2/8/17 Meeting Notes

CAC for Finance Meeting Notes
February 8, 2017 – 4:00 pm
Panorama Village Administrative Center – Room C
240 Villa Crest Drive, State College, PA  16801

Ms. Flynn called the CAC for Finance meeting to order at 4:01 pm.

Members Present:  Randy Brown, Marie Caster, Dan Duffy, Marisa Flynn, Scott Fozard, John Hook, Dave Lieb, Ann McGlaughlin, Carl Raup, Susan Sampsell, Lana Walker, Donna Watson

Mr. Brown announced future meetings will be in meeting room C.

Approval of meeting notes:  The November 9, 2016 meeting notes were approved by consensus.

2017-18 Budget Development:  Mr. Brown reported on Governor Wolf’s release of the proposed 2017-18 state budget.  The proposed $32.3 billion budget provides 1.8% increase in total funding, including $100 million increase in Basic Education Funding, $25 million increase for Special Education Funding, a $50 million cut to transportation subsidy.  Also included is $30 million for PlanCon. 

The PA legislature is discussing property tax reform for school districts. PASBO is concerned there is a very real chance of a bill being presented and enough Senate votes to pass. The Governor has stated he will not veto if it reaches his desk.  The School Board passed a resolution opposing legislation that eliminates school property taxes.  Dr. O’Donnell and Mr. Brown will be meeting with Senator Jake Corman on February 14th.  It is important to contact our legislators.  The committee asked Mr. Brown if he could do an analysis from other districts as to the local impact.  A huge concern is related to debt to finish the high school project because the proposed legislation requires debt be incurred by 12/31/16.  The committee discussed gathering a power pool to go to Harrisburg to lobby our position on property tax reform and send a letter from CAC in support of opposing legislation.

On December 19th, the board adopted an accelerated Opt Out Resolution, resolving not to raise taxes above the 2.5% index.  This option requires fewer budget proposals to the state and gives notice to the community.  The current budget proposal is 1.55% increase for a balanced budget.  Administration continues to analyze areas of budget. Factors driving changes are in elementary curriculum and higher than expected increase in health care.  The committee discussed insurance consortium; percentage of employees over 55 or 60 years old; consider opt out payout via FSA funds rather than cash; charter school costs; transportation services.  Each month, Mr. Brown will give the board a budget update.

Capital Financing:  Mr. Brown continues to check in with the District’s Financial Advisor.  Mr. Beckett the markets have settled down, there is no rush but we’re still on target for spring borrowing.  Should have funds to get through summer, if not early fall.  The Board Resolution allows $55 million borrowing without additional approval, in case the market moves quickly.  If property tax elimination comes to fruition, bond markets are going to explode, causing our interest rates to go through the roof.

DWFMP:   Elementary projects are on track to go to bid in Fall 2017 with construction beginning late-2017 to early-2018.  The only deviation is Corl Street as the board has not taken formal action yet but is expected to follow the same timeframe.

Memorial Field renovation is in the review stage of the design. The proposal is to eliminate the Nittany Avenue building.

Five-Year Capital Budget Plan:  The plan is much more attainable now with the high school, three elementary schools and Memorial Field out of the five-year plan.  The first several pages of the report describe summer projects for 2017-18, including paving MNMS, roofing at PV, CS asbestos removal, etc. Mr. Brown reviewed other projects in the report, noting that some unfunded needs in the plan have been removed.  Fairmount is expected to be vacated in 2019.  Page 10 includes a financial summary.  The committee discussed the future of FA building; 5-year plan is great in year 6, but year 15 is disconcerting. 

Future Meeting:  April 12, 2017

Adjournment:  The meeting adjourned at 5:17 pm. 

Submitted by:

Marie Caster