Agenda and Notes - January 18, 2018

Agenda

State College Area School District


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


January 18, Board Finance and Audit Committee Meeting
11:45 a.m.  - Meeting Room A, Panorama Village Building
240 Villa Crest Drive
State College, PA  16801

 
I.     Call to Order

II.    Budget Development 2018-2019

         A.  Opt Out Resolution
         B.  Community Education (attachment II-B-1) (attachment II-B-2) (attachment II-B-3)
         C.  PSERS (attachment II-C)
         D.  Charter School (attachment II-D)
         E.  Building/Department Methodology (attachment II-E)
         F.   PSU In Lieu (attachment II-F)

III.   Debt Financing (attachment III)


IV.    Education Foundation MOU (attachment IV)


V.     Donation Quarterly Report (attachment V)


VI.    Future Meeting Agenda Items


VII.   Public Comment


VIII.  Adjournment


NOTES

Board Finance and Audit Committee Meeting Notes                         
January 18, 2018 - 11:45 a.m. - Meeting Room A
Panorama Village Administrative Center                  
240 Villa Crest Drive
State College, PA  16801

 

I.         Call to Order
Mr. Fozard began the Board Finance and Audit Committee meeting at 11:47 a.m. and turned the meeting over to Mr. Brown who gave an overview of the agenda items being presented for discussion.

Present
Committee Members:  Amber Concepcion (arrived 12:00 p.m.), Dan Duffy, Scott Fozard, Laurel Zydney
Others:  Lori Bedell, Dave Bracken, Randy Brown, Marie Caster, Ann McGlaughlin, Bob O’Donnell, Donna Reinhardt, 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
Opt Out Resolution
Mr. Brown reminded committee members the Opt Out Resolution is a commitment to not raise the tax rate by more than the Act 1 Index of 2.4% for 2018-2019, and asked if there were any concerns about moving forward with the Resolution.  There were none.  He mentioned most school districts are opting out and staying within the Index.

Community Education including CEEL
The Community Education program is expected to show a loss for the second year in a row. Fiscal year 2016 had a positive fund balance. Projections are based on enrollments, and costs are estimated on the higher side rather than lower. Lemont CEEL site opened earlier this month and there are transitional costs with a new site. Next year’s budget will add Corl Street site after construction of the All Purpose Room is complete.  Board member asked for wait list numbers for board presentation. Ms. Messick will be at the Board meeting Monday.

Driver Education Instructor Rate
Requesting to increase the Driver Education Instructor rate to $30/hour.  Our current rate is not competitive with other area schools and we are having difficulty finding and keeping instructors. Also, the program has two cars and only one instructor, and has a wait list.  

PSERS
Ms. Watson reviewed the charts on the handout, comparing 2016 projection calculator to current calculator. Next year’s projected rate is 33.43.  The current fund balance shown in column F is $5.4 million.  Updated projection would result in use of fund balance by 2020-21. Recommend maintaining projected use at 2016 projected level.

Charter Schools
Regular and special education charter school enrollments are budgeted at 427 students for 2018-19, which is level. The cost per student continues to rise, therefore, total expense continues to rise. Committee members discussed charters not accepting all students as we do, determine cost ratio of district vs. charter, use only our elementary costs to calculate per pupil cost, cost with and without special ed, costs vs. services provided, break out by types of disabilities, is the dollar following the student, we are looking out for every student in our district and charter school students are our students. Charter schools are benefitting from our expensive high school programs because they don’t have a high school.

Building/Department Methodology
Outline provides insight into how budget allocations are determined. Funding per pupil is consistent over time, but changes in building enrollment from year to year, teachers, operational costs of programs, and online resources all have budgetary impact. Board member asked for explanation of variations in costs per students across buildings, expectation is relative consistency, and bullet points explain why there might not be consistency. Committee member questioned how much discretion schools have on offerings and Mr. Brown responded that it is less and less each year.  

PSU In Lieu
PSU is exempt from Real Estate taxes for anything other than properties used by for-profit activities. Mr. Brown reviewed examples of what is classified as tax exempt and what is included in the In Lieu Agreement. Taxation is bound by State law but the Agreement is between the District and PSU.

III.       Debt Financing
Mr. Brown reviewed the Bond Financing Overview which was prepared by Tom Beckett, District Financial Advisor, in the format of “Bonds 101.” All questions will need to be decisions of the Board, i.e., method of sale being negotiated or competitive. To include local sale, must be negotiated rather than competitive. The Board will be advised if competitive sale is an advantage; but if a negotiated sale, it is recommended Bank of America/Merrill Lynch be underwriters again. Committee member expressed preference to go negotiated unless there is an economic advantage to go competitive.  Mr. Beckett will be at the Board meeting on Monday and will share pros and cons of allowing Janney to share, which he believes is beneficial.

IV.       SCASD Education Foundation MOU
Mr. Brown reviewed the changes incorporated from the last Finance Committee meeting. The Committee suggested additional revisions: #4.B. “...shall provide an annual District allocation…”; “district contracts” vs. “contracts.” Break out into two sentences, with the second being what administrative types of expenses are.

Guest Ann McGlaughlin commented the Foundation Board Finance and Governance Committee asked a similar question about upfront expenses of the Foundation, i.e., Maroon & Gray Society.  She expressed there is no way to know how costs will run until going through something two or three times, and it is important to know they will have $120,000 annually so they can develop a budget year to year.  Right now, two-thirds of the $120,000 is committed, and the Foundation Board wasn’t involved in those decisions. Ms. McGlaughlin questioned how the Foundation can be held accountable if they don’t have any control over how the money is spent. Dr. O’Donnell responded when discussing donors for Memorial Field, for instance, he meets with Mr. Olivett, Mr. Brown and Mr. Poprik, so when he sits down with prospective donors, he already has Foundation input.

Committee members questioned 1) whether only the Foundation is benefiting from Mr. Olivett’s and Affinity’s contracts; 2) how much direction to Affinity is from the District vs. the Foundation; and 3) is Affinity doing two databases? Mr. Brown responded to question 1) yes; 2) most direction to Affinity is from Mr. Olivett; and 3) no, there is one database and the District owns it.  

The MOU had been included as a discussion item for the next board meeting, however Mr. Brown would not recommend that at this time. He suggested going forward with the action item on D&O Insurance. There was conversation about insurance coverages related to Boosters and/or PTOs,

V.        Donation Quarterly Report
A donation quarterly report was provided to the Committee and will be included on the next Board agenda.  Committee members should send any questions or comments to Mr. Brown and Ms. Watson.

VI.       Adjournment
The Board Finance and Audit Committee meeting adjourned at 1:20 pm.

Submitted by,

 

Marie Caster
Acting Board Secretary