BIDDING, BONDING, SCHOOL BUDGETS AND THE DEVELOPMENT OF A SOUNDOPERATIONS & MAINTENANCE FINANCIAL PLAN December 2010 Presented by: Stanley W. Polmateer
BIDDING1. WHY DO WE BID?• To obtain lowest responsible costs• Required by NYS Finance Law at certain expenditure limit• Guarantees prudent expenditure of public funds2. EXPENDITURE LIMITS• $10,000/yr. per commodity on materials only• $20,000/yr. per commodity/service on material & labor3. STATE BIDS AND CONTRACTS• Can be used to any limit of expenditure as a district bid
BIDDING4. COUNTY BIDS AND CONTRACTS• Public schools are a subset of county5. BOCES COOPERATIVE BIDS• Must have District approval to enter one and approval of successful bid.6. INDIVIDUAL BIDS• Yearly and multi year bids
PERFORMANCE BONDS1. WHY DO WE NEED THEM? • To guarantee the public a job is completed and in a quality fashion • If District does not have a performance bond guarantee, they are totally liable for the successful completion of a job, in case of vendor/contractor failure2. WHO SUPPLIES THEM? • Bonding Companies (Ins. Companies)
PERFORMANCE BONDS3. HOW DO THEY WORK WHEN A JOB GOES BAD? • When contractor goes bankrupt or out of business • Bond company is called upon to hire and pay for all remaining work not yet completed or paid for4. HOW DOES THIS AFFECT CIP’S? • On Capital Projects SED must be notified of vendor change due to bond in affect for receiving proper State Aid
KEY FACTORS IN BUDGETING1. MUST HAVE CREDIBILITY2. HAVE A SENSE OF REALISM3. FOLLOWS A LONGER RANGE PLAN4. EXHIBITS RESPONSIBLE PERFORMANCE5. FOLLOWS GUIDELINES OF THE DISTRICT6. IS CONSIDERATE OF CONDITIONS IN THE COMMUNITY7. COMMUNICATION & COMMUNITY INVOLVEMENT
TWO KINDS OF BUDGETS1. ANNUAL OPERATIONS & MAINTENANCE • Based on previous year • Includes adjustments for justifiable increases and savings reductions • Allows for inflationary increases • Should offer detail to show what makes up the budget and what a cut will affect
TWO KINDS OF BUDGETS2. CAPITAL IMPROVEMENT PLAN (CIP) • Based on Five Year Plan • Based on Annual Bldg. Condition Survey • Should be reviewed with the Board of Education annually • Requires voter approval for funding
HOW DO YOU MAKE AN O & M BUDGET?1. Use indices from surrounding Districts to comparatively budget manpower by area • Custodial • Mechanics • Grounds • Security • Couriers • Supervision2. Use a budget template from past years and fill in with current budget data.
HOW DO YOU MAKE AN O & M BUDGET?3. Acct. 200 (Equipment) requires special justification (based on mileage, age, condition)4. Don’t be afraid to compare contractual services cost vs. “in-house” services cost when justifying additional staff or supply inventory
HOW DO YOU MAKE A CIP BUDGET?1. Follow the Five Year Plan2. Be consistent in projects presented3. Timing is EVERYTHING4. Projects should be identified as: • Health, Safety or Environmental • Structurally required • Instructionally required • Cost savings justified (energy conservation) • Administrative request
HOW DO YOU MAKE A CIP BUDGET?5. Be consistent with Building Condition Survey6. Review annually with the Superintendent7. Review annually with the Board of Education
VITAL BUDGET TOOLS IN YOUR TOOL BOX1. The O & M Budget Template2. Personnel Indices3. The Five Year Plan4. Building Condition Survey
THE O & M BUDGET TEMPLATE1. Organized by account in numerical order (1620 & 1621 accounts)2. Include sufficient detail (type of service, type of supply, quantity, etc.)3. Compare to last years budget (by account) to show increase or decrease
THE FIVE YEAR PLAN1. Review annually with key administration2. Consider priorities of projects3. Be very accurate for first 2 –3 years4. Years 4 & 5 are not as well defined5. Should be coordinated with Bldg. Condition Survey6. Review with Supt. & Bd. of Ed. Annually7. Publish document annually and distribute to all participants to the plan
BUILDING CONDITION SURVEY1. Required by Commissioner’s Regulation2. Review annually for updates with certified individual3. Must be submitted annually to SED4. Should be coordinated with 5 Year Plan5. This is a basis for both O & M and CIP budgets
BUDGET TIMELINEOctober Annual Services Review Appoint Budget Advisory Committee Obtain Board of Ed GuidelinesNovember Begin Budget Advisory Meetings 1 time/monthDecember New Budget Proposal SubmittalsJanuary Prepare Rollover Budget Review New Budget ProposalsFebruary Prepare 1st Draft of Proposed Budget for Board of Education review Review income side of the budgetMarch Modify Original Draft Budget and formulate Final Draft for Board of Education submittal
BUDGET TIMELINEApril Further modify budget proposal Budget Advisory Committee recommends to the Superintendent New Proposed Budget Board of Education adopts Final Budget Proposal for referendum (including separate propositions) Send out Proposed Budget and explanation to voting publicMay Voting public considers Budget Proposition and approves or disapprovesJune If disapproved, Board of Education adopts a Contingency Budget or modifies Original Budget and re-submits for voter approvalJuly New school year budget begins
FUTURE COST FACTORS TO CONSIDER• Projected annual rate of inflation• Additive costs of contractual settlements• Projected overtime costs• Energy and utility cost increases• Health insurance increases
FUTURE COST FACTORS TO CONSIDER• Cost additives for new building(s) or addition(s)• Additional duties or functions transferred in or out of the facilities area• Identification of new equipment needs• Special regulatory events, i.e., Building Condition Surveys, Asbestos 3 Year Surveys
BOCES CoSERS and E-RateBOCES CoSers are shared services and equipment offering state aid reimbursement, i.e., computers, health and safety services, oil tank testing, telephone service, E-rate consulting services, etc.• Generates income for the following year and is considered a bid itemE-rate is a governmental rebate on data and telephone services determined by district relative to their “Free and Reduced Lunch” rate. Example a F&R rate of 20% generates 50% rebate on data systems (not individual computers) phone and long distance costs for public, private and parochial schools and public libraries.• E-rate is generated monthly from individual phone bills and redistributed by district F & R formula.
IF A BUDGET IS DEFEATEDTWO OPTIONS:• The original budget can be modified by the Board of Education and one re-vote can take place for passage and/or• Board can adopt a contingency budget aLast year’s budget plus inflation (regionalized) aNo new equipment other than safety & health aIncludes new debt repayment approved by voters aDoes not include high rate increases for energy, etc.