Agenda and Notes - March 21, 2018

State College Area School District

OUR MISSION:  To prepare students for lifelong success through excellence in education.

 

March 21, 2018, Board Finance and Audit Committee Meeting
12:00 p.m. - Meeting Room A, Panorama Village Building
240 Villa Crest Drive
State College, PA  16801


Agenda

I.    Call to Order


II.   Budget Development 2018-2019


III.
Debt Financing


IV.   Future Meeting Agenda Items


V.    Public Comment


VI.   Adjournment


NOTES


State College Area School District
March 21, 2018, Board Finance and Audit Committee Meeting
12:00 p.m. - Meeting Room A, Panorama Village Building
240 Villa Crest Drive
State College, PA 16801


I.        Call to Order
Mr. Fozard began the Board Finance and Audit Committee meeting at 12:04 p.m. and turned the meeting over to Mr. Brown.

Present
Committee Members:​ Amber Concepcion (by phone), Dan Duffy, Scott Fozard, Laurel Zydney
Others:​ Vern Bock, Randy Brown, Marie Caster, Bob O’Donnell, Donna Reinhardt, Will Stout, Donna Watson

A copy of all materials distributed to board members for discussion is included with the official notes, unless otherwise indicated.

II.       Budget Development 2018-2019
Transportation
Mr. Brown presented an overview of the transportation budget, noting an assumed
salary increase for driver complement, health insurance at a 10% increase, PSERS at the approved rate, an assumption of $50,000 increase for the change in student day next year, and a one-time increase of $200,000 for buses. He reviewed statistics on buses, runs, drivers, contracted services being a 40/60 split. Member asked how the split is determined. Mr. Brown explained that the contracts are bid on a daily price per bus. When a run is vacated it is evaluated whether that run can be combined with existing runs. There was discussion about bus contractor pay, advantages of drivers being district employees, calendars of private and charter schools, age of buses, costper mile, empty bus seats, congestion at schools due to parent pick up and drop off, and opt out option for parents if bus transportation is not needed. Members asked if transportation costs to charter schools and private schools are reimbursable. Mr. Brown responded the reimbursement rate is the same as for transporting to district schools.

Staffing
Dr. O’Donnell, Mr. Bock and Dr. Stout reviewed staffing additions proposed in the
2018-19 budget and stated they will expand the information at Monday’s board meeting to address questions from Committee members.

-Staffing to adjust student day - 7.35 FTE, which is almost 3.0 FTEs less than was
previously assumed.
-Elementary counselor - 1.0 FTE, would allow 1.0 counselor per elementary school, with Corl Street level at 0.6 counselor, and allows flexibility with parents and teachers.
-Primary autistic support classroom - 1.0 FTE faculty, 5.0 FTE paraprofessionals, due to six new students registered for Fall 2018 who cannot be mainstreamed.
-Elementary instructional support - 0.5 FTE at Corl Street due to shift in population, now Title I eligible, uptick in IEPs with writing. Committee discussed unable to determine if uptick is local or national, monitor evaluation of special education caseloads, look at how we are using our psychologist, Title I and Title I-like dollars are shifted from RP to CS, so no less.
-Elementary classroom teacher - in case enrollments shift and exceed class size
guidelines.
-Director of Diversity and Inclusivity - majority of funding from a shift in resources,
except $18,000.
-Part-time middle school Gifted Support - 0.4 FTE, allows full-time middle school gifted support due to increase in number of gifted-identified elementary students matriculating to middle level.
Member requested data on increase in positions not specifically related to increase in enrollment, but needed for additional services due to identification of needs and where classes are located.

Resources
-Security at State High - additional contracted security guard
-Lead Counselor-K-8 - anticipate zero budget increase due to shift in resources within student services budget.
-Psychological Services - 2 interns, degreed professionals finishing Doctorate, increase capacity to help psychologists, estimate $20,000.
-Recruitment Software - $30,000; stand alone, not integrated into eSchool program.  Member requested a list or overview of all software systems/programs the District is using.
-High School student assessment (PSAT) - proposing $11,000 for all grade 9 and 11 students, would help students and parents better understand strengths and
weaknesses, better inform course selections.

Due to time constraints of meeting, Dr. O’Donnell briefly reviewed items that are not proposed to be included in the 2018-19 budget at this time, including:
-Middle level School Resource Officer
-High School Band Uniforms - Education Foundation is currently working with the music community to raise funds for this purpose.
-Musical Instruments - old inventory in need of updating
Board Finance and Audit Committee Meeting 3
-Motivational Resource Center (MRC) - 0.5 paraprofessional at MNMS
-IT Staffing - due to increased number of devices
-Secretarial Support for Director of Diversity and Inclusivity - will provide through current staffing if new position is not created.
-State High class size for advanced courses - still early in schedule development and staffing assignments.
-Other items include counselor requested at Corl Street, move paras to full-time, STEM, moving divider at PFMS, library para.

2018-19 Revenue and Expenses
Mr. Brown commended Ms. Watson and the finance team for preparing the budget
report. The projected 2018-19 budget remains at 2.4% tax increase, however Highmark Blue Shield offered the medical insurance rate with no increase. The budget includes proposed increases for budget requests, increased Capital Reserve by $800,000. Ms. Concepcion asked board members to review the budget report and email questions before the board meeting. Members suggested separating operational items, indicating what is happening that is driving positions, with very high level cost estimate in order of magnitude, which ones are a one-time cost and which are ongoing or recurring, and are we contracting the right security services. Mr. Brown and Dr. O’Donnell responded that the only item not recurring is the recruitment software, Psychologist might not berecurring -- will add asterisk by recurring.

III.      Debt Financing
Bond Sale
Ms. Watson reviewed the 2018 General Obligation Bond sale results and stated that Tom Beckett from NW Financial and Eugene Spinelli from Merrill Lynch will attend the next board meeting. Ms. Watson and Mr. Brown participated in a pre-pricing call on March 12 to talk about the market, the next morning had another check in, at which time the underwriters adjusted prices based upon market conditions. The bonds were oversold on all maturities except the shortest and it was a very successful sale, with an All-in True Interest Cost of 3.72%, and closing will be April 18. Ms. Watson explained oversold means there was a demand for more than was available which enabled the interest rate to be lowered, saving $450,000.

Bond Proceeds Investment
The next step is to authorize Mr. Beckett to invest the bond proceeds. An engagement letter is included for your review, which has not changed since the 2017 Bond Sale. A letter will be presented for approval at the board meeting.

Investment Options
Mr. Beckett provided an outline of investment options for the bond proceeds, which Ms. Watson reviewed. There will be $56.6 million of proceeds for investment with three options -- money market funds, US Treasury securities, and flexible repurchase agreement (REPO). It is recommended requesting bids for money market and REPO, and asking the board to authorize administration to accept the highest guaranteed rate.  Members discussed collateralization and FDIC insured, different interest rates from banks, investment of proceeds, are REPO local?  REPO are national firms with net 1.97%, others are 1.4% to 1.96%. A member asked if consideration would be given to a local bank if bid rates are close. Ms. Watson responded the bid documents allow us to reject bids for any reason, however not all banks will take the whole amount.

IV.      Public Comment

There was no public comment.

V.        Adjournment
The Board Finance and Audit Committee meeting adjourned at 2:03 pm.

Submitted by,

 


Marie Caster
Acting Secretary