SPRINGFIELD PUBLIC SCHOOLS BUDGET COMMITTEE WORK SESSION
SPRINGFIELD, OR 97477 THURSDAY, January 14, 2016
A meeting of the Lane County School District No. 19 Budget Committee Work Session was held January 14, 2016 in the boardroom of the Administration Center.
Budget Committee members in attendance were Laurie Adams, Zach Bessett, Sandra Boyst, Tina DeHaven, Ken Kohl, Jonathan Light, Steve Irvin, John Svoboda, included District staff, students and community members identified included Dr. Sue Rieke-Smith, Brett Yancey, Yvonne Attebury, Anne Goff, Joan Bolls, Brenda Holt, Laura Pavlat, Michael Henry, Jenna McCulley, David Collins, Kevin Ricker, Suzy Price, Brian Megert, Gary Cole, Sheryl Cramer, and Linda Henry.
1. CALL MEETING TO ORDER – Welcome – Dr. Rieke-Smith
Dr. Rieke-Smith convened the Budget Committee at 6:02 p.m. She distributed a packet of documents entitled Springfield Public Schools—Budget Committee Work Session—January 14, 2016—Dr. Sue Rieke-Smith, Superintendent—Brett Yancey, Chief Operations Officer.
2. 2014-2015 AUDITED FINANCIALS – Joan Bolls
Ms. Bolls directed committee members to a PowerPoint presentation entitled 2014-2015 CAFR (Consolidated Annual Financial Report) and distributed a handout entitled Summary of Activity for 2014-2015. She said staff had taken the financial statement to the Springfield Board of Education in December. Additionally, as a public entity, the District was required, to have an annual audit, and file with the Oregon Secretary of State’s office, the Oregon Department of Education (ODE). She reviewed the CAFR document which had been distributed to committee members and responded to questions from committee members.
Ms. Adams acknowledged staff who had received the CAFR award for excellence in reporting.
3. 2015-2016 YEAR TO DATE FINANCIAL REPORT – Brett Yancey
Mr. Yancey directed committee members to the spreadsheet entitled Springfield School District 19—2015-2016 Revenue/Expenditure Forecast as of 12/31/15. He reviewed the document and responded to questions from committee members.
In response to Ms. Adams, Mr. Yancey confirmed that the District was not directly involved in the class action lawsuit related to federal forest fees recently filed by Linn County against the State of Oregon, but the District would be a recipient of any settlement funds if Linn County prevailed. He would provide committee members with information at a future meeting.
Responding to Mr. Svoboda, Mr. Yancey said District’s portion of Oregon Lottery funding had diminished significantly. Mr. Yancey said he had talked with State legislators who had indicated the schools would not receive significant funding from the marijuana taxation. He would provide committee members with information at a future meeting on those funding sources.
Ken Kohl arrived at 6:28 p.m.
In response to Mr. Irvin, Mr. Yancey noted the Board had the authority to recognize and allocate additional revenue any time after the budget was adopted. The current Board policy was to maintain 4 percent reserve funding. When the reserve level rose to 7 or 8 percent, there were concerns that adequate resources were not being directed to the classroom. It was important to maintain sufficient reserve for unanticipated expenditures. The Budget Committee had struggled with maintaining the right balance between the reserve funds and the ending fund balance.
4. ENROLLMENT UPDATE – Brenda Holt
Ms. Holt directed committee members to the Springfield School Enrollment graph in the meeting packet which illustrated the historic enrollment between 2002 and 2015. She noted enrollment for the current year was down by about 250-300 students and she anticipated it would remain flat for next year. She reviewed the Out of District Students data. She noted that the District lost approximately 250 students this year through open enrollment to out of district online and charter schools.
Ms. DeHaven arrived at 6:38 p.m.
Committee members and staff discussed the impacts of open enrollment and charter schools on the District’s enrollment. In response to Mr. Light, Mr. Ricker said he was currently reviewing the District’s online school, to provide information on how many students were enrolled, why the District wasn’t competing more successfully with other programs. The District wanted to retain and recover students, and continued to look at ways to improve those numbers.
Mr. Yancey said the District currently had one person dedicated to administering the District’s online program, and the committee may want to continue to discuss increasing resources for the program.
Dr. Rieke-Smith suggested that the District needed to consider how to expand options across the District, both within District facilities and online.
Ms. DeHaven asserted if parents did not see opportunities for their children to have classes they wish to participate in because of overcrowding or lack of availability in their home district, parents would take their children elsewhere to a school or district that would provide those opportunities.
In response to Mr. Irvin, Dr. Rieke-Smith said the District’s online program was not a charter school because, as originally conceived, it was intended to serve as an alternative education option for kids who were not successful in large, comprehensive high schools. The District had not explored expanding the program to provide customized education as well as alternative education due to insufficient resources. She opined this could be considered as one element of reinvesting the ending fund balance, as well as considering options within the comprehensive programs for career technical education, STEM and the other work the District was doing. She encouraged committee members to think broadly in terms of a system of options, of which online education was one.
5. ROLE OF A BUDGET COMMITTEE MEMBER – Committee Members
Mr. Yancey directed committee members to the document entitled Budget Committee handbook for School Districts and Education Services Districts from the Oregon School Boards Association. He directed committee members to Frequently Asked Questions (FAQ) on page 6. He reviewed the answer to What is the budget committee’s main function? “Answer: The budget committee holds a series of public meetings to review, discuss, make additions or deletions, and approve the budget that the district’s budget officer proposes. After finishing its deliberations, the budget committee approves the budget and sends it to the district board of directors for final approval. The budget committee also specifies the maximum tax rate or amount for any fund imposing a property tax levy.” Mr. Yancey stated the meetings the committee was currently holding were work sessions and the committee was not discussing the budget. The committee was discussing variables that informed the budget, noting the Superintendent’s proposed budget would come out in May 2016. Prior to that, the committee would discuss assumptions, current obligations, priorities, and reinvestments, as a venue to inform the committee so that there would not be surprises when it received the proposed budget. As stated in the FAQ on page 8, when the Budget Committee met, it must meet with a quorum to have conversations leading to decisions. He asked committee members to direct any questions to him, and he would respond to the entire committee.
In response to Mr. Svoboda, Mr. Yancey explained the FAQ said the Budget committee could revise allocation in the budget by moving it from one area to another. The FAQ stated that the committee did not set staffing levels, decide whether or not a service or program should be provided, and did not make district policies. He suggested that the Budget Committee and the Board should have a conversation about the Budget Committee and the Board’s roles, as well as the role of the Superintendent.
6. ASSUMPTIONS FOR 2016-17 BUDGET – Brett Yancey
a) Collective Bargaining Agreements
b) PERS (future)
c) Reserve Levels
Mr. Yancey directed committee members to the document entitled 2016-17 Beginning Assumptions in the meeting packet. H reviewed revenue, the PERS rate, Salary & Benefits, and CPY-u Discretionary Supplies and Services. In response to Mr. Light, Mr. Yancey stated if the state minimum wage increased, the impact on the District’s General Fund would be approximately $1 million. The biggest increase of approximately $700,000 would be in nutrition services. There would also be impacts in transportation and grants. He noted an increase in the minimum wage would impact the salary schedule and collective bargaining for other positions. He added the changes in the sick leave law would also have a budget impact. The changes would also impact the cost of goods the District purchased. He said staff would include some variables related to these changes in the long range forecasts they would bring to the committee. He and Dr. Rieke-Smith were beginning a District wide process to seek all of the voices in the conversation related to reinvestment priorities that would include an administrative voice, all of the school staff voices, collective bargaining units’ voices, parent advisory groups’ voices, and student advisory groups’ voices. He and Dr. Rieke-Smith were sharing information and seeking their opinion on priorities, which would be brought forward to the Budget Committee for consideration during the budget process. It would be important for the committee to keep in mind sustainability for reinvestment priorities versus one time investments. This would call for a balance of bringing reserves down, spending ongoing resources, as well as one time purchases versus the long term impacts of increasing employment levels.
7. CONTINUED DISCUSSION OF PROPERTY PURCHASE – Committee Members
(640/644 A Street, Springfield, OR)
Mr. Yancey said it was important to note that the building had been purchased.
Ms. McCully said the Board met in Executive Session on June 8, 2015 to discuss real property and the Board discussed that the current Administration Building had structural issues. The purchase of the building at 640/644 A Street closed on December 17, 2015.
In response to Mr. Kohl, Ms. McCully said the Facilities Advisory Committee met on July 6, 2015 and discussed a seismic study.
Ms. Adams added the District had a study done of several buildings and it was determined at that time that the current Administration Building was a hazard. She had raised the issue several times over the years with the Board.
Mr. Kohl had no issues with moving out of the Administration Building but he was concerned how the new building would be paid for.
Mr. Yancey said the University of Oregon Geology Department had done the original assessments on the District’s facilities. At that time, there were three facilities deemed 100 percent failures in a seismic event. Thurston Elementary School had been replaced and bond funds from the last bond were used to upgrade all of the seismic retrofits in Walterville Elementary School to ensure it was safe. The third facility was the Administration Building. Additional in-depth studies had been completed to verify the initial results.
Ms. McCully stated at three publicly noticed Board meetings and two publicly noticed Executive Session meetings, discussions occurred about how to move forward with the information received from the geological assessments. Additionally, there were seven Register Guard stories about the issue, two in-person radio interviews, and two independent television stories. There were two all staff District meetings and four Administration Building complex emails. The Facility Advisory Committee met, the website was developed with four web postings about the issue which included a link for providing input, and there were two versions of Frequently Asked Questions to clarify concerns that bond funds were not being used for the Administration Building.
Mr. Kohl said it was clear there was a lot of discussion, but it was not clear how much of the discussion was related to how the building purchase would be paid for.
Mr. Yancey asserted it had always been stated that the funds would come from the general operating fund. It had been clearly stated that the purchase would not come from bond funds and there were not sufficient capital improvement funds available. Staff had reported to the Board that the District would need to borrow the funds and pay them back through the general operating fund if property sale resources were not available.
Mr. Svoboda was concerned about the number of times the committee had been told that it could not use building fund money for operating, and that those funds were to be kept separate from each other. He recalled that operating money was used a number of years ago for capital improvements for A3. The committee subsequently heard that the Board had a policy that it would not use capital money to run the District. He stated that he has been on the Budget Committee for 12 to 14 years and that most of the people here know how to get in contact with him. He said that no one let him know through any means how this purchase was going to be funded. He did not receive an email or any other communication from any other lists that he is on that this was happening. He stated that he had not been advised how the purchase would be funded, which was his concern about not being open with the public as the district was not open with him. Historically, he had been concerned about hiding money in capital improvements and taking funds from operating funds and not using it for students directly and then putting it in the districts fund. The District should know by now that this has been a concern of his.
Mr. Yancey stated he had looked back and found that the Board had given direction that any property it sold would go into a capital fund that would be used for property acquisition. He did not recall any direction that indicated the District could not use operating funds for capital. The District had used operating funds for capital projects with A3, and there had been contingency requests submitted to the Board for capital improvement projects for a variety of purposes. It was likely there would be another request to spend general operating contingency funds on capital projects. In response to Mr. Svoboda, Mr. Yancey said by law, the Board had to approve by resolution any loan, and confirmed that there were meeting minutes that confirmed the terms of the loan. Mr. Yancey said A3 was not a loan. It had been funded primarily with a transfer from operating funds and 401 to the general fund.
Ms. Boyst understood if the District sold the current Administration Building, the proceeds could be used repay the loan for the new building.