Dec. 18, 2008 Work Session on the BUDGET

FYI: This special work session was not well attended by BOE members or staff. Absent were: Comm. Bollinger, Kneer, Craig, G. Butler, Patti Iverson and Jim Kling.

The presentation began with another sobering presentation by Mr. VandeWater about the 5 year budget projections. At the VERY BEST the ECASD faces 5 years of budget shortfalls beginning in school year 08-09 of $1.3 mill., $2.2 mill, $2.9 mill., $4.2 mill., and $5.8 million dollars!!! The 5 year total for this OPTIMISTIC scenario is $16.3 million. This does not include ANYTHING for Facilities or Technology. By varying percentage increases for salaries and benefits or Purchased Services to more likely increases the projected shortfalls increase dramatically and could be closer to $38.2 MILLION over 5 years. All BOE members in attendance were appropriately sobered by this information. (I digress: WHY was this simple accounting exercise NOT done in the past several years???)

(I apologize for the annoying capitalization but I hope readers get the idea that this is real, it is now and it is not going away.)

BOE members held a lengthy discussion for soliciting community input and ultimately support to address this situation. Dr. Leary was not present for the presentations by the outside consulting firms in June who offered a couple of different options for this activity. The cost of hiring professionals would be in the neighborhood of $10,000. It was suggested that the ECASD could seek out a community sponsor for such an activity. Dr. Leary is meeting on Jan. 3rd with Don Liftow (sp?) of School Perceptions to refine the needs of the ECASD. He commented that he only had Comm. Craig's copy of the presentation materials. (Again, WHY was he not given a FULL COPY of all 3 presenters' material from Dr. Klaus who left the week after the presentations??? Is this stuff simple or is it me?)

Comm. Faanes seemed very animated and committed to having the ECASD put together a framework of our needs and then have them respond to our needs. In addition, he said that we should ask about their ability to turn around the request. Excellent! Ken, we need a lot more of your wisdom and participation to get this process activated and pointed in the right direction and moving forward. Comm. Wogahn lapsed back into his "anecdotal mindset" and went on at length about his church conducting a survey with the bottom line being: "Hire a professional." Pres. O'Brien indicated that the participation of the prior committee for the failed referendum (Save our Schools) could be explored. My comment: that was such a hasty hack job that we should not even bother unless certain individuals from the committee have expertise that we can still use now.

Mr. Van de Water then presented a summary of Facilities needs that are still being postponed. Mr. Charlie Kramer indicated that the annual funding for facilities maintenance should be approx. $2.2 million but we have only funded $600,000 in the last few years so that is in a major deficit and building every year. In all, the facilities needs could be $33 million in today's dollars. Mr. Van de Water indicated that his theory is to support annual maintenance and operations and then use bond money for long term capital items.

Comm. Cummins asked when the BOE could schedule a discussion on the capital needs because she still sees some facility items that are simply out of the question that are still on the list. Mr. Van de Water indicated that just because it is on the list does not mean it has the same priority as other items. Mr. V. indicated that due to the declining schedule of past bond issues that the ECASD is in a good position to take on additional debt and continue to have a declining debt schedule. Two alternatives: 1.) borrow a lot of money less often or, 2.)borrow less money more often. He prefers option #2 becuase option #1 does not allow you to re-prioritize as the federal rules of arbitrage require the $'s to be spent of the money earned on interest must be refunded. IF the community would support smaller referenda every few years the ECASD would be better able to manage the projects and priorities. We would need solid justification for each item to get community support.

Comm. Cummins again re-iterated the need to have facility funding linked to programming needs as well as ongoing requests for referenda money would put pressure on legislators to reform the school funding formulas. Pres. O'Brien indicated that rates are low now so maybe we should borrow more $ now. Dan V. reminded him that organizations, just like homeowners, can refinance when interest rates drop. "So we are a little behind the curve here already..." YUP.

Mr. V. put up a possible schedule of election dates and a proposed timeline for communities considering a referendum. The timeline indicated that this discussion begins NO LATER THAN 180 days PRIOR to the election, unlike the 5 week crash and burn program we had last April. This generated a lot of discussion about potential advantages and disadvantages of holding a referendum during a regular fall election when turnout is higher vs. Spring elections or special elections. Dr. Leary indicated that naming the committee is important. Something like "the Committee for Quality Education" is good. (You mean better than SOS(?!?!) which implies that we need the taxpayers to rescue our district?) All members agreed that an April '08 date was not possible which means that the need to cut $2.8 million out of the '08-'09 budget must occur. Comm. Cummins was conserned about the effect of another round of reductions and if a Sept. 08 primary date would be reasonable. Mr. V said it would be "problematic" because of the deadlines for staffing decisions. She indicated that the district was planning to use $3.4 million of the fund balance last year that was not required and maybe that should be a consideration while a community supported referendum is prepared. Mr. V. was concerned about this approach as the Fund Balance is a finite resource. Preferable would be to "reduce the scope of our operation and live within the budget."

Another lengthy discussion about controlling health insurance costs ensued with Comm. Faanes asking how other districts manage these costs. Mr. V. : "I don't know." Dr. Leary commented that the Chippewa Falls district is self insured. This area has lots of possibility for analysis, in my opinion. Comm. Cummins final comment: We need to go back and add teachers not cut more of them.

There was an abbreviated discussion about alternative funding sources such as Naming Rights, etc....Pres. O'Brien said it would be good to explore this but cautioned about the need to not exploit students. There could also be some advertising in school newsletters but, again, caution is warranted. Comm. Faanes cited examples at Carson Park, Hobbs Field, and the gym floor in Stillwater being "sponsored". Comm. Wogahn went on at length about not allowing tobacco products or Coca Cola "although Coke did give my wife a scholarship." (!?!?)

Comm. Cummins noted that it was interesting that all the examples they discussed were for sports and that that would indicate that community funding of athletics is much more feasible than sponsors being willing to fund classes for French or other academic subjects.

Adjourn!!