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January 14, 2015 Notes
State College Area School District
CAC for Finance
January 14, 2015
Board Room, 131 W. Nittany Ave.
State College, PA 16801
Marisa Flynn (absent)
Andy Friberg (absent)
John Hook (absent)
Tim Hurley (absent)
Jim Myers (absent)
Lana Walker (absent)
Guests: Donna Reinhardt
Minutes: Action on approval of the November minutes will take place at the next meeting.
High School Project Financing: Interviews of underwriters were held December 17, 2014. On January 26, board action will occur on the recommendation to appoint Bank of America/Merrill Lynch as senior manager and Janney Montgomery Scott as co-manager.
After review of all scenarios, it has been recommended to do one borrowing, anticipated to occur in March, with a 30-year amortization period, which will generate an annual real estate tax impact of about $160/year for the average homeowner.
- The average (non-financial) person doesn’t understand the impact of amortization.
- If future boards do not plan responsibly, 30 years could limit them receiving public approval for additional taxes within the 30 year time, because they are still paying on the 30 year bonds.
- Randy was asked to confirm whether the tax portion of the referendum debt is allowed to be refinanced. Randy said both NW and PDE have answered affirmatively that yes, it is allowed, but he will re-confirm.
Preliminary 2015-16 Budget Proposal: The proposed preliminary budget was presented at the December 15 board meeting. The proposal includes an increase of $4.6 million, with only four areas of increased funding being requested, which were explained by Dr. O’Donnell. The proposed budget would result in a 1.9% real estate tax increase, which is equal to the Act 1 Index. The board will be asked to approve the proposed budget on January 19, with action to approve the Preliminary Budget on February 9. Budget refinement will continue throughout the remainder of the fiscal year.
- break out referendum millage increase and other, and how much will be next year, and the next year. It is less of a factor in year 1, than it is in the next years.
- suggested doing a spreadsheet for the next 3-4 years, then have CDT follow up on that with a more detailed article.
- be as simplistic as possible for comprehension in 10 minutes or so.
- write a letter thanking the public and all participants in helping to get the referendum passed. People have invested in the education of this community and the students, both existing and those not yet born.
Adjourn: The meeting adjourned at 4:53 pm.