Agenda and Notes - October 13, 2017

Agenda

State College Area School District

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

October 13, 2017 Board Finance and Audit Committee Meeting
11:30 a.m.  - Meeting Room A, Panorama Village Building
240 Villa Crest Drive
State College, PA  16801

 

I.   Call to Order

II.  2016-17 Management Discussion & Analysis (Draft) (attachment II)

III. Capital Financing Update (attachment III)

IV.  Budget Development 2018-2019 (attachment IV)

V.   Future Meeting Agenda Items

VI.  Public Comment

VII. Adjournment

 ___________________________________________

NOTES

Board Finance and Audit Committee Meeting Notes IV-B
October 13, 2017 - 11:30 a.m. - Meeting Room A
Panorama Village Administrative Center
240 Villa Crest Drive
State College, PA  16801

I.     Call to Order
Mr. Fozard called the meeting of the Board Finance and Audit Committee to order at 11:31 a.m. and turned the meeting over to Mr. Brown and Ms. Watson.

Present
Members: Amy Bader, Amber Concepcion, Scott Fozard
Others:  Dave Bracken, Randy Brown, Marie Caster, Bob O’Donnell (arrived at 12:20), Donna Reinhardt, Donna Watson, Laurel Zydney

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

II.    2016-17 Management Discussion and Analysis
Ms. Watson presented the draft Management Discussion and Analysis (MD&A) for the Committee’s review and to answer any questions.  She stated the report is in the same format as in previous years. A draft will be presented to the Board at their next meeting, which will then be reviewed by Baker Tilly before becoming part of the final audited financial statements. Ms. Watson pointed out some details of the report, including a shift in position due to a spend down of bond funds and increase in fixed assets due to the High School Project, and the increase in PSERS. She noted page 7 shows the true position.  This MD&A is actual compared to prior year and noted the DCED grant plays a part in the variance.  A Committee member suggested showing the impact of PSERS liability on net position.  Ms. Watson noted the swing in purchased property services and property is due to PDE changes in account coding. Verbiage related to the High School Project is included.

III. Capital Financing Update
Mr. Brown reviewed a summary of revenue and expenditures and noted the last time this was presented, the ending General Fund balance was $9.3 million, now $8.6 million going out through 2027-28 vs. 2025-26, debt service move to expense reduces capital reserve, interest rate estimate change, net of all those changes. Committee members discussed and offered suggestions on presentation:  subtotal of general fund balance and transfers; add another line with total excluding transfers; every report should break out charter school expenses; real estate assessed value growth assumptions creates greatest effect; point out a zero percent increase for one year, and cut in half for other years, illustrate 2007 impact when no tax increase, show examples of impact, i.e., X number of teacher positions; need to help public understand; is $32 million the right number in 27-28. Mr. Brown stated they will continue to refine salary and benefit numbers.  Negotiations start with SCESPA in January and Highmark is year to year.  Mr. Brown confirmed it is the board’s desire to not do another referendum and reminded members PFMS will need to be done from budget.

IV.   Budget Development 2018-19
Mr. Brown noted the majority of expenses are salaries, benefits, capital/debt service, charter schools and PSERS, which will be reviewed annually.  Every two years will rotate in physical plant, transportation, food service and support services. Board members suggested adding to the matrix on the last page a history of where money is spent, then can talk about where we want/need to spend; back into the methodology; if we can analyze 60% of expenses, that drives our approach to the budget process. Add a glossary to explain categories to improve communication. Every couple of years analyze purchased and professional services to break out “what” we’re paying for. Define or subtotal “Operational” expenses in Other Financing Uses is $21M – define or subtotal “Operational” expenses to show what our operation expense actually is. Dr. O’Donnell talked about how Title funding interfaces in the budget, show poverty numbers in each school. Mr. Brown would like to increase Community Ed and CEEL; hope to open Lemont/Houserville site next year and will open Corl Street site as soon as the multipurpose room is finished. Suggestion to show added charter school cost, not just gross; how many students from each elementary school zone go to charter schools; added cost of special ed related to charter schools; use a word other than tuition when referring to charter schools. Mr. Brown stated a need to focus on transportation due to the student day proposal; the way the cost information is presented is very important.  The budget timeline will be revised to add when certain things will be reviewed.

V.   Future Agenda Items
Cash needs
Cash management
Future borrowing needs.

VI.  Public Comment
There was no public comment.

VII. Adjournment
Mr. Fozard adjourned the Board Finance and Audit Committee meeting at 12:56 p.m.

Submitted by,


Marie Caster
Acting Board Secretary