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HomeMy WebLinkAboutMinutes - 20020617APPROVED 1011102 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION 7:00 p.m. June 17, 2002 The Orange County Board of Commissioners met in regular session for a budget work session on Monday, June 17, 2002 at 7:04 p.m. in the boardroom of the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Margaret W. Brown, Moses Carey, Jr., Alice M. Gordon and Stephen Halkiotis COUNTY STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Manager Rod Visser and Clerk to the Board Beverly A. Blythe {All other staff members will be identified appropriately below) NOTE: ALL DOCUMENTS REFERRED TO IN THESE MINUTES ARE IN THE PERMANENT AGENDA FILE IN THE CLERK'S OFFICE. 1. MINORITY STUDENT ACHIEVEMENT Chair Jacobs said that he plans to share information on the Minority Student Achievement report before the budget discussion. He commended the school boards, teachers, and administrators for the exemplary jobs they do. Brenda Stephens said that she appreciates the increase in the per pupil allocation. This is the first year they will be able to fund some of their expansion items. Orange County School Report an Minority Student Achievement Superintendent Randy Bridges made this report that is hereby incorporated by reference. He said that the fact is that children that need additional help cost additional money. He presented a graph which showed the minority student achievement over afour-year period. He is pleased and proud of these numbers with the exception of sixth grade reading. The proficiency levels are pretty much the same as last year. The End-of-Grade (EOG} Performance -shows what the school system has done aver time to close the achievement gap. They instituted an accountability policy in 1997. Having instituted this policy meant that some students would be retained because the bar had been elevated. They have a low teacher-student ratio which has also helped close the gap. They put money into the reading recovery program in their K-8 schools. Early Beginnings is a program that has benefited children as well as their pre-K program this year. There has also been consistency in leadership, which has helped. This past year they have had three groups involved in bridging the gap and evening out the transition from 5t" to 6t" grade and 8t" to 9t" grade. They also formed community focus groups and talked about the absence of minority students in upper level courses. Parents, students, and teachers provided same feedback about haw to improve this process of getting more students involved. The Closing the Gap committee was in operation for two years. Eleven recommendations came forth from that committee. Dr. Bridges said that obviously they still have work to da but they are improving their efforts. Commissioner Carey asked about the success plan and some examples of the results of students enrolled in upper classes and what was learned from the focus groups. Dr. Bridges said that a success plan is used to identify weaknesses and to have a structured plan on addressing those weaknesses. One of the biggest things they found out from the focus groups was a lack of communication to the parents of the testing that needed to be done. They now have meetings early in the year to inform parents. With reference to implementation, the Orange County School Board will receive this report on Wednesday evening and he will take direction from the School Board. Commissioner Carey asked what percentage of the decision made to close the gap has been funded by County dollars compared to State dollars. Dr. Bridges said that the majority of the money was local money. Delores Simpson said that they started closing the gap before it became a mandate to do so and that is why they are so passionate about continuing the programs and she hopes they can continue. Commissioner Gordon commended the Orange County School Board for their efforts and results. She asked if the graph could be read longitudinally. Dr. Bridges said that this is not tracking the same group of kids. They do have that tracking using the cohort analysis and he will share it if needed. The analysis is very similar for both methods. Chair Jacobs asked if he was able to track socioeconomic backgrounds. Dr. Bridges said that they could do that. Valarie Foushee, Chair of the Chapel Hill-Carrboro City School Board, said that while they have many students who are successful, they have a number of students who are not successful, which is why they have renewed their efforts. Superintendent Neil Pedersen said that there are two reports going to their Board this Thursday evening. One is a final report from the Blue Ribbon Task force and the other is the latest minority achievement report which outlines their new strategy for closing the gap. They are totally committed to eliminating the achievement gap. Some of the programs implemented have been reading recovery, advancement by individual determination, volunteers and partners office, mentoring program, expansion of preschool education, portfolio assessments, Communities in Schools, and after school transportation. He said that in reading and math they have closed the gap by about 50%. They believe that part of the issue is that the students are not being taught the material they are being tested on. They are taking a hard look at all of their policies, particularly equity issues and access to the same opportunities and curriculum. They believe that technology is one of the keys and divides the population in terms of "haves" and "have Hats". They are looking for strategies of access to technology at school, after school hours, in the community, and putting computers in students' homes. They are working hard on staff development and issues of staff diversity and equity. They believe that they have not made the progress they want because of staff attitudes. Commissioner Carey commended the Chapel Hill-Carrboro City Schools for what they have done and also for the charts which showed the differences in ranking for different cultures. He asked for more information on changing attitudes. He would also like to see from the Orange County Schaal Board a similar chart of rankings compared to other systems in the State and where we rank on funding this. Neil Pedersen made reference to the rankings and said that who ranks where is interesting. There is a lack of correlation in where different counties rank and the amount of money spent in this area. He said that the work they are doing with the staff is with a consultant. His work is called Beyond Diversity. What they found in the school system, particularly among the staff is that race is not a day to day conversation. When race was a systematic conversation, not much was said. A major part of the work is helping all of us look at the world differently through racial lenses. Another major aspect is looking at institutional racism. As they look at practices and policies they can find examples where they were promoting inequities within their school system. They were mare prone to talk about the inequities in a child's home and less prone to talk about inequities within our awn institutions. They are trying to correct this. Valarie Foushee said that what they found through some of their committee work is that there is an understanding among all of them that they need to work together to make a difference in closing the gap. The community is willing to be a part of the strategies to close the gap. Chair Jacobs asked the Chapel Hill-Carrboro City Schools to provide a list of school districts that they have compared in terms of socioeconomic status and achievement. Neil Pedersen said that there is a report card done by the State on the website where there is information on the percent proficient for every school district and every school. This information went home on hard copy to every home in the school system. The website is www. ncreportcards.org. 2. SCHOOL BUDGETS John Link expressed appreciation on behalf of the County staff to both school systems far the great cooperation on the budget process this year. He made reference to a handout, which illustrates the funding policy for each school board. Regarding recurring capital, he said that 3 cents is allocated for recurring capital, which will be distributed on a per-pupil basis. Last year, '! cent of the 3 cents was allocated far current expense. This year, the 'l cent has been moved back far recurring capital. He painted out all the memos in the agenda packet that need to be addressed as follows: memo dated March 6, 2002 with periodic updates; Collaboration Committee Report dated February 1, 2002; memo dated February 26, 2002 regarding renovations for Hillsborough Elementary School; memo dated June 11, 2002 regarding school budget issues; and memo dated June 6, 2002 regarding fund balance information. John Link reported that he is recommending a $2,516 per-pupil allocation far 2002-03. For the Chapel Hill-Carrboro City Schools it would total $26,201,624 and for the Orange County system it would total $16,029,336. The increase for CHCCS is $1,392,964 and for OCS is $115,364. This is driven by the number of pupils for each system. There is a recommended reduction of one cent for the district tax in CHCCS because the funding is over what was requested. There is a recommended $500,000 in interest earnings from certificates of participation for Cedar Ridge High School to be used by OCS toward one time capital start-up costs for the high school. Chapel Hill-Carrboro City Schools Presentation Neil Pedersen thanked the County Commissioners for the opportunity to share their budget request with the County Commissioners. The major accomplishments for 2001-2002 include implementation of the Minority Student Achievement Plan, implementation of the Curriculum Management Plan, new strategic plan, adoption of district High Performing School Environmental Standards, opening of Smith Middle School, and beginning construction of Elementary School #9. He listed the district cost savings initiatives as follows: partial outsourcing of custodial services (savings of $80,000 per year), proposed district-wide copier management contract, engagement of Robert S. Segal, CPA PA to identify potential sales tax revenue, and a contract with Educational Consortium for telecommunications savings. Regarding other studies by Segal and Associates, he said that they would like to wait to see the results from the Orange County Schools to see the savings before they decide to engage in a contract. He said that his understanding is that 100°~ of the savings go to the consultant in the first year, so they would like to try and identify the savings on their own. He listed the spending limitations they face this year because of the State budget. They have instituted a hiring freeze on all local and State paid positions except teachers, principals, and assistant principals; they are strictly enforcing expenditure deadlines; they have placed a freeze on out-of-state travel unless approved by the Superintendent; they have placed a freeze on new travel plans for this fiscal year and they have placed restrictions on expenses incurred for internal meetings. Regarding collaboration, he made reference to a cover memo and statistical backup on the student collaboration survey. There is some interest from the students in taking advantage of opportunities outside of the school system. Regarding collaborating on purchasing certain items, there is some interest from the Institute of Government in doing a study on this possibility. The School Facilities task force is studying and will report on citing and planning new facilities. He gave his definition of a budgetary mandate, "A funding requirement created by a Federal or State directive, enrollment growth, or increases in regulated costs such as utilities." He gave some examples of past mandates such as salary increases, changes in student-teacher ratios, and increases in health insurance costs. He explained the process they followed in doing their budget. He provided the schools with a projection of their budgets with no increases and required them to look at how they could reallocate those resources to meet their goals. If they could not meet the goals, then they had to justify any budgetary increases that they were requesting. They presented all of the requests from schools and departments to the board at the planning conference in February. The requests totaled an amount very similar to what they have seen every year - somewhere in the $5-6 million range. They agreed that they would submit a budget that was based upon the same per pupil County appropriation that was in the current budget. He said that their requests were na fewer this year, but they were trying to be sensitive to the situation that the County was in and put a restraint on their request. This is partly why the request is lower than the Manager's recommendation. The budget request includes $576,192 for growth and $411,700 for recruitment, retention, and development of quality staff. This would have been above the per pupil appropriation, so they made some internal budget reductions in support services and instruction services for a total of $866,292 net increase in revenues. The net increase in revenues proposed by the County Manager would be $1,098,691. Neil Pedersen said that the funding of the per-pupil and the recommendation to reduce the district tax by one cent will increase their per pupil amount by $24.00. Regarding the additional $232,399 that would be allocated to the school system, he outlined the possible State budget reductions based on preliminary Senate reports which would total $393,287. Regarding State employee pay increases, he is not sure if any increases are planned but they have not planned for any salary increases. Their fund balance of $2,032,747 or 5.45°~ is right on target. After all bills have been paid, they project their fund balance to be a little over $2 million dollars. The recurring capital reductions totaled $572,418 and a list is in the printed presentation in the Permanent Agenda File in the Clerk's office. He feels that once the budget process is aver that they should review their pay-as-you-go CIP budget and they may come back with a recommendation to change some of the funding for certain items in their Capital Investment Plan (CIP). Chair Jacobs said that the budget does not look any better, at this point, far next fiscal year and he appreciates both school systems working with the County. Commissioner Halkiotis made reference to collaboration and joint operation of services and said that transportation right now is coming out of one revenue stream in Raleigh for bath school systems. He is wondering if there could be an economy of scale for both systems to work together on transportation issues. Regarding child nutrition, Chapel Hill-Carrboro City Schools have outsourced this for several years to Marriott-Sedeco. He asked if Marriott pays a living wage to its employees. He made reference to outsourcing custodial services and said that the County Commissioners found out that the people under contract were not receiving a living wage or insurance coverage and the County chose not to go that route. He feels that both systems have worked together very successfully in the area of transportation. Outsourcing of custodial services may achieve an economy of savings, but he would want to be sure that the workers are paid a living wage. He feels the two school systems should work together as much as possible to achieve savings. Neil Pedersen said, in response to Commissioner Halkiotis' remarks, that food service is a different relationship in that all the food service employees are employees of the Chapel Hill- Carrboro City Schools under the State plan. The custodial employees are not Chapel Hill-Carrboro City Schools employees but employees of another firm. They use a firm that does not hire people without a background check and in most cases people who have another full-time job. These employers do not provide benefits for their part-time employees but they do for their full-time employees. Their salaries would fall below the living wage that Orange County has set. That is an issue that the Chapel Hill-Carrboro City School Board has discussed. They looked at cost savings and also the cleanliness of their buildings which has been excellent. Nick Didaw said that they discussed this issue at a recent school board meeting. They are not doing a complete outsourcing but a mixed plan outsourcing the major heavy duty work, but on each site the school system maintains their own employees for daily maintenance responsibilities. The program is being slowly phased in so that their employees are not let go but are worked into the program. Chair Jacobs made reference to the results of the survey that indicate that students in the Chapel Hill-Carrboro City Schools are interested in attending Cedar Ridge High School to take advantage of different opportunities. Neil Pedersen said that students are interested in other choices and flexibility. The school board has just received the results of the survey and will do an analysis and further discuss the results. Valarie Faushee said that she has long believed that many students are interested in being successful at working upon graduation from High School. It is apparent that every student is not going to go to college. Commissioner Gordon made reference to the district tax and Neil Pedersen said that the question poised to them was haw they would address the reduction in the district tax. He said that they will be asking for reconsideration of an increase in the district tax for the opening of elementary school #9 next year. Orange County Schools Presentation Superintendent Randy Bridges said that he provided to the County Commissioners a copy of the survey that they distributed to Orange County students. It indicated that some of their students would be interested in attending another High School. There will be further discussions on the different types of classes being offered by both systems. With regards to outsourcing child nutrition programs and custodial services, they have done studies an this and have provided that information to the Manager. In reference to the startup costs for Cedar Ridge High School, he feels that the $550,000 will allow that school to open. Mr. Segal is doing a study of haw they can realize savings and will be making a presentation to the school board in July. Mast of the savings will be through sales taxes and copier services. Regarding the question of how they would get their fund balance to 2.7°~, he said that they would have no problem with this. He said that the Orange County budget allocation for 2001-02 was $308,882. He thanked the County Manager for the $79 per-pupil increase. The actual enrollment for 2001-02 was 6,186. The Department of Public Instruction is telling them that there will be a reduction in enrollment to 6,142. He is afraid that they will have additional students. He feels that if they do came in with an enrollment about what DPI projected that money will not be available far teachers and supplies for these additional students. They have opened two new schools in the last two years -Pathways Elementary and Cedar Ridge High School this August. This has put a severe strain on the fund balance and the ability to address other needs. They need eight to ten new certified teaching positions and eight classified positions for Cedar Ridge. Their fund balance is $2.1 million with unappropriated funds of $928,795. They expect their health insurance increase to be 30 percent with utilities increasing an additional $55,000 and the lass of six state teaching positions totaling $311,370. He gave a list of what positions and other items they would need at Cedar Ridge High School. They had to go to their K through 5 schools and reduce staff which may increase the student teacher ratio from 1:22 to 1:23 or greater. The startup costs for Cedar Ridge will total $1 million to $1.2 million. They had to transfer 13 existing teaching positions to Cedar Ridge, which is a reduction of $674,635. The total budget request for 2002-03 is $880,237. They are about one half million dollars short of having what they need to open this High School. He said that when the superintendents went to Raleigh, they asked that the State make their decisions on the budget quickly. He showed what a percentage of State reductions would cost the Orange County School system. A 2% reduction would cast $553,995.08; a 2.5°~ reduction would cost $692,493.85; a 3% reduction would cost $830,992.62; a 3.5°~ reduction would cost $969,491.39; and a 4% reduction would cost $1,107,990.16. The total State Allotment for 2001-02 would be $27,699,754.00. Chair Jacobs made reference to the Cedar Ridge start-up costs and the $380,000 for athletics and asked if they thought about delaying these activities for one year. Randy Bridges said that they considered cutting it out of the middle schools, but it got a very negative response from the community. Some of the athletes in the high school are college prospects so they never thought about delaying the athletic program at the high school level. Susan Halkiotis said that there is already enough disruption with moving students from one High School to another and opening a school with less programs would be awful. A full athletic program is important to any school and particularly in this case. Chair Jacobs asked how they would address aone-half million dollar shortfall. Randy Bridges said that he is waiting until he knows far sure what cuts the State will make to their budget. They will have to cut programs, personnel, and supplies and increase teacher-student ratios, etc. He said that it has been two years that they have not been able to fund expansion items and next year will make three years. Chair Jacobs asked if the school board had had any conversations with the State legislators about these issues. Dana Thompson said that when she talked with a person in the legislature that it was suggested that the governing boards meet with the Orange County delegation to talk about those issues that impact schools and County government. Chair Jacobs suggested going to Raleigh to meet with the Orange County delegation for dinner to discuss these issues. Chair Jacobs made reference to the CIP and asked if each school system has a priority list of their items in the CIP. Randy Bridges said that they will be looking at those items that address the safety needs of their system. Neil Pedersen said that their priorities address health and safety issues first. Commissioner Gordan asked John Link if all the questions asked by the County Commissioners of the school boards have been addressed and John Link said yes. Commissioner Carey said that he was at a meeting sponsored by the Institute of Medicine which focused on efforts of the State on increasing the tax on cigarettes. They talked about a new initiative to prevent our youth from smoking through advertising. It showed the number of school districts that have declared themselves as smoke-free environments and they listed Chapel Hill- Carrboro City Schools as the only system in Orange County which has done that and it did not include the Orange County system. He asked the Orange County School Board about this. Randy Bridges said that they da not allow students to smoke but adults are allowed to smoke in designated areas outside of the buildings. Chapel Hill-Carrboro City Schools does not allow any smoking on any of their property. Commissioner Carey said that we pay a high price because of the impacts of smoking. He asked that Orange County schools reconsider their policy because of the message it sends to our young people. Also, women are being disproportionately influenced because of the advertising. Dana Thompson said that their school board will further discuss this issue. Commissioner Gordon made reference to the CIP and was interested in classroom additions and renovations, new schools, new space, system wide needs related to health and safety, athletics, technology, and other. She asked for a picture of the ten-year CIP of these categories. John Link said that he could confer with the two school systems and come back with some figures Commissioner Gordon asked whatever happened to alternative sources of revenue in the Orange County schools and how that issue stands. Brenda Stephens said that the status of a district tax was that the school board decided to wait until Segal gave their report and then they will move forward sometime very soon. Commissioner Halkiotis said that maintaining a school building is an expensive proposition. He cautioned that when repairs are delayed, they can cost more in the long run. In most school operations, replacementlrepairs are costly. He said that it was ridiculous that the State sent a directive for school systems to use parts from buses which are not in service to repair those being used on a daily basis. Susan Halkiotis expressed resignation about the budget for this year. She said that school board members and parents have resigned themselves to the fact that nothing can be done about the budget crisis this year. She said that the State allocation is not going to be pleasant, and they know they need $880,000 and they are getting $115,000. They also know that they have a huge gap in funding the startup costs for Cedar Ridge High School and the budget forecast for next year does not look any better. She said that Orange County schools will reduce their fund balance to cover the deficit they are faced with, and they could go lower and not fully fund the startup costs. She wonders where they are going to recover the deficits they are going to suffer from last year, this year, and next year. She is worried where they are going because it appears to be downhill. She asked the County Commissioners to consider the opportunity to look at funding for both school systems in the way they have approached building standards, land use issues, and collaboration issues, and talk about the future and what happens if their journey continues on a downhill course. She said that the Chair mentioned that following the presentation from Segal, the Orange County School Board will be discussing whether they will be asking the County Commissioners to include on a referendum the district tax for the Orange County system. She feels they need to further discuss the funding inequity between the two school systems. Chair Jacobs said that the County Commissioners are aware of what is happening in the schools with regards to funding and they are also worried. No one anticipated what the 9111 event would da to the economy. He said that the County Commissioners know they have to look at what they can da differently and they extend that challenge to the two school systems. ADJOURNMENT With no further items to discuss, a motion was made by Commissioner Halkiatis, seconded by Commissioner Carey to adjourn the meeting at 9:15 p.m. The next meeting will be held on Tuesday, June 1$, 20Q2 at 6:00 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. Barry Jacobs, Chair Beverly A. Blythe, CMC