BIDDING, BONDING, SCHOOL

BUDGETS AND THE

DEVELOPMENT OF A SOUND

OPERATIONS & MAINTENANCE

FINANCIAL PLAN

December 2010

Presented by:

Stanley W. Polmateer

BIDDING

1. WHY DO WE BID?

• To obtain lowest responsible costs

• Required by NYS Finance Law at certain expenditure limit

• Guarantees prudent expenditure of public funds

2. EXPENDITURE LIMITS

• $10,000/yr. per commodity on materials only

• $20,000/yr. per commodity/service on material & labor

3. STATE BIDS AND CONTRACTS

• Can be used to any limit of expenditure as a district bid

BIDDING

4. COUNTY BIDS AND CONTRACTS

• Public schools are a subset of county

5. BOCES COOPERATIVE BIDS

• Must have District approval to enter one and approval of

successful bid.

6. INDIVIDUAL BIDS

• Yearly and multi year bids

PERFORMANCE BONDS

1. 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

failure

2. WHO SUPPLIES THEM?

• Bonding Companies (Ins. Companies)

PERFORMANCE BONDS

3. 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 for

4. 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 BUDGETING

1. MUST HAVE CREDIBILITY

2. HAVE A SENSE OF REALISM

3. FOLLOWS A LONGER RANGE PLAN

4. EXHIBITS RESPONSIBLE PERFORMANCE

5. FOLLOWS GUIDELINES OF THE DISTRICT

6. IS CONSIDERATE OF CONDITIONS IN THE COMMUNITY

7. COMMUNICATION & COMMUNITY INVOLVEMENT

TWO KINDS OF BUDGETS

1. 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 BUDGETS

2. 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

• Supervision

2. 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 Plan

2. Be consistent in projects presented

3. Timing is EVERYTHING

4. Projects should be identified as:

• Health, Safety or Environmental

• Structurally required

• Instructionally required

• Cost savings justified (energy conservation)

• Administrative request

5. Be consistent with Building Condition Survey

6. Review annually with the Superintendent

7. Review annually with the Board of Education

HOW DO YOU MAKE A

CIP BUDGET?

VITAL BUDGET TOOLS IN

YOUR TOOL BOX

1. The O & M Budget Template

2. Personnel Indices

3. The Five Year Plan

4. Building Condition Survey

THE O & M BUDGET TEMPLATE

1. 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 PLAN

1. Review annually with key administration

2. Consider priorities of projects

3. Be very accurate for first 2 –3 years

4. Years 4 & 5 are not as well defined

5. Should be coordinated with Bldg. Condition Survey

6. Review with Supt. & Bd. of Ed. Annually

7. Publish document annually and distribute to all

participants to the plan

BUILDING CONDITION SURVEY

1. Required by Commissioner’s Regulation

2. Review annually for updates with certified individual

3. Must be submitted annually to SED

4. Should be coordinated with 5 Year Plan

5. This is a basis for both O & M and CIP budgets

BUDGET TIMELINEOctober

Annual Services Review

Appoint Budget Advisory Committee

Obtain Board of Ed Guidelines

November

Begin Budget Advisory Meetings

1 time/month

December

New Budget Proposal Submittals

January

Prepare Rollover Budget

Review New Budget Proposals

February

Prepare 1st Draft of Proposed Budget for Board of Education review

Review income side of the budget

March

Modify Original Draft Budget and formulate Final Draft for Board of

Education submittal

BUDGET TIMELINE

April

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 public

May

Voting public considers Budget Proposition and approves or disapproves

June

If disapproved, Board of Education adopts a Contingency Budget or

modifies Original Budget and re-submits for voter approval

July

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

• 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

FUTURE COST FACTORS

TO CONSIDER

BOCES CoSERS and E-Rate

BOCES 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 item

E-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 DEFEATED

TWO 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.