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2010-01-29 Joint MeetingJOINT BOARD OF SUPERVISORS AND SCHOOL BOARD MEETING MINUTES January 29, 2010 Supervisors in Attendance: Staff in Attendance: Mr. Daniel A. Gecker, Chairman Ms. Janice Blakley, Mr. James Holland, Vice Chairman Clerk to the Board Ms. Dorothy Jaeckle Mr. Tim Bullis, Dir., Mr. Arthur S. Warren Community Relations Ms. Marleen K. Durfee Mr. Allan Carmody, Dir., Budget and Management Mr. James J. L. Stegmaier Ms. Kim Carter, Dir., County Administrator Schools Human Resources, School Board Members in Mr. Barry Condrey, Chief Attendance: Information Officer Ms. Marilyn Cole, Asst. Mr. David Wyman, Chairman County Administrator Ms. Dianne Pettitt Colonel Thierry Dupuis, Mr. Omarh Rajah Police Department Ms. Patricia Carpenter Dr. Lyle Evans, Asst. Supt., Schools Human Dr. Marcus Newsome, Resources/Admin. Svcs. School Superintendent Mr. Mike Golden, Dir., Parks and Recreation Dr. Dale Kalkofan, Asst. Supt., Schools Instructional Support, Ms. Mary Lou Lyle, Acting Deputy County Admin., Management Services Ms. Mary Martin-Selby, Dir. of Human Resource Services Mr. Steven L. Micas, County Attorney Mr. David Myers, Asst. Supt. Schools Business & Finance Dr. Marcus Newsome, Superintendent of Schools Mr. Michael Packer, School Board Attorney Ms. Chris Ruth, Asst. Dir., Public Affairs Chief Edward Senter, Fire Department Mr. M. D. Stith, Jr., Deputy County Admin.,. Community Development 10-64 01/29/10 Dr. Sharon Thomas, Chief Executive to the Superintendent of Schools Mr. Kirk Turner, Dir., Planning Mr. Mike Westfall, Asst. Dir., Internal Audit Mr. Scott Zaremba, Dir. of Human Resource Programs WELCOME AND CALL TO ORDER Mr. Gecker called the Board of Supervisors' meeting to order. Mr. Wyman called the School Board meeting to order and expressed appreciation for the opportunity to participate in the meeting. ' Mr. Gecker read the following statement: "There has been a lot of public discussion regarding the school division's savings from FY2008 and FY2009 totaling $12 million. In fact, there has been a call to return those funds to the school division now for use in operations in the coming fiscal year. The issues we face are long term, yet some continue to insist on short-term thinking. We have already allocated those funds to the school division and we are committed to returning those funds to the school division when the school division demonstrates that it can provide a balanced budget through not just FY2011, but FY2012 as well. If those one-time funds are used operationally in FY2011 then we will be discussing another $12 million gap at this table next year. This is exactly the same issue as the stimulus money. We requested that it not all be used for operations in FY2010 because we knew it was non- reoccurring. Now the lack of additional stimulus funding is the basis of $19 million in the budget shortfall. The school division has also asked that the percentage of taxes it receives be the same as in previous years. We do not budget by percentage, we budget by need. We are in the middle of a line by line review of items in the county's general fund budget to determine needs there. We are reviewing the proposed School Board budget in the same manner. There are some who say the Board of Supervisors has no right to review the operational budget of the school division, but we disagree. Schools is asking for more than was allocated to them in order to make up a shortfall that was largely created by state funding issues and not local. Without a comprehensive review of expenditures by the school division, there is no method for us to weigh the relative priority of programs offered. I realize that there are some that say, just give more; however, the Board of Supervisors, not the School Board, is the ultimate steward of taxpayer funds. No one should be able to just get more, without being able to demonstrate that which they were given has been wisely spent . In this year, we do not intend to allocate more without complete agreement as to how the funds will be spent. To approach this in any other manner would be to abdicate our responsibility. We fully understand the relationship between a quality school system and the future of our county. I would say that I was 10-65 01/29/10 J J 0 r] C disappointed that the administration went first to classroom teachers instead of other programs that do not impact the classroom for their initial list of proposed budget cuts. we believe that there are other items that would have lesser priority than increasing the pupil- teacher ratio by one. Although suggestions regarding elimination of core programs might generate headlines, they do little to advance us toward a solution. We look forward to continuing to work with you toward a responsible solution and appreciate you being with us here today." Mr. Wyman expressed appreciation to Mr. Gecker for clarifying the return of the savings to the school division. He stated the school division is looking at a five-year plan, not just the next two years. He further stated the School Board wants to ensure the cuts made to the budget this year are sustainable. He stated hopefully this meeting will help the constituents understand where the school division is relative to the budget. UPDATE ON THE FY2011 BUDGET OUTLOOK Mr. Carmody stated this meeting has been scheduled to discuss how to move forward on the county's and school division's financial fronts. He provided a quick overview of how far the county has come with regard to the projected budget shortfall since the fall and a review of the total projected funding gap when comparing FY2010 and FY2011. He stated there has been very little movement in the revenue side of the general fund but noticeable movement on the expenditure pressures side, which is due to the VRS rates being lower than anticipated and the postponement of equipment replacement and capital replacement needs. He further stated the school division has seen substantial movement in the revenue and expenditure sides of the budget, which is attributable to lower VRS rates than anticipated and a reduction to their debt service numbers. He stated the economic conditions continue to remain stagnant. He further stated the General Assembly and Governor McDonnell are reviewing the proposed budget of Governor Kaine. He further stated in the budget being deliberated right now, the federal stimulus money which was going to be available for the school system in 2011 has been used by the state to back fill the state general funds and not be available as previously planned. Mr. Wyman stated the School Board knew the federal stimulus revenue stream was going to be temporary, whether it was going to go away in FY2010 or FY2011. Mr. Carmody stated going forward with the state budget shows a revised FY2010. forecast for general fund state revenues with a decline of nearly 7 percent. He further stated the state is projecting 3.8 percent general fund growth in FY2011 and 5 percent in FY2012. He provided an overview of the percentages of changes in the county real estate assessments. He stated 93 percent of the residential properties in the county saw a decline in their assessments. He provided a summary of feedback from community meetings. He stated there were nine community meetings on the budget outlook with over 500 participants. He further stated residents identified public safety, 10-66 01/29/10 education and support for the most vulnerable segments of the population as top priorities. He stated there was an overall willingness to entertain some revenue options as part of the solution which would be coupled with spending reductions. He further stated the County Administrator considered the feedback from the community and the Board's priorities for public education when he established the local funding levels for education. He stated the county and the schools collectively rely on primarily state and local revenues to varying degrees. He further stated state revenues make up 16 to 18 percent of general fund revenues on the county side and are closer to 50 percent on the school side. He provided an overview of the year over year percent change of the general fund versus real estate taxes. He stated the funding allocated for education allowed for many successes. In response to Mr. Wyman's questions, Mr. Carmody stated the ten-year 8.2 percent increase in the School Board's budget is adjusted for inflation. He further stated there has been an incremental inflation adjusted increase of less than one percent each year over this period. THE FY2011 BUDGET Dr. Newsome expressed appreciation to the Board of Supervisors for the opportunity to present the school division's budget. He stated Mr. Gecker articulated several questions and challenges for the school division in his opening comments and he is confident the presentation will be able to respond to most of them. He further stated the school division cannot articulate the recommendations in the budget without making a linkage to student achievement. He stated there has been very generous support to the school division from the county and the state over the past several years. He stated the school division's core beliefs are learning is the core purpose; effective teaching is the most essential factor in student learning; effective leaders support learning; trusting relationships and core values foster learning; the citizens, parents, students and employees are partners in sustaining competence and investing in excellence; and excellence requires planning and change. He provided an overview of some of the organizations that have recognized the school division over the last several years. He stated the school division has achieved high performance relative to the SOLs but has sustained it with all schools fully accredited. Mr. Myers stated the Superintendent has prepared a budget and presented it to the School Board. He further stated a significant portion of the successes of the school division are attributable to the efforts of staff, teachers, and the support of parents but the dollar investment by the county and the state cannot be ignored. He stated there has been a significant investment in the school division along with significant gains in achievements. Mr. Holland stated Mr. Myers has done an excellent job helping the Board of Supervisors understand the School Board's budget. He further stated it is important to J J J 10-67 01/29/10 review the CIP because 13 percent of the increase is due to debt service. C C•7 C Mr. Myers stated the most significant investment in the school division has been additional staff and increasing teachers' salaries. He further stated the $138 million investment included 586 additional positions from 2005 to 2010 and provided a breakdown of those positions. He stated the teacher salaries on average are close to market average. He stated a significant number of exceptional educational and reading teachers were added for the reading initiative. He further stated as the Superintendent's budget is reviewed, there is a correlation between the positions added and the proposed reductions. He stated while the school division tries to measure the value and cost of achieving the last 5 percent to reach 100 percent passing rate on SOLs, it is safe to say the children represented by that 5 percent are the most expensive students that require the most resources. Ms. Jaeckle stated the bulk of the increase in the SOL scores was prior to 2005. She further stated she has been trying to find out how much making Annual Yearly Progress (AYP) has been costing the school division. Mr. Holland stated he would like to look more closely at the technology Standards of Quality (SOQ) with respect to the CIP and state mandates. He further stated he would like to look at the opportunity of using the Virginia Public School Authority to fund technology for the school division. Mr. Wyman stated the five percent increase in the SOL scores is equivalent to 3,000 kids in the school system. He further stated the affect of those 3,000 kids on the community needs to be taken into consideration. Mr. Myers stated an important measure to ensure the school division spends the- funding wisely. is to compare with how other school divisions have spent their funding. He further stated even with all of the additional money which was invested in the school division from 2005 to 2010, Chesterfield County is still one of the most cost effective school divisions in the state. He stated Chesterfield is an extremely cost effective and successful school division. He stated the budget reduction from 2009 to 2010 was $22.9 million with additional fixed costs based on local choices of $10 million, for a total budget reduction of $32.9 million. He stated with those reductions the school division had no salary increase or decrease, student teacher ratio was not affected, and 250 positions were eliminated, which only affected about 10 employees. In response to Mr. Holland's question, Mr. Myers stated only six or seven employees lost their job last year.. In response to Mr. Gecker's question, Mr. Myers stated he does not have the exact number of teaching positions that were eliminated last year. Dr. Newsome stated only about 25 percent of the cuts made to the FY2010 budget affected the classrooms. He further 10-68 01/29/10 stated the School Board tried to minimize the negative impact on classrooms in the FY2010 budget. Ms. Carpenter stated instructional assistants were affected by the cuts to the FY2010 budget. In response to Mr. Holland's question, Dr. Evans stated there were approximately 260 teachers hired due to attrition. He further stated in previous years the school system had hired between 450 to 500 teachers. In response to Mr. Gecker's question, Dr. Evans stated although some specific reading teachers were eliminated, regular classroom teacher positions were not eliminated in the FY2010 budget. Mr. Myers stated the federal stimulus funding was essentially placed in the operating budget to pay salaries for staff, which deferred the decisions that were going to have to be made last year to this year. He further stated the school division is seeing a negative impact of $11.5 million which could have been used to purchase buses, textbooks and instructional materials. He provided a breakdown of the proposed FY2011 budget. He stated there is a .small amount of funding in the school division's budget which is not allocated to instruction. He further stated the proposed budget for FY2011 is a reduction of 3.5 percent or $26.4 million from 2010. He provided a breakdown of the proposed reductions in the school division's budget. In response to Mr. Gecker's question, Mr. Myers stated the reason there is so much concern about raising the PTR by one in FY2011 is due to the number of courses and offerings that have been added to the school system. Mr. Wyman stated perception has a lot to do with how the school division is viewed. He further stated in 2000 the citizens had the perception that the school system was great with only a 95 percent pass rate for the SOLs. He stated in that timeframe the school system was much weaker than it is now. Ms. Jaeckle stated the big increase in success with the SOLs had to do with curriculum alignment and not necessarily expenditures or adding teachers. Mr. Wyman stated many of the investments made by the school system have helped achieve the results. Ms. Carpenter stated the school system did not have the same requirements in 2000 as there are today. Mr. Gecker stated there have been decisions made by the school division to increase expenditures which may not have been necessary to reach 100% pass rate with the SOLs. Dr. Newsome shared a brief history in the course of education which elaborated how the expectations of a school division have changed over the last several decades. He stated the standards have increased every year and in order for a school division to maintain the demands of the laws, J J J 10-69 01/29/10 the expectations of the school divisions on the students and teachers have had to increase. 0 C Ms. Jaeckle stated she does not understand why the increase of PTR by one will affect the number of offerings for students in the schools. She further stated people move to Chesterfield for the. courses offered for their children. Ms. Carpenter stated the PTR was increased in 1996 by one and the school division is still trying to recover from that. Ms. Pettitt stated the increase in PTR is going to affect grades 4 and 5 the most because K-3 is more protected. She further stated the world has changed substantially and the diversity of the population contributes to the teachers having more trouble controlling the classroom. She stated the school division tries to establish good classroom behavior in the younger grades. Ms. Jaeckle stated all of the literature is saying the PTR is going to drastically affect the class offerings at the high school level. Mr. Rajah stated an increase of the PTR by one is an increased demand on resources. He further stated it is huge burden on the teachers to control the classroom with an increase in PTR. Ms. Pettitt stated every school gets and the principal has to look at the decide how the teachers are going further stated the teachers are pl first and then the principal has to teachers are left for the electives. a lump sum of teachers student population and to be divided.. She aced in core subjects look and see how many Ms. Jaeckle stated she did not understand why the school division had all of the offerings in 2000 with a higher PTR. In response to Ms. Jaeckle's question, Ms. Pettitt stated there are more offerings for the students now than in 2000. In response to Ms. Jaeckle's question, Dr. Kalkofan stated if the PTR is increased in a high school that means the number of sections included in the master schedule is reduced. She further stated the school division is trying to balance the expectations of No Child Left Behind and making the Annual Measureable Objective and offering choices with electives. Mr. Holland cautioned the School Board in reviewing the budget that grades 4 through 7 is a critical juncture for high school. In response to Mr. Gecker's question, Dr. Newsome stated prior to the implementation of the reading initiative, the school division had a reading teacher at all of the elementary schools and the initiative added a second teacher. Mr. Gecker stated it seems that have been more responsible for 10-70 the reading teachers would the increases in the SOL 01/29/10 passing rates than some of the other items not proposed to be cut. Dr. Newsome stated it would be counter-intuitive to argue that the school division should be reducing reading teachers because he does not feel they should be cut. Mr. Wyman stated it is difficult to cut any of the initiatives because he feels they are all important to the community as a whole. Dr. Newsome stated the list in the presentation was organized not by importance but simply numerically. He further stated all of the programs are important to the achievements made by the students in the school division. Mr. Gecker stated the Board of Supervisors is looking to establish the goals and the principles which are going to guide the budget decisions. He further stated the guiding principles are not reflected in the numbers that have been put before the Board. He stated approximately $40 million worth of proposed cuts were reviewed and items which are not classroom related did not make the initial round of proposed cuts. Mr. Myers stated the school division can review the items which were not included in the first round of proposed cuts and find items which would not affect the classroom. Mr. Holland stated he would not include athletics or music in the proposed cuts because they are important to the education of children. He further stated he would not propose to cut reading teachers either. He stated the budget needs to be reviewed more closely to find areas which will not affect the classroom. Mr. Wyman stated the school division's budget needs to be reviewed from a priorities perspective and a cutting perspective. Mr. Myers stated the Superintendent's budget would decrease $25 million, which would be an 8.2 percent reduction from 2009 to 2011 in the operating budget. He further stated the funding from the state has decreased proportionately greater and faster over the past three years than the county's funding. He further stated the identified revenues versus the Superintendent's proposed budget leave an unfunded amount in the budget of $16.5 million and the school division has no authority to generate its own revenue except for fees charged. He stated the $16.5 million shortfall is equivalent to an additional reduction of 112 teachers, pay cut of one percent, and reduction in support for the dental plan, to name a few. He further stated the school division will continue to work with the General Assembly on funding for localities and school divisions. Mr. Holland stated he has reviewed the amount of dollars transferred to the school division from 2000 to 2009. Mr. Wyman stated that one of the bar graphs presented shows that even though the percentage of funding decreased from J J J 10-71 01/29/10 2000 to 2009 for the school division, the dollar amount did increase. In response to Mr. Gecker's question, Mr. Myers stated for every $1 million the school division doesn't borrow, it saves approximately $90,000 in debt service. C 0 C~ Mr. Gecker stated if the school division took the $21 million in the CIP and transferred it to the operating budget it would equate to $1.8 million which would replace the reading teachers in the budget. Mr. Wyman stated the school division is looking at the next five years and as a part of the plan will incorporate the impact of the different changes. Mr. Gecker stated he looks forward to continuing to dissect the pure numbers of the budget at the Budget and Audit Committee meetings, which have been reasonably successful, and bringing the information back to both Boards in the future. In response to Ms. Durfee's question, Mr. Myers stated the school division has done some preliminary work on which fees could be charged. He further stated the primary areas in which fees are charged are community use of buildings, field trips to pay the bus drivers, and fees charged to students at the school level for certain activities. He stated HB491 in the General Assembly, if passed, will have a negative impact on the school division relative to the fees charged to students for certain activities to the tune of approximately $700,000. He further stated currently the school division recoups less than 50 percent of the cost of those items. In response to Ms. Durfee's question, Mr. Packer stated the school division has .looked at what is available for the schools to charge fees. He further stated the Constitution of Virginia requires that public education in Virginia be a free education so the school division is limited on .what fees can be proposed. He stated the school division is currently implementing most, if not all, of the fees which are permitted by State Code or the Board of Education. He further stated the emphasis now is not looking for new types of fees but looking at the possibility of increasing the fees, which are currently charged. Ms. Jaeckle stated the Board of Supervisors is trying to get to the root of the facts and figures. She further stated she picked up from the public that they do not like graphs and charts being chosen which goes to the county's advantage. She stated when grants are not counted towards the calculations for the cost per pupil for the schools, it could be misleading to compare if other localities include grants they have received in their reporting. She further stated the school system in the 80's attracted people to move to Chesterfield due to courses which were offered for the students. She stated she is trying to figure out what has happened between 1985 and .2005 for the electives to be threatened because that is what made the quality school system. 10-72 01/29/10 Mr. Holland expressed appreciation to everyone for the hard work in gathering the information for the Board- of Supervisors and School Board. He stated the county is facing unprecedented economic times. He further stated he looks forward to the opportunity to work with the School Board to look at the smart cuts which will have to be made, that will not impair education. He stated everything needs to be reviewed including the CIP and a detailed review of the FY2011 operating plan. Mr. warren stated occasionally he reads in the newspaper about struggles in a committee, but the committee structure is an important part of the process. He further stated the Budget and Audit and the School Board Liaison Committees are doing a wonderful job discussing the budget. He stated the public needs to focus on communicating to the legislatures to ensure the local governments receive the funding necessary for education. Ms. Durfee stated the Board of Supervisors and School Board have come a long way since last February. She further stated the Boards are learning and growing from each other throughout the process. She expressed appreciation to Mr. Myers for bringing all of the information forward to present to the Boards. She stated she looks forward to future discussions on the costs of categories on the school and county side. She further stated it is necessary to have the discussions on the CIP to ensure the Board is a good steward of the taxpayer's dollar. She stated the bulk of the cuts that the school division faces are coming from the state, not the county. She expressed concerns relative to the public wanting the Board of Supervisors to make up for those cuts, which is something a local governing body cannot do. She stated the public needs to stress to the state legislatures that the state cannot push the sole responsibility of education and transportation onto the local officials. Mr. Wyman stated the School Board has not appointed any members to the Liaison Committee. He further stated he and Ms. Durfee are going to talk about the format of the committee and will be moving forward on it. He stated he attended a meeting with Mr. Rajah, Dr. Newsome and Delegate Kirk Cox to discuss the prognosis relative to the numbers that were shown from the state. He further stated Delegate Cox made it clear that the problem at the state level was not going to get better in terms of the deliberations going forward. He stated as the budget is being reviewed item by item, the impact that will be made by the cuts on an entire school needs to be taken into account. He further stated Beulah Elementary School is one of the county's shining stars due to the strides made at the school in terms of SOL pass rates. He stated the grant writers at the central office have received federal funds to establish afternoon programs which along with reading specialists, technology integrators and volunteerism from parents, have placed Beulah in the top quartile in terms of pass rates. He further stated the cuts at the county level will impact how the Comprehensive Plan is perceived. He stated the Board needs to be cautious to avoid pitfalls that may be seen in the schools relative to the cuts proposed. J J J 10-73 01/29/10 Dr. Newsome stated a great deal of concern has been expressed about the priorities which have been laid out in the school division's budget. He further stated over the next several weeks the school division will be reviewing the budget. He stated approximately 97 percent of the school division's budget is comprised of compensation and benefits. He further stated the school division is open to look at innovative solutions regarding working with the state and reviewing the CIP. Mr. Gecker expressed appreciation for the School Board's participation in the meeting. He stated there has been a lot of discussion about the items presented at the meeting. He further stated the Budget and Audit and School Board Liaison Committees will continue to work through the budget and CIP for both the county and school division. On motion of Mr. Holland, seconded by Ms. Jaeckle, the Board adjourned to February 10, 2010 at 1:00 p.m. in the Eanes Pittman Public Safety Training Center for a joint meeting with the School Board and Planning Commission regarding the Comprehensive Plan. Ayes: Gecker, Holland, Jaeckle, Warren, and Durfee. Nays: None. J mes J. tegma' r Daniel A. Gecker `~ounty Administrator Chairman 10-74 01/29/10