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2i0 Mark Royster mentioned that zero-based budgeting does require accountability. The Chapel Hill/Carrboro system is currently moving toward "site-based" management. The School Board and administration are committed to moving at a pace that does not overwhelm the administration at the individual schools. The initial year for zero- based budgeting will be a stepping stone for subsequent years. This will be a gradual process. Larry Haverland indicated that the Orange County School Board and the Finance Office are also discussing the best way to move toward zero-based budgeting. Commissioner Gordon indicated that she would like to see the budget presented for each of the schools and the central office. She feels that the current categories are unwieldy and difficult to understand. Programmatic budgeting, with personnel costs, etc. assigned to each program, would be a step forward. More program differentiation needs to be given so that it is possible to understand the requests. Mark Royster indicated that Commissioner Gordon's suggestion is what zero-based budgeting will look like when it is fully implemented. Commissioner Willhoit commented that the rapid growth the Chapel Hill/Carrboro school system is experiencing makes significant expansion out of the question. He expressed concern that the motivation for requesting additional detail may be an attempt to second guess the school board about programs. Mark Royster suggested that an official economic forecast from the County would be extremely helpful for the School Boards in their preparation of the budget for the upcoming year. John Link indicated that County and School staffs do discuss what the upcoming year will look like in terms of possible funding implications and increases in student populations. Without looking at the start-up costs associated with the new schools, they are anticipating an increase of $850,000 in new pupil costs. Also the last $.04 on the $52 million dollar bond issue will cost $1.9 million. Commissioner Gordon indicated that increases usually are attached to new programs and a more differentiated budget would allow the Board of Commissioners to see how the new program fits into the overall plan. The Manager and Superintendents could work on creating a process which would take this into account. Also, it would be helpful if both school systems used the same format. .Commissioner Halkiotis suggested that a subcommittee be formed consisting of members from each of the School Boards and the Board of County Commissioners. This committee could get a clear overview of expenditures and make suggestions for improvements. Chair Carey stated that the goal of zero-based budgeting is one that needs to continue to be addressed by both school boards. There is no unanimity on either board on what should be the interim step for the upcoming year to improve clarity in the budget. He suggested that the Manager and Superintendents develop a proposal to be returned to each of the Boards for their consideration during the upcoming budget process. After that process is completed a subcommittee of elected officials could be formed to discuss this issue. FISCAL CHALLENGES: Start-Up Costs For New Schools - Impacts for 1995-1996, 1996-1997, and beyond: John Link indicated that unanticipated sales tax revenue was used for start-up costs for McDougal Middle School and the same will be used for Stanback. That is a short-range and insufficient remedy for the remainder of the new schools being planned. Another method of paying the start-up costs needs to be established for the remainder of the schools. Present policies regarding the use of property tax revenue vs. sales tax revenue may need to be reviewed. Commissioner Willhoit indicated that the policy of including start-up costs as