Budget Hearing - June 11, 2007
Minutes
BETHLEHEM AREA SCHOOL DISTRICT
BOARD OF SCHOOL DIRECTORS
FINANCE COMMITTEE MEETING AND SPRING BUDGET HEARING #3
JUNE 11, 2007
FINANCE COMMITTEE MEETING AND SPRING BUDGET HEARING #3
The third spring 2007-2008 budget hearing of the Board of School Directors of the Bethlehem Area
School District was held on Monday, June 11, 2007, beginning at 7:18 p.m., in Room 406, Lab Center
at Liberty High School, 1115 Linden Street, Bethlehem, Pennsylvania.
MEMBERS PRESENT
Members present: Directors Amato, Cann, Craig, Dexter, Haytmanek, Heske, Leeson, Rowe, and Koch -
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.
Chairperson Koch chaired the meeting.
COURTESY OF THE FLOOR TO VISITORS
Chairperson Koch offered courtesy of the floor to visitors. 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.
BERKHEIMER PER CAPITA TAX COLLECTION
Mr. Majewski stated that on June 25 at the regular board meeting, there will be a resolution
authorizing Berkheimer to collect per capita tax as well as the real estate tax. When he created
the resolution that the board approved earlier this year, it indicated that they will be
collecting the real estate tax. The intention, at that time, was to identify both real estate and
per capita. It is something he apologizes for and it should have been included with the agenda
item two months ago, however, he will correct that issue with the June agenda.
CONSTRUCTION WASTE DIVERSION
Mr. Majewski requested Mr. Gilliland and Mr. Fazil to address items two through six, which would
be the Construction Waste Diversion and Freedom High School PlanCon A.
Mr. Fazil referred to the Construction Waste Diversion for the New Broughal Middle School and is
part of the LEED certification that is being pursued stating that this actually a prerequisite
which is basically the diversion of waste from the landfill. From the new construction processes,
waste is diverted from the landfill. Initially Raritan Valley Disposal was submitted for the
process but after discussion with Mr. Majewski, he felt it was more appropriate to actually
solicit for public bid which was then pursued. All seven waste management firms within the local
area that usually handle waste from different sites were notified. Unfortunately only one firm
was able to submit a bid that pursued the LEED certification process. The firm has a tremendous
amount of experience dealing with the Philadelphia and Harrisburg regions. None of the other
local firms really addressed the LEED certification requirements so unfortunately only one bid was
received. The good news is the cost estimate per unit for waste diversion is below the overall
approved Broughal budget. Again, the firm that bid is most likely the most qualified to perform
the task. If this is awarded, the firm will be managing the waste from the new construction
process for Broughal.
Chairperson Koch asked if the waste includes the ground that is being removed. It is her
understanding that the excavated ground will be going to BethWorks.
Mr. Fazil stated that the contractor is required to address it, but LEED doesn't address it, it
will involve leftover masonry block, steel studs, insulation, etc.
Dr. Lewis referred to the second page for a listing of rejected items.
Chairperson Koch asked if these items would not be considered clean landfill.
Mr. Fazil responded that these items would be taken to recycling centers for the various
materials. For example: Drywall would be taken to a facility where drywall is recycled and it
may be reused in ceiling tiles or other products. Instead of metal going to the landfill and
mixed with other garbage, it is segregated and diverted from the landfill.
Director Leeson asked what would be the difference in costs if the district had to dispose of
these materials in an additional manner.
Mr. Fazil said it was an excellent question because analysis was done based on estimates. There
is an approximate $20,000 actual savings if everything was just taken to the landfill and paying
landfill fees versus following the required process. If one looks at the comparisons, the
district will receive $130 per ton credit for disposal of steel.
Director Leeson asked about the "whole" price to process and does it include disposal costs.
Mr. Fazil responded that the whole price for them is to come pick up the container and take it
away. If there were 5 tons of steel in there, a credit of $650 will be received for that haul.
Part of the reason he thinks that few
disposal companies get involved is utilizing spreadsheets and because it is a nuisance process,
most haulers do not having the resources to implement the program.
Chairperson Koch asked if we get any points for the green space.
Mr. Fazil responded that it is a pre-requisite actually and we don't actually get any points. If
the district keeps track and achieves a certain percentage then extra points will be earned. This
is a mandatory requirement.
FREEDOM HIGH SCHOOL CONSTRUCTION PROJECT
Mr. Gilliland proceeded with Item A-Freedom High School Addition Construction Project - PlanCon
Part I. On May 21st the approval was given to submit PlanCon I. This just verifies that PlanCon
I paperwork was submitted to the state and it was approved by them. Approval of the final
documents by the board is now requested.
Chairperson Koch asked if there were any questions on that. No questions were asked.
NEW BROUGHAL MIDDLE SCHOOL
The next item is the New Broughal Middle School - PlanCon Part F. Again, this was relative to the
submission of the appropriate documents to the state and it is now submitted to the board for
approval.
LIBERTY HIGH SCHOOL ADDITIONS/RENOVATIONS
Mr. Gilliland stated he had two items to bring attention to, commenting that when construction
progresses, certain existing problems arise. Two concerns were found that are in need of
attention. First, on the second floor of the Memorial Gym and it was found that there is a block
wall where the blocks used were only 4 inches thick. There is concern about the stability of that
wall and if it is possibly bumped by someone, it could come down.
Dr. Lewis commented that the wall was not fastened at the top and he thought it to be of
importance for the board to be aware.
Mr. Fazil described the area as above the old athletic office and is the full length where there
are glued on mats.
Director Craig asked if the walls had closet areas on the other side.
Mr. Fazil stated that they aren't supporting anything but in new construction that area is
scheduled to become music practice rooms. There is going to be a hallway that opens for student
activity going right through the second floor. As Mr. Gilliland said, when the thick rubber mats
were attempted to be removed from the wall, they were basically part of the wall. The
recommendation is to take that wall down and reconstruct that wall.
Chairperson Koch asked it there is anyway to determine if these are the same people that did the
Charlie Klein addition.
Director Craig responded no, that was done in 1955 or 1956 when the gym was built.
Chairperson Koch said that she was thinking about when the exterior walls were coming loose.
Mr. Fazil stated they fixed that a couple of years ago and it was different people and issues.
Mr. Gilliland continued with the second item of concern regarding the Liberty project. He stated
they were trying to finish up the front of the building with new sidewalks out on the street and
the last thing was to pave the bus depot. There are a number of areas of deterioration that had
been brought to their attention. As the blacktop ages, moisture gets down into it and over the
winter the moisture expands and basically breaks up the blacktop. There are a number of areas out
there where the blacktop is broken up. The plan is to resurface that with 2 inches of blacktop.
The only problem is that if the broken up areas are not corrected, the possibility exists for it
to just come up and break up the final coat that is to be placed over it. To do it the correct
way, the sections need to be dug out, put a wear course down and then blacktop over it and we know
it will be much better than just going over it the way it is. It certainly is a considerable
expenditure, however, the area is going to be getting some very heavy traffic with buses using it
every day. This is what is being proposed.
Chairperson Koch asked if Mr. Gilliland thinks what he is recommending will be strong enough, to
endure the continued heavy use.
Mr. Gilliland stated that if the sections get cut out and are patched appropriately, it probably
isn't necessary to rip out every bit of macadam and start from scratch. He thinks if the bad
sections are removed, the wear course and final course placed, it will be the way to go.
Chairperson Koch asked if there are any questions from the board.
Director Leeson said that it sounds reasonable to do this but she was curious as to why this
wasn't placed into the specifications to begin with.
Mr. Fazil stated that when it was bid three years ago, the bus depot was surveyed and it was
determined that the district owned the entire 3 inches of the bus loop and to answer Mrs. Koch's
question if the whole thing was being replaced, this number would be at least 10 times greater if
not more. A judgment was made at the time so the perimeter could be milled against the curb and
overlay two inches of asphalt over the whole thing. Evaluating it today, after having gone
through three more winters and considering conditions, it would be prudent to cut those areas out
and patch them. The whole thing could have been ripped out and replaced but he didn't think it
was prudent at that time to take those areas because it wasn't be justifiable because it was three
years away before the work was going to be done. He said that one of the things that they have
been cautious about concerning the project is "not carte blanche total inclusion of just doing
everything." The cost expenditures are minimized by only doing absolutely necessary work at the
time. It is his opinion that they have been prudent in that regard. The alternatives could be to
do a lot more and then not have change orders but pay a lot more up front. It is tough when doing
an existing renovation; judgment calls are being made.
Mr. Hanna referred to the overlay in the Klein Center parking lot, it was thought that the same
thing could be done in the bus loop but after taking a look at it by cutting the blacktop and
putting the new walkway in the plaza, it was noted that the bus loop was of different construction
than the Klein Center and just overlaying it is not going to take the bus traffic.
Chairperson Koch asked if there were any questions from the board.
BUDGET HEARING
Chairperson Koch asked if there are any items from the administration to present to the board
members before questioning.
Dr. Lewis stated the budget will stay as presented which is open for discussion by the board.
Chairperson Koch asked if there are any board members who need further information from
administration.
Director Craig said that he asked Dr. Lewis about the Rifle Program. He has been approached by a
number of people with the desire to save the program if possible. His advice to them was to
discuss it with the athletic directors which is the proper channel. He received a telephone call
today before the meeting informing him that both rifle coaches spoke with their athletic directors
and apparently they have come up with some solutions to practice sites and contest locations. He
asked Mr. Villani if he was aware of the aforementioned discussion.
Mr. Villani stated the cost to reinstate the two teams is approximately $22,000 - $23,000. Because
the space that they had previously used for practice is now being used for something else, a
secure practice location must be obtained and transportation provided. The athletic directors are
currently looking at other options for practice locations. He commented that there are only two
other teams in the Lehigh Valley; Salisbury and Emmaus, that have competitive rifle squads that
also compete in the Northeast Pennsylvania group of schools.
Director Craig said his understanding is that the squad has communicated with those programs and
also there is apparently a rifle range at Saucon Valley and both he and the athletic directors
were told that they received permission to use their facility. He said this is a recent
development which came to his attention today. He asked the coaches if their athletic directors
spoke with Mr. Villiani and they told him that they would be touching base and that both athletic
directors were aware of the developments. He admires that they are coaches who have kids involved
and are doing everything they can to save their program. Whether it is still feasible is up to
the board and administration. Dr. Lewis stated to Mr. Villiani that he had asked him to have a
discussion with the athletic directors and he reported back that they were opposing the
reinsertion at that time. He asked if they touched base with him today.
Mr. Villiani replied that barring a practice location, they were making some phone calls to
Salisbury and Southern Lehigh that have what used to be a rifle range. Whether or not they would
be able to use the location in exchange for pool time for competitive swimming practice was the
last he heard regarding the discussion.
Director Craig stated that Southern Lehigh, Saucon Valley and Salisbury were the three names he
heard. He said these discussions were apparently held in the last day or two. He said he was
approached by the coaches on both graduation nights and gave them the same information to speak
with their athletic directors and Mr. Villiani. He received a telephone call today and attempted
to contact Mr. Senneca and Mr. Harris but could not reach them.
Chairperson Koch asked if information can be obtained in time for the vote at the business
meeting.
President Haytmanek asked Mr. Villani how many students are involved at both schools.
Mr. Villani said there are approximately 25 students on each squad for a total of 50 students.
President Haytmanek stated that he was also approached at both graduations and he was supportive.
He has always been a proponent of the rifle team and believes it provides both a team and letter
sport for students who probably are unable to compete in other sports. He thinks it is a good
thing and supports it if it can be worked out. The two coaches seem to have communication with
the other schools to work out a rifle range to practice.
Chairperson Koch asked if there are possible legal issues involved when students are practicing
with rifles on another school's property.
Dr. Lewis responded that there is always potentiality but the district carries certain coverage
and he is sure that similar districts carry those coverages. He asked Mr. Majewski for his
opinion.
Mr. Majewski stated that insurance coverage with both school district carriers would need to be
coordinated because he is certain they would need to agree upon some level of responsibility with
regard to the students. It is still their property so their insurance carrier would be primary.
Chairperson Koch asked if some closure on the issue could be obtained at a business meeting before
a final vote.
Mr. Majewski reiterated the insurance issue.
Chairperson Koch replied she is focusing on the whole issue.
Dr. Lewis told her that this is the business meeting and there is no future meeting prior to final
vote.
Chairperson Koch responded that if they don't have the information tonight, it should be at least
available by that evening. She questioned if the board has to decide on a vote considering all
information isn't available.
Dr. Lewis stated additional information can be enclosed in the mailing and the board can decide as
much as "the eleventh hour" to reinsert it. He doesn't envision it as having a revenue impact.
Director Dexter made comment that there is strong evidence to support that participating in sports
connects kids with school. She said they stay in school and the academic achievement of students
who do participate in sports and other extracurricular activities is higher. She believes this
was addressed at a prior budget hearing and thought the board agreed to reinstate the rifle team
and asked for affirmation.
Chairperson Koch said that it was discussed but at that point we didn't have a place for them to
practice.
Dr. Lewis and Director Craig both said that driver's education was the subject matter at that
hearing.
Director Dexter said that she does support adding the rifle team back into the budget and is
certain a practice location can be obtained for the students.
Dr. Lewis suggested to Director Koch, if she wanted to take a general consensus, administration
would make the adjustment.
Chairperson Koch asked how the consensus should be worded because she has heard a few different
opinions.
Dr. Lewis stated a consensus could be asked for which is contingent upon the securing of a place
to practice and compete.
Chairperson Koch replied that it sounded fair to her and asked the board for comment.
Director Craig said he agreed with "contingent to finding a place" but wanted to make it clear
that this have been done before. He reflected on a similar situation when he was athletic
director in the early 90's and the rifle range in the district was closed during renovations. He
said both rifle teams were shipped to another school everyday to practice and also held their
matches there for an entire year. He mentioned to Mr. Majewski that the liability insurance was
handled appropriately. He reiterated that to add it as a contingency with regard to securing a
location would be a good way to do it and it could be added in for June 25th.
Director Heske commented that there is a state law stating that it is illegal to have guns on
school property. There is a code of conduct in effect that expels students who bring guns onto
school property. He thought it would be fine if people want to participate in a marksmanship
program but he doesn't think a rifle team here is sending a message that is consistent with the
state's law or with the district's code of conduct. He thought it should be a strictly private
activity. The other big part of the problem is the majority of other districts have given up the
sport leaving little competition. There isn't a long term fix and he thought it was "time to bite
the bullet" and say "siyanara."
Director Craig responded that Director Heske had a well made point with regard to the code of
conduct. He also reminded everyone that it is stated in the code about not being allowed to hit
people but the district sponsors football which involves hitting people. Under controlled
circumstances it should be o.k. He still thought consideration should be made in the form of a
motion for the board to consider it contingent upon the ability to obtain a site and it should be
voted upon on June 25th when the budget is discussed.
Chairperson Koch asked if there was a second.
Dr. Lewis said a motion cannot be called for but Director Koch as chairperson can call for a
consensus only.
Chairperson Koch polled the school board members and asked who were in agreement with Director
Craig's statement. She observed that the majority of members would agree.
Dr. Lewis stated that it would be reinserted for the board.
Director Leeson recalled an earlier budget hearing where Director Heske requested a 25 percent
reduction in conference spending and she supported it as well and she has not seen that reflection
in the budget since then or a proposal to that effect.
Dr. Lewis responded that he didn't want to speak for Mr. Majewski but his recollection is the same
as his in that it was raised by Mr. Heske but not moved by consensus. It was in part of the
discussion tied to the rifle program.
Director Leeson stated she supported Director Heske's position and she didn't think the board had
support from other board members.
Director Heske noted that Director Leeson had pointed out several areas where cuts could be made
regarding conferences and thought it appropriate that she review and compile a list and it can be
considered an amendment to the budget. He said he was fully supportive of considering that and to
identify what she wants cut and the board consider it an item on the budget.
Director Leeson replied that she and Director Heske will go back and forth in support of each
other but she thought her conflict of support was what administration would cut. She thought that
25 percent is very reasonable and hoped that the board could have had something to look at.
Dr. Lewis stated the board was provided with the total general fund conference budget of $141,000.
He said the vast majority of conferences are funded by non-general fund dollars and he believed
this was identified by Mr. Majewski and Mr. Villani. He asked the board to refer to the May 4th
memorandum (response to questions raised to public budget). On the cover of the memorandum he
reviewed his statement to please find the attached information gathered by cabinet regarding the
questions raised at the public budget hearing on April 23. If you have any questions please do
not hesitate to call me. He did not hear any inquiries relative to the memorandum.
Director Leeson said that she recalled reviewing it but was surprised at the $141,000 number,
having looked at DECA expenses of $37,000.
Dr. Lewis responded it was approximately $30,000 but much of that was split between general fund
and fundraising.
Mr. Majewski pointed out in the conference budget where it says building allocation; that is part
of the per student money. The budget could not be reduced by that amount. The principals would
be asked to reallocate their funds for other purposes. It would not reduce the overall budget by
eliminating those funds.
Mr. Villiani added that because there is so little money in the budget for the size of staff,
teachers and administrators, over the years building principals have allocated funds from their
building based budgets to support teachers who they wish to send to conferences. If they are not
a "Title" school then they aren't entitled to some of the grant funds, they can't avail themselves
of those funds to send teachers. Over the years, building principals have been allowed to
allocate money to send teachers to one day seminars and conferences. Many overnight, statewide
conferences seen on monthly board meetings are paid out of the grant funds received from various
state and federal programs.
Director Leeson questioned why DECA is not addressed on the list of conference budgets.
Mr. Villani replied that under the $60,000 which is allocated for student activities, which is a
pot of money used for DECA, FBLA, various competitions, and PNEA conferences. The funding comes
out of the $60,000 pot with the understanding that a lot of fundraising occurs in addition to that
money to support those conferences which students attend. They are given a per pupil
stipend/expenditure so it's an allocation.
Director Amato commented that he heard Director Leeson's concerns regarding conferences and the
request to reduce it by 25 or 30 percent. He said it can't be done and he agreed with Director
Heske. Choose a specific item to cut. If DECA is done which is $25,000-$30,000 and then pick
another one, Mrs. Leeson, and that's another $25,000, then just tell the students they can't go to
DECA, or to state competition and this is the money that's left. He asked how the money is
allocated when cutting it by 25 or 30 percent. He is in agreement with Director Heske by
identifying programs or conferences to be cut.
Director Heske responded that it doesn't have to be totally eliminated but maybe they could raise
some more funds on their own.
Director Amato added to identify that "there is no DECA, but that is not saying that we wouldn't
send students to DECA--then they would have to raise 100 percent of their money--not 70 percent."
Director Leeson informed Director Heske that it was his proposal to recommend the 25 percent cut.
She inquired what recommendations he had to make a cut.
Director Heske said that his intent was to recommend a guideline of 25 percent. He didn't think
every single conference could be cut by 25 percent, but specific item reductions by 25 percent.
Director Leeson stated she agreed with Director Heske but she would have liked to see
administration do that against their recommendations.
Chairperson Koch asked if an absolute decision had to be made tonight in order to vote on the
budget at the business meeting.
Dr. Lewis responded that any item could be changed, pulled, added or deleted in the budget right
up to the vote - "right up to the eleventh hour." It is the board's prerogative.
Chairperson Koch asked how many board members thought that administration should be requested to
cut "any" percent of the conference attendance budget. She asked if they were in favor of cutting
the conferences and asking administration to compile a specific list of items.
Director Leeson reiterated that it was requested a couple of months ago.
Director Amato inquired what was being voted on.
Chairperson Koch stated she was attempting to find out if the rest of the board concurs that there
is a need to look into conference expenditures and is a specific percentage cut necessary. If all
members agree, then administration will be asked for further information before the vote.
Director Amato asked what was spent on conferences at present.
Dr. Lewis responded - $141,756.
Director Heske said that he doesn't want administration to do it, and continued that
administration recommended approval of a conference request. He said that if board members want
to make a cut, then identify where the cuts should be made.
Chairperson Koch responded that she doesn't think it possible because of time constraints because
by the next business meeting the budget will be voted on.
Director Heske recommended that someone present a motion to "recommend reducing DECA by X and
another one by Y, etc." There is nothing to prevent that.
Chairperson Koch asked Director Leeson if she was prepared to do that.
Director Leeson responded, "not at this point."
Director Amato added that this is a $180,000,000 budget and the discussion is about $146,000. Why
are we laboring continually over the specifics of this budget? Pick a number that should be cut,
50 percent, then $70,000 has to come out of those conferences and those kids have to raise the
remainder of the money. The only way the budget will be reduced is to eliminate the "meat and
potatoes" - the programs. Driver Education and the Rifle Team were eliminated and tonight both
were voted back in.
Chairperson Koch responded that her intention was an attempt to avoid a lengthy discussion and to
find out how the other board members feel about the matter. She initiated a poll asking the board
if administration should be cutting the budget by a certain percentage with regard to conferences.
Comments during the polling were:
- Director Rowe asked if this is the final budget hearing before the vote. She asked that all
members of the public present this evening who were in favor of the board cutting conference
spending to please stand up and identify themselves. Director Rowe stated that as a member of the
public, she would like to hear where the cuts could come from. She is in favor of keeping the
budget as it stands and reviewing conferences as they come up at monthly meetings and reviewing
them on a case by case basis. If the board at that time decides to eliminate or cut a conference
attendance, then they could do so at that time.
- Director Cann stated that it seems to make sense to examine any point in a budget to make sure
that it is the most efficient and most economical that it could be. She said that if it is
difficult at this point to cut it by a certain percentage across the board, she agreed with
Director Rowe to address it on a case by case basis, if that is a possibility as long as it is
actually done.
- Chairperson Koch addressed Director Heske stating that the board already knows how he feels and
he agreed.
- Director Amato stated that the board knows how he feels and to move along.
- President Haytmanek commented that this is such a small number, and cutting 25 percent out of
$141,000 when there is a $181,000,000 budget is silly. He thought there has been too much time
spent on the subject. The conferences are one of the most valuable high school experiences for
the students. These are students who have never stayed at a hotel or have been to a big city.
These are very valuable experiences for students and he suggested that they be allowed to attend
the conferences.
- Director Craig stated there may be an assumption these conferences are only for the students
and he thinks there are a lot of other conferences where the district spends money. Staff, school
board members, administrators, and teachers are sent to many places throughout the course of the
year. He thinks there is nothing wrong with taking a look at that area but he is not in favor of
cutting back conferences for the students. He sees no problem with looking at some of the monies
used to send adults because he thinks in some cases some adults get to go to multiple conferences.
He suggests taking it on a one by one basis but he thinks it would be more appropriate to look at
the adult spending than the student spending. He agrees with Directors Rowe, Cann, Heske and
Amato that we should not be asking the administration to break it down.
- Director Dexter remarked that she thinks it is time for the board to examine not only
conference spending but other areas of budget spending where cuts can be made. She realizes that
it is only $141,000 on the list that comes out of the general fund but far more is spent out of
tax dollars on conferences and she doesn't think that all of it is justified, valuable or
necessary. She realizes that federal or state tax dollars is spent on some but nevertheless it is
tax dollars and some funds could be spent on programming and not conferences that would enhance
educational achievement in the district. When reviewing the list of conference spending, in her
view, not all of the approved conferences appear on the list including some conferences that have
not been indicated as grant conferences. She can't believe that this is all the district is
spending. It was her impression and understanding when the board agreed to Director Heske's
request at a prior meeting that administration would review their budget and prioritize where they
would like to see that 25 percent of the cuts. She thought the board had reached a consensus on
the board to consider such a list. As a board member and also as a member of the audience in
prior years, she recalled when the board would make the request of "x" number of dollars or "x"
percentage in cuts. Administration was asked, "Where would those cuts come from if you, Dr. Lewis
or your administration were making those cuts?" She remarked about the board conference in San
Francisco this year and knew that 25 percent of that conference budget could have been saved. She
said the board could have stayed at a lesser expensive hotel, close enough to walk or take the
shuttle to the conference location and right there is a 25 percent savings. That is the kind of
economizing she thinks the district needs to do to respect the taxpayers.
Dr. Lewis stated that the reason Director Dexter saw those interactions in prior budget years was
because administration came in with a proposal in some instances of three or four mills and the
board requested options for reduction. This year, a conscious effort was made to target a mill
and that would be the minimal increase that would be tolerated at cabinet level. They were able
to see more favorable signals from the state and tax collection was improved. He said this is the
fifth budget of one mill or less in the last five years and we did that intentionally because
there is not a lot here to trim. If this board gives us direction to trim, we would go back and
go through the procedure one more time but he needs to tell them that this is pretty lean. What
is being spent on both student and professional conferences (and you can ask any folks who have
been in other districts seated here), this is seven hundredths of a percent, which is minuscule.
He doesn't mean to diminish $140,000 but to become so isolated in your purview that you don't send
people out to learn. He thought that Director Dexter would agree that there were many good
sessions on that trip and that they all learned a lot. When a cabinet member or principal goes to
a conference they gain knowledge and to be cognizant of that. He stated that administration came
back with a trimmed budget after the state kept changing the game, so to speak, and the timelines.
It permitted us to get back into the former timeline cycle with agreement not to go over the
index. This business division did a better job because there was more time. Director Leeson
stated to Dr. Lewis that she thinks this is the first that he has communicated with the board
stating he felt the budget was trimmed and that the board was not going to have any basic input
with regard to trimming the budget.
Dr. Lewis replied that he did not say that and requested that she not misquote him.
Director Leeson continued that if this process was different than in previous years, she thought
it should be communicated. She thought that the board had asked for a 25 percent cut. She found
her papers and on the conference budgets she noted that the $141,000 does not include the
substitute costs. It showed $20,000 for school board conferences and that does not cover them.
There are superintendent costs of $1,456 and the budget is for $66,000 next year so these numbers
are not jiving, reviewing the figure of $66,500 for conferences and travel on the superintendent's
budget.
Dr. Lewis responded that she is misquoting the numbers and needs to clarify.
Chairperson Koch commented that she had been at every one of the meetings and had never heard the
board ask for a 25 percent cut in conferences.
Director Leeson stated that Director Heske asked for that.
Chairperson Koch responded that it was one person on the board, Director Heske.
Director Leeson said that it was responded to by others. She stated that although it is a one
mill increased budget, about $4,500,000 is being taken out of what could be called savings
accounts. Those savings accounts are beginning to get very low. If one takes $4,500,000 and try
to put it back into next year's budget, where the cap will be the same with Act I, there will be
at least a 2.2 mil increase for $4,500,000. She asked Mr. Majewski for verification.
Mr. Majewski responded that $4,500,000 would be 1.69 mills.
Dr. Lewis responded that it equates to 1.69 mills, however, typically they have gone to fund
balance because they have been able to create fund balance. By closing the expenditure cycle down
early so that people in building positions in other divisions have to go through Mr. Majewski or
himself for any purchase no matter how minute. Mr. Majewski did a marvelous job with recapturing
revenue on several other fronts. Looking at a five year history, there has been consistency in
maintaining and replenishing a sound fund balance along with consistency in utilizing that amount
to help balance a budget. He doesn't want to say that the constraints and the declining support
of the state are going to help in the future. It is his hope this governor gets his way on June
30th and that our subsidies are true to what they are projecting. Based on the district's
history, he feels we are fiscally sound and doesn't see us putting ourselves behind the "8 ball"
with the 1 mill increase.
Director Leeson asked if our expenditures were closed in January of this year.
Dr. Lewis responded that he believes they were closed around March.
Mr. Majewski stated that purchase orders were still coming in and being reviewed. Technically we
didn't close but they were scrutinized and some were rejected starting in February.
Mr. Majewski commented that after looking at the last three years, the fund balance has been
reduced by approximately $1,000,000 last year and $2,000,000 the year before. Reductions have
been seen and this year he is projecting that we may see a reduction because of spending in excess
of revenue generated. We had a horrible year relative to health benefits and the charter school
expenditures were significantly higher than budgeted. They will potentially be using
approximately $3,000,000 for that fund balance this year. Wherever we have the ability to find a
"break even" point, we have done so. The last three years have been somewhat of an anomaly in
that the fund balance was needed to balance the budget. Approximately $3,000,000 was used from
the fund balance over from the fiscal year end 2005 and 2006 budgets and at least $3,000,000 more
will be used for the fiscal year end 2007 budget. Health costs this year are probably going to be
approximately $1,200,000 over budget.
Chairperson Koch reiterated that she was attempting to obtain a consensus with regard to the
conference issue. She would like to point out, as Directors Rowe and Cann mentioned, just because
an item is existing, it doesn't mean the board has to pass the budget. Each item in the budget
can be individually analyzed.
Director Leeson asked Mr. Majewski if he anticipates finding additional revenue to balance the
budget for next year.
Mr. Majewski stated that in general it is very difficult to know even half way through the school
year. One looks for opportunities but he doesn't see those same opportunities at present or next
year but he does see that the potential is there for the next two or three years. Some
developments occur throughout the year and we attempt to take advantage of them. The positive
isn't necessarily just revenues but abilities to be able to make reductions in expenditures,
however to look at next year's budget and think it is going to much different than it is right
now, it would be very grandiose for him to say that he knows exactly where it is going to come
next year and he does not. He believes a steady growth in assessments will be seen as it has been
seen in the past. This past year there was an extraordinary boom because Northampton County had
caught up with their backlog but that will not continue. It was appreciated this year. He thinks
we are resuming a more normal growth pattern as seen in the past and is approximately two percent
per year.
Director Leeson asked if there are any contractual expenses or additional debt service anticipated
for the following year.
Mr. Majewski replied that our debt service will rise probably another $2,000,000-$2.500,000 to
$19,000,000 per year with the 2008-2009 budget because that was the full phase in of the
additional $40,000,000 that we will be settling on in September. Our debt service will go up
almost another mil.
Director Leeson asked if he was anticipating approximately two percent additional revenue in
assessed values.
Mr. Majewski repeated that it is two percent in the increased assessed values and that by itself
since last year generates between $1,500,000 to $2,000,000.
Director Leeson inquired about the "picture" for next year to cover the $4,500,000. She reminded
the board about the Act I ceiling and to consider there are debt service and contractual agreement
increases along with health care increases. She questioned where the money is coming from for the
next budget.
Mr. Majewski responded that the focus has been on the 2007-2008 budget. To start to construct the
2008-2009 budget and attempt to get the type of picture that you are looking at would not be clear
enough right now. He stated that until he puts in multiple weeks of work to develop that budget he
really won't know and prefers not to speculate. What he will know is that he can expect to see
continued growth of approximately two percent in the assessed values. The participation of the
state in our budget has been fairly stable, adding approximately $500,000 to $600,000 per year in
subsidies. They have continued to take a look at keeping at 50 percent subsidy for retirement and
social security. He doesn't expect that to change but he does see a change in debt service which
will be an additional increase and will challenge the budget. Everything else we have planned
will continue to move as they have. Charter schools have been difficult to keep up. Based upon
where we are right now, costs may be more predictable because they are starting to get to the
point where they don't have any more seats. Unless they get additional facilities or open up
other grade levels, we will get to a more normal increase. He is more comfortable with our
ability to be able to maintain an inflationary increase with the charter schools.
Mr. Majewski stated that he is uncertain about the cost of energy. He wished he knew where energy
was and just take it from one year to the next. What we are looking at is a picture that has a
number of negatives but we look for opportunities for those positive revenues. He doesn't know
where they are right now but we "mine" for them. No doubt, the 2008-2009 year appears more
challenging but he can't produce a scale of that yet because the time has not been available to
develop it yet. It will very likely be the most challenging budget based on what he has seen. He
foresees a future positive impact with regard to commercial development but they are not here at
the moment. He knows that until they hit our books and make a bigger impact, they will find a way
to move forward and try to balance the budget, even being more creative than before.
Director Leeson reiterated her point that the board should look at some of the cuts as they move
on.
Director Craig addressed Dr. Lewis regarding the Career Academy situation. He asked if some
changes are made to the middle school program regarding student population, by possibly
incorporating the Intermediate Unit, would it make an impact on this budget with regard to
teaching positions, etc.?
Dr. Lewis responded that he met with Mr. Gross, Mr. Villani and Mrs. Robledo today to retool that
program and they will be bringing those recommendations to the board. He added that it will be
budget neutral. He said that the difficult middle school children are not the entire population
and the cost to move some of them to a more intensive program at the I.U. is almost "nickel for
nickel" offsets with the reduction.
Director Craig stated that he had concern after hearing the proposal from Mrs. Robledo regarding
Career Academy approximately one month ago. It was obvious to him that their biggest problem was
that many of the students should not have been placed within the middle school program. His
concern after speaking with a lot of people was the possibility of taking part of that program and
creating a more intensive program away from Career Academy. He brought his concern to Dr. Lewis
and that resulted in the meeting.
Dr. Lewis said that it was a point of contention from day one on the middle school level. The
concern about possible inappropriate student placement and in some cases the students may have
been at pre-evaluation stage and should have been evaluated at the home school which was not
occurring. Mr. Majewski looked at the program today.
Chairperson Koch questioned Mr. Majewski regarding the charter schools and that he doesn't expect
them to increase much and asked if cyber schools are considered charter schools as well.
Mr. Majewski responded affirmatively.
Chairperson Koch continued that the cyber schools don't have a problem with seating and they are
growing very rapidly so she is questioning if there may be a concern.
Mr. Majewski replied that for a district this size, we have approximately 80 students enrolled in
cyber schools. A few years ago there were approximately 20 students so they have grown but still
are a small fraction of all of our charter schools. As they are adding ten to fifteen per year,
it has been dwarfed by the Lehigh Valley Academy which has been adding far more.
Chairperson Koch asked if the district pays a specific set amount for the cyber school students.
She said she read an article written by Paul Carpenter where he stated some cyber school students
were getting $14,000 per student.
Mr. Majewski said that could be a Lower Merion resident. There is a formula used to calculate
regular education as well as special education for every charter school student. The amount is
the same for every regular education student going to a cyber and/or brick and mortar charter
school and is approximately $7,500. For a special education student, whether it be cyber school
or charter school, the amount is the same which is in excess of $13,000 per student. It is
possible for a Bethlehem Area School District cyber school student who is identified as a special
education student to receive close to $14,000. Mr. Agretto's department ensures they are in
compliance with the requirements as has been done previously with other charter schools.
Chairperson Koch questioned if the majority of them would be $7,500 and not $14,000.
Mr. Majewski said that with regard to cyber schools, almost of all of it, if not all of it.
Dr. Lewis stated that Representative Byers' bill is supposedly going to address the issue.
Chairperson Koch inquired about PSERS.
Mr. Majewski stated the projected employer contribution for PSERS is to remain fairly consistent
between now and 2013 when current legislation lapses. The rate will be calculated based upon
their actuarial calculations and it may go from approximately 7 percent to a 20 percent employer
contribution. Chairperson Koch asked if there is reason to believe that the state legislation may
attempt to do something to assist the system.
Mr. Majewski added that in the past, the employer contribution figure of 20 percent has been seen
before. It does come around and depending on the environment, PSERS contributions have ranged
anywhere from just under 2 percent to 20 percent. He thinks it unlikely that they will allow that
kind of spike to occur in one year. Unless something is done to change the retirement formula, it
may someday again approach that lofty amount. He hopes the folks in Harrisburg will develop a
more rational way of funding and providing benefits when they are taking a look at the retirement
system. He doesn't think they will allow a spike to occur in one year considering it would be
devastating to fund almost 2.5 times the amount in one year.
Chairperson Koch questioned what is needed at this time.
Dr. Lewis responded that the rifle item is reinserted contingent upon location and if there is any
recalculation, Mr. Majewski will do that but they don't anticipate anything.
Director Leeson wanted to say thank you for the break down on the superintendent's budget. She
had a question about "other professional services" and she saw some initials. She inquired if
Janet Belletti was working in our schools and if so, in what capacity.
Dr. Lewis responded that Ms. Belletti worked with cabinet last year with some team building. This
year she worked with Liberty and Freedom doing team building and a study on leadership styles and
interactivity of administrators. He said she is a consultant and was used 20 years ago by his
superintendent when she was with Knightsbridge. She does a very good job of facilitating.
Director Leeson asked about the figure $66,500 for travel and conference.
Dr. Lewis stated Mr. Majewski broke it out. He said that in the contract for the Act 93 group,
every principal has $500 contractually set aside.
Mr. Majewski continued to say there is $25,000 in there for contractual requirements. The
district wide budget is not only for the instructional meet and discuss but when we take a look at
funding for any other conference requests that come in outside of the board, this account would be
responsible for providing those payments.
Of the $66,500 figure, $25,000 is for conferences and that is for the instructional meet and
discuss. The remainder of the money is mileage reimbursement for employees who do inter-district
travel and is not conference related. For example, the Special Education Department with
psychologists traveling to different sites will accumulate approximately $7,000-$10,000 alone in
inter-district travel. Regular education teachers will also travel from building to building.
More is spent on mileage reimbursement than what is spent on conferences so the majority of that
budget is inter-district travel.
OPEN FORUM
Chairperson Koch asked if there were any further questions from the board.
CURRICULUM MEETING President Haytmanek stated he wanted to address subject matter which is not
under the budget. He said they would be discussing the Acerra investigation at the Curriculum
Meeting next Monday, June 18th. He requested questions be faxed or emailed to Attorney Conrad so
she can be better prepared to address them in the executive session on June 18th.
Dr. Lewis addressed Chairperson Koch stating the information was emailed at the request of
President Haytmanek. It was also faxed and some of the faxes were not successful so he requested
President Haytmanek to read the aforementioned information.
BETHLEHEM AREA VOCATIONAL-TECHNICIAL SCHOOL Director Rowe had another unrelated item stating that
there is a Wednesday night meeting of the BAVTS Joint Operating Committee and all were urged to
attend.
COURTESY OF THE FLOOR TO VISITORS
No one wished to address the Board of School Directors.
ADJOURNMENT
Directors Heske and Craig moved to adjourn the meeting which carried by voice vote. The meeting
adjourned at 8:38 p.m.
Attest,
Stanley J. Majewski, Jr.
Board Secretary
:dw