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HomeMy WebLinkAboutMinutes - 20060608APPROVED 9112/2006 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS BUDGET WORK SESSION June 8, 2006 7:30 p.m. The Orange County Board of Commissioners met for a budget work session on Thursday, June 8, 2006 at 7:30 p.m. at the Southern Human Services Center in Chapel Hill, North Carolina. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Moses Carey, Jr., Valerie P. Foushee, Alice M. Gordon, and Steve Halkiotis COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEY PRESENT: COUNTY STAFF PRESENT: County Manager John M. Link, Jr., Assistant County Managers Rod Visser and Gwen Harvey and Deputy Clerk to the Board David Hunt {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. Chair Review of Schedule and Topics Chair Jacobs went through a few items at the Commissioners' places. There was an MSNBC.com article from Lisa Stuckey and Dr. Pedersen, two PowerPoint presentations from the school systems, a report on the recommendations of the Fair Funding Work Group, two handouts from the CHCCS about school health and safety resources, a handout on per pupil allocations to each district, and a handout about annual debt service projections and the annual debt service capacity. He made reference to Appendix Table 8. This table is North Carolina's total operations general fund since 1970. The first column has the percentage of money spent for public schools. Since 1972-1973, it has been on a steady decline as a percentage, and it is now down to 41.1 °~ as of 2000-2001, which was the last year this information was available. He said that Orange County is doing better than the State in funding the schools with 48% of its budget. He said that the County Commissioners were asking the citizens to raise the property tax every year primarily to pay for public education. 2. School Budgets and CIP - County Manager Comments John Link pointed out the basic facts of his recommendation on education in the proposed budget. He recommended $79.8 million total for both school systems, which is 48.4% of the total general fund and an increase of $7.6 million that includes operating, capital, and debt service on capital. He recommended a per pupil of $2,957, which is a $161 increase. The total recommended current expense for CHCCS is $33.1 million and for OCS, $20.6 million. This is an increase for CHCCS of $2.7 million and for OCS, just over $1 million. This is based on the number of students in each system. He said that in his presentation of the budget, he wanted to make sure that there was enough money to address the Governor's recommendation on the increase of salaries for teachers and certified staff. He also recommended $800,000 as a reserve fund by which the Board could address either out of the per-pupil ideas (funding SRO's, social workers, nurses} or any other issues. -CHCCS Superintendent and Board of Education Presentation CHCCS Board Chair Lisa Stuckey made some general comments. She said that there has been a lot of media hype about the global economy and about U. S. high schools recently. She made reference to the article she distributed about North Carolina high school reform. She said that the economy is changing and North Carolina is losing manufacturing, agricultural, and furniture industry jobs to foreign countries. Work for the uneducated has also become so low-paying that it cannot provide a decent living. She said that they must graduate every student with either sufficient skills to obtain a good job, ar prepare far college; and they must graduate students who are ar will became truly world class and able to pursue careers that will make the economy competitive. She said that they could not afford to maintain the status quo, but they must move forward to meet student needs and raise achievement. She said that the Manager's recommended budget covers their match of the State proposed teacher pay raises and some of their cast increases, but it does not provide sufficient funds for them to stay even. It does not provide funds for growth to implement the new high school schedule or to open Carrboro High School. They believe that the community supports the efforts to move forward and the budget request outlines the needs. She pointed out that traditionally the special district tax has been used to support the opening costs of new schools. She said that their board voted to support funding outside of the per pupil allocation for health and safety, so they are pleased with the Manager's recommendation and the Fair Funding Work Group recommendation. She encouraged the Board to move forward with this initiative. Superintendent Neil Pedersen made a PowerPoint presentation. He said that the community has high expectations of the schools. He said that, as they look at the district's performance there are some indicators of which they can be proud and others that confirm that they have much work to do. They have made significant strides with African American students in reading and math at the elementary school level. The high school level results are more mixed. Recently, the stakes have increased on the EOG tests and students must pass the four exams in order to graduate from high school, starting with next year's freshman class. CHAPEL HILL-CARRBORO CITY SCHOOLS Board of Education's 2006-2007 Budget Request To the Orange County Commissioners June 8, 2006 Student Progress Report Reading EOG Percent Proficient (chart) Math EOG Percent Proficient (chart} English I EOC (chart) Biology EOC (chart} Other Highlights - 176 National Board Certified Teachers representing 20°~ of the district teachers - 1185 average SAT score for 2005-06 - 26 National Merit Finalists - 6 State Championships in 5 different sports - 4 Odyssey of the Mind Teams qualified for the International Championships - 5 high school students to compete on the U. S. Physics team Cast of the New High School Schedule - 17°~ increase in availability of classes to students - 3,500 high school students wlone additional class period - Maximum teacher class load is 125 students 0 3,500 students with 1 more period per day divided by 125=28 new teachers - Budget request for only 8 new teaching positions High School Reform - Students able to meet new high school requirements - Students able to explore more electives - More assistance to students during the day - More opportunities for professional collaboration during the school day Local Impact of Governor's and Senate's Proposed Salary Increases Local Staffing 310 Certified 371 Non-Certified 681 Total - Salary and supplement for locally paid staff - Local budget funds the supplementary pay for all staff - New state positions received from student enrollment growth require additional local supplement - Must budget for the Governor's November pay increase to certified staff; covered by the state for only 2005-06 Fiscally Responsible Restored Local Fund Balance - Implemented spending constraints such as restricting professional development and out-of-state travel - Froze vacant positions for the whole year ar a part of the year - Reduced number of approved substitute requests Undesignated Local Fund Balance History (chart) Implemented Cost Savings Strategies - Down 20 Energy Savings Program - a $2,000 investment has yielded $180,000 in savings - Implemented Segal Recommendations - $423,000 recovered -majority of savings were from capital projects - Privatization of Child Nutrition Services and Custodial Services ($90,000 in savings} - Reduced outsourced printing - $10,000 in savings Subsidy for Child Nutrition Services - District has a 16% free and reduced lunch rate the lowest in the state Board supports maintaining reasonable meal prices for students: prices increased by 25 cents Budget Shortfall from Manager's Recommended Budget Requested Budget Amount Shortfall Salary Increases 2,426,852 Growth (positions and supplies} 348,862 Continuation of Current Services 848,431 Opening Carrboro High School 396,666 SUBTOTAL 4,020,811 (902,875) Implementation of 7-Period Day 564,314 SUBTOTAL 4,585,125 (1,467,189} All Other Requests 705,732 TOTAL REQUEST 5,290,857 2,172,921 Manager's Budget Provides 3,117,936 Potential Cuts to Cover Shortfall Deletion or Reductions in New Budget Items: - Classified Pay Raise (Reduce from 5% to 4°~) 110,000 - Middle School Teaching Positions (4) 245,424 - After School Proficiency Program Expansion 51,000 - Athletic Task Force Recommendations 10,000 - Data Warehousing 75,000 - Wellness Program Expansion 9,000 - Academic Assessments 29,150 -Client Assessment 27,750 - Dual Language Instructional Materials 10,000 SUBTOTAL 567,324 Proposed Reductions in Continuation Budget - Reduction of Daytime Custodians 290,000 - Reduction of .5 Clerical Position -each elem. 140,000 -Maintenance Positions {2) 85,000 - Reduce Gifted Ed. Spec. to 1 per elem. School 240,000 - World Language -reduce 4 teacher positions 240,000 - Proficiency Specialists (reduce contract period} 39,000 - Utilities 35,000 - New Teacher Vouchers -Instructional Expenses 15,000 - Support Services Travel 8,000 - Support Services Supplies 4,900 - AIG Program Supplies 20,000 - Arts Education Supplies 50,000 - Character Education Supplies 16,000 - High School Reform Professional Development 25,000 - Professional Development 200,000 - Technology Funding Supporting Re-fresh Prog. 50,000 Subtotal 1,477,990 Grand Total of Potential Cuts 2,045,224 District Tax 3% increase in the district tax base = $419,194 8% increase in costs associated with the district tax = $1,117,850 Difference $698,656 Equivalent to .92 cents on the district tax rate CAPITAL INVESTMENT PLAN 2006-16 Overall support for existing facilities is declining (graph) SAPFO and CAPS -the need far facilities is clear (chart) - The denial of CAPS based on elementary growth could begin next school year and would continue for three years - This chart assumes no spikes in elementary growth, any further increases in elementary growth will only shorten the time frame Elementary #10 -Reductions have been made! - Reductions in square footage - Reductions in furniture and equipment - Reductions in professional fees - Reduction in contingency - Reduction in technology - $9,302,023 short - Growing $1,100,000 every year - Can it be open in 2008? Unfunded Projects -Building projects now will save money - Funding for Elementary #10 is presently at $12.8 million, a shortfall of over $9 million. Inflation for every year the school is delayed could increase costs over $1.1 million per year. - No other projects are presently funded, elementary #11 or middle school #5. Those schools will be needed sooner rather than later. Superintendent Pedersen thanked John Link and Rod Visser for going through this budget process for the last time. He said that they do not ever get all that they ask for, but they are always treated respectfully and in a professional manner. -CHCCS and County Dialogue Chair Jacobs said that the Board would be working on a letter to the Chair of the CHCCS Board responding to the concerns about when Elementary #10 could be built. This is why he handed out the debt service information. Commissioner Gordon asked about denying CAPS and Steve Scroggs said that if the growth continues at the current rate, they would on November 15, 2007 start denying CAPS. Commissioner Gordon made reference to the debt capacity and when they could afford to build Elementary #10 and said that the Board has not approved a debt issuance schedule far awhile. She would like to discuss this as a Board. Commissioner Halkiotis thanked Lisa Stuckey for sharing the article from Newsweek. He felt very good about the fact that several County and school representatives visited Guilford Technical Community College five years ago and learned about the concept of middle college. He said that the article was very frightening to see Mike Easley portrayed as an education governor. Commissioner Halkiotis said that he has had concerns all along about subsidies for child nutrition. He said that he remembers reading that CHCCS used fund balance to nip away at some large deficits in the child nutrition program. Superintendent Pedersen said that when their audit was completed, they found that they were running a deficit and they had to balance it out. They did appropriate about $460,000 of fund balance to take care of the deficit. Steve Scroggs clarified that the amount was for three years of accumulated deficit. Commissioner Halkiotis acknowledged that this is a tough decision because CHCCS does not have the numbers of free and reduced lunch eligible children that would provide reimbursements, yet they need to feed kids healthy meals. There will still be challenges, even with raising the cost 25 cents. Commissioner Halkiotis said that he remembers hearing Steve Scroggs talk about an in-house energy savings program. He was hoping to get some information about this and how they accomplished an $180,000 in savings from a $2,000 investment. He asked about the expected utility increases of $274,000. He would like to see the whole utility picture. He would also like to see information about the $423,000 savings from the Segal recommendations, specifically the projects and categories of the savings. Commissioner Halkiotis said that it seems that in the whole budget document, the school system is trying to play catch-up. Steve Scroggs said that they have had the same old challenges and many things have been under-budgeted for years and to ask for it all at once would be unreasonable. Regarding the utilities, they have been under- budgeted for years, so even though they have saved money, they still need money to catch upon what has been under-budgeted. Commissioner Halkiotis asked about the possibility of the County and either school system or both school systems partnering for copying contracts. Commissioner Halkiotis made reference to "Potential Cuts to Cover Shortfall" and said that he had a meeting with the Qurham Tech representatives this week and he asked Dr. Wynn how many students they had from OCS and CHCCS and the number was not that great. He said that last year OCS requested $65,000 in transportation casts and he learned that the students ended up driving themselves. He asked if middle college was going to make it or if they should just forget about it. Superintendent Pedersen said that they were hoping after this first year that it would grow. He suggested distributing the article in the packet to all parents of potential middle college students. He thinks that it will work and take off. He knows that transportation is a huge barrier. They were supposed to have 25 students last year, but there were only eight. Commissioner Halkiotis asked about the estimated cost for middle college for CHCCS and Superintendent Pedersen said that this year it would be about $75,000. They only budgeted $20,000 for transportation and the transportation costs are minimal. Commissioner Halkiotis asked for clarification and what exactly both school systems have with school nurses, social workers, and resource officers so that they can get a handle an opportunities for possible equity in this area. He made reference to Appendix D8, School Health Nurses. He read the columns, "Funded by CHCCS Local Funds - $180,000; Funded by Orange County - $338,000; Funded by other agencies such as State or Towns - $463,000" with a total of $982,000. He asked about other agencies and verified with Superintendent Pedersen that this was State money. Commissioner Halkiotis said that he thinks some people were surprised to see the total funding far school nurses coming in at $1.6 million for bath school systems. For social workers, there are six positions funded by CHCCS at $440,230; $0 funded by Orange County; and nine positions funded by other agencies at $484,429 for a total of $924,659. He pointed out that total funding for this area in both school systems is $1.35 million. Regarding Schaol resource officers, he asked if CHCCS has been receiving assistance from Carrbaro and Chapel Hill and if this assistance was going to disappear. It was answered yes. He read the numbers for this item. There is $178,000 funded by CHCCS, $0 funded by Orange County, and $178,000 funded from other agencies (Safe Schools money). He asked about the total amount from Safe Schools money and Superintendent Pedersen said that it was on the sheet that they handed out. Commissioner Carey asked how much the total subsidy was for the nutrition program and Lisa Stuckey said $122,000. At this time, meals at the high schools are $2.45 and at the elementary schools are right at $2.00. Lisa Stuckey said that they have also negotiated with the Tawn of Chapel Hill to put the SRO's on a 10-month salary. Superintendent Pedersen said that the high school SRO's continue to work 12 months. The middle school SRO's were working 12 months because that was the contract that was offered. Commissioner Halkiotis said that it is everyone's responsibility to make sure people are safe. Chair Jacobs made reference to page eight of the Manager's recommended budget and the shortfall where it says that the Manager's budget provides $3.118 million. He asked if this counts the outside the per pupil of $400,000 and Superintendent Pedersen said no. Chair Jacobs said that there will be a presentation at the June 27th meeting from the principal of the middle college and this will be an opportunity to go commercial with this opportunity. Chair Jacobs said that last year at this time they talked about working together on computer purchases. He urged that there at least be a conversation about whether there would be any benefit in working together. Commissioner Gordon made reference to the chart, Overall Support for Existing Facilities is Declining, and asked if this was the alternative financing for alder schools that they are worried about. Superintendent Pedersen said that in general it is providing funding to renovate and upgrade the current and aging facilities. He said that the funding for maintaining buildings is flat at best. Commissioner Gordon asked how much of the pay as you go funds were used for High School #3. Steve Scroggs said $1.4 million through 2007-08. The final billing cycle will be 2008-09. Chair Jacobs said that the County has in its budget money to study and update the impact fees. - OCS Superintendent and Board of Education Presentation Chair Randy Copeland and Superintendent Carraway made this presentation. Randy Copeland said that they are facing some unique challenges this year with the building of Gravelly Hill and opening the new alternative school. He asked the Board to give due consideration and do the right thing for the students. Superintendent Carraway made the PowerPoint presentation. She said that the level of funding provided by the Board of County Commissioners has exceeded funding received by many other counties across the state. She said that as they prepared the budget, the school board and staff looked critically at the needs clearly indicated from the work done on the strategic plan, the Middle School Task Force Report, the action plan for that report, and the High School Reform Task Force Report and its subsequent action plan. These three reports, along with the Grumet Report commissioned by the Board of County Commissioners, when aligned, validate the needs in the budget. Orange County Schools 2006-2007 Budget Request VISION STATEMENT Orange County Schools will be a leader in ensuring academic success and in preparing students to be responsible citizens in a diverse world. MISSION STATEMENT Orange County Schools will provide challenging and relevant educational opportunities for students of all ability levels in a safe school environment. Through caring relationships with highly qualified staff and partnerships with the community, we will ensure that our students demonstrate high achievement and the skills necessary to function as lifelong learners and responsible citizens in a competitive, ever-changing global society. SYSTEM PRIORITIES High Student Performance Healthy Students in Safe, Orderly, and Caring Schools Quality Teachers, Administrators, and Staff Strong Family, Community, and Business Support Effective and Efficient Operations Critical Factors Driving the Orange Gounty Schools 2006-07 Budget Request Critical Factor 1: The Dropout Rate • OCS dropout rate increased in 2Q04-05 to 4.93% (from 4.57%} OCS dropout rate is higher than the state average "The higher dropout rate in OCS is a matter of concern and raises questions about the district's capacity to provide intensive support to students who are having difficulty. " --Educational Excellence Workgroup Report Stn grade -The Problem Year • Nationwide, the rate at which 9t" grade students don't get to 10t" has tripled in the past 3Q years * North Carolina has one of the nation's worst attrition rates between 9t" and 10t" grade • Of the 19,000 NC high schoo graders. The 9th grade problem in OCS 2004-05 9~ grade 9t grade Month 1 Month 9 720 students 678 students I dropouts who quit last year, more than 113 were 9t" 2005-06 10t g e Month 1 603 students We lost 16% of our students who enrolled as 9t" graders by the time they should have started 10t" grade. • Of the 109 high school students who dropped out of Orange County Schools in 2004- 2005, 48 of them were 9t" graders. 44% of our dropouts were 9th graders 27% were 10t" graders 19°~ were 11t" graders 10% were 12t" graders What happens when students don't graduate • National unemployment rate: 5.1 °~6; unemployment rate far dropouts: 53% • Nearly 80°~ of individuals in prison do not have a high school diploma. • Average earnings for high school dropouts: $18,734 (Avg. earnings for those with education beyond high school: $56,856} To Address the Dropout Rate • 2 Freshman Academy Teachers • Language Arts/Social Studies Specialist • Psychologist • 3 AVID Teachers • PAAS Social Studies Teacher • 2 JROTC Teachers • Central MICASA After School Program • AUID Supplies and Materials * JROTC Supplies and Materials • Literacy Support Freshman Academies • Help reduce dropouts • Increase attendance • Raise test scores • Improve behavior • Increase the # of promotions to 10t" grade AVID: Advancement Via Individual Determination • 5th -12th grade program to prepare students in the academic middle for 4-year college eligibility • National avg. for 4-year college enrollment: 35°~ • AVID's national avg. for college enrollment: 77% in 4-year colleges; 17°~ in community colleges JR(~TC Goals: • Develop leadership • Promote citizenship • Graduate from high school • Communicate effectively • Improve physical fitness Compared to peers, JRC~TC students have: • Higher GPAs • Higher SAT scares • Fewer absences & infractions • Lower dropout rates Critical Factor 2: Student Achievement • Decline in Achievement at Grade 6 • Achievement Gap • Increasing Requirements (charts) Student Achievement - Math and Science • By 2008, technology-driven economy will add 5.6 million jobs in the health sciences and computer industries that will require science and math skills. • Since 1975, the U.S. has dropped from 3~d to 13th in the world in the proportion of 24- year-olds who hold science or engineering degrees. • Asian universities produce about 6 times as many engineering degrees as do U.S. institutions of higher learning. Student Achievement -Science • Beginning in the spring of 2008, North Carolina will begin administering End-of-Grade Tests of Science in grades 5 & 8. • Students must be able to interpret laboratory activities. • Tests will focus on higher-order thinking skills. Ta Address Student Achievement • 3 AIG Teachers • 2 Freshman Academy Teachers • Language Arts/Social Studies Specialist • 3 AVID Teachers • 2 JROTC Teachers • 2 High School Elective Teachers • Science Kits for Inquiry-based Science and Materials • Literacy Support • AVID Supplies & Materials • JROTC Supplies & Materials • Textbooks • Central MICASA After School Program Critical Factor 3: Maintaining Momentum Using fund balance and Enterprise Funds in 2005-2006, we were able to provide: • 3 Reading Resource Teachers • 1 Math/Science Specialist • 1.5 Social Workers {matched to became 3) Maintaining Momentum * Support for Middle College High School at Durham Tech • Support for High Five • Support for International Baccalaureate • Implementation of 6th Grade Transition Program We must sustain the efforts we have begun, and we must continue to expand them. ORANGE COUNTY SCHOOLS BUDGET REQUEST FOR 2006-2007 Orange County Schools Savings {charts for revenue and expenditure savings) MandateslCritical Needs Salary Increase 8°lo Certified, 4% Other Personnel 939,925 Matching Social Security 71,904 Matching Retirement 51,458 Utilities 50,000 Charter Schools Growth 83,282 Continuation Budget {funded from fund balance 05-06} 422,401 TOTAL MANDATESICRITICAL NEEDS 1,618,970 Gravelly Hill Middle School Mandates Associate Principal 68,755 Guidance Counselor 60,046 Nurse {12-month position) 72,056 Media Specialist 60,046 Gifted Teacher 60,046 Art Teacher 60,046 P. E. Teacher 60,046 Music Teacher 60,046 Band Teacher 60,046 Technology Resource Teacher 60,046 Secretary 33,849 Bookkeeper 33,849 SI MS 33,849 Property Insurance 10,000 Utilities 200,000 TOTAL GRAVELLY HILL MIDDLE SCHOOL 932,726 Unfunded ExpansionlNew Initiatives 05-06 Human Resources 2 High School Teachers (Freshman Academy) 120,092 1 Language Arts/Social Studies Specialist {12 months) 72,055 0.8 Psychologist 48,037 1 Plumber 38,314 Increase Tenured Teachers Supplement {1 % at 15 years of Service; 2% at 20 years of service; 3% at 25 years of service) 163,821 Curriculum and Instruction Textbooks 50,000 Central MICASA After School Program 44,000 TOTAL EXPANSION OR NEW INITIATIVES BUDGET x36,319 Current ExpansionlNew Initiatives 06107 Human Resources 2 High School Elective Teachers 120,092 1 Partnership Academy Social Studies Teacher 60,046 3 AVID Teachers 180,138 3 AIG Teachers 180,138 2 JROTC Teachers 120,092 Contracted Groundskeeping Crew 150,000 0.2 Months employment for band directors 12,010 Curriculum and Instruction AVID Supplies and Materials 60,000 JRQTC Supplies and Materials 60,600 Science Kits for inquiry-based science {K-8) and Materials 60,000 Literacy Support 12,000 Auxiliary Services Transportation Fuel and Repair Parts 20.000 TOTAL EXPANSION OR NEW INITIATIVES BUDGET 1,035,116 GRAND TOTAL EXPANSIONlNEW INITIATIVES BUDGET 1,571,435 Reductions Janitorial Privatization (OHS, CRHS, ALS} 9( 0.000) TOTAL BUDGET REQUEST 2006-2007 4,033,131 ORANGE COUNTY SCHOOLS 2006-2007 Expenditure Increase County Appropriation 2005-2006 19,608,329 County Appropriation Increase 4,033,131 TOTAL PROPOSED COUNTY APPROPRIATION 23,641,460 {net increase 20.57°~) Gravelly Hill Middle School One-Time Startup Costs Art Supplies and Equipment 205,356 Athletic Supplies and Equipment 177,710 Physical Education Supplies and Materials 16,820 English Language Arts Supplies and Materials 57,339 Media/Technology Materials and Equipment 683,965 Science Department Supplies and Equipment 84,750 Social Studies Department Materials 7,056 Workforce Development Materials 47,756 Foreign Language Classroom 150 Guidance Secretary and Registrar 5,790 Nurse Supplies and Equipment 6,316 Math Department Supplies 14,592 School Wide Supplies and Materials 2,100 Middle School After School Program 40,000 TOTAL GRAVELLY HILL MIDDLE STARTUP COSTS 1,349,700 Total Gravelly Hill Startup Costs 1,349,700 Total 2006-2007 Budget Request 4,033,131 TOTAL ALL REQUEST 2006-2007 5,382,831 ORANGE COUNTY SCHOOLS Recurring Capital Budget and Capital Improvement Budget Far 2006-2007 Summary of Recurring Capital Annual Needs (chart) Summary of Recurring Capital Health and Safety Needs (chart) Total Recurring Capital Total Recurring Capital Annual Needs 494,500 Total Recurring Capital Health and Safety Needs 447.020 TOTAL RECURRING CAPITAL 941,520 Orange County Schools Capital Improvement (chart} Orange County Schools Capital Improvement Revenue (chart} State LEA Discretionary Cut -Recurring (chart) What's Not in the Budget High School Athletic Request 677,000 8 Teacher Assistants 101,456 10 Teaching Positions 600,457 Furniture and Equipment Request 499,932 Total 1,878,845 Superintendent Carraway said, in closing, that the goal for their district is that they would be the best school district forthe County, forthe state, and forthe nation rather than the best in the County, in the state, and in the nation. Their students deserve no less. She said that it is evident that the dropout rate is higher and the free and reduced lunch percentages are higher than the sister district. As a result, many of the students come to school needing more and are given less. Commissioner Foushee asked which items were included in the enterprise fund. Superintendent Carraway said that there are two enterprise funds -child nutrition and Community Schools program for after-school. Commissioner Foushee asked about the middle college program and the projected transportation costs given that not very many students are riding the bus. Superintendent Carraway said that they have the same amount in the budget this year as last year, which was $165,000. They had 12 students participate last year and they hope to have more this year. Commissioner Halkiotis thanked CHCCS Board Chair Lisa Stuckey because she brought a new perspective to her board and it went beyond the spirit of collaboration. He said that she was willing to go into the world of understanding. He said that in the last 18 months, because of the willingness of the CHCCS Board under her leadership, they did not raise a big fuss but only said, "We think that this is in the best interest for all children in this County." He said that because of the approved bond money to fall back an, they were able to absolve the OCS of $6.5 million of Cedar Ridge debt in the CIP and were able to find $3.5 million of construction cost overruns at Gravelly Hill, $4.3 million of construction cost overruns at Carrboro High School, another $1.4 million for water and sewer lines at Gravelly Hill, another $60,000 in underground electrical lines at Gravelly Hill, another $30,000+ to satisfy Mebtel to move underground communication lines from one part of the road to the other, etc. Commissioner Halkiotis said that over the past 18 months, the Board has redirected $11.5 million in both school systems. The CHCCS Board did not complain when the Board of County Commissioners took the money from the approved bond package and promised to give it back. He said that others could have screamed and jumped up and down, but the CHCCS Board took the high road. Commissioner Halkiotis asked Superintendent Carraway about page two of the PowerPoint and the percentage of school children in OCS who had some kind of disorder. Superintendent Carraway said that this was for all children and it is 10-12% of all children have same sort of emotional disturbance or disorder, something that would require a special kind of system. Commissioner Halkiotis said that the 9t" grade dropout problem has been endemic in North Carolina for a long time. He has always believed that 9t" grade dropouts begin in the 3rd and 4t"grade and just hold on. Commissioner Halkiotis made reference to page nine of the PowerPoint, Orange County Schools Savings, and asked about Waterford Sterling. Superintendent Carraway said that this was the money paid back for the roadwork done at Pathways. Commissioner Halkiotis made reference to grounds keeping crews and if OCS would consider using Orange Enterprises. Many people working on the grounds keeping crews with Orange Enterprises are students of both school systems. He commended OCS for using both sides of the paper for the CIP, but he chastised them on the budget document for only printing on one side of the paper. He said that in order to survive in the new world, they are going to have to keep kids in school and also learn haw to be environmentally conscious at all times. Commissioner Halkiotis said that he looked at the OCS PowerPoint from last year, and there was an energy conservation program, which provided cast avoidance of $178,000 in the first nine months. When the Board asked both systems for clarification a couple of weeks ago, Superintendent Carraway responded in a memo to John Link dated May 30t", and item 4, "Haw much has each district realized in energy savings?", it was answered, "At this point, we have experienced cost avoidance of $464,000, which barely covers the monthly expenses of the program of $489,000." He is confused about this. He asked if they were losing money. Superintendent Carraway said that this is one of the programs that requires investment before money is saved. When they started the program, they went for a period of 6-8 months before they actually began the program because they had to have staffing in place. There was also some technology required for the program. They expect to generate some actual dollars next year. The cost avoidance is saving them money because those are costs that they would have paid had they not had the energy management program in place. Commissioner Halkiotis said that the two Superintendents need to clear up some of the lingering questions about this. In the document, it shows Energy Management Cost Avoidance $378,913 for 2004-2005 and 2005-2006. He would like to see these numbers reduced into layman's terms. Commissioner Halkiotis went through the numbers of school health nurses for OCS. He verified that OCS does not have state-funded nurses like CHCCS. Superintendent Carraway said that they do not use any of their state funds for that. There are no funds that came specifically for nurses, but the funds came for whatever support they choose. Commissioner Halkiotis then went through the school social workers numbers for OCS. Commissioner Carey asked why CHCCS was not working with Social Services to help with 50% of their social workers. Commissioner Carey also asked how much money was associated with the 7 social workers for OCS. The document should show how much federal money is being drawn down. Commissioner Halkiotis continued with school resource officers for OCS. He said that the game is going to change on this because municipalities are not going to want to do this anymore. He made reference to the column that shows that 5 positions are funded by Orange County but there is no dollar amount. He said that under this, they should put the Sheriff's contribution there, which is $300,000+. The bottom line is that this number is going to go up because of Gravelly Hill and the alternative school. He said that this needs to be shown as another contribution. Commissioner Halkiotis reiterated the importance of using Orange Enterprises. Commissioner Gordon asked about the PRC on the last page. Shirley Carraway said that they were asked to provide the Board some information on how the funds are used in the school systems. These are state funds. The PRC 72 is Improving Student Accountability Fund and they received $170,000; PRC 69 is At-Risk Alternative Funds and they received $725,000; and PRC 48 is the Safe and Drug Free Schools Funds and they received $31,000. Commissioner Gordon asked about the reliability of these funds each year. Superintendent Carraway said that the code dictates what the money can be used for. The funds are fairly reliable. Chair Jacobs asked how much of the fund balance is going to opening up Gravely Hill. Superintendent Carraway said that they have not pinpointed a specific amount because it depends an how much they receive from the County Commissioners. They would like to maintain some small amount of fund balance. Randy Copeland said that they have spent their fund balance down upon recommendation of the Board of County Commissioners a little over a year ago to try and equalize the student offerings at all middle schools. Their fund balance is really low. Chair Jacobs said that the fund balance issue puts the Board in an awkward position and the County Commissioners have a different opinion about how the fund balance was spent. Commissioner Carey encouraged CHCCS to talk with Social Services about the cost-sharing arrangement. Fair Funding Work Group Recommendations Libby Hough made this presentation. She recognized the group members: Jamezetta Bedford, Randy Copeland, Valerie Foushee, Alice Gordon, Jean Hamilton, Libbie Hough, Michael Kelley, Dennis Whitling. The group met twice for a total of four and a half hours in response to the Board of County Commissioners' request (based on a proposal by Commissioner Gordon) that representatives of the two school boards and the BOCC work together at generating solutions to concerns about fair funding for the two school systems in this year's budget. The recommendations are supported by every elected official participating on the work group. Mike Kelley went through the recommendations. I. Capital 1. Use the $2.4 million of anticipated lottery proceeds to provide an additional funding stream for school capital projects. These funds should not supplant current funding sources. 2. Include new school start-up costs far equipment and technology in the projected capital budgets for new schools and fund along with the construction casts. 3. Review the level at which impact fees are assessed and adjust them in light of increased construction costs. 4. Allocate impact fees directly to the school districts, outside of the 60140 formula, to be used for "pay as you go funding" for school construction. II. Operating 5. The Work Group supports the "reserve fund" of $800,000 recommended by the County Manager, but with the funding considered over and above the 48.1 °~ target. This reserve funding could be used for services and programs such as (but not limited to) middle college, transportation of students between districts, other collaborative initiatives, and health and safety positions. The outcome should at least maintain the current levels of any services in either district. 6. Add one cent to the general ad valorem tax to provide additional funding for the school districts in budget year 2006-2007. This one-cent increase should be treated as additional funding over and above the 48.1 % target. 7. Commit to an additional one-cent increase to the general ad valorem tax over and above the previous year's increase to provide supplemental funding to the school districts for 2007-2008 and 2008-2009, with these increases to be treated as additional funding over and above the 48.1 % target (e.g., the total increase in the general ad valorem tax would be two cents for 2007-2008 and three cents for 2008-2009). Reevaluate the impact on fair funding at the end of this three-year period. Commissioner Carey asked if this proposal was presented as a reasonable and satisfactory resolution to the fair and equitable funding debate that has gone on for the last three years. Libby Hough said that it is a start, but it will not be fixed overnight. The charge of the work group was to address this year's budget cycle. John Link verified that item #1 is basically recommending adding another two cents to the tax rate that he recommended. He reduced his recommended tax increase by two cents by budgeting lottery proceeds as revenue for the upcoming fiscal year. Discussion ensued on the use of the $800,000 reserve and if it would have to be allocated on a per pupil basis. With no other items to discuss, a motion was made by Commissioner Halkiotis, seconded by Commissioner Carey to adjourn the meeting at 10:09 p.m. Barry Jacobs, Chair Donna S. Baker Clerk to the Board