monies because he was able to do some cash flow. In order to fund those
programs, the district could have gone to the general fund but the bond funds
were available as agreed to.
Mr. Soden stated his point is that borrowed money is used to pay for
something that is leased and will be given back at some point. Dr. Lewis
stated that it costs money to get rid of owned computers and that is the
premise behind leasing. Mr. Majewski further explained that this money could
not have been used for the next school project because there are arbitrage
restrictions. You need to spend the money within a required period of time.
There are limitations within the ability to use funds when borrowed because
you tell the investors how the funds will be used. The money needed to be
spent within five years; usually it is three years. Otherwise, there are IRS
problems with arbitrage.
Mr. Soden stated that Director Amato pointed out that the budget is up
approximately six percent. There are about 330 new students coming into the
district. At last week's Act 72 meeting he tried to bring up the fact that
it is important for Dr. Lewis and Mr. Majewski to let developers and
townships know what the effect will be long-term on their school taxes. He
thinks a part of this year's increases is because there are a lot more
students coming into the district. Dr. Lewis replied to Mr. Soden that he is
not privy to his conversations with the mayor, the board of supervisors and
commissioners with the various municipalities. Mr. Soden told Dr. Lewis he
needs to do it publicly. Dr. Lewis stated he will tell him publicly that he
will not support residential development if the school has any piece of that
decision-making - if it is a right-of-way to be granted, district-owned land
that somebody wants to take over for residential. What he cannot do is tell,
nor does he want them to tell the Board of Education, which some legislators
are trying to do, how to run the county and municipalities. Dr. Lewis stated
it is no secret that he does not want to see any more residential
development. But areas are zoned, have statutes of limitations. They will
do what they wish to do with their property. He suggested to Mr. Soden that
he have a conversation with the board of commissioners in Bethlehem Township
because they could change future restrictions on, for example, required lot
size. Neither the board nor he has any power to do that. Mr. Soden stated
that he thinks he has the power as the CEO of our school district to let the
taxpaying public know what the tax consequences could be down the line and,
ultimately, let the people decide.
Director Koch pointed out that if not for state-mandated construction cost
requirements and prevailing wage that would reduce school construction costs
quite a bit.
2. Bob Flanning, 2800 block of Linden Street, Bethlehem, asked about
unreserved fund balance transfer of $3,500,000. He asked what is left after
that is taken. Mr. Majewski replied as of June 30, 2004, there was
approximately $10,000,000. Three million is being used in this year's
budget, bringing it down to a little over $7,000,000. After that $3,500,000
the amount will be between $3,500,000 to $3,800,000. Mr. Flanning commented
that there will be maybe one year left "in the cookie jar." Dr. Lewis
replied, "No." The anticipation is that the fund balance is typically
rebuilt each year by unexpended dollars. The outflow of dollars will be
controlled. Usually in early spring and March spending is curtailed. That
reconstitutes the fund balance. Mr. Majewski pointed out that the fund
balance is actively managed. If the fund balance grows, taxes can be reduced
and given back through this method. Board policy requires that it be kept at
a certain rate of usually four to five percent of the budget. There is a
state law that will limit it to no more than eight percent.
Mr. Flanning stated his second question is the percentage of the total
expenditures directly impacting the classroom. Dr. Lewis stated he assumes
Mr. Flanning is referring to the "65 percent rule." Ours is 68.1 percent.
Mr. Majewski stated that at the first budget hearing a pie chart showed that
the district is in excess of it.
3. Judy Dexter stated she had a couple brief points. She wanted to echo
Director Venanzi's concern about the rifle team. She has heard similar
information to what the coaches have said. Often students participate in
rifle teams who are not traditional athletes. Perhaps money could be found
in the budget, perhaps by looking at conference expenditures or some other
lines that might have a little fluff in them. Another point is that guidance
is a huge need in this district. She believes that at least ten days in the
summer are well spent by guidance counselors at the high school level.
Guidance counselors float with the class. What this means is that the
guidance counselors do not develop expertise in college planning. That hurts
students at every level of achievement. She stated that this past summer she
went to guidance with her daughter. At that time, she and her daughter were
educating her guidance counselor about which schools are called the "ivy
league" schools. Parents need to go out into the community, talk to other
parents, find their own resources. There is a gap. A specialty guidance
counselor is needed who can deal with college or post high school planning at
each high school. Even if it can't be included in this year's budget, it is
a need to think about for next year.
Mrs. Dexter spoke about the technology initiative. She heard Alan Jennings
tell the board he believes the technology initiative is unbelievable. She
stated that on Sunday she attended a concert in Hanover Township. The number
one issue that people discussed was redistricting. Mrs. Dexter stated the
number two issue that day was the technology initiative. People were asking
why the district has those laptop computers and asking what is wrong with the
cheaper version. People were stating they thought grants were going to cover
this. None of that came to fruition. She sat through two presentations by
Dr. Cates of Lehigh. Mrs. Dexter said she wanted to find out what students
are doing with the laptops, even though she has a child in sixth grade who
enjoys his use of the laptop. What she learned is that we are going into the
third year of the program with the next budget year. Just now, the district
is developing what should be done with the laptops. She heard Dr. Cates say
that seven or eight out of 50 teachers were using the laptops when he went to
do his observations. Those teachers knew he was coming. She is not saying
that technology is not needed in the schools but questions, in a tight budget
year, if the highest priced cutting edge toy is needed. She also questions
if these sixth and seventh graders are really going to be more prepared when
they get out in the community for their jobs. She is not sure that getting
acquainted with technology is a goal that warrants the expenditure of money
this district has committed in these tight budget times, especially when
construction projects are going to be coming in at higher costs, there is not
enough money for Broughal, and money is being squeezed out for various other
items.
4. Mr. Kritis referred to page 32 - employee benefits, unused sick leave -
from 2004-05 to 2005-06, it goes from $51,500 to $125,000, about a 150
percent increase. He suggested, even though Mrs. Kostem has said that more
people are retiring, that the dollar amount has increased because more
administrators are retiring. He hopes the board would look at that severance
package that he mentioned earlier.
Mr. Kritis stated that for years there was a professional contract given to
the engineering firm of D'Huy Engineering and a professional contract given
to Spillman Farmer Architects. He asked if that is still the case, if D'Huy
Engineering is still the consulting engineering firm the district has hired
and also the site engineering firm in every capital expenditure. Dr. Lewis
stated that, essentially, that is correct. There was a cut in engineering
services; however, due to the reduced role of D'Huy Engineering in the
operations of the school district next year. With the hiring of the
facilities director, that will be phased downward. Regarding Spillman
Farmer, there is also deviation from what had been. He had done all the
previous buildings to diversify and went with a second architect on the
Freedom project. Sometimes people need to be reminded that this is
competitive as well. Dr. Lewis said that he needs to speak to Mr. Fazil who
has carried the district through some tough times and is fully aware that the
district is going to start to shift some of the responsibilities he has
assumed to the cabinet level position. Mr. Kritis stated he thinks that
would be wise to do. Competitive bidding is critical whether talking about
architectural work or engineering.
Mr. Kritis congratulated the school board for being so patient.
ADJOURNMENT
The meeting adjourned at 10:08 p.m.
Attest,
Stanley J. Majewski, Jr.
Board Secretary
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