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Home My WebLink AboutAUGUST 28, 1995 MINUTESMINUTES VIRGINIA BEACH CITY COUNCIL VirgInia Beach, Virginia August 28, 1995 Mayor Meyera E. Oberndorf called to order the SPECIAL FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL re School Board Budget - Amendments on Monday, August 28, 1995, at 10:00 A.M. Council Members Present: John A. Baum, Linwood O. Branch, III, Robert IC Dean, William W. Harrison, Jr., Harold Heischober, Barbara M. Henley, Louis R. Jones, Mayor Meyera E. Oberndorf and Nancy IC Parker, Vice Mayor William D. Sessoms, Jr. and Louisa M Strayhorn Council Members Absent: None School Board Members Present: DonaM F. Bennis, Susan L. Creamer, Donald L. Felt, Robert gE. Hall, Timothy Jackson, Chairman June Turner Kernutt, Karen 00'Brien, Joseph D. Taylor, II and Ferdinand V.. Tolentino School Board Members Absent: Elsie M. Barnes and Dr. Ulysses l/an Spiva -2- Item II. ITEM # 39687 The Mayor read the CALL TO SPECIAL FORMAL SESSION: "HONORABLE MEMBERS OF CITY COUNCIL In accordance with the City Charter, Section 3.06, the City Code, Section 2-21, and by the authority vested in me as Mayor of the City, I hereby call a SPECIAL FO~ SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, on Monday, August 28, 1995, at 10:00 A.M. for the following purposes: Discussion/Action upon amendments to the School Board Budget. Sincerely, s/Meyera E. Oberndorf Mayor" August 28, 1995 -3- Item IH. SCHOOL BOARD BUDGET AMENDMENT ITEM # 39688 Dr. James L. Pughsley, Interim Superintendent, distributed to the Mayor and Members of City Council, the Resolutions, Adopted by the School Board of the City of Virginia Beach, Virginia on August 28, 1995: Resolution requesting City Council APPROPRIATE funds in the amount of $7,384,529 to the FY 1994-95 School Operating Budget Resolution requesting City Council appropriate funds in the amount of $443,000 from the Schools Cafeteria Enterprise Fund Retained Earnings to the School Cafeteria Enterprise Fund. Dr. Pughsley advised upon the closing of the books for FY 1994-95, It was determined that, as of June 30, 1995, the School Board will have an Operating Budget deficit of $7,384,529. Dr. Donald A. Peccia, Associate Superintendent, City of Virginia Beach Benefits Office, distributed a copy of his remarks which are hereby made a part of the record. "Change is the law of life, and those who look only to the past and to the present are certain to miss the future. I stand here today to report on the fiscal state of the School Division for the 1994-95 school year. I make no apologies for the report, but only make a promise to present accurate and clear information to you now and in the future. I want it very clear from the start that there was no mishandling of funds and all expense, subject to audit were spent on operating needs. To say that 1994-95 was a difficult year is a clear understatement exemplified by these facts: 1. A $6.9-MILLION shortfall in Impact Aid. A $I.5-MILLION shortfall in State Aid primarily due to the utilization of September 30 average daily membership (ADM) instead of March 31 ADM data. One MILLION DOLLARS in 1993-94 canceled purchase orders brought forth and reinstated in 1994-95. The inability to transfer funds inW textbooks, athletics, and self-insurance enterprise accounts because funds were expended for other operating expense. The underbudgeting of personnel salary and fringe benefits line items." August 28, 1995 -4- Item IH. SCHOOL BOARD BUDGET AMENDMENT ITEM # 39688 (Continued) "The Food Service operation is an Enterprise Fund. Over the years, the School Division has had both financial gains in the reserve amount, as well as financial decreases to the reserve amount; but, at no time has Food Services had to seek additional funds from the School's operating budget to support the program. On August 9, 1994, the City Council appropriated $15,382,850 for the operation of the Food Service fund in Fiscal Year 1994-95. At that time, the Food Service fund had a reserve balance of approximately $1,776,000. During the 1994-95 fiscal year, Food Services overexpended the appropriated amount by approximately $443,000. A request to fund the $443,000 out of the Food Service fund will need to be made by the School Board to the City Council. A full analysis of the financial health of this fund will be conducted in the next few months with a report to the School Board in November or December." VIRGINIA BEACH CITY PUBLIC SCHOOLS 1994-95 YEAR END FISCAL BALANCE FOR THE OPERATING BUDGET 1994-95 Year to Date Expenditures 1994-95 Encumbrances 1994-95 Expenditures prior to City Interdepartmental transfers on August 26, 1995 Transfer to Athletics Transfer to Self-Insurance Transfer to Textbook Transfer to Fringe Benefits Transfer to Other Charges $343,855,591 108.664 $343.964.255 391,000 1,883,ooo 1,454,662 338,000 50,517 TOTAL EXPENDITURES (Including Outstanding Encumbrances/Other Charges) BUDGETED APPROPRIATIONS OVEREXPENDITURE (Total Expenditures minus Budgeted Appropriations) SHORTFALL IN REVENUE TOTAL 1994-95 SHORTFALL (overexpenditure plus Shortfall in Revenue) $348,081,434 ($44.291,245} $ 3, 790,189 3,594,340 $ 7,384,529 Dr. Pughsley shared with the City Council the corrective actions which have been instituted as well as those under consideration. A Budget Management Document has been adopted to ensure greater discipline and accountability (signature controls, transfer of funds, purchasing controls). Development and implementation of staffing standards and guidelines. August 28, 1995 -5- Item SCHOOL BOARD BUDGET AMENDMENT ITEM # 39688 (Continued) Concerning 70-30% allocation of funds to Schools, at this time 70% is received based on the projected allocation and then in September when actual enrollment is ascertained, the balance is received (30%), which is adjusted up or down depending on the actual enrollment. Interim Administration Reorganization has to do with providing greater supervision, as it relates to Human Services and Financial Services Operation. The Budget Transfer Policy advises the School Board will be the only body which can authorize the transfer of $10,000 or more, as relates to the Budget; however, the Budget Management Document would address amounts less than that. Main frame access to Budget data for Budget Managers will ensure timely and accurate information available to all Budget Managers. Reports re the Enterprise Funds will be presented to the School Board An analysis of the FY 1995-1996 Budget and related adjustments will be performed~ There will be quarterly meetings between the City and School Financial Departments. An improved financial and accountability system will be devised on a joint basis with City Staff. There will be serious consideration of consolidating financial operations. The staff will explore and present a formal report to the School Board in terms of cost, personnel and overall effectiveness and efficiencies. Mordechai Smith, Chief Financial Officer, advised a shortfall in the amount of $1.7-MILLION in sales tax revenue was experienced in Fiscal Year 1993-1994. There was also approximately $10-MILLION in unbudgeted expenditures. Total amount of unexpected expenditures in salaries and fringes related to the Service Master contract at $1,100,000. The early retirement issue resulted in unexpected expenses of approximately $1.2-MILLION. These funds had not been budgeted. In order to close the books in FY 1993-1994, there were approximately SI-MILLION in Purchase Orders and $2.8-MILLION in encumbrances, which were brought into FY 1994-1995 and, as they were not budgeted, had to be absorbed. Dr. Peccia advised, by law, the third service fund is an Enterprise Fund, but you can not mingle Food Service funds with other Enterprise funds. Therefore, there are two separate resolutions being presented to City Council, one for the Operating Budget and one for food services. August 28, 1995 -6- Item V. RECESS INTO EXECUTIVE SESSION ITEM # 39689 Mayor Meyera E. Oberndorf entertained a motion to permit City Council to conduct its' EXECUTIVE SESSION, pursuant to Section 2.1-344, Code of V~rginia, as amended, for the following purpose: LEG~ MATTERS: Consultation with legal counsel or briefings by staff members, consultants, or attorneys pertaining to actual or probable litigation, or other specific legal matters requesting the provision of legal advice by counsel pursuant to Section 2.1-344(/1)(7). To- Wit: Legal Implications - School Budget Upon motion by Vice Mayor Sessoms, seconded by Council Lady Parker, City Council voted to proceed into EXECUTIVE SESSION (I2:08 P.M.). Voting: 11-0 Council Members Voting Aye: John A. Baum, Linwood O. Branch, III, Robert I~ Dean, William W. Harrison, Jr., Harold Heischober, Barbara M. Henley, Louis R. Jones, Mayor Meyera E. Oberndorf and Nancy I~ Parker, Vice Mayor William D. Sessoms, Jr. and Louisa M. Strayhorn Council Members Voting Nay: None Council Members Absent: None August 28, 1995 -7- ITEM # 39690 Mayor Oberndorf RECONVENED the FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, on Monday, August 28, 1995, at 1:20 P.M. Council Members Present: John A. Baum, Linwood O. Branch, III, Robert IC Dean, William W. Harrison, Jr., Harold Heischober, Barbara M. Henley, Louis R. Jones, Mayor Meyera E. Oberndo~ Nancy IC Parker, Vice Mayor William D. Sessotns, Jr. and Louisa M. Strayhorn Council Members Absent: None August 28, 1995 -8- ITEM # 39691 Upon motion by Vice Mayor Sessoms, seconded by Council Lady Strayhorn, City Council CERTIFIED THE EXECUTIVE SESSION TO BE IN ACCORDANCE WITH THE MOTION TO RECESS. Only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Executive Session to which this certification resolution applies; AND, Only such public business matters as were identified in the motion convening the Executive Session were heard, discussed or considered by Virginia Beach City Council. Voting: 11-0 Council Members Voting Aye: John A. Baurn, Linwood O. Branch, III, Robert K. Dean, William W. Harrison, Jr., Harold Heischober, Barbara M. Henley, Louis R. Jones, Mayor Meyera E. Oberndorf, Nancy I~ Parker, Vice Mayor William D. Sessorns, Jr. and Louisa M. Strayhorn Council Members Voting Nay: None Council Members Absent: None August 28, 1995 CERTIFICATION OF EXECUTIVE SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: Thc Virginia Beach City Council convened into EXECUTIVE SESSION, pursuant to thc affirmative vote recorded in ITEM # 39689 Page No. 6 and in accordance with thc provisions of Thc Virginia Freedom of Information Act; and, WHEREAS: Section 2.1-344. of the Code of Virginia requires a certification by the governing body that such Executive Session was conducted in conformity with Virginia law. NOW, THEREFORE, BE IT RESOLVED: That the Virginia Beach City Council hereby certifies that, to thc best of each member's knowledge, (a) only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Executive Session to which this certification resolution applies; and, Co) only such public business matters as were identified in the motion convening this Executive Session wcrc heard, discussed or considered by Virginia Beach City Council. Rfi~h Hodgcs S~ith, CMC/AAE City Clerk August 28, 1995 -9- Item VIII. ADJOURNMENT ITEM # 39692 Mayor Oberndorf DECLARED the City Council SPECIAL SESSION ADJOURNED at 1:30 P.M. Beverly O. Hooks, CMC Chief Deputy City Clerk Ruth Hodges Smith, CMC/AAE City Clerk Meyera E. Oberndorf Mayor City of Virginia Beach Virginia August 28, 1995