Finance & Audit Committee Meeting/Notes November 14, 2019

Agenda

November 14, 2019 Board Finance and Audit Meeting Agenda 
Panorama Village Administrative Centre 
IT Conference Room - 11:45 a.m. 
240 Villa Crest Drive 
State College, PA 16801 

  1. Call to Order

  2. 2018-19 MDNA for Financial Statements ( attachment)

  3. 2020-21 Budget Development Process (attachment) 

  4. Foundation (attachment)

  5. Future Agenda Items
    1. Cohort Review
    2. Budget Development
    3. Capital Financing

  6. Adjournment

APPROVED
November 14, 2019 Board Finance and Audit Meeting Minutes
Panorama Village Administrative Centre
IT Conference Room - 11:45 a.m.
240 Villa Crest Drive
State College, PA 16801

 

  1. Call to Order
    Mr. Scott Fozard called the Board Finance and Audit Committee meeting to order at 11:50 a.m. and turned the meeting over to Mr. Randy Brown.

    Committee Members Present: Amber Concepcion, Scott Fozard, Jim Leous, Laurel Zydney
    Committee Members Absent:
    Others: Gretchen Brandt, Randy Brown, Nancy Reese, Donna Watson

    A copy of all materials Distributed to the committee members for discussion are included with the official minutes, unless otherwise indicated.

  2. 2018-19 MD&A for Financial Statements
    Ms. Donna Watson presented the Management’s Discussion and Analysis (MD&A) draft which provides a narrative overview and analysis of the financial activities of the SCASD for the year ended June 30, 2019. The discussion focused on the district’s financial statements as a whole. The draft MD&A will be presented to the full board on Monday, November 18, 2019. The discussion and analysis presented is intended to serve as an introduction to the District’s basic financial statements, comprised of three components: (1) government-wide financial statements; (2) fund financial statements; and (3) notes to the financial statements. The Condensed Statements of Activities (page 5) showing the total net position of the District increased $15,065,561 in 2019. Net position of governmental activities increased by $14,981,516, while net position of the business-type activity increased $84,045. In 2018, the effect of adoption of GASB No. 75 was $11,998,343; however, there are no new accounting pronouncements that impacted the 2019 statement. One formatting change was made this year, as suggested by the committee last year; the statements are now shown in a comparative format. The total net deficit (page 4) shows that we went from a deficit of $86,070,297 in 2018 to $71,088,781 in 2019. The decrease in the deficit was primarily due to the DCED grant of $6.8 million. Revenues from local, State and Federal sources (page 6) and a comparison of the impact with and without the GASB 68 and 75 liability are shown. A forward look at the next year's budget (page 9) shows capital assets, long-term debt and factors expected to have an effect on future operations were discussed.

    The MD&A will be presented as an information item to the full board on November 18. On December 2 the MD&A will be presented as an action item for board approval followed by the audited financial statement presented by BakerTilly at the December 16 board meeting.

  3. 2020-21 Budget Development Process
    Mr. Brown and Ms. Watson reviewed the 2020-2021 budget development process with the following considerations:
    - Review 2019-21 general fund projections
    - Review 2020-21 proposed general fund budget
    - Act 1 Index for 2020-21 is 2.6%
    - Accelerated Opt Out Resolution versus Preliminary Budget approval

    Although early in the budget development process, and looking at the 2019-20 projections, the projected 2020-21 budget with a 2.0% tax rate increase was reviewed. Review and discussion followed. Under the Act 1 of 2006, the Board is required to complete one of two actions before January 19, 2019; (1) present for public review and adopt a proposed preliminary budget for 2020-2021; (2) adopt an accelerated budget opt-out resolution. Based upon review, the committee supported the administration’s recommendation to consider the adoption of the accelerated budget opt-out resolution. This option notifies the community and PDE that the tax rate will not increase by more than the Act 1 Index. The 2020-2021 Act 1 Index is 2.6%. By adopting the resolution, the district is not required to submit the preliminary budget document to PDE. This recommendation will be presented to the full board on December 2 for approval. Mr. Brown will be recommending to the board that the January 6 and January 21 meetings be combined into one board meeting on January 13.

    Discussion surrounded Student Activities and the guidelines used to determine what student groups are funded. The committee would like to have additional insight on how these decisions are made and stated this could be a topic to review at a future board leadership meeting.

  4. Foundation Financials
    Mr. Brown reviewed the September 30, 2019 Education Foundation financials. The 2019-20 EITC budget was set at $30,000 which has been reached with a projection of $30,500. It was noted that Mr. Paul Olivett received his full bonus and that the 2020 Maroon and Gray banquet will be raising funds for the Student Opportunity Fund.

  5. Future Agenda Items
    • Cohort Review
    • Budget Development
    • Capital Financing
    • Solar Power

  6. Public Comment
    There was no public comment

  7. Adjournment
    Mr. Fozard adjourned the Board Finance and Audit Committee meeting at 1:25 p.m.

Submitted by,

Nancy Reese