Transcript Document

Building and Sustaining the
Business Manager’s Relationship
with Board Members
Luann Mathis, Business Manager, Prospect Heights ESD 23
Lauri Calabrese, Asst. Superintendent of Finance, LaGrange ESD 102
Ann Williams, Director of Business & Ops, Bradley-Bourbonnais HSD 307
Agenda
• School Board Roles and Responsibilities
• Building & Sustaining Relationship
• Board Members Should Have a Basic
Understanding of Business Office Functions:
– School Finance
– Business Operations
• Question and Answer Session with Real Life
Board Members!
Origins and Basic Function of
School Boards
 Grew out of town meetings dating back to the original
Thirteen Colonies.
 Basic Function of the School Board remains the same:
represent all constituents within their district providing
local control over education.
 ALL CONSTITUENTS: Administrators, teachers, support
staff, students, parents, non-parent tax payers, local
businesses, special interest groups etc. etc.
IASB Mission Statement
“The mission of the Illinois
Association of School Boards is
Excellence in local school
governance and support of public
education”
Foundational Principles of
Effective Governance
 The School Board is considered a corporate entity
required by law to govern the school district
according to State Statute.
 The School Board represents all their constituents
within their school district boundaries.
School Board Duties & Responsibilities
 IASB Defined Duties:






Employs a Superintendent
Clarifies the District Purpose
Connects with the Community
Delegates Authority
Monitors Performance
Takes Responsibility for Itself
Employs Superintendent





Single most important job of the School Board.
Only individual School Board actually employs and evaluates.
Directs and holds Superintendent accountable for
implementation of School Board Policy and overall School
District performance.
School Board is legally required to approve all employment
contracts, however,
School Board delegates authority to Superintendent to select,
employ and evaluate all other employees within the standards
established by School Board policy.
Clarifies the District Purpose
 Per IASB, “as its primary task, the School Board
continually defines, re-defines and articulates district
ends to answer the recurring question – who gets what
benefits for how much?”
 As Steven Covey states: “Begin with the End in Mind”.
Knowing where you want to be as a School District will
help you to establish your mission, values and goals
providing clear direction to all involved.
 Clearly established goals allows the School Board to
easily monitor the District performance holding the
organization accountable.
Board Connects with the Community
 Per IASB “the purpose of the conversation is to
enable the Board to hear and understand the
community’s educational aspirations and desires,
to serve effectively as an advocate for district
improvement and to inform the community of
the district’s performance”.
 How does your Board communicate?

Comment time at meetings, web site, email, twitter,
face book, day/evening coffees, staff coffees,
newsletters = transparency, transparency
Board Delegates Authority
 Difficult for some Board Members!
 Board is ultimately responsible for everything,
however the Board delegates authority to the
Superintendent who delegates to many
individuals within the District including the
Business Manager.
 Successful Boards are able to delegate and
empower their Superintendent and staff.
Board Monitors Performance
 Per IASB “A School Board that pursues its ends
through the delegation of authority has a
moral obligation to itself and the community
to determine whether that authority is being
used as intended”.
 Board needs to have a basic understanding of
data used within District, both student and
financial based data.
Board Takes Responsibility for Itself
The role the School Board fulfills as trustee
for their constituents cannot be filled by any
other person or group – the Board is
ultimately responsible for the operations,
success and compliance with State Laws.
Mandatory Board Training
 Open Meeting Act – Effective 1/1/2012
 Board Members elected post 6/13/2011:
 Minimum 4 hours of professional development
inclusive of: education and labor law, financial
oversight and accountability and fiduciary
responsibilities.
 PERA – Effective 6/13/2011
That’s All Great, But Where Does
the Business Manager Fit in? –
How do I Build and Sustain My
Relationship with My Board
Members??
District’s Are Different!
 The First Step is to understand how your District
operates in terms of:






Board Structure
Communication with Board
Board Policy Development
Trust Between Board & Administrators
Documents for the Board
Board Involvement in Training & IASB
Don’t Forget
 CARDINAL RULE: UNDERSTAND clearly your
superintendent’s expectations of your relationship with
Board Members!!
 History of Relationship between Business Manager and
Board Members

New to the District - talk to your predecessor about their
relationship with Board. Take all discussions with a grain of salt –
what worked for them, might not be your style – what can be
changed, what needs to remain the same!
 Have a basic understanding of your Board Members
professional and personal backgrounds. Hot Buttons?
Platforms? Agendas?
Board Structure
 This is not a cookie cutter approach! All Boards are
unique with their own personality!
 How Does your Board Operate:







Committee of the Whole?
Board Committees with only Board members
Board Committees plus community members
Board Committees plus other administrators
Board Committees plus community members & other
administrators,
Etc., Etc., Etc.,!!!!!!
Don’t forget – What authority do these committees have?
How Do You Communicate?
 Here is where having a clear understanding of your
superintendent’s expectations will come in handy!
 Again, possibilities are endless:
 Individual Board member can email you
questions:
 You respond only to that Board member,
 You forward question and your response to superintendent who
will respond to Board member(s),
 You respond only to that Board member and superintendent,
 You respond to entire Board and superintendent.
 If not already established, early in your tenure, talk
with your superintendent and possibly entire Board
on their preferences for communication.
A Few Last Words on
Communication Methods
 Please Note in Ink!!!
 Established methods are subject to change!!!
 New Superintendent – new methods
 New Board President – potential new methods.
 And your mantra:
 Transparency, Transparency, Transparency!!
School Board Policy Development
 Well developed School Board Policy has been found to
make your life easier in some respects…..
 Does your Board just implement/approve policy
pushed out by IASB?
 Does your Board and superintendent allow you to
further develop policies unique to your district that are
associated with finance and operations of the District?
What Exactly Do You Do All Day? Or,
Why Does Our District Need You?
In meeting with new Board Members
it is critical that they have a basic
understanding of your role and
responsibilities in the District!
Top Ten Business Manager
Responsibilities
Tax Levy
Annual Budget
Audit/Legally Required Claims (GSA, Grants, NSLP, Etc.)
Payroll & Accounts Payable
Buildings & Grounds/Construction
Risk Management
Transportation
Food Service
Enrollment Projections/Staffing
Contract Negotiations
Board Members Should Have
 Essentials of Illinois School Finance by Jim Fritts
 Annual Budget Book:
- ISBE Generated Budget & Budget Certifications
- District Financial System Generated Budget
- Budget Presentation/Talking Points
- Long Range Planning Overview – How did we arrive at
this budget
- Fund Summary – One Sheet Broken Down by Fund
- Tax Levy
- GSA Entitlement
Board Members Should Have




Audit & AFR
Current Five Year Financial Projections
Most Recent Life Safety Report
Copy of all Collective Bargaining Agreements
 In addition – review the Business Office sections of
your school district website.
Finance Toolbox
Tools for the Business Manager to use
with School Board Members in
Understanding School Finance
Simplify the High Level Concepts
Budget
Tax Levy
Investing
Borrowing
FUND ACCOUNTING
OPERATING FUNDS





10 - Education
20 - Operations &
Maintenance
40 - Transportation
50 - IMRF/Social
Security
70 - Working Cash
OTHER FUNDS




30 - Debt Service
60 - Capital Projects
80 - Tort Immunity
90 - Health/Life Safety
A Good Resource
How is school income determined?
• Property Values
• Tax Rates
• State Appropriations & Federal Aid
• Pupil Enrollment
Revenue (Federal)
• Block Grants - usually based on student
population and need. Focus resources on
handicapped children, economically
disadvantaged students and other targeted
special purposes.
• National School Lunch Program
Revenue (State)
• General State Aid - Unrestricted. The greater the
property value results in less General State Aid to
the district per student. Based on average daily
attendance.
• Categorical Aid - Restricted. Underwrites state
required programs such as lunch program,
transportation and special education.
• Grants - Restricted. Block and Matching
GSA & the Foundation Level (State)
• The State Legislature increases General State Aid (GSA)
each year by increasing the foundation level.
• $6,119 in FY13 - $5,631?
• General assembly boasts that each school district will
receive $X more per student
• GSA formula reduces foundation level by local “wealth”.
Divide it!
Revenue (Local)
Property Values
• Determines how much revenue the district is capable of raising
from property taxes.
• Property value is set by the marketplace, the ability to access it is
affected by the tax cap.
Tax Rate
• Maximum tax rates are established by the State of Illinois
• Can be raised above the maximum only with approval of voters.
• Tax cap keeps the tax rate lower than the approved level.
Revenue (Local - Other)
• School Fees
• Lunch Fees
• Rental Income
Who decides how the district
spends the money?
1. Determined by Board of Education based on
recommendations from administrators
through program decisions and negotiated
contracts.
2. More and more budget decisions however
are forced on boards by mandates beyond
the board’s control (federal and state).
LaGrange School District 102
BUDGET PRESENTATION
FISCAL YEAR 2012
All Funds Summary
CHANGES FROM TENTATIVE TO FINAL BUDGET
•
•
•
•
•
•
Final Stimulus Payment Received $187,945
Added Retirement Penalty Budget $142,000
Salary & Benefits Increase $178,611
Reduced Supply Budget $20,000
Construction Loan $2,000,000
Net Effect: $1,887,334
Operating Funds Summary
PRELIMINARY RESULTS FOR FY11:
• Operating Fund Balance $1.5m Favorable Variance
• Deliberate Cost Savings Measures
• Conservative Estimates
• Teacher Contribution $660,000 over next two years
• State of Illinois Owed $1.1 Million from FY11
• Promised by December
• Will Receive Four Payments in FY12
7/20/2015
Budgeted Revenues FY12
General State Aid
6%
Other State Federal
5%
2%
Property Taxes
Other Local
8%
Other Local
General State Aid
Other State
Federal
Property Taxes
79%
Budgeted Expenditures FY12
Equipment
Supplies 2%
6%
Tuition
4%
Services
11%
Salaries
Benefits
Benefits
11%
Services
Salaries
66%
Supplies
Equipment
Tuition
Purchased
Services
DESCRIPTION
BUDGET
S/E Tuition to LEA's
$650,000
S/E Transportation
$517,011
Regular Transportation
$341,662
Cleaning Service
$279,046
Professional Development
$189,501
Food Service
$170,512
TRS Penalty/Bonus
$142,000
Worker's Comp
$132,749
Telephone
$130,900
Property/Liability Ins.
$110,536
Legal
$110,000
Treasurer's Office Fee
$107,000
Purchased
Services
DESCRIPTION
Heating/Cooling
BUDGET
$100,000
Grounds
$72,000
Equipment Service
$65,800
Copiers
$62,649
Trash
$61,500
Auditing
$55,000
Technology Repairs
$47,340
Substitute Custodians
$44,472
Unemployment
$43,360
Custodial Equipment
$37,500
Water
$28,250
Professional Services
$24,726
Purchased
Services
DESCRIPTION
BUDGET
Travel
$22,500
Plumbing
$21,000
Postage
$18,000
Discretionary
$17,200
Software
$17,115
Testing Services
$17,000
S/E Diagnostics
$15,000
Building Structure
$13,000
Electrical
$12,000
Printing
$12,000
Miscellaneous (ED)
$11,114
Miscellaneous (O&M)
$10,300
Purchased
Services
DESCRIPTION
BUDGET
Homebound
$10,000
PMA
$10,000
BASE
$8,790
Field Trips
$8,500
OPEB-GASB 45 Valuation
$7,000
Officials
$6,500
Security
$6,000
Vehicle Expense
$4,000
Criminal Background
$3,500
Appraisal
$3,000
Debt Recovery
$2,500
Staff Recognition
$2,500
Purchased
Services
DESCRIPTION
BUDGET
Storage
$2,000
Graduation
$1,500
Travel (O&M)
$1,500
Exterminator
$1,200
Total
$3,788,233
NON OPERATING FUNDS
Debt Service Fund:
Tentative
Final
Preliminary FY 2011
Beginning Fund Balance
$1,455,351
$1,455,351
$1,556,281
Revenues
$2,577,668
$2,577,668
$2,399,889
Expenditures
$2,452,667
$2,452,667
$2,500,819
Ending Fund Balance
$1,580,352
$1,580,352
$1,455,351
Beginning Fund Balance
$60,513
$60,513
$1,463,446
Revenues/Loan Proceeds
$10,000
$2,010,000
$10,618
Expenditures
$1,520,000
$1,520,000
$1,534,217
Ending Fund Balance
$1,570,153
$429,487
$60,513
Capital Projects Fund
2011 Property Tax Levy
Presented By: Lauri Calabrese
2011 Tax Levy
Timeline & Truth in Taxation Act
• Tax levy must be estimated twenty days prior to
the adoption
• If the proposed levy increase is more than 105%
– Public notice must be given via local media
– Public hearing must be held
• Tax Levy filed with Cook County by the last Tuesday
in December
2011 Tax Levy
•
•
Equalized Assessed Valuation (EAV) should be
approximately 1/3 of a parcels Fair Market Value
Property tax burden is shifting from
commercial/industrial to residential property
values in recent years
2011 Tax Levy
Cook County collects and distributes property taxes as follows:
55% of prior year in the spring and the remainder in the fall
TAX COLLECTION CYCLE
LEVY YEAR
CPI
COLLECTED:
2010 Levy
2.7%
Spring 2011
FY11
2010 Levy
2.7%
Fall 2011
FY12
2011 Levy
1.5%
Spring 2012
FY12
2011 Levy
1.5%
Fall 2012
FY13
2011 Tax Levy
10-Year CPI History
5.0%
4.1%
4.5%
4.0%
3.3%
3.5%
3.0%
3.4%
2.4%
2.5%
2.7%
2.5%
1.9%
1.5%
2.0%
1.5%
1.6%
1.0%
0.1%
0.5%
0.0%
2002
2003
2004
2005
2006
2007
Levy Year
2008
2009
2010
2011
2011 Tax Levy
TOTAL LEVY $25,130,881
1.8%
2010 EXTENSION
2011Tax Levy
• Limiting tax rate:
– The calculated total allowable tax rate for all
operating funds.
• Bond and interest rate:
– The rate for bond and interest payments is in
addition to the limiting rate, and OUTSIDE of the
tax cap.
2011 Tax Levy
Step 1
• Compute the limiting rate
Numerator: Multiply the previous years extension by the
CPI
$24,680,171 * 101.5% = $25,050,374
Denominator: Subtract the new construction from current
year EAV
$931,924,834 - $3,000,000 = $928,924,834
Divide: $25,050,374 / $928,924,834 = 2.6967%
2011 Tax Levy
– Step 2:
• Multiply the limiting rate by the EAV for the current
year
2.6967% * $931,924,834 = $25,130,881
– Step 3:
• Distribute the total extension to the operating funds
2011 Tax Levy
Limiting Rate
Bond & Interest
2.6967%
.2748%
Total Estimated Tax Rate
2.9715%
2011 Tax Levy
LaGrange Elementary School District 102
2011 TAX LEVY
Fund
Name
Education
Tort Immunity
Special Education
Operations & Maintenance
Transportation
IMRF
Social Security/Medicare
Working Cash
Life Safety
Limiting Rate
Bond & Interest
Total Tax Rate
EQUALIZED ASSESSED VALUATION (EAV)
NEW PROPERTY
LIMITING RATE CALCULATION
Aggregate Extension Base
x Extension Limitation (CPI)
Numerator
Net EAV
- New Property
Denominator
Limiting Rate
ACTUAL
2010 LEVY YEAR
Tax
Tax
Rate
Extension
1.8743 $ 19,345,436
0.0369 $
380,469
0.0117 $
120,377
0.3387 $
3,495,362
0.0370 $
382,318
0.0317 $
327,221
0.0317 $
327,221
0.0292 $
301,767
0.0000 $
2.3912 $ 24,680,171
0.2375 $
2,451,247
2.6287 $ 27,131,418
Tax
Rate
2.1311
0.0301
0.0132
0.3751
0.0418
0.0527
0.0525
0.0002
2.6967 $
0.2748
2.9715 $
$ 1,032,138,704
$
2,282,819
$
$
$
$
$
23,977,217
1.027
24,624,602
$ 1,032,138,704
$
2,282,819
$ 1,029,855,885
2.3911
$
$
$
$
2011 LEVY YEAR
Tax
Extension
19,860,000 $
280,469 $
123,386 $
3,495,362 $
390,000 $
490,832 $
488,832 $
2,000 $
$
25,130,881 $
2,560,905
27,691,786 $
Balloon
Levy
20,455,800
288,883
127,088
3,635,176
390,000
505,557
503,497
2,080
25,908,081
2,560,905
28,468,986
931,924,834 Estimated
3,000,000 Estimated
24,680,171
1.015
25,050,374
931,924,834
3,000,000
928,924,834
2.6967
Tax Rate
Ceiling
3.5000
N/A
0.4000
0.5500
0.0000
As Needed
As Needed
0.0500
0.1000
As Needed
2011 Tax Levy
Seeking approval of the final
resolutions at the December 8,2011
Board Meeting.
Thank You
2011Tax Levy
NEW PROPERTY & TIFS
• When tax increment financing districts expire they are
returned to the tax rolls as new property
• These tax dollars were already being collected, they were just
redirected to the municipality for redevelopment projects
• This increase in EAV will not impact individual taxpayers
• Individual resident taxes will adjust based on the new EAV of
their individual property and the Consumer Price Index (2.7%)
2011Tax Levy
How TIFs Work
A Tax Bill
Tax Bill-Village of Oak Lawn
42%
Suburban TB Sanitarium
S Cook Mosquito Abatem ent
Water Reclam ation Dist
Oak Lawn Park District
4%
Moraine Valley College Dist
High School District 229
School District 123
13%
Oak Lawn Library Fund
Village of Oak Lawn
Road and Bridge Worth
Worth General Assistance
Town of Worth
3%
23%
3%
3%
5%
1%
1%
1%
Forest Preserve District
County of Cook
Cook County Public Safety
Cook County Health Facil
State of School Funding from
State of Illinois
Current Hot Topics:
•Pension Reform
•General State Aid Funding
•Transportation Funding
Financial Forecasting
•
•
•
•
Importance of a three to five year projection
Standard format
Revisit no more than 3 times per year
Reaffirm the Philosophy
• Maintain Programs & Deficit Spend?
• Achieve a Balanced Operating Budget?
Analyze Revenues & Expenses
How are we doing?
•
•
•
•
Quarterly Benchmarking
Monthly Cost Center Reporting
Dashboards
Monthly Board Run
Financial Profile Score
Investment Policy
• Policy 4:30 in accordance with 30 ILCS 225
Borrowing
• General limit:
– Separate Elementary & H.S. Districts
– Unit Districts
• Rating Agencies
– Long Term Borrowing for Operations
• EAV Changes
– & Bond Levy – Be Aware…
6.9% EAV
13.8% EAV
Collective bargaining agreements
• Review current environment
– How many years is the current agreement?
– Is there language that we need to focus on modifying
or removing?
– During negotiations what will be our focus?
• Salary schedule
• Benefit plan
• Language changes
– What is the current relationship with the union?
Operations
Purchasing
–
–
–
–
Purchasing Official
Purchase Orders
Request for Proposals
Bidding
• Expenses over $25k must be bid ($50k relating to Operations &
Maintenance)
• Bids should be awarded to the lowest responsible bidder who conforms in
all material aspects to the requirements and criteria set for in the invitation
to bid
– In house services
– Contracted services
– Vendor relations
• Gift ban act
Purchasing-Bidding
• Specifications
• Vendor selection
• Bid opening
• Public notice 10 days before
• All bids must be sealed
• All bids must be opened during a public bid opening where the
contents are announced
• Bid analysis
• Low, responsive, responsible
• Bids should be awarded to the lowest responsible bidder who
conforms in all material aspects to the requirements and criteria set
for in the invitation to bid
• Board approval
Facilities
• Describe current environment
– Custodial and Maintenance
• Cleaning schedule
• Summer/spring/holiday break schedules
– Intergovernmental agreements
• An agreement between two or more government to cooperate in
some specific way
– Facility planning
• Facility committee
• Long range facility plan
• Facility inspection schedule
– Life safety
• Life safety fund
• 10 year life safety survey
Food Service
• Describe current environment
– In house or contracted out
– Services provided
• Lunch
– Free/Reduced participation
– National School Lunch Program
• Breakfast
• Snack
– Before and after school programs
• Milk
– Preschool and kindergarten programs
– Nutritional requirements for grant funded programs
Transportation
• Describe current environment
– In house
• Own or leased bus fleet
– outsourced
– Special ed transportation
• Parent concerns often come from this service-be knowledgeable!
• Service must be provided for students living 1.5+ miles from the
school
• Distances under 1.5 miles may be approved as “serious safety
hazards”
• Business Manager or Transportation Director files an annual claim for
reimbursement
Technology
• Current environment
– Hardware
– Software
– Replacement schedule
– Telephone system
– Copier/printer management
– Security
• E-rate program
Risk Management
• Lines of Insurance
–
–
–
–
–
Property
General liability
Board legal liability
Student accident insurance
Workers’ compensation
• Insurance Cooperatives
– Medical/Dental
– Workers’ Compensation
– Risk Management
• Unemployment Compensation
School Board Member calendar
When to do what you do
•
•
•
•
•
•
•
July 1st – First day of fiscal year
July/August – Prepare Tentative Budget OR Hold
Public Hearing on the Final Budget (105 ILCS
5/17-1)
September 30 –last day to adopt the annual
budget (105 ILCS 5/17-1).
October 15 – Annual Financial Report (ISBE 5035) due
November IASB, IASA, & IASBO Joint Annual
Conference in Chicago
November 30 – Annual Statement of Affairs due
Last Tuesday in December (December 27) –
Certificate of Tax Levy (ISBE 50-02) due
•
•
•
•
•
December 30 – Last day for the school board to
adopt a resolutions putting policy questions on
the ballot at the March 20, 2012 General
Primary Election. (10 ILCS5/28-2).
March – Approve Staffing Plan for next fiscal
year and release certified staff (if needed) at
the March Board Meeting.
April 1 – School Board must give written notice
and reason of intent not to renew
Superintendent’s expiring contract (105 ILCS
5/10-21.4)
May 1 – Statement of Economic Interests:
Completed form filed with county clerk (5 ILCS
420/4A-105)
June 30 – Last day of the fiscal year for most
Illinois school districts.
In summary…
• As the Business Official you need to:
– Understand the Board Member’s Role
– Communicate and work with your Board Members
to help them understand your role as the Business
Official.
– Last Piece of Advice – Remember!!
Superintendent is the Orchestra Leader! Follow
their lead in developing your relationship with
your Board of Education.