School Board Grapples With Money Problems

Lively discussion prevailed at the Orcas Island School District(OISD) Board meeting last night as it addressed an uncertain future  covering controversial items:

• plans for the high school trip to Japan
• presentation of a tutorial in the latest technology
• budget planning for next year

and then they faced the question for which they found no answer:

Should the District plan on voter approval of a $1,000,000 capital levy and accept $900,000 towards payment of the $1.7 million required to do plumbing, lighting and heating system repairs to the elementary school, this summer?

Or

Should the District reject the $900,000 grant and work towards voter approval for a $2 million capital levy for the school improvements next year?

The board will re-engage in that discussion, (described further in this article) at a special meeting on April 13, following the “Community Consensus” meetings organized by Fred Klein from April 2 to 9.

High School trip to Japan

The trip, originally planned for early in April, has been postponed until April 14, organizers Pat and Hugh Burleson of Lopez Island told the board. This re-scheduled date came after the latest U.S.  State Department advisory on March 31, indicating that there was no advisory against unnecessary travel to the areas the high schoolers from Lopez and Orcas Island will visit – south and west of Tokyo. On March 21, the State Department had issued a country-wide advisory against unnecessary travel to Japan.

The original trip proposed a week in Tokyo, but the itinerary has been changed to start in Kyoto, and spend the second portion in Fukioka, “about as far away as you can get” from the areas most affected by disaster, Pat Burleson said.

The board asked parents in attendance at the board meeting if they were concerned, and while one parent said he felt confident in going ahead, Michelle Reed asked if the trip could be postponed a few months. Shewas told that in May, senior testing affects the seniors and after that time, the weather in Japan is hot and rainy and not a good time to travel to Japan.

Reed also brought up the matter of refunds if a parent decides they don’t want their child to go on the trip, as did parent Linda Wheeler-Rose who also said “Japan is in an ongoing crisis… my child is not going. I do think it’s a burden on the people there. Liability-wise, I think it’s just crazy to consider doing that now.”

She said that there had been no collective meeting of the parents involved, just an email advising that the itinerary was being changed, and the date change.

Superintendent Kline said that after talking to the district’s risk management advisors, the district would be closely monitoring what the state department says about the risk of travel to Japan.

The board took no action to rescind their approval of the trip, however Board President Janet Brownell strongly advised the organizers to meet with all parents to discuss the advisability of going forward, and the means to refund those families who decide against sending their children on the trip.

Brownell also encouraged those meeting to “examine the quality of experience of these children vs. postponing the trip to another time.”

The Board decided by consensus that it was up to Kline and Brownell to make a decision on rescinding school approval for the trip.

Sir Francis Bacon Grant

School technology teacher Paul Evans displayed one of the two “Smart technology interactive white board response systems” to the Board. The large screen mounted on the library wall is part of a technology package purchased by the school district with a grant from the Sir Francis Bacon Foundation; the grant was awarded through the efforts of island Richard Fadem, who is a member of the foundation board.

Fadem’s grant required that the district purchase technology products that were:

• based in library so that every student and every teacher would use
• of advanced technology
• included media tools
• accessible and beneficial to the whole school

The package also includes six Apple iMac workstations in the main library room (with plaques acknowledging the Bacon Foundation); Safari Montage digital media server, which allows video streaming of over 4,000 educational videos from sources such as National Geographic, the History Channel, ABC News and Public Broadcasting Service, as well as interactive manipulation of the videos.

The District also purchased home access to the system by teachers, and 32 hand-held response tools that show immediate responses of those using the interactive screens.

Board member Tony Ghazel voiced his concerns that the “fun” of new technology not overshadow the “work” of learning, and expressed satisfaction in the educational value of the new technology.

Principal Kyle Freeman, who has worked with similar technology in schools before coming to Orcas Island, said that it increases engagement and interaction from students and provides greater access in terms of portability.

Freeman pointed out that all teachers will have compatible notebook software on their computers, as will the students.

Brownell determined that the library screen can be used by the public for conferencing and presentations.

Evans then reviewed the five-year technology replacement plan before the board, taking in factors such as individual teachers’ workstations, student computer “laboratories” including the rolling carts that are now used, network operation equipment, the district server, which recently suffered a breakdown, (LINK) and district and staff computer systems.

Enrollment  assumptions, staffing and budget timeline

Business Manager Keith Whitaker presented the financial report as of March 1, 2011.

Enrollment averaged 664 students for the year (2010-11). Projections for the next year can be based on two methods, one resulting in 654 students, the other in 657. Whitaker said he recommends a conservative projection, “reflecting uncertainty about state budget and based on changes in rules for ALE [K-12 Alternative Learning Experience program].” The OISD will be informed on May 1 of final rule changes to ALE reimbursements.

Whitaker stated that the General Fund balance is at almost $340,000; with encumbrances on the Capital Projects Fund, that balance “drops to about $220,000, which is about  $50,000 below the same time last year.” Whitaker said that the $50,000 difference also reflects a decline in revenues from last year, including the revised state budget which cut Kindergarten through 4^th grade funding last month.

Whitaker compared the relationship between month-end billing and end-of-year fund balance for the previous year and the current year:

• In Feb. 2010, the month-end percentage of the fund balance was 7.69 percent; the year ended at a 4.26 percentage;
• This year the year-end fund target is 5.75 percent; at the end of Feb.2011, the rate was 5.48 percent.

At the request of OISD Board Member Tony Ghazel, Whitaker reviewed the Associated Student Body (ASB) funds in the District’s budget.  Whitaker said that after going over the athletic accounts and “years of rolling inaccuracies, when you really get right down to the basics, the overall difference was less than 4$4,000.

District Superintendent Barbara Kline commented that the process had been complex and time-consuming  and said, “I thank you for a fulltime business manager that was able to get that done.” (The OISD board had voted to employ Whitaker full-time at their last board meeting).

Superintendent Kline and Whitaker cautioned that formulating the budget for next year will be problematical until the state legislature makes its Basic Education and other funding decisions. Already, there are changes in the OASIS Alternative Learning Experience (ALE) reimbursement program which will require the District to purchase materials.

Elementary/Middle School Principal Kyle Freeman noted, however, that the District will then advise about the purchases, and own them so that they may be used in future years. Freeman said that OASIS/ALE staff has already set up systems for inventory and use of such materials.

In a discussion of the enrollment figures, Principal Freeman said that a number of families have left or plan to leave the island because of economic reasons, primarily unemployment.

The board will review enrollment figures in order to make assumptions for the 2011-2012 budget at a meeting scheduled for Wednesday, April 13.  They will be required to project staffing figures based on the enrollment projection at the regular board meeting on April 28.

Money: hard to come by, hard to let go

The board then faced items on the money front. Supt Kline reiterated the sequence of events in which the district was awarded federal funds of $461,000 from the state Office of Superintendent of Public Instruction (OSPI), for energy efficiency renovations to the elementary school  in November 2010. However, the district is required to match those funds with $1,383,000.

In February this year, the district was then awarded $900,000 from the State Department of Commerce. These funds require $72,000 in matching funds, and must be used by Sept. 1, of this year. Superintendent Kline and the Board considered whether those funds could be considered part of the required match for the OSPI funds.

Kline said that the district was recently informed that the district could not use the Commerce grant as a match for the OSPI money, and further, that only one of the competitive grants could be accepted by the OISD.

Faced with returning one of the grants, the board voted to rescind the $460,000 grant. OISD Board Member Scott Lancaster said, “It’s painful to give back nearly $500,000 until you remember it requires the 3-to-1 match.”

In order to use the $900,000 Commerce energy grant, the board then considered how to obtain the $800,000 difference between the Commerce grant and the contracted price tag of $1,700,000 for the work to be completed this summer.

They analyzed three debt proposals to provide adequate funding for the $1.7 million energy work :

• To Capital One, for a $2 million loan with repayment of $147,000 per year
• To Capital One, for a $1 million loan with repayment of $72,000 annually
• To Cashmere Bank for $1 million with repayment of  $108,000 per year.

The board then faced the question of how to:

• Pay the $72,000 match for the $1 million loan
• Repay loan payments of $72,000 annually from the District’s General Fund before receiving voter approval to incur that debt through a capital levy.

The board then engaged in a lengthy discussion of applying for bonds, loans and other funding vehicles, delaying annual loan payments, and applying for a loan with the understanding that if terms were not agreeable, the application would be withdrawn. Lancaster and Brownell explored loan terms that would delay payments for two years so that a capital levy may be passed before payment was due.

The board further explored the option of using funds from the Capital Projects Fund.

Several board members said they weren’t comfortable going ahead with any non-voted debt obligations until the community had weighed in.

Lancaster pointed out that it was past the deadline to go out for a vote on the matter in June, but Chris Sutton said, “To bet we can pay back $72,000 per year — that’s a teacher or two. As much as I want to take advantage of $900,000 and fix the school building that my daughter goes to, I think it’s essential that we have the backing of the voters.”

Superintendent Kline said that she has heard from the community that it does “not want us to walk away from $900,000; it would prefer us to take on some non-voted debt and use the money to get the project done than to come back later and ask them for twice as much for same project.”

The board spent several moments in silent reflection, and took a break, before deciding to delay a decision on the matter until the April 13 meeting.

Board members as well as Kline expressed their interest in hearing feedback at the community meetings, scheduled for April 2, 6, 7 and 9.

With the board agreeing to postpone their decision until the April 13 meeting, Brownell commented, “I sure hope we hear from more than one person.”