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July 25, 2005 Minutes

Meeting of the Board of Trustees
Texas School for the Blind and Visually Impaired

The first day of the regularly scheduled meeting of the Board of Trustees, Texas School for the Blind and Visually Impaired (TSBVI) was held in the TSBVI Superintendent’s Conference Room, Room 116, located at 1100 West 45^th Street, Austin, Texas on July 25, 2005.

Call To Order:  Debbie Louder, Vice President, called the meeting to order at 1:10 p.m.  In addition to Debbie Louder, the following board members were present: Mary Sue Welch, Gene Brooks, Toby Galindo, Donna Clopton, and Jamie Wheeler.

Introduction of Audience:  In addition to the members of the board, the meeting was attended by Dr. Phil Hatlen, Barney Schulz, Susan Houghtling, and John Botti.

Budget Training Session By Barney Schulz, TSBVI: Barney Schulz gave an overview of the Board’s responsibilities and powers as pertaining to the budget.  The Board has the authority to set policy within the state’s allowed parameters.

Each year in the non-legislative session we go through the preparation of the budget request.  The Legislative Appropriations Request (LAR) is prepared by the school, and then submitted to the Legislative Budget Board (LBB) and the Governor’s Office of Budget and Planning (GOBP).  Copies are also made available to the State Auditor’s Office (SAO) and the Comptroller of Public Accounts.

The baseline budget is the first document prepared.  It is based on the previous biennium’s appropriations, modified to reflect any adjustments authorized by the two budget offices.

Mr. Schulz explained that exceptional items are budget items that fall outside the current operating budget, and are over and above the baseline budget.  This past year the LBB and the Governor’s Office asked all agencies, including TSBVI, to prepare a LAR that reflected 95% of the baseline.  Mr. Schulz reminded the Board of the very difficult task of last July when the decision was made to eliminate the Summer School program to comply with the 5% reduction requirement.  Fortunately, the LBB’s recommendation to the legislature exempted TSBVI from the 5% reduction.

The Board has the authority to review and approve or disapprove any exceptional items.

For the new building project proposal, the LBB asked for a cost validation study by the Texas Building and Procurement Commission (TBPC).  That cost validation came in close enough to the school’s proposed budget that TSBVI adopted the validation study’s recommendations and went ahead with their results as the basis for our request to the Legislature. 

The LAR submitted to the state includes a detailed report of all the expenses and method of financing for the past two fiscal years, the next fiscal year, and the requested budget for the next biennium.  Expenditure data are entered into a database called ABEST on a quarterly basis.  ABEST is also used as a reporting database for performance and efficiency measures.  It is also reconciled quarterly by Malcolm.  ABEST is not set up to act as an accounting system.

Mr. Schulz went on to explain that after the TSBVI Board of Trustees approves the budget, the supplementary material that goes with the budget is developed and all of those items are entered into ABEST in August. The LBB and the GOBP review those requests and then ask questions of the TSBVI management, after which they make recommendations to their respective leadership.  Those leaders coordinate with the comptroller and the state budget analysts to develop a balanced budget.

The General Appropriations Act (GAA) is the sum total of all the state agencies’ budgets, and is usually presented in each house of the legislature as Bill 1.  Then there’s debate and dissention and the governor’s office publishes its recommendations.  The two houses reconcile their different versions.

Mr. Schulz explained the layout of the GAA as it pertains to TSBVI.

Retirement, health insurance, Social Security match, and benefit replacement pay are not appropriated to TSBVI-- they are allocated to other agencies on TSBVI’s behalf.  Other items that TSBVI does not have to pay for include the bond debt service (interest and principal on the general obligation bonds).

Susan Houghtling reports performance measure data on a quarterly basis. These measures include enrollment data and other statistical data compiled by the various departments.  TSBVI projects targets based on the requested budget. The school’s Center for School Resources (CSR) coordinates the preparation of the estimate of the number of students TSBVI will serve each year.

There followed a discussion of the evaluation of the effectiveness and budget of short-term programs.  The Board expressed its wish that the summer school programs budget and performance measures be considered a key measure.

Mr. Schulz then led a discussion of the capital budget.  The capital budget outlay details how the bond money for the capital improvement project will be spent.  For 2006, the capital budget reflects appropriations in 2006 for renovation, construction and maintenance, and for the planning for these items.

The Master Plan study was an item that the TBPC considered important for TSBVI to conduct.  It is included in the capital expenditures budget.  The budget for deferred maintenance, master plan, and covered walkway could be used for any of those items depending on need.  TBPC will help guide TSBVI in making those decisions.  An in-house project manager will be hired to work with the TBPC-assigned project manager to oversee the capital projects.

TBPC is also charged with studying the Waco site to determine its viability for moving the school, as well as considering the school’s feedback on the programmatic impacts that such move would cause.

Mr. Schulz pointed out that the General Revenue Appropriations (GRA) from the GAA are the known TSBVI revenues from the State.  In the current LAR, state resources are increasing in the areas of the GRA, an operating appropriation, and elimination of Article IX reductions.  Some of the reductions are caused by decreases in certain salaried positions and transportation allocations.

Mr. Schulz then detailed the school’s revenue resources, breaking down the funding sources and highlighting the differences between the previous and current revenue budgets.

Mr. Schulz explained the Expenditure Budget Summary to the Board.  This document compares the 04-05 and 05-06 expenditure budgets.

The Board discussed the new budget analyst position, other new positions, and the way that some salary and position changes are reflected in the budget.

At Mr. Brooks’ request, Mr. Schulz outlined the transfer authority proposition with regards to funding the accounting software upgrades.

Mr. Schulz reviewed the bond proposal and the process for issuance of the bonds.

Debbie Louder adjourned the meeting at 4:33 p.m.

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July 26, 2005 Minutes

Meeting of the Board of Trustees
Texas School for the Blind and Visually Impaired

The second day of the regularly scheduled meeting of the Board of Trustees, Texas School for the Blind and Visually Impaired (TSBVI) was held in Room 116 of the TSBVI Administration Building, located at 1100 West 45^th Street, Austin, Texas on July 26, 2005.

Call to Order:  Frankie Swift, Board President, called the meeting to order at 9:10 a.m.  In addition to Ms. Swift, the following Board members were in attendance:  Gene Brooks, Jamie Wheeler, Mary Sue Welch, Debbie Louder, Toby Galindo and Donna Clopton.

Introduction of Audience:  Members of the audience included Marissa Negovetich from the Governor’s Office, Michelle Feller and Jenay Oliphant from the State Auditor’s Office, Claude Martin, Barbara Brown, Dick Finnegan and Charles Brown with Dark Horse Riders Motorcycle Club, Susan Houghtling, John Botti, Barney Schulz, Dr. Phil Hatlen, Debra Nesbitt, Carol Vaughan, Cyral Miller, Dr. Lauren Newton, and Malcolm Cleveland.

Public Comments/ Open Forum: There were no public comments.

Presentation of Donation from Dark Horse Riders Motorcycle Club: The Dark Horse Riders presented the proceeds of their fundraiser in the amount of $4201.50.  They expressed their pride in being involved in the cause of the School.  Frankie Swift expressed the Board’s appreciation for all the help that the Dark Horse Riders have given the school over the past several years. The donations from the motorcycle club primarily are used for maintenance of the track and playground next to the Elementary Complex. 

Consideration of Approval of Minutes of May 25, 2005 Board Meeting: Frankie Swift presented the minutes of the May 25, 2005 Board Meeting to the Board for approval.  Donna Clopton moved that the minutes be accepted as presented.  Debbie Louder seconded the motion.  The motion to pass was unanimous.

Report on Financial Audit by State Auditor’s Office: Michelle Feller and Jenay Oliphant reported that the State Auditor’s Office (SAO) released its report to the Legislative Audit Committee (LAC) and to TSBVI on July 19, 2005, which was a week ahead of schedule.  The report was released to the public on July 21, 2005 and posted on the SAO website.  The audit report noted no instances of fraud, abuse, or illegal acts.  Ms. Feller reported the SAO’s findings that the School does a reasonable job of protecting state assets and providing accurate financial information, considering that it has a limited number of accounting and budgeting staff who work with outdated automated systems.  Ms. Feller then opened the floor to questions.  Frankie Swift asked Ms. Feller about her discussions with our staff about accounting software upgrades and accessibility of these systems.  Ms. Feller indicated that Barney Schulz and Malcolm Cleveland were researching the solutions that other state agencies are using.  Mr. Brooks asked about accounting software problems across state agencies. Ms. Feller reported that it appears to be more difficult for smaller operations/agencies.  Mr. Brooks asked whether the state is aware of this issue.  Ms. Feller responded that the problems are being mentioned to the Legislative Audit Committee via this report, and that they have been made aware from numerous sources.  Phil Hatlen indicated that the money for the accounting system upgrade is not likely to arise from the dissemination of the audit, but rather that the School would have to find the resources internally.  Ms. Clopton asked Ms. Feller whether she had a recommendation as to the size of the accounting office staff for TSBVI.  Ms. Feller stated that she does not usually advise on that subject, but that the addition of the proposed budgeting position should help. 

Ms. Swift asked about ways to change the forecast of student population.  Ms. Feller expressed hope that the procedures for forecasting enrollment would be formalized and documented so that the methodology is in place for future incumbents of Mr. Miller’s position, and so that the forecasting methodology is consistent from year to year.  Ms. Clopton asked whether we have a student enrollment cap, and Dr. Hatlen responded that the legislative appropriation request presents a target number, which he believes is 148 for this school year.  Dr. Hatlen pointed out that the quality of the audit is indicated by the fact that the management team fully concurs with all of the recommendations in the audit.  Ms. Welch stated that she found the report to be easily read, which she had not expected.

Mr. Brooks then asked Ms. Feller to compare TSBVI practices to other state agencies in regards to the difficulties with continuity of daily operations when procedures are not documented and an employee retires and is not rehired.  Ms. Feller and Ms. Oliphant responded that this seems to be a problem in many agencies-- that retirees would either take a lot of knowledge with them, or stay in the position without documenting their procedures and knowledge.  She suggested adopting a succession plan for the employees of the various departments.  Mr. Brooks asked whether Ms. Feller believed that it is costing TSBVI not to have these practices documented.  The SAO guests related a story from another agency in which a director of accounting retired.  The new hire was several months behind due to the sudden retirement of this long-term employee who had done everything herself and had not documented her procedures.  Ms. Feller concluded that agencies are set back by these situations, but that the costs may not be monetary. 

Ms. Swift pointed out that the way that budgets work for state agencies, there is no provision for training a new person for a month while the departing incumbent continues to work.  Dr. Hatlen mentioned that the school may not always wish to promote from within or re-hire a retiree for every position, but that we are in need of a system for ensuring that the important job functions are carried out at the school in the event of short- or long-term absence by administrators or mid-level management.  Dr. Hatlen said that he and the management team will be looking into solving this problem.  Ms. Nesbitt spoke about the lack of a successor for the position of Human Resources director, and her intention to document her roles and responsibilities.  She pointed out that it is not practical to cross-train every professional position, especially in an agency this size.

Mr. Brooks asked the SAO representatives if any state agencies are outsourcing their accounting.  Ms. Oliphant responded that there is an agency that was told recently by the SAO that they had to outsource their accounting because they could not handle their own accounting.  Dr. Hatlen clarified that outsourcing accounting would not be a cost-saving measure. 

Mr. Brooks asked how the audit was reading politically.  Marissa Negovetich expressed the Governor’s Office’s pleasure with the audit report, and their desire to be of assistance in implementing the SAO’s recommendations, especially in the area of updating our accounting software.  Ms. Wheeler expressed her gratefulness that the SAO prepared a thorough and well-researched document.

Ms. Feller then related that the 75^th legislature created House Bill 2906 which is Government Code Sec. 321.014 which requires agencies to report to the SAO on the implementation status of their findings and recommendations.  Every December the SAO sends out a request form for state agencies to digitally submit information about the status of implementation of their recommendations.  TSBVI is responsible for sending it back to the State Auditor’s Office.  These reports are to be annually submitted until all of the recommendations have been implemented and verified by the internal auditor.

Discussion of a Proposal by Wells Fargo Bank, Trustee for the Bert Broday Jr. Trust, to Initiate or Participate in a Petition to Allow Diversification of the Assets of the Trust: Barney Schulz reported to the Board on the Bert Brody, Jr. Trust fund. TSBVI is a 50% partner with the American Heart Association in this trust fund, which currently has a market value of approximately $25 million.  This trust is a primary source of revenue for the Legacy fund. 

Mr. Schulz further stated that Wells Fargo, the trustee, has no authority to sell, transfer or dispose of the corporate stock, nor does it have liability if something happens to the stock and it falls in value.  The trust is mostly ExxonMobil stock.  Wells Fargo would like to petition the courts to modify the trust so that they may diversify the assets.  This would entail disposing of some of the ExxonMobil stock and putting it into other types of investments. Wells Fargo is seeking the support of the beneficiaries in their petition to get this authority from the courts.  Mr. Schulz then indicated that he, Ms. Vaughan, and Malcolm Cleveland will be requesting more information from Wells Fargo.  They are also planning to seek advice from the Attorney General’s Office. 

The American Heart Association (AHA) has stepped forward in support of the diversification.  AHA has also asked Wells Fargo to petition the court to allow the trust to pay the greater of 5% of the account value or the net income for the year, which would benefit the School and the AHA because it would increase the amount of revenue coming to us on an annual basis.  This increase would, in turn, decrease the amount off the assets coming to us at the end of the trust, which was set up for a 50-year period in the late 70s.  A specific diversification recommendation will be presented at September meeting. 

Ms. Swift asked Mr. Schulz whether he had any guidelines on how Wells Fargo would like to diversify.  Mr. Schulz indicated that they have not shared that information with us as yet, but that we would want to find out the specifics of the diversification before recommending it.  Mr. Schulz mentioned that the team is leaning in favor of diversification if the trustee can maintain the asset value and current revenue.

Discussion of Proposed Participation in the Roscoe Wind Farm: Barney Schulz and Malcolm Cleveland reported on the windmill farm near one of the TSBVI-owned properties in Nolan County.  Two electric co-ops (Tri-County Wind Farm, West Texas Blackland Divide Wind Farm) have joined to form one co-op named Roscoe Wind Farm, they and would like us to join in the co-op.  The contract would probably entail a transmission line easement across TSBVI’s farm property, in exchange for a portion of the electric co-op’s profits.  As far as we know at this time, the proposed contract would not impact the operations of the farmers who are currently farming that land.   Mr. Schulz and Mr. Cleveland would like to prepare a proposal and present it to the Board at a later date.  Mr. Schulz believes that participation in the co-op would cost the school less than $500, but he has been unable to reach their liaison.

Mr. Cleveland mentioned that the Roscoe Wind Farm is contracting with a company named Airtricity.

Ms. Louder asked whether TSBVI wouldn’t be better served if we replaced our farmland with a wind farm.  Mr. Schulz replied that the Governor’s Land Office determined that crops are the current best use of that land.  Right now we receive no fixed rent from this land; TSBVI receives a percentage of the crop profits.

Consideration of the Superintendent’s Salary: Donna Clopton moved to adjourn to closed session.  Ms. Louder moved to recess for 5 minutes before convening the closed session.  Ms. Swift adjourned the open session at 10:17 a.m.

At 10:33 a.m. Board President Frankie Swift announced that the Board would convene in closed session under the authority of the Texas Open Meetings Act, Texas Government Code Sec. 551.074, to discuss the superintendent’s salary.

The Board reconvened in open session at 11:35 a.m.

Consideration of Approval of Abuse and Neglect Audit: Russell Gregorczyk presented his analysis of TSBVI’s policies and procedures concerning the School’s handling of accusations of student abuse and neglect.  This audit is required by the state on a three-year basis.  The last one was conducted by former Internal Auditor Judy Schauer approximately three years ago. 

Mr. Gregorczyk reported that in carrying out this audit, he reviewed the policies and procedures regarding the reporting and investigation of abuse and neglect, and compared those to state regulations.  He then looked at the actual allegations that have been made over the last three years to determine if we are following those procedures.

Some of the recommendations from the previous audit were not implemented.  That audit recommended a checklist for the procedure, to ensure that we are following procedure.  The audit determined that such a checklist was designed but never used.  The second non-implemented recommendation from the previous audit was to improve the record keeping and documentation of the process.  Mr. Gregorczyk couldn’t find written documentation, but there were electronic records.

Mr. Gregorczyk reported that he couldn’t tell whether we were following the procedures because the audit trail is not available in hard copy.  It all resides on Mr. Miller’s computer, usually in the form of a final report.  Ms. Swift expressed concern that if Mr. Miller’s hard drive were to die, the documentation would disappear.  Mr. Gregorczyk’s audit suggests improving the recordkeeping. 

Mr. Gregorczyk reported that he went back and checked the policy references back to the laws, and found that some of the laws that are being cited in the policy have changed or been repealed.  Ms. Vaughan pointed out that this policy is on Mr. Miller’s list of policies to complete, but that she wasn’t sure whether he had gotten around to it yet.  Mr. Gregorczyk is planning to follow up on his audit recommendations and report back to the Board in about six months.

Recommendations contained in the audit:

1. Track the implementation of these and previous recommendations.
2. Look back at the changes in policy/law.
3. Ensure that all procedures are followed by Mr. Miller and the social worker by using the checklist, which needs to be revised.
4. Train social workers on investigations.  They need to catch up on required training and learn more about our internal procedure.

Mr. Gregorczyk reported that most of the allegations of abuse and neglect are unfounded.  However, he could not tell what response the school had once an investigation was concluded—there is no clear record in the file of the administrative action taken against employees who are found to be negligent.

Ms. Wheeler asked where the responsibility lies in tracking and documenting the investigations.  Mr. Gregorczyk replied that the social workers handle the investigation, but that Mr. Miller is responsible for keeping the records.

Dr. Hatlen reported that there has only been one instance of an incident since the most recent update of the procedure was adopted.  Therefore there is not a lot of data for comparing the old and new procedures.

Mr. Gregorczyk reported that there is no standard template for an investigation.  He suggested standardization of the investigation procedure.  He expressed his belief that we are following the procedure, but that it is not being documented.

Ms. Swift suggested that the School ensure that the evaluation of social workers includes an evaluation of recordkeeping and procedure documentation.

Ms. Vaughan and Mr. Gregorczyk believe that the procedure and the policy are basically intact, but agree that there’s no documentation to let us know whether they are being followed.

Ms. Louder asked whether there could not be more checks and balances in the responsibility for documentation and following through on the procedure.  Dr. Hatlen responded that he receives the final investigation reports and approves or suggests changes in them.  He finds the lack of a paper trail unsettling, and feels that he himself will be the other person responsible for the documentation.  Dr. Hatlen will prepare a checklist before the September Board meeting.  Mr. Gregorczyk suggested pulling Ms. Vaughan more into the process. 

At Mr. Brooks’ prompting, Ms. Vaughan explained the process of preparing an investigation and final reports, and explained that the social workers’ investigations and reports are carried out independently, and that Mr. Miller’s role is more that of a quality control manager. 

Donna Clopton moved to accept the audit report.  Toby Galindo seconded the motion.  The motion passed unanimously by voice vote. 

Ms. Swift mentioned that the directives for follow-up are for Dr. Hatlen to prepare a checklist by the September meeting, and for the audit follow-up report by Mr. Gregorczyk in the future.

Consideration of the Superintendent’s Salary: At 12:01 p.m. Ms. Swift announced that the Board would convene in closed session under the authority of the Texas Open Meetings Act, Texas Government Code Sec. 551.074.

Ms. Swift reconvened the open session of the meeting at 2:07 p.m. 

Gene Brooks moved that the Superintendent’s salary for the next year be set at $92,000, and Mary Sue Welch seconded that motion.  Donna Clopton moved to change the motion to $89,500, but Ms. Vaughan explained that that would be a complicated task, and the change was not added as an amendment. Ms. Welch called the previous question.

Mr. Galindo seconded that motion.  The results of the voice vote were as follows:  2 Yeas: Gene Brooks, Mary Sue Welch; 4 Nays: Toby Galindo, Donna Clopton, Debbie Louder, Jamie Wheeler; 1 Abstention: Frankie Swift. The motion failed to pass. 

Donna Clopton moved that the Superintendent’s 2005-2006 salary be set at $89,500.  This motion was seconded by Debbie Louder.  A show of hands vote was taken, the results of which were: Yeas: Debbie Louder, Frankie Swift, Donna Clopton, Jamie Wheeler; Nays: Toby Galindo, Mary Sue Welch; Abstain: Gene Brooks.  The motion passed.

Consideration of Approval of Operating Budget for 2005-2006:  Mr. Schulz reviewed the budget overall figures and described each of the budget documents to the board, then opened the floor to questions.  There followed a discussion of certain line items.  Ms. Swift asked if Board members would like to go over the budget line by line or review the summary; the Board chose to review the large budget document.

Board members asked several questions about specific line items, which were answered by Mr. Schulz, Dr. Hatlen, and Ms. Nesbitt.

Mr. Schulz indicated that he hopes to be able to report before the September Board Meeting on longevity pay, teacher salary increases, and classified employee salary increases. He reminded the Board that these changes would not cause an increase in the overall budget, but a transfer from one area to another.

Ms. Swift asked Mr. Schulz whether the budget figures that he sends out this year in his reports are going to match the amounts that the board approves this meeting, because last year some of the starting figures that Mr. Schulz submitted did not match the adopted budget.  Mr. Schulz replied that the discrepancy was due to contingency funds being moved into the personnel accounts that they were destined for.  Last year, the main examples were additional substitute pay and budgeted salaries for annual leave in each department.  Mr. Schulz indicated that this year he will notify the board of any line item changes and interdepartmental transfers.  The personnel budget presented at this meeting will act as the original starting budget, and the post-allocation figures will be submitted separately. 

Ms. Clopton asked whether the Legacy revenues are budgeted every year, and said that she had thought that they were similar to a contingency fund.  Mr. Cleveland responded that Legacy revenues are interest, rent from real estate, and proceeds from the Broday Trust, and that the revenues fluctuate from year to year.  He also said that the Board approves the expenditures of the Legacy funds on a yearly basis, based upon expected revenues.

Ms. Swift indicated that this Board feels that in the past it has not been as involved in setting budget as it needs to be.  She said that now money is tighter, and the Board is responsible to the school, to the students, and to the public to manage the budget of the school.  The Board does not receive the budget documents in print, nor two weeks before the board meeting, leaving them disgruntled and with little time to review the budget.  The Board is frustrated that they cannot prepare adequately.  This leads to a crunch in which the Board is under pressure to approve the budget hurriedly in order to keep the school going, without having an opportunity to understand the budget that they are voting on.

Ms. Louder asked Mr. Lambert about the cost of gas and whether the buses will be able to run on the projected budget.  He indicated that they will probably need more than the allocated amount, and that the money would probably come out of contingency funding.

The Board and members of the management team discussed the personnel budget process.  Dr. Hatlen advised that the Legislature authorizes a limit on the number of full-time equivalent staff positions (FTEs).

The Board discussed its options with regards to postponing approval of the budget until a future meeting.

The Board recessed at 4:35 p.m.

The Board reconvened at 5:15 p.m.

Ms. Swift asked whether the board had questions about the current changes in FTEs. 

Dr. Newton responded that she has a new unit composed of a part-time Residential Instructor, a part-time TA, and one new full-time teacher to support the legislative request that Special Programs serve more students.  She said that some positions in the Outreach department are being restored to full time from 80% time.

Ms. Nesbitt reported that she has been working 60 percent time, and will add 4 more hours to her schedule. The part-time HR assistants in her office are both going up to 20 hours each from 15 hours. The Human Resources Department budget is also growing to allow for more extensive criminal background checks, based on Mr. Gregorczyk’s security audit.

Dr. Hatlen reported that the comprehensive instructional program is adding a TA from Fort Bend ISD and a basic skills teacher aide to allow for an increase of 2-4 additional students.  He also reported that there is a change in physical education program staff assignments. The retirements of Coach Mike Woodward and Carol Woodward have enabled the following: the return of PE teacher Nancy Voots to full time status, the promotion of PE teacher Joe Paschall to Athletic Director, the addition of the duties of wrestling coach to a currently-employed job coach, and the hiring of an administrative technician.  This physical education reshuffle causes no net budget increase.

The Residential-A Program is adding 1 full-time Residential Instructor (RI) and a ½-time dorm manager to increase safety, adding $36,000 to their budget.  The Residential-B Program is adding 2 RIs for safety and 2 basic skills RIs to allow for 2-4 additional new students, as well as a new lead RI to act as an independent skills living coach.  Ms. Swift inquired about the residential directors’ salaries.  Debra Nesbitt indicated that they are $63,920, which is within the salary range for the state classification of Manager II.  When asked about the comparability of their salaries to that of the Curriculum Coordinator, whose department generates funds, Ms. Nesbitt noted that the Curriculum Coordinator is not quite a 12-month position, and the fact that her department generates revenue is not a salary consideration.  Ms. Nesbitt suggested further budget workshops so that the Board will better understand the difference in the compensation system for classified and contract staff as well as other considerations in determining appropriate classification.  Ms. Clopton suggested adding it as approved board training.

Ms. Swift indicated that the Board has been requesting for two years that materials get to the Board in a timely manner.  She said that the Board wishes no longer to rubberstamp the budget without looking at the numbers in advance.

Jamie Wheeler moved to accept the budget as presented, with the option of amending it in September as needed. The motion was seconded by Debbie Louder.  Mr. Galindo mentioned that he would rather only approve the personnel budget.  Ms. Wheeler expressed concern that the Board could not get a quorum before September, which would put the school at risk of being unable to serve the students and the community in September.  Ms. Welch moved the previous question.

Mr. Schulz asked that the board review the Texas Public Finance Authority (TPFA) bond proposals, and Ms. Vaughan mentioned certain responsibilities of the board in regards to these bonds.  Dr. Hatlen mentioned that the new building and renovations would not be able to start until January unless the Board approved the budget today.

Jamie Wheeler moved to approve the entire operating budget as presented, and that, as part of the approval of the budget, the Board also approve the resolution to the Texas Public Finance Authority (TPFA), as presented in the board materials, for financing the campus construction projects included in the operating budget and the execution and delivery of documents required to effect such financing.  The motion was seconded by Mary Sue Welch.

Ms. Swift began discussion of the bond projects.  Mr. Schulz indicated that the appropriations bill itemizes the amount for each of the bond projects. Transfer authority among projects is 25% of each item.  For instance, deciding not to do a playground would erase that line item, leaving 25% of its budget for transfer to other projects.  Any project’s budget cannot increase by more than 25%.  This proposal is giving authority to TPFA to proceed with these projects. 

The legislature makes appropriations for a two-year period, so we have 2 years to secure the construction and renovations contracts, plus an additional 4 years to complete the projects (6 years to liquidate your obligations.)  James Lambert pointed out that the projects include a markup for annual inflation in construction costs. 

Ms. Swift asked what the next step is.    The first step is for the TPFA board to approve the sale of bonds to finance the projects.  Then the Bond Review Board must approve the bond issuance.

The Board discussed quality control with regards to the new construction.  Mr. Lambert mentioned that TSBVI will hire a project manager to oversee the whole project and to work with the Texas Building and Procurement Commission’s assigned full-time project manager.

Ms. Wheeler asked whether there is visually impaired representation on the facilities meeting team. Ms. Welch would like Dr. Hatlen to extend a particular invitation to teacher Jeri Cleveland to come to the facilities meetings.

The Board voted on the previous motion to approve the budget, including the TPFA resolution, as presented, given that the Board can go back and revise budget items within 12.5% at the strategy level.

The motion passed by a majority hand vote. Mary Sue Welch, Debbie Louder, Gene Brooks, and Jamie Wheeler voted in the affirmative.

Consideration of Approval to Transfer Funds between Budget Codes: Mr. Schulz read the topic from the board packet, which contained two separate requests.  One would authorize the superintendent to transfer funds between appropriation items up to 25% for the current fiscal year.  The second measure would authorize the same, at a 12.5% rate, for the 2005-2006 fiscal year.  The Board then reviewed with the staff how the transfer authority functions in practice, and the relative urgency of accepting the two motions.

Debbie Louder moved that the board authorize the Superintendent in fiscal year 2005 to transfer up to 25% from any one appropriation item to another appropriation item for the purpose of consolidating any budget savings in departmental operating budgets, including those savings from lapsed salaries, to first cover any budget deficits that may occur in other departmental budgets or program cost accounts and then to utilize any additional savings to cover any emergencies or any unplanned expenditures that may occur between now and the end of the fiscal year.  Any additional balances remaining, after these two uses, will then be used to complete the renovations in the Blue Dorm (Building 545), purchase additional dormitory furniture for the new dormitories, or to transfer forward to the following fiscal year. Gene Brooks seconded.  The motion to pass was unanimous. 

Debbie Louder moved to table the consideration of approval of transfer authority for FY 2006 to the September meeting. Toby Galindo seconded the motion.  The motion to pass was unanimous. The item Transfer Authority for the Superintendent is moved to the September Board meeting.

Consideration of Approval of Waiver to Exempt TSBVI from Mandatory 2% FTE  Reduction: Dr. Hatlen presented the topic, and expressed TSBVI management’s wish to submit a letter to the Governor’s Office and the Legislative Budget Board asking that we be exempt from this reduction.  Ms. Louder indicated that she would not want the instructional staff reduced if the appeal is unsuccessful. 

Donna Clopton moved to approve the letter, and Jamie Wheeler seconded.  The motion to pass was unanimous.

Discussion of Future Board Training Sessions and Development of Policy or Procedure: Dr. Hatlen suggested that the board consider training on the personnel classification system and on budgeting, especially legacy and bond funds. 

Ms. Swift suggested that the Board members review the adopted budgets before the September meeting to highlight and write questions about to prepare for the next meeting. Mr. Cleveland asked that the Board submit questions in advance by emailing them to Mr. Schulz so that TSBVI can prepare answers instead of answering questions cold. Ms. Vaughan suggested that the emails not be forwarded to all the board members for discussion to avoid conflicting with open meetings regulations.

The Board discussed meeting on Saturday, September 24, 2005 from 8:30-12:30 for a legislative update and a training session on the legacy budget and the use of bond funds. Training on personnel classification will occur in January.

Consideration of Future Board Meeting Topics:  If the Board has any proposed budget amendments, they will be added as agenda items for the September regularly scheduled Board meeting.

Other topics for the September meeting include a review of the Abuse and Neglect procedures and follow-up on audit recommendations, options for updating accounting software, and a follow-up regarding timelines for TSBVI’s response to the SAO audit.

Ms. Louder indicated a desire to look at the policy/procedure for a dress code for staff and students in September.

Ms. Clopton mentioned revisiting the policy on the low-vision clinic, specifically regarding reimbursement for low vision evaluations.

Ms. Swift suggested that Board members email Dr. Hatlen to ask about other possible topics. 

Announcements:  Mr. Galindo asked whether his and Ms. Louder’s board terms were not expired.  Ms. Louder responded that they have lapsed, but that they serve at the Governor’s will and until he sees fit to change their status, they stay on the board.

Mary Sue Welch’s birthday is September 25.

Adjournment: Ms. Swift adjourned the Board meeting at 6:45 p.m.

Frankie Swift  Date
Board President

Donna Clopton   Date
Board Secretary

John Botti  Date
Recording Secretary

BOARD DIRECTIVES

July 26, 2005

1. If a member of the Board has any proposed budget amendments, they will contact Dr. Hatlen to request that the item be added to the agenda for the September regularly scheduled Board meeting. 
2. Questions about the bond projects should be emailed to Barney Schulz.
3. Place on September Board Meeting Agenda- Discussion of the Student Abuse and Neglect procedures and follow-up on audit recommendations
4. Discussion of options for updating accounting software (Gene Brooks)
5. Discussion of timelines for TSBVI’s response to the State Auditor’s Office audit (Frankie Swift)
6. Review of the Student Abuse and Neglect investigation checklist (Frankie Swift)
7. Discussion of the policy/procedure for a dress code for staff and students in September (Debbie Louder)
8. Discussion of the low-vision clinic and reimbursement for low vision evaluations (Donna Clopton)
9. Consideration of Transfer Authority for the Superintendent for the 2005-2006 school year (Debbie Louder)
10. Place on the January Board Meeting Agenda- Training on the personnel classification system.
11. Place on Future Board Meeting Agenda- Report by Russell Gregorczyk on the implementation of the Student Abuse and Neglect Audit’s recommendations (Frankie Swift)