OPSB Board Business Meeting Minutes – September 22, 2008
ORLEANS PARISH SCHOOL BOARD
REGULAR BOARD BUSINESS MEETING
Mc DONOGH #35 HIGH SCHOOL
1331 Kerlerec Street
New Orleans, Louisiana 70119
Monday, September 22, 2008
5:00 P.M.
The Orleans Parish School Board convened for a Board Business Meeting on Monday, September 22, 2008, in the auditorium of McDonogh 35 High School, 1331 Kerlerec St., New Orleans, LA. Rev. Torin Sanders, Board President, called the meeting to order at 5:15 p.m.
Board Roll call: Ms. Una Anderson, absent* Ms. Cynthia Cade, present; Ms. Heidi Daniels, absent*; Mr. Jimmy Fahrenholtz, present; Mrs. Phyllis Landrieu, present, Ms. Lourdes Moran, present, Rev. Torin Sanders, present. Ex–officio Board Members: Mr. Darryl Kilbert, Superintendent, absent; Mr. Edward Morris, General Counsel, present; Ms. Thelma French, Board Secretary, present.
Dr. Rosalynne Dennis, Executive Director of Exceptional Children Services, represented Superintendent Kilbert at this evening’s meeting in his absence. Mr. Kilbert is attending the State Superintendents’ Retreat with State Superintendent Pastorek.
Mrs. Anderson and Mrs. Daniels arrived at the meeting immediately following the roll cal, pledge and meditation and participated thereafter.
Rev. Sanders asked those present to remember the Rainey family and the students and faculty of McMain Secondary School on the loss of one of their students, Darielle Rainey, as he led the Board in a moment of Silent Meditation followed by the Pledge of Allegiance.
An audio tape of the meeting is available in the Board Office.
ADOPTION OF THE AGENDA:
Additions: There are 3 additions to the agenda:
Action Item No. 12: Board Policies B210 and D420 for Receipt and Retention on First Reading were accidentally omitted; discussed in the Policy & Legal Committee.
Action Item No. 13: Approval of Superintendent’s Administrative Plan to Recoup Instructional Time and Work Time Because of School District Closure Caused by Hurricane Gustav; heard in the Budget, Finance and Property Committee and referred to full Board favorably.
Action Item No. 14: Approval of the General Counsel Request for the Continued Use of Meridian Damage Assessments, Inc. in the Lexington Insurance Claim Litigation, and Approval of the Withdrawal of Funds from the OPSB/RSD Joint Bank Account to Pay the Meridian Fees.
Motion to approve the additions to the agenda was made by Mrs. Daniels, seconded by Mr. Fahrenholtz. Motion passed unanimously.
There were no Modifications or Deletions to the agenda.
Motion to adopt the agenda as amended was made by Mrs. Daniels, seconded by Mrs. Landrieu. Motion passed unanimously.
PRESENTATIONS/ ACKNOWLEDGEMENTS
2008 Stay in School Campaign – Troy Duhon, Premier Automotive and The President’s Club
Mr. Duhon, President of the OPSB President’s Club and of Premier Automotive, addressed the Board on the FY ’09 Stay in School Campaign... He began by stating that they (President’s Club members) are back again for the third year for the “Stay in School Campaign”. He gave a brief overview of the last two years’ cars. This year, the goal is to have 100 finalists. Toyota has again donated this year’s car, which is a brand new Scion XD that will be “converted”. Mr. Duhon displayed a copy of the poster that will be put out in the schools promoting the program. He clarified that this year the students must be present to win the car and also to receive the scholarship. A $500 in scholarship is awarded to each student who qualifies as a finalist. Mr. Duhon encouraged the Board to refer any companies or corporations interested in supporting student to the President’s Club, Stay in School Campaign
Chris Kline of Gulf South Region of Toyota, Inc. addressed the Board and thanked the Board for giving Toyota the opportunity to be involved in this program in New Orleans and to be good corporate citizens in New Orleans.
Mr. Duhon presented the radio advertisements that will be aired on the radio stations, as PSA equaling over $100,000. in-kind donation. CBS Outdoor has also donated billboards for the Stay in School Campaign.
PRESIDENTS MESSAGE
Rev. Sanders did not present a President’s message.
CONSIDERATION OF MINUTES
· May 20, 2008 Board Business Meeting (revised)
· August 19, 2008 Board Business Meeting
· September 11, 2008 Special Board Meeting
· September 17, 2008 Special Board meeting
Motion to approve the minutes the revisions to the May 20, 2008 Board Business Meeting; and approval of the August 19, 2008, Board Business Meeting; and the minutes of the Special Board Meetings on September 11, and September 17, 2008 was made by Mrs. Daniels, seconded by Mr. Fahrenholtz. Motion passed unanimously.
COMMITTEE REPORTS/RECOMMENDATIONS/ACTION ITEMS:
· Accountability Committee: Mrs. Heidi Daniels, Chair
The Accountability and Charter Committee meeting for September 15, 2008 was cancelled.
All reports scheduled for the Committee Meeting are included in the Superintendent’s Agenda under Reports for Information.
· Budget, Finance & Property Committee: Mrs. Lourdes Moran, Chair
Mrs. Moran reviewed the Budget, Finance and Property Committee meeting that was held on Thursday, September 17, 2008 at 5:30 p.m. as listed below:
§ The Budget, Finance & Property Committee reviewed the following Board Action Items that are included in the Agenda Board Action Items with recommendations.
§ Resolution 40-08 Request to secure bridge financing of up to $25 million for cash flow.
§ Review of the Superintendent’s Plan to Recoup Instructional and Work Time resultant from District Closure due to Hurricane Gustav
§ Resolution 41-08 Acknowledging that a Reduction in Force is Necessary
§ Resolution 42-08 Authorization and Compliance with CDBG regulations
§ Purchasing:
o Sole Source Provider: Center for Development Learning
o Sole Source Provider: SRE High Schools that Work
§ Historical Invoices:
o Brown Industries, Inc.
o Princeton Review
§ The Budget, Finance & Property Committee received the following reports for information, these reports can be found under TAB 5 of the Board Agenda Packet.
§ Reports for Information
§ Report on Redemption of Series 1998B General Obligation Bonds
§ Report on Potential for Additional Bond Funding
§ Capital Projects Report
§ Facilities and Maintenance Report
§ Status Report on Budget, Finance and Property Committee Legal Matters
§ Report on Policy Hearing
· Policy and Legal Committee: Mr. Jimmy Fahrenholtz, Chair
Mr. Fahrenholtz reviewed the Policy and Legal Committee meeting that was held on Thursday, September 17, 2008, at noon. The committee meeting convened and then recessed directly into Executive Session where the UTNO contract was discussed. It was recommended and voted on to that the consideration of this contract was not right at this time, so the consideration was deferred for 30 days for more input from administration and other Board members. There was also a legislative update presented by General Counsel and discussion on some items for next session. Action in the MOU was deferred on the lease with the ECFLC.
§ The Policy and Legal Committee reviewed the following Board Action Items that are included in the Agenda Board Action Items with recommendations.
§ OPSB Policy Issues
§ First Reading
§ B210 – Board Meeting Procedure (amended)
§ D420 – Inventories (amended)
§ Second Reading/Adoption (first reading was held August 19, 2008)
§ D401 – Annual Operating Budget (amendment)
§ D435 – Payments of Judgments, Settlements and Legal Claims (amendment)
§ E500 – Facilities Capital and Maintenance Management (amendment)
§ E501 – Charter School Facility Management (new)
§ J904 – School Admissions (amendment)
The Policy and Legal Committee hosted a Policy Hearing at 4:00pm on Thursday, September 17, 2008, for above listed Board Policies scheduled for second reading and adoption at the September 22,2008 Board Business Meeting.
Mr. Fahrenholtz advised the Board that following the Policy Hearing, it was the recommendation of the Committee to defer action, and retain in Committee Board Policy E501 Charter School Capital and Maintenance.
SUPERINTENDENT’S AGENDA
· Hurricane Gustav After Action Report
Dr. Rosalynne Dennis presented the report that was included in the Board packet. Ms. French, Board Secretary, added that attached to this report is an article where our IT Executive Director was interviewed in a national trade article about our preparedness activities around our IT storage. The journal entitled “Byte and Switch” is attached to the report.
· Division of Financial Services- Stan C. Smith, CFO
§ Monthly Financial Reports: August 31, 2008 –
Mr. Smith, CFO, stated that in the Budget and Finance Committee a report on the current cash position and condition was presented. Particularly in light of the recent challenges in the market, Greg Rattler with J.P. Morgan Chase Bank was present to address any questions that Board members may have with respect to OPSB’s investments and the collateral underlying those investments and the strength of JP Morgan Chase.
Mrs. Moran added for the benefit of Board members who weren’t present at the Committee Meeting, that the fluctuation in the market has cost the district approximately $1.5 million. Also, there was some concern about the workers’ compensation benefits through AIG. Mr. Smith added that the primary concern is that it (AIG account) is anticipated to have a reduction in the interest earnings. The investment is sound and soundly invested. It will have an impact on the interest investments projected for this year. Mrs. Moran said that this is why it was requested to have a representative from the bank come to a meeting in order to answer any questions Board members may have.
Mr. Rattler addressed the Board and said that the country is going through an unprecedented financial stress period. The last two weeks have been nothing short of absolutely incredible in terms of the banking industry. Mr. Rattler said that his role this afternoon is to just come and to let the Board know that JP Morgan Chase is one of the strongest and best capitalized firms on Wall Street. He went through what that really means. Chase is a $1.8 trillion banking corporation. They have $99 billion in tier one capital; that’s the level at which banks are measured in terms of their financial stability. That works out to about 9% capitalization, which as of today is one of the highest in the country. Chase has always practiced what they consider to be very conservative underwriting, which has paid off for them recently. They have diversified over the last seven years the revenue stream so they’re not concentrated in any one area geographically or in terms of industry. And on top of everything else, Chase thinks they have one of the most dynamic and effective management teams on Wall Street. Mr. Rattler brought an article from the September edition of Fortune magazine the contents talk about the JP Morgan Chase management and dynamic leader, Jamie Diamond.
Mr. Rattler also reassured the Board that in compliance with Title 39, Section 1221 of the Louisiana Revised Statutes, all the commercial banks in the state of Louisiana that accept public funding deposits are required to collateralize those deposits. The list of collateral is also provided by the State by State Statute. Certainly, Chase as a critical part of the business that they deliver to this state and around the rest of the country; they take that commitment and legal responsibility very seriously. Every month, the Orleans Parish School Board through Stan Smith’s area receives a Collateral Pledge Report where JP Morgan Chase would pledge suitable acceptable collateral to the Federal Reserve Bank of New York on behalf of the Orleans Parish School Board. Mr. Rattler wanted to make the Board know that aware that Chase bank is strong. They’re very pleased to have OPSB as a loyal client. They take the stability of the bank very seriously as it is to the Board as well.
Mr. Tim Russell, Controller, presented the monthly Financial Report highlights as listed below. The full report was presented and discussed in the Budget and Finance Committee meeting.
· A new fund entitled “Clearing” was created in order to isolate the pass through monies e.g., ad valorem and sales taxes.
· The Clearing Fund indicates a loss of $22.1 million. The loss is a result of advancing Local Share to the RSD and to the Charters before the actual cash is received. This loss will turn around in February and March when ad valorem taxes are received by OPSB.
· The Clearing Fund includes an OPSB Transfer for MFP / Local Share payment of $3.4 million. The amount is shown as revenue in the General Fund.
· General Fund cash totaled $25.1 million.
· The General Fund held a certificate of deposit totaling $31.0 million. This CD matures on October 30, 2008 and yields 2.65 percent per year.
· The General Fund has a receivable from the Recovery School District of $4.3 million.
· The General Fund assets totaled $99.1 million.
· Accounts payable at August 31, 2008 totaled $10.4 million. This balance includes $3.5 million and $3.9 million for the UTNO and RSD settlements, respectively.
· Accrued salaries including the sabbatical leave settlement totaled $6.0 million. .
· General Fund liabilities totaled $16.8 million.
· Total net assets for the General Fund totaled $74.3 million, which is basically unchanged from June 30, 2008.
· General Fund revenues totaled $4.3 million with the main source of revenue being the transfer from the Clearing fund for MFP / Local Share totaling $3.4 million.
· Expenditures seem to be in line with two exceptions: (1) Insurance is high because it includes property insurance through April 30. 2009; (2) .Curriculum is high because of expenditures for textbooks.
· General Fund expenditures totaled $4.2 million for the two months. It’s too early in the fiscal year to draw any conclusions about General Fund revenues and expenditures.
· During the two months ended August 31, 2008 available cash declined by $9.7 million i.e., from $34.8 at June 30, 2008 to $25.1 million. This amount excludes the certificate of deposit which totals $31.0 million. The primary reason for the decline is the advance payments to the RSD and Charters offset by collections of June 30, 2008 accruals for sales and ad valorem taxes.
Mrs. Cade asked about the decline in cash, about the advance payment to the RSD and the Charters.