Budget Hearing 1 - January 11, 2007
Minutes
BETHLEHEM AREA SCHOOL DISTRICT
BOARD OF SCHOOL DIRECTORS
BUDGET HEARING #1
JANUARY 11, 2007
BUDGET HEARING #1
The first 2007-2008 budget hearing of the Board of School Directors of the Bethlehem Area School
District was held on Thursday, January 11, 2007, beginning at 6:07 p.m. in the Auditorium of East
Hills Middle School, 2005 Chester Road, Bethlehem, Pennsylvania.
Director Koch presided.
MEMBERS PRESENT
Members present: Directors Amato, Craig, Dexter, Heske, Koch, Leeson (arrived at 6:15 p.m.),
Rowe, Williams, and Haytmanek - 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.
COURTESY OF THE FLOOR TO VISITORS
Director Koch offered courtesy of the floor to visitors and asked that comments be limited to the
budget. Speakers are asked to come to the podium, stating their name and address. Public comment
in the first session is limited to 30 minutes. Speakers are limited to three minutes each. The
board requests that, when possible, all individuals supporting a like position on a topic select a
speaker to present their views to avoid repetition. If that is not possible, all are welcome to
speak. As per school board policy, generally, speakers are limited to taxpayers, residents, or
employees of this school district. At the conclusion of the regular school board meeting, another
block of time will be allocated for public comment. At that time, the same rules will apply. It
is asked that speakers observe proper decorum, without personal attacks towards a specific
individual or individuals. It is not the custom for the board to enter into a dialogue at these
meetings about concerns. However, the board does listen with care to issues raised. Speakers
will receive responses, in some form, by the administration. No one wished to address the Board of
School Directors.
DR. LEWIS - INTRODUCTION OF BUDGET
Dr. Lewis thanked his cabinet, Mr. Majewski, and his department. They have had a lot preliminary
work that went into the budget development. It was probably the most trying process of the last
five years. Dr. Lewis wanted to be sure the board and the public understand that this is what is
called a "preliminary budget." The traditional timelines had two steps. Now the timeline is
preliminary to proposed to final. There will be three seasons. This is the first one. It is not
imperative to do major adjustments this evening. It is an evening to present the work of this
administration and to ask clarification questions. Administration hopes to answer those
questions. Some programs and assignments have been altered in this budget. These are very early
guesstimates. He is optimistic that this governor's budget is going to show a continued increase
that we haven't had anomalies over the last two budget supports from the state and that the
district will see a fair increase. Until that budget is passed at the state level, we won't know
for sure.
BUDGET PROCESS
Mr. Majewski stated this is the first year under the new budget guidelines. Act 1 was passed in
summer 2006. Act 1 requires the district to have a tentative budget adoption early enough to
determine whether or not the tax increase will be under the index or come under the index with all
approved exclusions. Several exclusions are built into Act 1 that districts can apply for if
there is a tax increase in excess of its index. To date, the district has not applied for any of
those. For our district, the number to be under in order to avoid a referendum is 4.1 percent, as
calculated by the state. As Dr. Lewis indicated, the budget process has changed. Previously, a
budget would be prepared starting in January through March, released in April, followed by several
budget hearings from the end of April throughout May with tentative adoption in mid May, and final
adoption prior to June 30. That part of the budget process has not changed. Act 1 has created an
add-on. This is the period of time where districts are asked to develop a budget prior to getting
the governor's budget, prior to getting certified assessments, and prior to having much in the way
of this year's trend to compare for expenditures. Mr. Majewski stated he believes they have
developed a budget that can reasonably estimate what those revenues/expenditures are going to be,
but they are estimates.
BUDGET PRESENTATION - REVENUES
Mr. Majewski gave a PowerPoint presentation of the preliminary proposed 2007-2008 budget.
The first column indicates the major revenue sources for the school district: local, state,
federal, and other financing sources, with the appropriation of fund balance being the second from
the bottom line and the total budget revenues being the bottom line. The first column of numbers
is considered the unrestricted portion of the general fund. That is where real estate tax
revenues will fall and where the majority of operations are charged. The middle column,
federal/state/local grant budgets are grant funds, having no effect in most cases to the bottom
line of the budget. Any unspent grant money, typically, must be returned to the funding source.
The far right column is the combined total of both of those two funds. The bottom right-hand
corner is the total budget - $178,305,567.
Mr. Majewski stated that in looking at projected revenues most of the focus is on local revenue.
Almost all of our funding, 73.33 percent, comes from local revenue: real estate taxes and other
income (to be discussed later). The second largest component of the budget is state revenues -
23.73 percent of the budget. Less than one-fourth of the budget comes from the state and various
funding sources. The next largest portion comes from other financing sources, followed by fund
balance, and the smallest nongrant component of the budget - federal revenue. Under the 2007-08
budget, the largest revenue item is the current real estate tax number. It is the one item that
the district typically has any control over. The per capita tax, earned income tax, real estate
transfer tax rates are set by outside agencies or the state. The district has the ability to
establish the millage rate which is why a lot of focus is spent on real estate taxes. A one and
one half mill increase is built into this first draft of the budget which will generate
$98,838,000. The other portion of the local tax revenue, the next largest, is earned income tax.
Currently, the district receives one half of one percent. That possibly can change in the next
budget cycle. The Tax Study Commission that was created under Act 1 made a recommendation to
increase the earned income tax by one percent. The board will review that recommendation and make
its own recommendation to be presented to the voters in May. If the Tax Study Commission, the
board, and the voters agree that there is going to be an increase in earned income tax, that
number will increase and the real estate tax value will decrease. Anything that will be approved
as part of that process is a shift. There is no additional revenue or loss of revenue.
Mr. Majewski explained that the largest component of other local nontax revenue is interest on
investments. Our investments will be maintained at one year or less. Currently, those numbers
have been very favorable. As a result, interest investment income budget has been increased by
$200,000.
Mr. Majewski referred to the top of the slide. With the other taxes, per capita tax has been one
of those that has been in place and is fairly stable. It doesn't change much from year-to-year.
Approximately the same amount of money is generated from year-to-year.
The occupational privilege tax has been renamed as EMST - emergency municipal services tax.
Although it has been increased to $52, the district still receives the same five dollars as it
has. Any increase in that budget is not due to the increase in that tax. It is due to the
increase in the number of residents within the Bethlehem Area School District who are eligible and
required to pay that tax.
Mr. Majewski said that the mercantile tax is a percentage of the gross receipts. The local
economy has been reasonably good. As individuals are selling more, the district will be able to
obtain more revenue.
Mr. Majewski stated that in delinquent real estate tax there has been an increase of $150,000
because it is being found that the district can get approximately $2,800,000 annually through the
collection of delinquent real estate tax.
Mr. Majewski showed a graph illustrating the largest bar representing real estate tax. The
majority of the budget is funded by real estate tax.
Mr. Majewski explained assessment growth by municipality. There are five municipalities within
the Bethlehem Area School District: the Borough of Freemansburg, the Borough of Fountain Hill,
Hanover Township, Bethlehem Township, and the City of Bethlehem. The smallest municipality is the
Borough of Freemansburg. The largest municipality, approximately one half of all assessed value,
is the City of Bethlehem. Average collection over the last 12-year period has been approximately
95.45 percent. Over the last few years, it has been 95.98 percent. That number is significant.
A 95.9 percent collectability rate was assumed when establishing the budget.
Mr. Majewski stated that growth of the assessed values within the Bethlehem Area School District
is good news. Freemansburg has had an average of about a 2.3 percent growth over the 12-year
period and almost six percent over the last five years. However, prior to 2003-04, the Borough of
Freemansburg has shown very little growth and, in fact, had declined. Then, there was a two-year
period of time when there was significant growth. Because of the size of Freemansburg, when they
had some development and put taxable assessed value onto the rolls, there is a significant bump of
incremental increase in their real estate taxable assessed value. After those two years, that has
declined and is slightly negative. The assumption is that they will have moderate growth over the
next several years. Fountain Hill has been relatively flat with an average of .35 percent over
the 12-year period and 1.8 percent over the last five years. There is not really much room there
for any type of development. Hanover and Bethlehem Townships have been the two areas of
consistent growth. Hanover Township over the 12-year period has grown about three percent and 3.2
percent over the last five years. There may be continued growth. At some point, that is also
translated into increased student enrollment. Bethlehem Township has been the largest grower both
over the 12-year period and the last five years, at approximately 3.5 to 3.6 percent per year.
The district is hoping that some of the issues Bethlehem Township is having such as obtaining
sewerage from the City of Bethlehem will not inhibit that growth. That is something to keep an
eye on when taking a look at the future growth of Bethlehem Township. The City of Bethlehem is
the shining star right now, having shown a lack of growth and decelerating because of Bethlehem
Steel. Looking at the 12-year period, average growth was a negative number in the City of
Bethlehem. However, in the last two years some growth is seen, as little as about .84 percent in
2006-07, 1.87 percent in 2007-08. There are any number of projects that are looking to be
proposed, are on the books, and are occurring within the City of Bethlehem. If the townships'
growth slows down, it appears that the City of Bethlehem is positioned to be able to offset some
of that. Mr. Majewski said he is anticipating about a two percent growth in taxable assessed
property over the next couple of years. Two percent is a very envious number for some other
school districts. However, a two percent growth is still under the CPI and not capable of being
able to maintain revenue growth at levels of normal expenditures.
Mr. Majewski showed a history of some of the revenue. Real estate tax and some others have been
fairly stable. Growth in earned income tax since 2001-02 went from $8,700,000 to about
$10,500,000. Between the local vibrant economy and the growing number of folks that are living
within the Bethlehem Area School District, earned income tax has shown better than average growth.
At the bottom of the page the millage increases are shown and the value of the mill has shown a
regular increase from $2,300,000 in 2001-02 to $2,529,000 in 2006-07 which is the current year's
budget. Proposed and approved millage increases are shown over the last 10 years. Looking at the
last several years starting with 2003-04, most of those increases have been less than three
percent. A 4.1 percent increase is proposed.
Mr. Majewski stated the largest component of the state revenue is the basic instructional subsidy
- the amount of money received per student. It is subject to the politics in Harrisburg. The
funding mechanism is not necessarily viewed as one of the most equitable. During the last couple
of years under Governor Rendell the district has seen better increases in the basic instructional
subsidy. Built into this budget is an assumption of a 4.5 percent increase. Special education is
the second largest revenue source from the state, about $6,300,000. That does not approximate 50
percent of expenditures in the special education area as it should. The next largest component is
the subsidy received for FICA/Social Security and PSERS' or retirement. The district receives 50
percent of its costs to offset Social Security as well as retirement payments for nonfederal
wages. If a person is paid out of a federal grant, the district receives no subsidy from the
state and needs to receive 100 percent from the federal government. This is just the 50 percent
reimbursement of those who are being paid out of state funds.
Mr. Majewski commented that there has always been discussion about fund balance. Fund balance is
the money kept as comparable to a savings account. For an organization as the Bethlehem Area
School District and most municipalities fund balance helps by having money available for
contingencies. Even more importantly, because of the cyclical nature of district revenue, there
needs to be some money on hand in order to provide cash until tax revenue or state revenue is
being received. That, typically, is most necessary during the summer months. Bills go out around
July 1. The majority of money does not get received until the end of August. The cash on hand
carries the district through until that time. The state has legislated that a school district of
our size cannot maintain a fund balance greater than eight percent. The numbers on the far right
show that our fund balance is under eight percent and significantly under eight percent projected
for 2007-08.
BUDGET PRESENTATION - EXPENDITURES
Mr. Majewski stated that salaries and wages are the largest component of the budget. The school
district is a very labor-intensive operation in the service of educating the eligible students
within our district. The largest cost of a benefit is under the self-insurances. That is almost
exclusively health care costs. The other two large portions of employee benefit costs will be
Social Security and the cost of retirement.
Mr. Majewski stated that debt service has been a growing number as the district has been
continuing with the renovation program throughout the district. Starting in 1991-92 the school
district undertook a program to be able to go through the entire district and determine whether
each building needed to be renovated or, if the cost of renovation was so high that it would
require adding on or through enrollment growth at times to increase the size of some buildings.
At present, two projects are underway - Freedom and Liberty. Broughal is being discussed and
prepared to move forward during this year. The only school building that has not received any
type of addition or renovation to date is Nitschmann Middle School. However, several years ago
because of growth in their area, an addition was put on in order to accommodate some of the
growth. Equipment increases and decreases and is not a huge portion of the budget but is very
important and vital.
Mr. Majewski explained that intersystem payments are payments the district makes to organizations
and other school entities outside of the Bethlehem Area School District such as: Vo-Tech, the
community college, the intermediate unit. Also, the state has structured the financial
responsibility in such a way that students who have needs and are court-placed outside of the
Bethlehem Area School District are required to be provided an education at the cost of our school
district.
Mr. Majewski said that as much as an attempt has been made to increase the charter school budget
in order to anticipate costs, it has fallen short. Prior to 2002-03 there were no costs for
charter schools. With the enactment of the legislation that allowed for charter schools, those
costs began at $1,200,000. Currently, $3,700,000 is budgeted based on estimates for the current
year. That will be several hundred thousand dollars short.
Mr. Majewski stated that textbooks has been a fairly stable number over the years - between
$800,000 to $900,000 or $1,100,000 now. There are several line items in the budget that will
provide for textbooks and software. That is not the total amount budgeted for this item.
Additional areas throughout the budget include textbooks or software purchases.
Mr. Majewski stated that the cost of health care receives a lot of attention in the press,
nationally, and within the state where consideration of a statewide health care program is being
considered. Health care in the Bethlehem Area School District is increasing at a rate of between
eight and nine percent. Numbers from some other organizations may be significantly higher than
that. There are probably very few that are lower. The district's increase is at or below the
average of most increases in the cost of health care.
Mr. Majewski explained how the budget is split up. The cost of regular education will consume the
largest component of the budget, approximately 42 percent. Special education is around 10
percent. Other instructional programs equal about 12 percent. Operation and maintenance is about
9.5 percent. Slivers are divided throughout. Probably, two-thirds of the budget will be
supporting direct instruction. That is not including administrative costs, the costs of our
plant, but only the costs of educating students.
Mr. Majewski said that looking at charter school costs in April 2005, there were 419 students
enrolled in charter schools. The top component showing total regional schools are the brick and
mortar charter schools. The cyber school is students working at home using computers. Lehigh
Valley Area Regional Charter School is the largest brick and mortar charter school that our
district has and funds. In April 2005, it had 305 students which increased to 334 the next year.
As of December 2006, there were 383 students at that school. That is about 80 additional students
in a year-and-a-half span. Lehigh Valley Charter School for the Performing Arts went from 66
students to 90. Vitalistic Therapeutic School is the smallest of our brick and mortar charter
schools. At one point, half-time students attended Vitalistic. Currently, there are none.
Vitalistic enrollment went from 14 students in 2005 to currently 11. The cyber schools went from
34 to 80, a significant increase.
Mr. Majewski said that another way of looking at the budget, as he stated earlier, is that the
largest portion of the budget is to fund salaries and wages. The general fund budget is
$83,400,000. That is about half of our budget just for salaries and wages. Employee benefits
cost almost $30,000,000. Mr. Majewski pointed out that $113,000,000 out of $167,000,000 is to
fund people. It is a very people-focused budget because the district provides that type of
service.
Mr. Majewski pointed out another graphical display of expenditures by objects, showing the largest
bar for salaries and the second largest for benefits. Actually, as a percentage of the budget,
you can see 50.70 percent last year and currently it has decreased a little to 49.95 percent.
However, the cost of benefits has gone from 10.98 percent of the budget to 11.41 percent. Other
costs shown are costs that are part of running the school district that would not be defined in
any other location, but are very significant, including electricity, oil, gas.
Mr. Majewski reviewed cabinet code assignments.
Director Craig referred to driver ed lab fees listed for $16,000, but the proposal for this year
is to drop driver ed. He asked Mr. Majewski if he is anticipating that the program may be kept.
Mr. Majewski replied that at the end of the year the district is required to request subsidy for
activity that would have taken place in the prior year. The revenue budget shown is for activity
that would have occurred during the current year.
Director Craig stated that Mr. Majewski was talking about anticipated growth in about two years
and the money coming in. He asked if he has any idea what the growth to our district could be in
income with the development of the casinos and the brown fields once it is in full swing by 2009
or 2010.
Mr. Majewski stated it is a very difficult question to answer accurately. We know that the
license has been approved for the brown field area in the former Bethlehem Steel site. We do not
know how rapidly that will develop, what type of other business may generate in order to be able
to take advantage of that location. There is also a commerce park that Lehigh Valley Industrial
Park is developing. Right now there appears to be a steady movement towards development. He
expects that within the next two years our growth is probably going to be very similar to what he
said earlier tonight about next year, looking at growth of about two percent. What he is hoping
is that with the growth we are hearing about in the City of Bethlehem and assuming there will be
nothing to impede that growth or to slow it down, that we will start seeing the majority of those
funds come somewhere in the four to eight-year time frame.
Director Craig remarked that people in the community are asking him, assuming the casino opens in
two years, about the sum of money that the city and the county will receive as a benefit of having
the casino in the community. Is it correct that the school district does not get any part of
that?
Mr. Majewski said that is correct.
Director Craig asked if the only benefit that the school district could receive from the casino
would be the taxes it would get for a business running in the school district area.
Mr. Majewski replied that the district would anticipate receiving the increase in real estate
taxes as a result of development and, if there are any increases which he assumes there would be,
increase in earned income tax.
Director Craig stated that the district is not part of that payout to the county and the city. He
wanted to make that clear because it is something that some of the community are not clear about.
Mr. Majewski stated that the district will not be getting one dollar.
Director Williams asked, if eventually the district decides through referendum to raise the earned
income tax, if there has been any study to see if earned income grows at a rate different than the
property tax assessment. If that would occur, earned income possibly could grow at a different
rate. Then, you would not be simply offsetting the property tax, but getting revenue growth at a
different rate, if that was to occur.
Mr. Majewski said that no one would have done those types of projections. However, historically,
the assessment growth has been between one and one-half to two percent, a very favorable rate
right now. Earned income tax has been increasing at a rate of about three and a half percent.
However, the percentage is not the only factor to be looked at. It is a percentage of what
number? Two percent of the real estate tax growth, even though it is a lower percentage, is much
larger in dollars than a three and a half percent growth in what is almost one-tenth the size of
the real estate tax. It would bring additional revenue, but not at the same rate that real estate
taxes do.
Director Williams commented that when they saw the City of Bethlehem, even though there have been
some changes, it is fairly stable.
Mr. Majewski said that the City of Bethlehem was quite a roller coaster ride for some time. Over
the last two years you start to see the growth we have been hearing about turning into taxable
assessed values. That is something the district has been hoping for. We are finally seeing some
of that growth. The City of Bethlehem is about 50 percent of the district's assessed value.
Director Heske asked Mr. Majewski how he treated the perspective sale of 68 acres from the Sisters
of Sienna when he looked at growth in Hanover Township. What is going to be built on that land is
not clear. Zoning has not gone through to put the retirement community there. Nobody knows what
the township commissioners are eventually going to come up with. This is 68 acres that will be
transferred from a nontaxable religious order to the taxable rolls. This is supposed to happen.
Therefore, he is trying to figure out how Mr. Majewski evaluated that when he predicted the
growth.
Mr. Majewski replied that because it was not definite it was not factored into the 2007-2008
proposed budget. If it is not resolved prior to July 1, it cannot be a significant part of the
2007-08 budget; therefore, he did not include any additional revenue.
Director Leeson stated that on page 24, alternative ed shows actual expenditures for 2005-06. The
district did not have the alternative ed program in 2005-06. She asked where those numbers are
from.
Mr. Majewski replied that prior to the 2006-07 year the district still had the Regional Academy
and CA/MP in place and some money coming from the general fund for the Vo-Tech Prep program.
Those were already in place as alternative education programs. As of 2006-07, the Career Academy
was added which included what was remaining from the Regional Academy and CA/MP. For purpose of
display, all of the alternative education programs were combined.
Director Leeson asked why the 110 Salary Official Administrative is being deleted and where it is
going to.
Mr. Majewski replied that there was an individual who headed the CA/MP program. He was moved into
another position. The salary for the additional principal for the Career Academy is being picked
up under building staff on page 18.
Director Leeson remarked that this salary has moved to building staff. She asked if the total
cost of the alternative ed program is known.
Mr. Majewski said that those costs would be identified separately. He does not have those
components separated right now.
Director Koch asked why one category went from $25 to $78,000 on page 24.
Mr. Majewski replied that it is the building rental. The $25 might have been for a piece of
equipment that was rented. Now, there is a building.
Director Williams referred to Arts in Motion on page 8 which has been axed. Her memory of Arts in
Motion is that it was an elementary school supplemental enrichment program.
Dr. Lewis stated this was a grant that underwrote sculptors, musicians, and visiting artists. The
grant dissipated and administration stopped getting inquiries from elementary schools for the Arts
in Motion program. The program is now nonexistent.
Mr. Villani stated that other ways are being found to fund events previously funded by the Arts in
Motion program. Individual grants are sometimes written for the same kinds of activities. In
addition, part of the after-school ASPIRE program has arts programs that are replacing some of the
kinds of things that were done through Arts in Motion.
Director Dexter stated that an example, using page 24 because it was already being discussed. She
knows that the board has approved conference expenditures for the alternative ed program. She
thinks this year they went to a conference in the Poconos. She doesn't see much listed here. She
asked if that means if it is not seen here that the conference cost is listed on another line,
perhaps some federal grant money.
Dr. Lewis replied, "Yes." Most of that kind of expenses has been put into the alternative ed
grants that come out of the state.
Mr. Villani stated that a lot of the teacher conferences are paid for out of grant funds.
Director Leeson said that the other evening she was hearing about the reading series. A reading
series was put into place last year with books for grades four and five. She asked if that is
correct.
Dr. Lewis replied that it was grades three, four, and five.
Director Leeson continued, stating that this year books are being put in place for K, one, and
two. She asked if K, one, and two got the new reading series or if they used the old reading
series.
Mr. Villani said some teachers piloted the new reading series over the last year and a half. In
some instances, they used that series this year. The rest of the schools were still using the
other series. This year the complete set of the new Macmillan series for, hopefully, K through
five will be purchased.
Director Leeson asked if a program was in place, though, without books.
Mr. Villani replied, "Yes." Other books and materials were used.
Director Leeson asked how the technology program was expanded into ninth grade but not provide
books for a reading series. The district could have waited on the ninth grade expansion and fully
funded the reading series. That way, all of our children would have had reading books.
Dr. Lewis stated he does not want her to think they did not have reading books. They had the
prior series.
Director Leeson commented that the books were not part of the series.
Dr. Lewis stated that is correct but the students had a very workable, useable series. In some
cases, some K, one, and two had the new series, if they had piloted it. The other risk, talking
about priorities, is that a class of eighth graders would have been sent into their ninth grade
experience without the technology they had become accustomed to using. It was a philosophic
decision and that was the recommendation at that time.
Director Leeson stated one of the things she finds difficult with this budget is trying to figure
out some of those priorities. Now, it is a year later. She thinks that is something that should
be discussed as a total group to be determined. She thinks, personally, that children in K, one,
and two having the reading series is more important than ninth graders having laptop computers
whether the students are used to having them or not. As is known, ninth graders did not have the
laptops for the first couple of months because of the battery problem.
Mrs. Lutcher stated that the battery problem didn't affect the ninth grade computers. They were
delivered in September and rolled out from the end of September into the beginning of October.
Director Leeson said that they were still in the boxes in early December. She knows they talked
about the fact that they had not been put into use in the classrooms.
Mrs. Lutcher stated that the sixth, seventh, and eighth grade roll out was delayed due to
batteries. The six, seventh, and eighth grade roll out began in October and went through November
just into the beginning of December. The ninth grade computers were delivered in August and
September, put into carts, and were ready to go in October.
Director Koch stated she wanted to make sure what the main purpose is of this particular budget
hearing. Her understanding is that there is a certain amount that the board must establish as
being under so that the budget does not have to go to referendum. Once that is established, then
the board is ok until later in the year. She asked if this is correct.
Dr. Lewis replied that she is correct. The specifics of Act 1 gives districts two options. A
district can pass a resolution by January 25 that it will not exceed the index no matter what the
state's revenues are, no matter what the local revenues turn out to be. The second option is to
have at least one hearing, which the board is doing, where the board determines that the
preliminary budget is under the index and that it will stay within that in terms of any millage
increase once the board finally adopts the budget prior to June 30. Director Koch is correct.
This is the board's first look, first opportunity of budget review. In some discussions with some
board members privately, it was noted that if revenues from various sources show more optimistic
signs as time goes along, the board may end up with an automatic decrease in the increase. Mr.
Majewski and his cabinet feel confident that a very conservative approach has been taken and that
the district can, at the minimum, deliver the programs in existence except for those noted in the
letter of transmittal based on being under that index.
Director Koch commented that in the future when the board works on the budget it will expect that
it might still be able to take it lower. It is just that the board understands it will not have
to go to a referendum. That is what the most concern is about at this point.
Director Koch asked Mr. Majewski if when he lists the 80 cyber schools if these are the ones that
the majority of them come out of Midland, Pennsylvania.
Mr. Majewski replied that for the Bethlehem Area School District the largest cyber school that is
identified is PA Virtual. Those that came out of Midland are also included. Of those 80
students, there could be 10 to 12 cyber schools. Some cyber schools have one or two students
enrolled. Others such as PA Virtual may have close to 15 to 20 at times. PA Midland is now
called Pennsylvania Cyber School. It is probably our second largest cyber school.
Director Koch remarked that she knows that the state legislature was proposing legislation that
they would look into this and try to put some restrictions on the cyber schools.
Mr. Majewski stated he has not heard anything about it recently. There have been discussions
about capping the funding that goes to charter schools. Even though there are limits on fund
balances required to be maintained by law, when the year-end audits are received of a number of
the brick and mortar charter schools (audits are not received for cyber schools), some of their
fund balances are between 25 to 33 percent of their operating budget.
Director Koch said that in the one with Midland, it was the place that built a great arts center
and did not build a high school. Their students still don't have a high school to go to.
Dr. Lewis said he received an update on the Beyer Bill yesterday. It is being reintroduced. That
puts a $5,000; $4,000, and $3,000 limit on what can come out of local school districts' budgets
depending on the number of students at the charter school.
Director Craig asked if we know if these cyber students were former students of our district or
mostly home-schooled students.
Dr. Lewis stated that we have a very good sense that a large number of these students were
formerly home schooled and in many cases came out of the private schools.
Director Craig pointed out that many of them have not attended our schools.
Dr. Lewis said that we know this and a definitive study will be done on that. We know that there
is no concurrent reduction in enrollment paralleled to the increase in enrollment in cyber
schools.
Director Dexter stated that page 43 shows a jump in insurance from $623,000 to $677,000.
She asked what has caused the jump and what kind of insurance it is.
Mr. Majewski stated these are the property/casualty insurances, errors and omission, and auto
insurances. The majority of increase would come from the two areas of property/casualty and auto
insurances. The auto insurance is the fleet insurance for transportation and has been the largest
percentage increase. As the values of district buildings are increasing, the property/casualty
rates have gone up, but that has been at a rate that has not been accelerating anywhere near the
auto rates.
Director Dexter asked about page 48 Maintenance Department - redemption of principle showing
$481,000 for last year's budget and nothing this year.
Mr. Majewski replied that 10 years ago the Bethlehem Area School District entered into an
agreement with Johnson Controls to put in more energy-efficient lighting equipment, etc. The
project cost over $6,000,000. Half was paid and half was financed over 10 years. This is now
dropping off of the budget.
Director Leeson stated she noticed some discrepancies between actual expenditures and budgeted
expenditures. The one that is most egregious is the board on page 15. The largest area, it
appears, is in other professional services. She wondered why it is being budgeted much lower when
the actual expenditures two years ago were so much higher.
Mr. Majewski said it is an excellent question. The one-word answer is "Freemansburg." In
December last year the district settled on the Freemansburg case for the mold issue. During the
2005-06 year, an incredible amount of money was being spent for legal fees because of depositions
and related court costs that no longer are being spent at those levels. Once that case was
settled in December the legal fees dropped and the district received a significant settlement.
Director Leeson stated that on page 72 under the superintendent's budget, the contingencies and
miscellaneous expenditures end up as 41 percent of that budget as basically unaccounted for money.
Throughout the year as seen in the 2005-06 actual expenditures, the money does get shifted
around. She asked if the board could have a finer budget of this, maybe in April, of where monies
are anticipated to be going.
Dr. Lewis stated that the contingencies are redistributed amongst everything from category 120
through category 630, 810, etc. He will have a breakout prepared of that $91,000 in the prior
budget year and one up-to-date to this point.
Director Leeson said she wondered if he could just project where he thinks some of these monies
are going to be next year. There are some patterns. She knows he might need a contingency, but
not necessarily 41 percent of the budget.
Dr. Lewis said he doesn't have a problem providing that historical perspective. He will have the
breakout sometime in April or before.
Director Dexter referred to page 30, Department of Instruction. The supplies were $86,000. She
asked if this is for books. The supply expense for that department is much higher than for most.
Mr. Villani replied that it is the line item where the band uniforms are taken from. Every year,
a different school is designated to get new band uniforms.
Director Dexter asked about Curriculum Enrichment on page 27, showing an increase in a line item
from $118,900 to $139,000. She asked what the curriculum enrichment department does and why an
additional $20,000 is needed.
Mr. Villani replied that the line item includes transportation runs. In some instances, some
schools needing to be transported to other sites to practice, has necessitated increasing in the
area of transportation costs.
Dr. Lewis stated that the Weller Center trips and other trips are also categorized under that
item. It is a combination of moving youngsters to fields, to required field trips, and other
activities. With that are also driver costs and fuel costs. There is movement from some schools
that are under construction.
Director Leeson, following up on the last question, asked if we are saying that this is movement
of students after school for athletic programs.
Mr. Villani replied that it is athletics, during the day, programs. It also includes the increase
in the salaries of the people that do the curriculum enrichment activities, the club advisors.
Director Leeson remarked that she is finding it harder and harder to figure out the budget.
Athletics is under curriculum.
Mr. Majewski explained those are the activity runs, any activity, not just athletics. It could
also include students staying after school for tutoring.
Director Leeson added that he is also saying for students going to fields.
Mr. Majewski said there are activity runs that will take students home at the end of the day
irrespective of what the students are there for. Although it is identified as athletics, it could
be students staying after school for tutoring, for clubs, for any reasons. The activity runs have
not increased. The overall jump in the cost of transportation is more related to the cost of fuel
and running a vehicle.
Director Koch referred to the beginning of the budget highlights on the second page. She
commented that she understands the first part of Skill 21: "The Skill 21 technology project has
been put on hold for 2007-2008." She does not understand what is meant by "...and four-year use
of existing equipment will now be extended to five."
Dr. Lewis replied that all leases for technology equipment have been on a four-year lease.
Theoretically, the district would refresh the first lease group this year. The district would get
new systems. Old systems would be returned to Apple. Instead, the district will get a fifth year
out. For one dollar per system, it is felt software can be adequately run for one more year on
those systems. Software usually drives the need to refresh hardware. A lot of districts, when
they go into a technology program, buy all new computers in year one. Then, in year three or four
they realize they are in trouble because now they must replace, as in the case of Henrico County
Public Schools, 20,000 computers. This simply will stretch out the usage one year. It is hoped
that can be done as a matter of practice, but that will remain to be seen.
Director Williams questioned the bullet on the bottom of the same page stating that no additional
technology support positions are included. She said she knows at some point there was discussion
about maybe needing some more technology support people for the teacher. She knows we must not do
certain things, but asked if that is a good thing.
Dr. Lewis replied that the obvious answer is administration would prefer to be able to add some
staff in that area because we are running more systems. As Mrs. Lutcher works on trying to fund
units with grants and other sources, the district will probably be pretty much at the same
inventory level unless that happens. Response time has been increased. More third party is being
used. As a credit to Mrs. Lutcher and her department, this has probably been the district's best
year, barring the fact that the district can't control manufacturing defects or battery defects.
It is commensurate with added systems that staff would need to be added, although Mrs. Lutcher
would argue that we could use them now. The short answer is that additional units and staff have
been put on hold.
Director Williams remarked that, from experience, she knows that if you have a bunch of laptops in
your classroom and two aren't functioning so two students are sitting there without it, and
everybody else is busy, having the help and support to do it. The more you use these things, the
better each individual is at trouble shooting, also.
Director Heske questioned "schedule adjustments and department chair modifications."
Dr. Lewis replied. The bullet reads, "Schedule adjustment and department chair modifications will
account for small student growth at the secondary level." Mr. Gross and Mr. Villani were asked to
get inside the schedules. A lot of course offerings, especially in our high schools, contain
courses that we have become accustomed to providing. One example is there are multiple sections
in sports history. Maybe multiple sections are not needed in sports history. We need to look at
those maverick courses that are enrolling fewer students than a core course might. Courses that
have been servicing 12, 14, or 15 students, in talking to his colleagues, they have established a
minimum of 15 and above for honors and AP and courses that are unique or mavericks, but they are
not offering multiple sections of that. Dr. Lewis said his argument hinges on the fact that if we
can expect an English teacher to teach 31 students in an academic level course, then we should
expect elective teachers to teach similar numbers or balance the two. If there is a class of 15
and of 31, maybe there should be a couple sections of 23 and 25. The emphasis is on getting the
core numbers down and the elective numbers up. Through collapsing of the internal schedule,
creating more teacher units to make up for some small growth in those high schools. The second
piece of that is a modification of the department chair position. Mr. Gross has done an analysis.
Department chairs serve a role. Administration is suggesting that maybe through the process of
collapsing some of that time, better training and utilization of some of our K-12 people, they can
teach five of six instead of four of six. That creates three total teachers. Again, they would
have to be in the right place.
Director Leeson, on that subject, said her only concern about that is that currently there are two
schools that have an awful lot of stress on the system right now. Philosophically, she agrees
with going to this approach. She is now sure if next year is the right year to be doing it, with
two schools under construction, two schools trying to get off corrective action. At least one
school has three or four new department heads. We have relatively new administrators at the
principal and assistant principal level. She is not sure next year is necessarily the best year
for instituting this type of change. Again, Director Leeson stated she philosophically agrees
with the change.
Dr. Lewis said he does not disagree with her perspective. If there is a revenue shift, this is
probably one of those first areas to be reinstated. This is probably not a good time. We must
wait to see what state monies come through.
Director Williams said, since there are so many ifs, so many parts of the budget that could be
changed, particularly if there are different revenues that can't be guesstimated at this point.
In a sense the whole discussion is moot. In spring, the discussion will be more realistic.
Dr. Lewis said her points are well taken. Both he and Mr. Majewski find it valuable to know the
thoughts of the board. If value is placed on department chairs or driver education or other
aspects, they will know when revisiting the budget where to begin discussion on recommending to
the board what comes back in or must come out. He agrees, this is an exercise, but not without
some value.
Director Koch asked about academic interventions on page 12. She would be willing to bet that a
great number of these interventions have to do with No Child Left Behind and required by a federal
act. The amount proposed is $100,000. She asked how much money is anticipated from the federal
government to put towards this.
Dr. Lewis said this is the point Mr. Majewski made the other evening to a parent group. This
money is geared toward those students who cannot benefit from some of the federal and state monies
simply because their schools are not high impact schools. It was found that Asa Packer, Hanover,
and those other schools also need money to run their programs. Mr. Villani has calculated, with
the help of Mrs. Cintron and others, resulting in about a 67 percent increase in what was funded
in the prior year to make up adequate funds.
Mr. Villani stated that, in addition, the Tutoring in Pennsylvania EAP funds, we do not test our
K, one, and two students, but we tutor them. Therefore, those funds can't be used to tutor the
little ones. Therefore, funds are budgeted from our funding to tutor our kindergartners, first
graders, and second graders who are in need of additional instruction in certain areas.
Mrs. Cintron stated the amount of Tutoring in Pennsylvania is about one million dollars. There is
some tutoring in the Accountability Block grant of about $80,000. In addition, there is some
tutoring in both of the Twenty-First Century Community Learning Center grants. However, this is
the last year for both of those Twenty-First Century grants.
Director Koch asked if those are state grants.
Mrs. Cintron stated Accountability and Tutoring are state grants. The Twenty-First Century are
pass-through federal grants.
Director Koch stated that she is going to Washington at the end of the month. It would be helpful
to her if she had some idea of what the district is paying for these federal programs that are
based on No Child Left Behind and what the district is getting paid to help us with those
programs; so that when she goes to see Congressman Dent she has some issues to discuss with him.
Dr. Lewis said there is no question that there has been freer mindset from government in terms of
tutoring monies, he would also say that it is not enough. Mrs. Cintron told us that this is the
last year of the Twenty-First Century funding stream. He thinks her message to Mr. Dent and
others is that we need those things restored. Overall, $1,200,000 is from external sources and
$100,000 in this budget from internal or general fund for $1,300,000. That is still not enough.
Director Koch said she understands this is also a year when the whole No Child Left Behind program
is to be re-evaluated by Congress. This is a timely item to be discussing in Washington.
Director Dexter referred to the pupil allocation per building for standard programs at the end of
the budget. Nothing is listed for RASA or Career Academy. She asked what those buildings do for
the per pupil allocation.
Mr. Majewski replied that the students are identified by the building of enrollment prior to going
to RASA or Career Academy. At the beginning of the year the number of students coming from a
building into that program is unsure, so the initial decision is made on how many students are
projected to be in any one building, appropriate the money based on that number of students. As
students leave to go to those programs, funds are reallocated accordingly. Our child accounting
records will track them by building.
Director Dexter said that if, for example, Mrs. Moran needs money for a skating event, normally
that would be paid by an elementary building principal. What must she do? Does she have money
she can access on her own?
Mr. Majewski replied that she would not have to go to the principals. She has money on her own.
Dr. Lewis stated it is like she is a charter school within the system and the money follows the
student.
Director Dexter asked if this has been communicated to the Career Academy.
Mr. Majewski stated that the Career Academy is fairly new. There have already been two changes of
administrators. There have been discussions with them concerning funding. Mr. Guerrero became
aware that his needs were being funded. Although he does not believe Mr. Guerrero initially
understood how that was happening, there was that discussion.
Director Dexter stated that Mr. Guerrero had at one point communicated to her that he had no
building allocation.
Director Dexter questioned guidance counselors and priorities in the district. She searched the
strategic plan and does not find anything in it that says expansion of the laptop initiative was
or is our district priority. Yet, that was funded last year to expand into the ninth grade. She
does see in the strategic plan that improving guidance services and guidance ratio is a priority.
She thinks it was a top-level priority. Yet, she sees nothing in this current projected budget to
increase guidance services. She would like to know how the priorities of our district have been
changed through budgetary methods without a board discussion and also if increasing guidance is
also towards the top of the list if the district receives a higher state subsidy than is planned
for in this budget.
Dr. Lewis stated that increasing guidance counselors is one of the highest priorities. To be on
the mark would require six positions, if we had an infinite pot of gold.
Mr. Washington said that it actually would be 10 positions, if we wanted to be on the mark.
Director Dexter asked if 10 counselors need to be added this year to bring it up to the strategic
plan goals.
Mr. Washington said that is correct to achieve the ratio listed in the strategic plan.
Director Dexter asked if she is correct that some were added last year.
Mr. Washington said that is correct.
Dr. Lewis said that if revenues became available, he believes we would reasonably expect to add
more than the two being recommended.
Dr. Lewis replied to Director Dexter's question concerning changing the district's strategic plan
priorities through budget without a board discussion. He stated he doesn't think it is linked
intrinsically that if it says we need ten counselors that it is automatically put in the budget.
He also wants to refer to the technology plan which is continually revised on a three-year
midpoint cycle. A strategic plan is a guide. You strive for that guide knowing it sets an
optimal target. In all his experience, he has never been able to implement 100 percent of all
those optimal targets. You try to get as close to that target as you can.
Director Koch commented that she thinks this board had always been in favor of having more
counselors. There has never been the amount of money to get that 10 people.
Dr. Lewis remarked that two or three years ago in the eleventh hour the board put two additional
counselors back in.
Director Koch said that hopefully some money will come from somewhere to enable more of that.
Director Dexter said it is true that we say we have priorities. But if we don't fund them, then
priorities are being changed by what is funded. She thought the board would be guided in the
governance of our district by the strategic plan or she thought it was to be a living document and
the priorities could be changed. But the process should then be part of the action. The board
should look at the strategic plan from time-to-time and say technology is now a greater priority
so that will be changed to number one and guidance will fall off the wayside. That was never
done. That is why she was surprised to look at the budget and see that we are still funding ninth
grade computers but not adding the guidance component. She thinks that it is more critical and
easier to link to student performance than the laptops. She does not believe there is research
that tells us there is a link to student achievement with a laptop program.
Dr. Lewis said he would suggest that the strategic plan not be changed on a monthly or even annual
basis. You do one revisit at the midpoint to examine where you are. Mr. Gross has begun work on
that. You also have unforeseen costs that redirect priorities of the district. Those are the
drivers listed in the letter of transmittal. The technology plan, currently not included with the
strategic plan, will be a part of the future strategic plan documents. Therefore, you may not see
the technology markers as clear in the strategic plan as you will in the future.
Mrs. Lutcher stated the technology plan was submitted last year. It won't be submitted again
until it is part of the revision of the strategic plan.
Dr. Lewis stated that the technology plan will be folded into the strategic plan, by state
direction.
Dr. Lewis stated we must be cautious that we have multiple plans. We don't want to assume that we
are diverting from our intentions.
Director Dexter stated that she has additional questions but will yield to Director Craig.
Director Craig, in regard to the strategic plan and all of the parts to it, what the district
determined to be important and things to work to, stated that the recommendation of adding half a
dozen or ten or four or one or three guidance counselors or whatever that strategic area
particular board members are interested in is really nothing more than when it is time to talk
budget, to say, "I, as a board member, want to add seven guidance counselors." Then, being
prepared to ask administration to do that to make changes in some other places because you're
talking about $700,000. Even though a formal discussion on changing the strategic plan hasn't
taken place, all board members should be familiar with what items are in that strategic plan. He
thinks most of the board has a pretty good feel for it. Board members can always look at the
strategic plan and bring it up. It doesn't involve an opening of the strategic plan every other
year or so. Don't hesitate to bring items up and ask to have them included in the budget if you
feel strongly about it.
Director Koch said also you realize that you must make a choice between cutting something, as
Director Craig said, or if the budget must be increased by many thousands of dollars, be prepared
to vote yes for the budget.
Director Dexter offered the point she wanted to finish making. Director Craig's point is really
what she wanted to make. When the board decided to fund an expansion of the laptop initiative,
she thinks the number was a half a million dollars per year, per grade level for the laptop. She
asked if we are still working with that as an approximate cost of the laptop initiative. She
asked if it is a little less for ninth grade because that is not a one-on-one program but rather a
cart.
Mrs. Lutcher replied that it is about a half a million.
Director Dexter stated that today she asked Dr. Lewis and Mr. Majewski how much we are talking
about for a guidance counselor. She was told about $55,000 for salary and benefits. As she sees
it, if guidance staff was brought up to just about what the strategic plan calls for, which is our
district's stated goals, and not fund the ninth grade program, which was not our district's stated
goal, the district would have compliance. That is her suggestion.
Director Heske commented that one thing must be kept in mind. This board approved last year's
budget, strategic plan or not. The board approved spending that money. The multi-year commitment
of money from various funding sources that you're talking about is not completely interchangeable.
You get some of the money for the technology program from a grant. You can't apply that to
guidance.
Director Dexter stated she understands that. But what the district got last year in the grant
money did not fully cover the laptop initiative. There was still an expenditure from the general
fund. Her point is that we did not really have a discussion. That ninth grade expansion was
rolled out at the budget time. She told Director Heske that he was the one that moved to adjourn
a meeting when that was on the list to be discussed.
Director Koch stated that this discussion is not going to get anywhere.
Director Leeson stated that Dr. Lewis is asking the directors about their priorities and said
that this is an opportunity to hear those. She is hearing a lot of comments about adding items
if additional funds are received. Director Leeson said she is suggesting, that if the district
gets additional funds, the tax burden be reduced. She understands that right now the main point
is just staying under a cap. This is not what will necessarily be projected as the tax increase.
But, if additional funds are received, she would like to see that money be applied to reducing
taxes. There have been tax increases almost every year. She thinks the district needs to start
giving the poor taxpayers a break and get down to some years where there is a zero tax increase.
She thinks this year might be a very difficult one in which to do that.
Dr. Lewis stated that he had discussions with a couple of directors who contacted Mr. Majewski and
himself to discuss this. He referred the board to the 10-year historical change in millage rate
(one of Mr. Majewski's slides). Mr. Majewski pointed out that our district has been at or just
about under three percent going out, well below the cost of living, in terms of an increase in
taxes. This is still the lowest impact district. He stated that he learned this again yesterday
while going through the budget routine with the 13 intermediate unit schools. Our district is
still unequivocally the lowest impact. Dr. Lewis said he wanted to point to one mill, .91, .991
mill. This is a preliminary budget, coming in at 1.5. Our district has never done that. That
was done to get under that index. He stated he agrees with Director Dexter and would very much
like to bring that impact down. He is a taxpayer, too. It must be a combination of things. If,
indeed, the board feels it needs to put counselors back in, that becomes a high priority. If this
board feels that it needs to bring that differential down from 1.5, then we will bring it down.
It needs to be a combination of the two to give the best product here and the best deal to the
taxpayer.
Director Williams commented that she believes this is what the board does every year since she has
been on the board, for 12 years. The board looks at it and tries to get it down. If there is
additional revenue, the board is always going to give that benefit to the taxpayers. That is
exactly what the board is trying to do. She believes it was Mr. Huertas who pointed out the other
night that that is the board's job, to do that but to also hold and balance the needs of the
students and taxpayers. It is her impression that the board is not going to do that this evening
because the board doesn't have all the information to do that.
Director Dexter said that the comment she has this time is a request for additional information
from the administration. She would like to receive a school year to date list, school by school,
of tutoring expenses showing what has been budgeted under each of the programs, and what has been
expended to date.
Director Koch asked what the purpose for that information is.
Director Dexter said she would like to review it.
Dr. Lewis stated that the update can be provided. It is something that is monitored regularly.
Mrs. Cintron's office handles that spreadsheet.
Director Amato asked Mr. Majewski what the minimum fund balance is, if the budget could have no
fund balance, or if the state requires some type of fund balance.
Mr. Majewski replied that the state requires two things concerning fund balance. (1) The district
cannot maintain a fund balance greater than eight percent. (2) The state requires the district to
provide sufficient revenue to not run a deficit so that the school district cannot run. The state
does not set any minimum.
Director Amato questioned if fund balance was at a half a million dollars and the board felt
comfortable with it, that could be done.
Mr. Majewski said there are two different things - what the state requires and what is good
business practice. The state does not require any minimum fund balance, assuming that the
district is not in deficit, only a maximum. Good business practice to meet the needs of this
organization as well as the cash flow of our cycle requires some fund balance. The board policy
on fund balance that was established years ago includes any number of factors that go into what
should be in fund balance. It could be the political environment in Harrisburg, any other type of
building needs, whether or not there is uncertainty about the district's cash flow and whether we
have sufficient funding. Right now, there is a fairly stable political environment. Our needs
have continued to be maintained. The barometer we would have established, at least initially of
four to five percent, is probably still appropriate, but we can go below that number because of
our stability. That doesn't mean that it couldn't change. He is comfortable that we could be
slightly below that.
Director Amato said the reason he asked is that he has been on the board for 10 or 12 years. When
looking at fund balances throughout the course of the budgets that have been approved, with a mill
being $2,000,000; $2,250,000, up to about $2,500,000, the district has had three or four mills
worth of fund balance. Members of this board as well as Director Leeson who just brought this up
a little while ago spoke about, if additional revenues are received, considering trying to keep
what is presently in place, maybe add a little bit, but, in turn, reduce the budget. One year,
there was almost five mills of fund balance. He thinks there are some things the board can do
with that. He won't get into that tonight. His question was if there is a minimum. Mr. Majewski
answered that there is not. If we are comfortable with certain indicators, fund balance could go
down under a million dollars which would enable maybe cutting out another mill for the taxpayers.
Director Amato stated in the budget Career Academy, the Regional Academy, L/AMP, CA/MP, etc.
remain in the budget at their current funding levels. He asked if the board could receive an idea
of what each one of those programs is actually costing the district. He wants to look at what the
district is getting for its dollars in those initiatives. When something of this nature is put in
place, we should be getting the results from those dollars being put into these programs or, if we
are not, the board should make a decision to eliminate those.
Director Amato remarked that in Mr. Majewski's PowerPoint presentation there was a slide
concerning self-insurance going back to the 2001-02 budget. He asked if that is when the district
started to be self-insured.
Mr. Majewski replied that he can say, comfortably, that the district has been self-insured since
at least the early 1980s.
Director Amato said that in 2001-02 the average net cost per employee was about $5,860. Going
into the 2006-07 budget projections, we are at $9,408 gross with a net of $8,776 with 1,989
subscribers. In 2004-05 it was about 1,872 subscribers. In 2005-06 it was also 1,989. It is
kind of a stable number. Director Amato said that the board negotiated with the teachers that
they would contribute additional funds for their health benefits. He asked if adding the gross
premium costs, then individual reimbursements and payroll deduction, is their contribution.
Mr. Majewski replied that the employee's contribution includes the teacher as well as any other
employee who contributes. Those offsets would be those types of funds. In addition to that, that
could be COBRA (those paying the full amount).
Director Amato said the reason he asked that question is that if you look at 2005-06, there were
contributions of about $1,200,000 between the two items. For 2006-07 about the same amount is
projected. He asked when the additional revenues of contributions from subscribers began. If
they began this year, it does not reflect in the individual reimbursements or payroll deductions,
unless that is not what he is looking for. He is not seeing the increase in employee
contributions reflected.
Mr. Majewski stated when he reviews the reimbursement being received, it is higher than it has
been per individual because more is being taken out. Some of the increases may be a dollar per
pay per person. When looking at the overall scope, we may be getting tens of thousands of dollars
more from the employees; however, the cost will be rising more rapidly.
Director Amato said that 2006-07 payroll deductions are projected to be about $569,000. Going
back one year, payroll deductions were $628,000. He is trying to see what was negotiated with
our subscribers.
Mr. Majewski replied that it is helping with defraying some of the costs. It is not growing as
rapidly as the cost itself. The difference from year-to-year may be those who are full pays on
COBRA. That would show increases in revenue. There may be more folks who have students who are
graduating and they are paying for a period of time. If they find jobs right away, less revenue
would be shown as they are removed from our rolls completely. Those contractual increases,
without a doubt, are providing a benefit to keeping the cost down.
Director Amato asked if there is a way to show that information.
Mr. Majewski can provide that. Actual information is captured on a fiscal-year basis. He can
provide multiple years of which categories of expenses and the revenues, whether payroll deduction
or other revenue, and the amounts.
Director Leeson told Director Amato that she wanted to refine one small thing. Concerning his
request to Mr. Majewski for some information on L/AMP, CA/MP, RASA, and Career Academy, she asked
if the number of children being serviced could be provided along with that information and a
history of some of the old alternative ed programs.
Director Amato stated that page 46 gives the breakdown on charter schools, cyber schools, and
everything else. It is costing about a million dollars plus in this upcoming budget. We started
out with charter schools at about 419 students. It is now up to 564 total students taking
advantage of charter and cyber schools. He asked if we know the breakdown of senior high, middle
school, and elementary enrollments. He is making the assumption that all are middle school
students. We don't see any effect in staffing with that reduction.
Mr. Majewski said that the report might be difficult to provide in how Director Amato is
requesting it because the charter schools will provide the students that they have enrolled and we
can verify that. But we may or may not have in our files the breakdown of their grade level. The
only high school of all the charter schools would be the performing arts. The other schools would
be, typically, in a K to eight category.
Director Heske stated he had to leave because his wife is sick. To piggyback onto Director
Amato's earlier request, Director Heske said he wanted to know if administration could quantify on
the alternative programs what was gained. For instance, we know how many students were serviced
by L/AMP. What he is looking at is how many did not have to come back. How many are back in
regular schools? He is trying to get a feel for what the benefits of the program are, not just
what it costs.
Director Koch remarked that this might be good to add to a curriculum meeting.
Mr. Villani stated that an update of the Career Academy is scheduled for March. Ms. Moran did a
report on Regional Academic Standards Academy two months ago.
Director Koch said that a lot of the directors will be looking forward to the report.
Director Craig stated that another meeting is scheduled for next Thursday, although not required.
Since the goal of these meetings is to establish whether or not the budget must be put out for a
referendum vote, if it has been established tonight that it will be 4.1 percent as a worse case
scenario, he asked if it is necessary to have next Thursday's meeting.
Dr. Lewis said that Director Dexter asked a series of questions today. He thinks she got a better
understanding, although he doesn't think they were in absolute agreement on every point. He asked
any of the board members who have additional questions to send an e-mail or send in their
questions.
Director Craig said his point was that there was nothing the board would do next Thursday that
would change whether or not the budget would be put out to referendum. That has been established
with discussion tonight. He thinks that was the intent.
Director Amato said the district was trying to get input from the public. Not one person
commented.
The board members agreed that another budget hearing would not be necessary until April.
Director Koch thanked fellow board members for a very cordial meeting tonight. They have gotten
through a preliminary budget hearing without any sniping at each other. As the person running the
meeting, she definitely appreciates it.
Mr. Majewski announced the dates of future budget hearings:
April 25
May 7
June 25 (final vote)
ADJOURNMENT
Directors Craig and Williams moved to adjourn the meeting which carried by voice vote. The
meeting adjourned at 8:17 p.m.
Attest,
Stanley J. Majewski, Jr.
Board Secretary
:mg