Monday, September 22, 2008

Audit/Finance Committee Update

Last Thursday the Audit Finance Committee covered a few topics. There were as follows:

1) Funding of the Retiree Health Care Trust- The District needs to fund a Retiree Health Care account. With over $2 million in surplus funds from the past fiscal years, it makes sense to use some of those funds to fund this new account. After our discussion, it sounds like the Committee will recommend that the Board fund the new account with two-thirds of the total surplus. The rest of the surplus would be directed to the high school construction project.

2) Non-electoral debt- I had asked the Administration to prepare an estimate of the District's borrowing ability over the next few years. Our non-electoral debt limit is 2.25 times our three year average annual revenues. As we pay down our existing debt and increase revenue, this limit changes. For discussion purposes, I feel it safe to say that any project over $110 million would require voter approval via a referendum. That number is not exact because it will be calculated again once we are ready to move forward on the project and will undoubtedly change a number of times before all is said and done. The point that I tried to express to the Committee was that I wanted to make sure we did the bond float in ONE float, not in multiple floats. Otherwise, I fear that we might approve a project only later to have a referendum not pass after we have started down a certain path on the project. Let's get it out there, see if the voters approve it and move on. Along those same lines, I asked the Committee to consider NOT approving the exception to Act 1 next January unless we are certain to float the bonds for the high school project by that time. Mt Lebanon was part of a minority number of schools that decided to get the Act 1 exemption last year.

3) District Budget Priorities- The Committee discussed the need to start the budget process earlier this year than in years past. This will give us a head start in letting the Administration know where the Board as a whole stands on certain budgetary issues. With recent class size discussions in the District, I would expect that to be a major part of any type of early budget meetings

There was an additional meeting on Thursday night that I attended which dealt with class size issues at Washington Elementary. Four Board members, Superintendent Allison, and the Principal at Washington met with approximately 30 parents that were concerned about the District's priorities regarding class sizes. In particular, they were parents of students in classrooms that had 26 and 27 students respectively. The forum was set up like a Q&A and I think I learned quite a bit along with the parents in attendance. I am not certain if there is any short-term solution here but I do look forward to hearing about and reviewing any recommendations that come from the administration.

I'd also like to remind everyone that the Board will be holding a meeting tomorrow night at 7pm in the library to finalize the selection of the construction manager for the High School Project. This is a continuation of our last meeting that was recessed in order to get the final details of each proposal. I expect the meeting will be quite short.

Thanks for reading.