August 22nd Special Board Meeting Minutes
Arapahoe-Holbrook Public School
Board of Education – Special Meeting
August 22nd, 2018 7:00 pm
President Dennis Roskop called the meeting to order at 7:00 pm.
President Roskop announced that the Arapahoe-Holbrook Board of Education follows the rules of the Open Meetings Act which is posted.
The following members were present: Dan Warner, Chad Carpenter, Rodney Whipple, Dennis Roskop, Brad Schutz, and Lisa Anderson.
The following member(s) were absent: None.
Also present was Dr. George Griffith, Superintendent and Cassie Hilker, Board Secretary. Visitors were present.
A motion was made by Schutz and seconded by Whipple to approve the agenda as presented. AYES: Carpenter, Whipple, Roskop, Schutz, Anderson, and Warner. Motion carried 6-0.
President Roskop welcomed the visitors and asked for Public Comment. Tracy Roskop (Freshman), Joslyn tenBensel (Freshman), Faith Pruitt (Junior), Brianna Wilkison (Freshman), Mrs. Joanna Pruitt, Dominik Roberts (Freshman), Ashton Vargas (Freshman), Ashley Durk (Freshman), Areli Calamaco (Freshman), Adrienne Bowers (Sophomore). Other visitors were also present. No other public comment.
A motion was made by Schutz and seconded by Carpenter to approve the Consent Agenda as presented, which included end of the year claims totaling $26,074.67 from the General Fund, Lunch Fund and Building Fund. AYES: Whipple, Roskop, Schutz, Anderson, Warner, and Carpenter. Motion carried 6-0.
2018-19 District Budget – Griffith stated that the budget presented is only different by one number. He went back and realized he started with the 2016 starting balance by mistake. The positive thing is that the number is higher. Thanks to Cassie for looking at that. The general fund budget shows the transfers to other funds broken out, but that is only for the purpose of tonight’s meeting. The budget that goes to the state will have it on one line item. He is referring to page 16 of the budget document. Since the Finance Committee meeting he went through and re-calculated everything and the tax asking went down a little bit more. The transfer to the bond fund is to help make the December 2018 bond payment. The transfer to the nutrition fund is $18,000 and is there because he had $18,000 to plug in. There is a $35,000 transfer to the activity fund. There is a $230,000 transfer to the depreciation fund for bus purchases. He is in the process of getting a request out for bids on a new bus and it will be out in the next week or so. They are scheduled to look at getting another one and replacing a van. Warner stated that there is some excess there. Griffith agreed. Buses run around $89,000. Schutz asked if Griffith increased maintenance. Griffith agreed that he did and stated that he did that because even though they will be getting reimbursed the money they have around $235,000 in insurance expenses that he needs authority for. Schutz asked if this was from hail damage. Griffith agreed. That is just from the current buildings and does not include any replacements on the new construction. He has not heard anything back from them on amounts. Warner asked if that was reflected in the $536k proposed amount versus the $450k. Griffith agreed. That has actually allowed us to extend our budget another $235k but instead he only raised it by $135k in the general fund. The second page of the LC2 shows the total unused budget authority of $421,000. There is no cash reserve carry-over showing in this general fund budget and based on his estimates of 3% growth they should maintain around 2 ½ months to cover expenses. Warner asked if it was 3% growth on expenses. Griffith agreed. Warner asked for some clarification on the bus purchases. He understands that purchase can be made from the general fund, but he asked if part of that could still be pulled from bus depreciation. Griffith stated that what is showing in the general fund is a transfer to the depreciation fund for the bus purchases. It could be less. Warner stated that they have been carrying some carry-over in the bus depreciation fund as well. Griffith agreed. The depreciation fund is showing a balance of around $343k and he is showing a transfer of $230k which would put us at around $570. He is planning to purchase two buses and possibly a van. That will total close to $330k. That may be a little high, but it is an estimate at this time. Approving it in the budget at this time doesn’t mean we have to do it. It would be a separate motion at a board meeting. Warner agreed. Griffith stated that the bond fund is showing a tax request for the amount of the actual payment that would be made during the year. The last two years we have requested less than the payment amount and that has resulted in taking money out of the general fund last year and this coming December. This will put us in a situation so that we won’t have to borrow money from the general fund after the December payment. Anderson stated that last year they didn’t budget anything in the general fund to make that bond payment and that was $256,308 and she asked Griffith about budgeting it in for this year. Griffith stated that it is budgeted as a transfer in the general fund but is not showing as a transfer in on the bond fund. The amount will be whatever they need to make the payment at that time and it will be a motion at a future board meeting. Schutz asked if they could decide that amount at the December board meeting. Griffith stated that it would actually be the November board meeting since the payment is due December 15th. We will know exactly how much we have in the bond fund at that time and will then know the amount we need to make up. Schutz stated that it will depend on tax collection. Griffith agreed. Anderson stated that last year they budgeted to transfer $100,000 to the bus depreciation fund and they didn’t do that. Griffith agreed and stated that he hasn’t gotten the bid requests out yet. He will have some assistance with that in the next week and will hopefully be able to bring something to the October board meeting. Schutz asked if the transportation committee has met and come up with the specifics on what they want in a bus. Carpenter stated that they have met and mentioned some things that they want but nothing hard-lined. Griffith stated that he has a list of things that he requires in a bus. He has talked to Sara and in the past they have brought buses out for us to look at and then make a decision. The best way for him and his recommendation is to tell the companies what we want in a bus so that we get the same comparison between the buses. We know what engine we won’t buy. Griffith stated that with the amount in the general fund budget and what he is projecting to have left at the end of the budget year next year, he feels confident with these levels. He feels confident with the 3% growth and the budgeted 2 ½ months of expenses. These numbers put the general fund levy at $0.708665 and the bond levy at $0.184688. Schutz thought they were around $0.59 in the general fund and around $0.10 in the bond fund last year. Roskop stated that last year it was $0.590638 for the general fund levy and $0.119441 for the bond fund levy. Warner stated that they will have to a transfer for the bond payment but they are levying for the full bond payment. Griffith agreed and that is so they won’t have to transfer next year. Warner stated that they are still asking for around $400k and they have carry-over every year. He asked for some direction on what they are doing there. Griffith stated that last year they had about $600k in cash reserve plus another $600k over in the general fund. This year his goal was to not have a carry-over of more than $900k, which is about 2 ½ months of expenses. That is how this budget is set up now. Everything is budgeted within the fund and not the cash reserve. Schutz stated that they had a similar discussion in their committee meeting and the consensus was to levy for the full bond payment every year. Warner agreed with that and stated that he was completely content with that part. Looking at a new facility and the 3% growth he is comfortable with that. Levying for the full bond payment, he asked how they are going to control costs to keep the general fund levy down. Schutz stated that this proposal is about a 16% increase in tax asking in the general fund. He would like to talk about the transfer of $230k into the bus depreciation fund. $0.05 on the levy is about $236k. He asked if they should consider lowering the levy by $0.05 and consider a 10% increase instead of a 16% increase. Warner stated that they have an aging fleet of buses and we have spent a lot of money in repairs. We know we need to update at some point. It would be nice to get on a rotation and that is what they have all tried to do. Let’s look at a rotation so that we don’t have to try to purchase two buses and another vehicle every year. He didn’t think they have made a decision as to whether they can repair the buses they have and only update with one bus. He understands where Schutz is coming from. It is only good business to keep it current. Schutz didn’t disagree and asked if they need to have $573k in depreciation if they are planning to spend $150k on vehicle purchases in the next 12 months. That leaves around $425k left and he asked how much is enough for that fund. Warner agreed. Anderson asked if they were looking at equipment depreciation that shows $284k now. Warner stated that is outside of bus depreciation. Anderson stated that bus depreciation shows $46k. Schutz stated that he is looking at the depreciation fund page in the budget document and it shows $343k as a beginning balance. He assumed that was both. Hilker stated that it is bus depreciation and equipment depreciation combined. Roskop agreed. Warner stated that with a $230k levy that would take us to the $573k. Anderson asked Griffith what he potentially sees spending that money on. Griffith stated that this is his maximum recommendation. Carpenter stated that they don’t need that much to purchase a bus. Warner stated that the fund is for bus and other equipment. But as we are looking at a relatively new facility with fairly updated equipment he is not sure they need to be sitting on that much money in the depreciation fund. Schutz stated that is what he has been trying to ask. Griffith stated he has no problem with that. Schutz stated that he appreciates the fact tonight that they do have solid figures in front of the board so they can have a discussion. There is no running back and forth printing out new stuff and so on. He told Dr. G that he appreciated that. Anderson added thanking Hilker for catching the balances. Griffith stated that they both punched around on the budget and he was a little lower on some and she was a little higher on some. He was a little higher on more than she was. Schutz asked if he was right with his assumption on the percentage. Hilker pointed the board to a document that showed the percentage change. Warner stated that they had a reduction in valuation. Griffith stated it was 6.6%. Hilker noted that the valuation change is at the bottom of that same worksheet. Warner stated that he was hoping Griffith would give them a budget that changed the levy in relation to that. Roskop stated that he would agree with that but the last two years they have under-budgeted the general fund by a considerable amount to try and get back to where it should be. Now that they have given a large majority of those funds back they need to get back to collecting enough to make the building run again. On average the expenditures have been between $4 million and $4.5 million in the last five years. Last year they asked for $2.9 million and there is about another $1 million we get between reimbursements and other income. That figures at about a half a million dollar shortfall for last year plus another $256k that had to be transferred to make a bond payment that they didn’t levy for last year as well. Understand that $700k of what was in budget was a shortfall from last year. The increase that they are doing basically makes up for what was not done last year. In his opinion they did what they needed to do. They needed to get their balances down to where they should be as opposed to having $2 million. Having $1 million is about two months of expenditures. Warner doesn’t disagree but he also wanted to challenge the board to look at a three year budget. So they are not telling the patrons they will save them this year but they are going to get it next year. Roskop agrees with that, but 70% of the budget is staff. There is only so much they can do with that other 30%. There may be staff things that they need to look at as well, but there are limitations on what those total dollars. A majority of what we are paying is for staff. Warner doesn’t disagree. Schutz asked if Griffith knew what the neighboring schools were thinking for increases. Hilker pointed the board to another report showing what the neighboring districts were thinking. Griffith stated that when he talked to Cambridge he learned that they are planning to rely upon their reserves. We dropped 6.65% and they dropped 6.56% in valuations. Our position is better than theirs. Schutz stated that their valuation is substantially lower than ours. He was curious to know what their state aid did. Griffith thought their state aid was between $300k and $500k. What he did to come up with the $900k number is he took what was spent last year and took it times 1.03 and subtracted that from the total budget number of $5,756,000 and that is how he calculated getting to a 2 ½ month carry-over for the budget. Schutz asked what the goal is for tonight’s meeting. Griffith stated that the goal is to figure out what will be published in the newspaper and he really wants to hold strongly to what gets published. As he looks at the budget and this is his 12th year preparing one, this is something he feels comfortable with and will cash flow. He has been down to having less than $200,000 in a budget year to carry-over and that is when you hope you have enough the following year to keep staff. This budget is as low as he is comfortable with. He knows this is an increase and doesn’t want to go asking for more than they need. He doesn’t see the District going to the $6 million that they are authorized to go to. In regards to the $230k transfer for the buses, he reminded the board that there are two 2014 buses that could go down at any time. He would rather be ready to buy another bus if they need to. Carpenter asked what the amount was for a new bus. Griffith stated around $89,000. Carpenter stated that without the $230k transfer they would still have $200k in the depreciation fund on average if they buy one bus and one van. There is more than enough to buy another bus or fix something for the school. Griffith stated that a vehicle rotation schedule was approved a couple of years ago and based on that we are to replace two buses. Warner stated that the $230k is for two buses and another vehicle. Schutz asked if the two 2014 buses are any trouble besides the motors. Griffith stated that it is everything. Carpenter agreed. He stated that swapping motors would even be difficult because of the wiring. Griffith stated that these are things that will be specified in the bid requests. Warner stated that the problem is that there is still a 2003 bus and a 2004 bus that are ahead of the 2014 buses on the rotation schedule. Griffith stated that the 2003 bus is what they are looking at replacing first. Schutz asked if Roskop needed a motion or anything. Roskop stated that this is a discussion item and no action will be taken. We just need to give Griffith direction. Whipple stated that looking at the student enrollment and with the exception of last year being different by one they are as high as they have been since 2004 for K-12. PK-12 other than last year they are as high as they ever have been. Schutz stated that there are students to fill the rooms. Griffith stated that some elementary classes have 29 students. Schutz noticed Mrs. Stagemeyer taking the kindergarteners out for recess and he counted 27. That is a pretty good sized kindergarten class. Griffith stated that after everything gets moved around they will have two extra classrooms available if a class would need to be split. He wouldn’t want to see one much over 28. He has always had recommended to him 22 in an elementary class but that is not financially feasible. His recommendation is this budget. He feels comfortable with the financial flow of this budget and he doesn’t think it needs to be higher. The level it is at will keep us good going into the next year. Unless something majorly drastically occurs this is what he will be recommending at the September meetings. Whipple asked if the Finance Committee has already seen the numbers presented tonight. Anderson and Schutz stated that they changed a little bit. Schutz thought they were looking at $0.91 for a total levy. Roskop and Anderson agreed. Roskop stated that there is a difference of about $150k in the general fund from what they were looking at before. Schutz stated that their discussion was about the beginning balance of the general fund and where they want to always see that number at, just like all of the other funds. They talked about trying to find a balance that is comfortable. Anderson stated that the county treasurer beginning balance is showing quite a bit less than before. Griffith stated that he found the correct numbers in the AFR. Anderson stated that the buses weren’t budgeted in so it looks like Griffith used that money up there. Griffith agreed. The expenditures in the general fund can be moved around if they need to as long as it doesn’t go over the bottom line. When a District goes over the bottom line is when they get into trouble. Anderson asked if reducing the $230k transfer for the buses would cause problems with the reserve. She asked if Griffith was kind of using that as part of the reserve in case they don’t use it all. Griffith stated that would give the District about a month and a half in the reserve. Anderson stated that would be something she would consider taking out and possibly reclassify into a reserve. She doesn’t know exactly what that would do. Whipple asked what the recommendation is for a cash reserve. Roskop stated that they have been told for a long time that the recommendation for a cash reserve is three months of expenses. Right now three months of expenditures for us would be just over $1 million. Anderson stated that is about where the general fund balance is at right now. Roskop stated that the cash balance in the general fund today is $1,046,000. He feels comfortable with that balance and would like to see the general fund at that balance on an annual basis. There will be an influx of taxes now, but then we won’t see anything until January. Last year they were looking at $2.3 million and this year they are looking at $1 million. In his opinion they have done what they set out to do to try and relieve some of those tax burdens that have been put on the patrons. Now we need to get back to leveling off. They can’t take $700k out of that again. Griffith stated that when he and Hilker looked at the ending balance they looked at between $700k and $900k. He would still be comfortable at $100k less, but he wouldn’t want to go much lower than that. There is too much uncertainty in the economy right now. That is always a concern. Griffith asked Roskop if he would be comfortable with an $800k cash reserve. He stated that he will be asking each board member. Roskop stated that the one of the things he is concerned about is the $292k budgeted in to be transferred to the bond fund. There will be money coming in so it’s not like they are going to have $1 million and take $300k and then take another $300k out in December. That is the only part that he is still trying to figure, the cash flow for December. The $200k they are looking at in reserve or buses or whatever it is, that is the December transfer money that is not specifically budgeted as the December transfer money cash flow wise. He knows they have it budgeted annually. The problem is that they don’t get all of that in December. That is his only concern with going lower or taking out the $200k. Griffith moved to Whipple. Whipple stated that he likes the recommendation of three months for a cash reserve. That is what they have always done. If the consensus was to operate on less he thinks he would go with the recommendation of the majority. Griffith moved to Carpenter. Carpenter stated that he just wants to make sure the school runs. If Griffith is not comfortable with it then they will do what they need to do, but he doesn’t want to get to the end of the year and be in trouble. Griffith stated that he wouldn’t be comfortable going below $800k. When the September money comes in there will be three months. That is what he is looking at. Carpenter stated that as long as they have the three months so they can operate if something were to go wrong, economy or otherwise. Anderson stated that she is guessing they are a little low on what they are estimating for the county treasurer balance. She was showing that they have gotten 65% of what was asked for last year. There is probably 10% in delinquency. She is guessing that they will get a little more than $530k. That is a good estimate but she is guessing they will get a little more than that. She is also hoping that they won’t need to use the full $300k to make the December bond payment. She thinks what Griffith is showing is fine and she thinks they could go a tiny bit less because of those reasons, but she is fine with leaving it as is too. Griffith moved to Schutz. Schutz stated that he agrees with all of Anderson’s comments. His preference would be to compromise somewhat and take another $100k out and set the general fund levy. Griffith stated that based on the information he would be fine with that. Griffith moved to Warner. Warner stated that he agreed with Schutz. He doesn’t want the District to get into a situation where they can’t function but he also doesn’t like the knee jerk reaction in what they are doing to the tax asking either. Griffith stated that he would build a budget with $100k less in the general fund and that is what he will get published if there are no objections to that. Anderson stated that this is just a classification thing, but she asked if Griffith would be reducing the amount of the transfer to the bus depreciation fund. Griffith stated that the transfers on the published budget will be only one line item, they won’t be broken out. The numbers will be combined and the total will be around $490k. Schutz stated that would take about another $0.02 off of the general fund levy. Griffith agreed. Roskop stated that they can make it work. It doesn’t matter what the numbers are, they can make it work. It’s just if they feel comfortable with where they are at today. There are some bond things that they are working through and have been discussed at a finance meeting and will hopefully address some things. Griffith stated that there are eight classrooms in the renovation that are only scheduled to have fire sprinklers and nothing else. That doesn’t include the heavier doors or updated lights. Those are things that the board may want to think about doing now. He hopes to be here another eleven years and he doesn’t want to have to go and ask for money to do those things in the next eleven years. Schutz stated that now is the time to do it when everything is all tore up. He asked if they were collecting bids for everything though. Griffith confirmed that he was. He hasn’t sent a request for the lights yet, but will do that. Anderson asked if they would get flagged at all for showing nothing in the cash reserve column on the budget. She asked if the state auditor would say anything if there is nothing showing as a cash reserve on the budget form. Griffith stated that NDE will be calling him about the fact that they aren’t maxing out the budget authority. This is what he is comfortable with. We will get to carry-over a portion of the unused budget authority. Right now there is about $229k in unused budget authority for this year and $192k in the adjusted budget authority and prior years is $94k. There is a way to recapture some of those funds. The budget waivers are not included which would permit us to go higher if we needed to. A three percent growth with these numbers and $800k projected at the end of the year is fiscal responsibility and he is very comfortable with it. Anderson commented about a form Griffith emailed to them that showed $192k of unused budget authority and this year $452k for a total of $644k. Griffith stated that the $452k is a combination of last year and this year. The total would actually be around $510k. He sent the budget to NDE to be reviewed. He told them that they would not be using the full budget authority and asked that they review it and make sure everything looks okay. Roskop asked if Anderson would prefer they show $100k in cash reserve as opposed to transfers. Anderson stated that she doesn’t know if anyone looks at these documents, but she would think of it as kind of odd if nothing is showing in cash reserve. Hilker stated that if they show the cash reserve in the cash reserve column and they need to use it, the budget has to be amended to do so. Griffith has already built it into the budget so it doesn’t have to be amended to use it. She knows that some schools list it in the expenditures as a separate line item rather than showing it in the cash reserve column. Griffith stated that is beneficial if we would get close to the end and need to use that. It is kind of hard to run a revised budget in a month. He sleeps far less at the beginning of a budget year than at the end. Hilker stated that it is obviously up to them and whatever they want to do. Griffith appreciated Hilker pointing that out. Roskop stated that it doesn’t make any difference to him. He just knows that they will have the other side coming in saying that there should be something in cash reserve. Anderson asked if that shows on what is posted in the newspaper. Roskop and Griffith confirmed it would show. Anderson didn’t know if anyone would come to the next meeting and ask why they don’t have anything in cash reserve. Schutz stated that he doesn’t have a problem showing $100k in cash reserve. Roskop agreed. It is whatever we are comfortable with. Anderson stated that she thinks it would save answering some questions. Schutz agreed. Warner stated that if they are predicting carry-over at the end of the year there should be no need to have to amend the budget. Hilker and Griffith agreed. Roskop stated that if they have to amend it for $100k there are bigger problems. All agreed. Roskop stated the plan is to try and get the general fund tax asking to around $3.2 million and show $100k in cash reserve and get the bond fund tax asking to $865k. He asked if everyone was on the same page about what they are planning to publish. None.
Roskop stated that the Labor Relations Conference is September 5th and 6th in Lincoln. He highly recommends that for anyone on the Negotiations Committee. He has attended and it is nice to have an aspect that is not what they generally walk into when they start negotiations. If they can attend, he recommends it. It gives a broader knowledge of negotiations. Anderson asked if they offer it every year. Roskop confirmed that they do.
Roskop stated that the NASB Membership Meeting is August 29th. Anyone interested in going is to let Hilker or Griffith know as soon as possible. Griffith added to do the same about Labor Relations.
Roskop stated that the registration for the NASB State Conference starts September 15th. Griffith stated that he is going and one other board member has signed up. Roskop asked anyone that is interested to let Griffith or Hilker know prior to the next board meeting so the rooms can get reserved. Whipple asked when it would be. Roskop thought it was November 14th-16th.
Public Comment – No further discussion.
Finance Committee Meeting, Friday, September 7th, 2018 at 12:00 pm in Conference Room.
Budget Hearing, Monday, September 10th, 2018 at 6:30 pm in Conference Room.
Tax Asking, Monday, September 10th, 2018 at 6:45 pm in Conference Room.
Regular Board Meeting, Monday, September 10th, 2018 at 7:00 pm in Conference Room.
A motion was made by Carpenter and seconded by Whipple to adjourn the meeting at 8:05 pm.
Cassie Hilker, Board Secretary