PROCEEDINGS OF THE PARISH SCHOOL BOARD OF THE PARISH OF EAST FELICIANA, STATE OF LOUISIANA, TAKEN AT A PUBLIC HEARING PRIOR TO A REGULAR BOARD MEETING HELD ON JUNE 6, 2017
PUBLIC NOTICE
A Budget Hearing will be held on Tuesday, June 6, 2017, at 4:30 P.M., Central daylight saving time; at the East Feliciana Parish School Board Central Office Board Room, located at 12732 Silliman Street, Town of Clinton, Louisiana, for interested citizens of the East Feliciana Parish. The purpose of the hearing is to review the proposed amendments of the operating budgets for the year ending June 30, 2017 and adoption of the June 30, 2018 operating budgets. A summary of the operating budgets are as follows:
EAST FELICIANA PARISH SCHOOL BOARD - SUMMARY OF 2017 and 2018 OPERATING BUDGETS
The proposed budget may be examined Monday through Friday from 8:00 A.M. to 3:00 P.M. at the East Feliciana Parish School Board Central Office. Interested citizens will have the opportunity to give written or oral comment.
/s/
Carlos J. Sam, Superintendent
Publish two (2) times:
May 18, 2017 and May 25, 2017
There were present: School Board Members Timothy Corcoran, Paul Kent, Richard Terrell and Joyce A. Kent. Board Vice-President Mitchell Harrell joined the public hearing at 4:31:42 P.M. Board Member Michael Ray Bradford joined the public hearing at 4:34:16 P.M. Board Member Elizabeth Dawson joined the public hearing at 4:40:15 P.M. Board Members absent: Derald Spears, Sr., Melvin L. Hollins, Rufus Nesbitt, Rhonda Matthews and Edward Brooks, Jr. Other Attendees: Carlos J. Sam, Superintendent, Irma Lee Bendily, Confidential Assistant to the Superintendent and Tommy LeJeune, C.P.A., Partner of Faulk & Winkler LLC, Certified Public Accountants, James Minton, Reporter for The Advocate Newspaper.
Board President Richard Terrell convened the Public Hearing at 4:30:20 P.M. according to the notice as set out above. Board President Terrell opened the public hearing and turned the floor over to Tommy LeJeune, C.P.A., Partner of Faulk & Winkler LLC, Certified Public Accountants for his presentation.
C.P.A. LeJeune related to Board Members present, Carlos J. Sam, Superintendent and other Attendees, that the purpose of the Public Hearing is just to take any questions from the Public, we did go through the Document last night with the Finance Committee, which they sent up to the Board for its consideration later on tonight. In you packet you have got a copy of the Budget along with some Talking Points and then some Adjustments that we made relative to the starting point that we came to you guys back in May when we knew we had a Funding Issue relative to State Funding. So what I thought I would do was just walk through the Talking Points and we could field any questions. There is no action taken at this point in time since that will be reserved for the Board to act on later tonight. But basically for a Budgetary stand point your 2017 Budget has Revenue and Resources Budgeted of about $23,339,000.00, Expenses are Budgeted at $23,296,000.00, so collectively you have got a small Surplus of about $43,000.00 Budgeted for this Fiscal Year that will end at the end of the Month…
Vice-President Mitchell Harrell joined the public hearing at this time.
C.P.A. LeJeune continued so okay there are a number of modifications to the Budget one was the QZAB Related Projects, we did not Budget that last Summer when that convened and into this year we had about $4 Million Dollars of Project spending and Resources coming in, so that is part of our adjustment. In addition to making adjustments for things that happened with local taxes, what we project out and what they actually come in at sometimes can be a little different, so I just adjust those. In our Grant Funding to from a Federal prospective a lot of those Budgets and Funding Sources have not been finalized yet. So we generally find that out later on in the Summer when School starts, I do my best guess to Budget those at this point and time in terms of like Title I, IDEA and those types of Funding and we generally just true them up once we get the Budget and what we know the Feds are going to give us. So that is kind of how this year finished out, it should be okay…
Board Member Michael Ray Bradford joined the public hearing at this time.
C.P.A. LeJeune continued next year we have got Budgeted Revenues of $18,605,000.00, Expenditures of $18.5 Million or $18,567,000.00, so we have another very small Surplus of about $38,000.00, so it is going to be a tight year. As you recall one of the things we went over last time was the Original Budget Proposal that we, you know without any modifications, we were left with about a $761,000.00 Budget Shortfall that was projected. We made a number of modifications that we talked about with the Finance Committee last night, some were Revenue based and I have got that on the third page of this Talking Points list, but basically we had about $220,000.00 in Revenue adjustments one is the Rebate from our QZAB. We did go back to the State and we found that there was an adjustment made to your Millage in the year that they were using to reduce your MFP Funding, they had not processed that adjustment that was made locally here at the by the Tax, by the State Tax Commission and sent down to your Assessors’ Office. So we passed that information on, they are in process of adjusting that Reduction, so we expect that to change and we may be pick up about $60,000.00 in Funding as a result. So I have got that as part of our adjustment and in addition each year that this Charter School picks up some additional Children, that generally results in a small increase to our Student Body, which has a positive increase to our MFP Funding. So I have got a small provision of about $80,000.00 in there relative to that, so I am Budgeting a higher Student Count for the Charter School, so I am going to Budget a little bit higher Revenue to offset that. From an Expense prospective I got a number of modifications that the Superintendent recommended some of it was Personnel, basically looking at Positions that we are going you know through attrition or Positions that you may not no longer need, we basically came and made some modifications there at sort of the School Level as well as the Central Office Level. Looked at Bus Routes and tried to create some efficiency in the Bus Routes to save a few dollars that resulted in a small savings of about $66,000.00. We also scrubbed some of the Grants for next year, in terms of the Budgets we are turn into the Feds and the State and we picked up about $100,000.00 in Benefits that our General Fund currently pays for right now that we expect those Grants to pick up. So it was kind of re-shifting where all the Funding Source for certain Costs that our General Fund currently pays for. So these are people that are working for the School System, paid for by Federal Grants, but in the past the Benefits were paid for by the General Fund. So here the Benefits are going to stay with the Federal Funds. And then finally we made two (2) modifications for Insurance, the Insurance Committee will talk about this later, but we looked at Property Insurance and felt like the School District had more risks that it really needed to have from a Property Insurance standpoint. When looking at each School and the Value that in the event of a catastrophe what you would have received under your Insurance Policy, that equated to rebuilding amount of about $100.00 per square foot for New Construction. So assuming one of your Facilities got or had a tornado hit it and it was torn up, you basically would have been compensated on $100.00 per square foot and we just didn’t think that was going to be enough to replace the Buildings, so we went for a higher Replacement Costs and used $150.00 per square foot. So that passing on that additional risks to the Insurance Company created about a $45,000.00 hit to our Budget, so we felt as we talked to the Insurance Committee we felt like that was a risk or that was going to be money that we felt like needed to spend so that you didn’t or you weren’t put in a really bad predicament in the event of a catastrophe. We did save some money on the Workers’ Compensation Insurance, the net difference of about $35,000.00, we felt compelled to move forward with that and that would be a recommendation for your consideration later tonight. So over all the net change between Revenue and Expense Adjustments was a Net Change of a positive $764,000.00 which basically allowed us to offset the Deficit that we were confronted with once we factored in some of the MFP modifications, so leaving us with roughly about a $3,000.00 Surplus in our General Fund. So something that we will have to watch fairly closely, like we always do, throughout the year and to the extent something negative happens with our Budget we will have to continue to consider other modifications to try to keep that Surplus number flat. Beyond that, sort of coming back to the Talking Points, I have hit a majority of these, you know basic Property Taxes I have got a marginal increase. Net MFP after those few modifications at about ½ Million Dollars down, so that was the primary thing we had to deal with. And I also budgeted some sort of Sales Tax Decline, that may or may not come to fruition, but I felt from a Budget prospective it was more conservative. So I would rather come back to you and say we have got more Sales Tax Money than we budgeted than to tell you we have got less Sales Tax Money. So that is sort of the approach and in addition included in the Budget from a Personnel prospective is maintaining a 13th Check that you have historically given out in December, maintaining that at its present $250,000.00 and then a Step or one Step Increase to the Employees that move over into next Fiscal Year with you, which is about a $200,000.00 additional adjustment. But that is factored into the numbers that I just went over. Obviously the contingency is that Student Count, you know the number the State gives us at this point in time is an estimate based on our Student Count and until we get the October and February we won’t know the Final Student Count. So it could go up, it could go down, you know we just don’t know that at this point in time. The Charter School Student Count, same thing, it is sort of unknown in terms of where they are going to fall out but I think I have got them at a pretty good number they could probably achieve. And I think the last thing is Sales Tax Collections, I mean you never know where that is going to be, every year I kind of project it to be high and it comes in low, so I sort of projected low and seek to come in high, so I am going to sort of stay with that approach. Beyond that included in your Budget Document are four (4) Resolutions: one is to Adopt a Budget and historically at the back I have got three (3) Resolutions in terms of the use of some of your Dedicated Funding and these are Resolutions that you have historically passed in terms of how we are going to use that to help pay for some of our Retirement Obligations so pretty much staying with the current practice. That is just things in a nut shell, fortunately you had a pretty big modification you had to consider this year since our Funding from the State was being challenged and so from that stand point that is kind of where we stand.
Board Member Elizabeth Dawson joined the public hearing at this time.
Board Member Corcoran questioned Tommy the $95,000.00 for the Benefits Paid with Grants, is that going to recur, or is that just for this year?
C.P.A. LeJeune related I understand that probably recur, I think it is going to be an Annual consideration depending upon you know what our Federal Allotment is, but as Dr. Roddy and Mr. Sam went through some of the Federal Grants that we anticipate or the Budgets that we anticipate for next year they just identified some places where those Individuals that are being compensated or are being Funded from Grants their Benefits could follow them and in the past they could not. So we took advantage of it, so I think it will be an Annual determination, I mean going into it I would expect that it would be recurring. But you know how Federal Dollars are, just like the State, you are almost unfortunately kind of a year-to-year basis and just kind of deal with it with whatever they give you.
Board Member Corcoran related yes.
Carlos J. Sam, Superintendent related and Mr. Corcoran that is a good question…
C.P.A. LeJeune related yes.
Carlos J. Sam, Superintendent continued because obviously the General Fund was picking up this Expenditure for a reason, meaning the Federal Dollars that we get on an Annual basis varies and so we have a Grant called the TIF Grant, we have moved some Folks from out of our Title Budget into the TIF Grant, which freed up some Dollars in our Title Budget which allows us to basically pick up these Benefits in the Title I Budget. So it is kind of just moving money around, the TIF Grant is a 5-Year Grant, so at some point that is going to run out. Title Money we get on an Annual basis, but that money fluctuates and it comes down from the Federal Government. It just depends on what is going on in Washington D.C. based on your Allocation, but for the meantime we thought you know if you are funded by a Grant Fund then your Benefits and Salaries should come from that particular Funding Source. Typically that is the way that it is, but so hopefully that will hold for more than a year.
Board Member Corcoran questioned but a Board has the Option to do that or not to do that, use the money for…
Carlos J. Sam, Superintendent related well you want to do that; you want to do that…
Board Member Corcoran continued yes, I see why you would what to do it.
Carlos J. Sam, Superintendent continued yes, the problem is that you couldn’t do it in the past because there were not enough Funds in those Federal Funds…
Board Member Corcoran related oh, I got you.
Carlos J. Sam, Superintendent continued and so the General Fund had to incur the Costs. So this is just another way of us kind of softening the blow to help the Deficit and move Funds around so that we don’t hit the General Fund as hard as you know…
C.P.A. LeJeune related and I think the smart thing is looking at how we manage our Federal Dollars sort of in correlation to our Local Dollars and you kind of try to maximize what you can and that kind of does that. In the past I can see where it would be attractive to say if the General Fund could pay for it, maybe you do and you give some of your Title I or other Federal Dollars more flexibility to spend more money…
Board Member Corcoran related yes.
Carlos J. Sam, Superintendent related right…
C.P.A. LeJeune continued but in a year like this where you don’t have as much flexibility, this is a good way to kind of get some efficiency and sort of make it all kind of just kind of work together. But that is a really good question.
Vice-President Harrell related Richard.
Board President Terrell turned the floor over to Mr. Minton.
James Minton, Reporter for The Advocate Newspaper questioned on page 1 of you Talking Points you had 5% Sales Tax, is that an Increase or a Decrease?
C.P.A. LeJeune related Decrease, yes just trying to be conservative. I think we have good reason to believe that it will stay flat, but on the other hand I would rather be conservative. I think I mentioned this last year you know it is like completing a Tax Return, you bring somebody a Refund and they are Happy, if you bring them a Bill then they are not. So it is the same concept, I would rather come back to you and say you got some excess money, than to say you don’t or that we over shot and we are falling short so we got to make some Expenditure cuts.
Board President Terrell called for any other questions.
C.P.A. LeJeune related it wasn’t easy and certainly none of the options were appealing. I know when we talked to Mr. P. Kent and Mr. Bradford in the Finance Committee that we had a number of ideas that we shot around and several of them just weren’t or none of them were really that appealing. But this was the one that seemed to be the lesser of all of the evils that we talked about.
Board Member P. Kent questioned Tommy on your Resolutions that one cent sales tax and then that or the first Resolution is what Sales Tax is that it is one percent I know. But I mean what or it is one-half of one percent?
C.P.A. LeJeune related yes, if you remember those Schedules, those landscaped Schedules, you have two (2) Sales Tax, and one of the one-half of the one cent is Dedicated to pay your Teacher Salaries and Benefits. So this is or what I am taking out of here is exactly what is coming out of the Proposition…
Board Member P. Kent related yes, what or which one goes only to Teachers?
C.P.A. LeJeune related this one.
Board Member P. Kent questioned this one?
C.P.A. LeJeune related this one.
Board Member P. Kent related okay and so the other one…
C.P.A. LeJeune related yes the other one is…
Board Member P. Kent continued you pay Teachers and All Employees…
C.P.A. LeJeune related all Employees, right.
Board Member P. Kent continued out that other one?
C.P.A. LeJeune related right.
Board Member P. Kent related okay.
C.P.A. LeJeune related one-half or the fifty percent is for Teachers only, Salaries and Benefits…
Board Member P. Kent related okay.
C.P.A. LeJeune continued and so what these Resolutions accomplish is setting up an Accounting Practice that we basically take some of our Retirement Benefits and they serve as a Funding Source, since Retirement has grown to such a high burden on the District. So just on an Annual Ratification standpoint I kind of prepare that as far as the Budget.
Board Member P. Kent related let me ask you another question, just say on this 1%, what does that bring in?
C.P.A. LeJeune related about $1.5 Million Dollars a year, you know average, this year it will be a little over $1.6 Million Dollars.
Board Member P. Kent related okay and it says down here the minimum, no that is not what I am looking for…
C.P.A. LeJeune related yes, the full one cent has been about $1.5 Million Dollars and you got two percents…
Board Member P. Kent questioned do you pay out every bit of that money to the Teachers?
C.P.A. LeJeune related for Resolution 1. we do…
Board Member P. Kent related yes.
C.P.A. LeJeune continued all we do is capture the Teachers portion…
Board Member P. Kent related okay.
C.P.A. LeJeune continued and that is what we do on those Schedules, we get some specifics that we have dedicated for Teacher Salaries and that is how we capture the Costs to track how much are we spending compared to how are we Collecting…
Board Member P. Kent questioned and then you pay out the other nine-one percent on the other one?
C.P.A. LeJeune related right, nine-one percent of the one percent is for Teacher or Employee Salary and Benefits and so we do the same thing and so it picks up a slew of people and we show that. I mean that is set up in your…
Carlos J. Sam, Superintendent related Salary Schedules…
C.P.A. LeJeune continued Salary Schedules too in terms of what the Funding Sources are for Peoples Salaries. Some of it is Local, some of it is MFP and the same thing with the Property Tax the 17 Mills follows the same methodology. It is just something that is unique to School Boards that you have to and most places where you have a Dedicated Tax, you don’t have to go through the Level of Accounting that you do here, as I appreciate it goes back to a long term lawsuit that kind of happened to this space, so to speak with the School Board.
Board Member P. Kent related okay.
C.P.A. LeJeune continued especially when it is dedicated to Salaries, you have got to follow the People…
Board Member P. Kent related right.
C.P.A. LeJeune continued at the time of Collection. I mean you couldn’t or you can’t carry it over and use it for Future Salaries…
Board Member P. Kent questioned but we Pay Out that one percent that goes to those Teachers, every bit of that goes to…
C.P.A. LeJeune related yes, we pay that out, that is what I do with those Schedules every Month, is that we basically have an Accounting Methodology that we assign it and compare it to the Dollars and sometimes it matches up and sometimes we spend or we follow what normally dedicate it is what our Dedicated Spending is. It can be above what we collect, but we just keep it on a Cumulative Basis so when we get to the end of the year, as long as there is no major excess you know, then we won’t pay it out…
Board Member P. Kent questioned so are we talking about the Teachers Money that goes to the Teachers in that one cent?
C.P.A. LeJeune related yes that fifty percent of the one percent…
Board Member P. Kent questioned that is fifty percent of one point five, right?
C.P.A. LeJeune related right, right.
Board Member P. Kent questioned and that other part is used for Maintenance and Stuff Operations?
C.P.A. LeJeune related yes, jus that other fifty percent is just Undedicated and so it helps Fund the General Fund. And the majority or reality too is the majority of your Dollars in the General Fund eighty percent is Personnel, so it is really just hard to get that is paying Personnel anyway.
Board Member P. Kent questioned and that is the way the Proposals…
C.P.A. LeJeune related yes, I don’t have it written in here…
Board Member P. Kent continued as to what it is Dedicated to?
C.P.A. LeJeune continued it is how it is Dedicated…
Board Member P. Kent continued one-half of one percent?
C.P.A. LeJeune related yes, yes. So the one percent, like I said half is Undedicated and the other is half is Dedicated on how it is written in this Resolution. I went back to the Propositions and just pulled the exact language that is what I have in “Bold”, in this deal for all three (3) of them and it says for the purpose of paying Teacher Salaries and Benefits and Constructing and Maintaining and Operating Public Schools in the Parish and it says a minimum of one-half of the proceeds will be used for paying Teacher Salaries and Benefits. The remaining proceeds are for the purpose of Constructing, Supporting, Maintaining and Operating Public Schools, which is what you do so it is Undedicated. It doesn’t have the same kind of Restriction that it would when you say I am just going to pay Salaries and Benefits.
Board Member P. Kent related yes.
Board President Terrell then asked for any public questions or comment from the Board? Receiving none, Board President Terrell announced if there are no more questions we will declare our public hearing closed. Thank you, Mr. LeJeune. Board Members in attendance concurred.
Board President Terrell then closed the public hearing at 4:50:54 P.M.
There being no further business to come before the Board, Board President Terrell adjourned the public hearing until the next regular meeting unless called into special session by the President.
CARLOS J. SAM, SUPERINTENDENT RICHARD TERRELL,
SECRETARY-TREASURER BOARD PRESIDENT