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draft document back to you in March and then we'll get some
born from a board action on putting the team in place
right okay thank you for a few okay
on arm I'm going to start of
this concerned about the five-year budget projection
I wish doctor Kelly was here because I don't wanna words in his mouth om
quite concerned that his remarks at the January 28 meeting
are misconstrued I in no way was he
trying to imply that a mistake has been made in the five-year projections
and fact we did go back and look at the tape and
his exact words I believe right attributes the perception
that a mistake had been made on the part of some people
having said that I will tell you personally that I don't feel there's any
mistake up there I'll
I view the five-year budget projection as
just that it's a it's an exercise %ah
it was originally intended to be an in-house exercise
to give us some sense out where we're going and terms
I've presents trends continuing
are just as an aside I looked up
the definition of the word projection
and it reads a projection is an estimate your forecast
our future situation or trend based on the study
a present months sell the five-year projection as it sits right now
very very conservative on the revenue side I
assumes that the index will not increase beyond the 2.1
which is probably unrealistic it does not factor in the exceptions that were
eligible for
I new word is a factor and some other fluctuations we're seeing in state
budget numbers
I'm on the expense side
I feel very comfortable that the assumptions used were reasonable
I think it's not necessarily the worst case scenario
what might happen but it's certainly I'm
very conservative this well I
if you go back and you look at the Sun balance projections over the past couple
years
you will see the bats the projections for both 13 and 14
called for deficit situation and yet when we got to that point
in time the budgets that we were able to offer US administration
were balanced with no tax increase
so I'm very concerned about the contention that we somehow need to
address
a budget projection that may or may not happen three and four years
out there I'm I view it more
as this is potentially what could happen
and it's going to be our job as an administration
and in preparation with the boorda to make sure
as those budget years come of and we're actually budgeting for them
that we realistically look at what we need to do
to keep that budget imbalance either within the index were be low
and that's
I have to say okay mom
I appreciate the historical context as well because I've
i've seen these forecast documents
and past and Lisa last two years I believe on this committee
and I seem to recall that that is what would happen is we've
if we had relied strictly on the forecast we issue 2 years ago we would
be in a deficit situation ashworth yes
and and doctor Kelley cited the fact that you know a year ago we were looking
at a potential deficit
in the budget for 14-15 of about 1.5 billion dollars
that did not manifest itself because
Aug the om very
limited and defined use a fund balance and I would also like to discuss their
not be caused we do have a fine balance
policy in place and it's designed to limit our ability to use those funds
for non-recurring expenses except in very limited circumstances
such as the retirement escrow fund that was specifically
money put aside for purposes of cushioning the impact
have the pieces increases and that's what we're using it for
we've also as administration been charged by several boards
over the year the years I love spending down that money
I'll buy 1780 and those numbers are in place
and indeed that's what we used to formulate the 14-15 budget
and as a result and we were able to bring you
keynote tax increase budget for 1450
and I think that speaks volumes for the planning that goes on
on a continuing basis I think it does as well
I'm any committee questions
term yeah
re: I'm
okay so not a mistake that's
I think encouraging news and I think that that was good merited
as saying on group it's a projection
and projections are what they are you dealing with imperfect information
I'm EU are uncertain future
by you're making some reasonable assumptions
and we're doing the best we can with the information that's presently at your
fingertips in order to do this
so I guess my question his week
we as a district do you need to be engaged in longer-term planning because
we've got longer term issues that are before us
we know for example about Obama in students at the high school
which is going to have to be dealt with at some time it in advance
they're showing up for ninth grade ninth-grade I'm group
several I can get the philosophy
I've well maybe we get right maybe we get it wrong maybe it's his baby if that
maybe we didn't do so well last time
you know I understand all that those are all can be oxblood
but what is the alternative to you
projecting reasonably into the future and
and trying to understand where we need to be financially me we've got
according to these numbers you know the $80 million dollar cumulative deficit
heard the upcoming five years that isn't that is very
significant number that we ought to be dealing with now rather
it's the exact number it's the best we can do right now it's got implications
for a whole host of other things that are on the table ahead of us
sound so how are we going to address that
make I think the disconnect here isn't putting out
a set of numbers and then walking away from home is there for some
how they're not use for now I will in fact I think they're very useful for
framing the discussion I'm around some important things that we have to be able
to talk about
here we're talking about various options for capital improvements
I'm at the elementary schools as a consequence a full day kindergarten
on we've got this issue with high school there are other things hanging out there
what are we supposed to use to you help cope with those questions given where
we're sitting right now if not this
while there's a lotta questions and what you just said
pot just to capture on one from Omni you know that we've taken great pains to
categorizes I our fund balance into various assignments
on I personally and I think the administration
I can speak for them feel very comfortable
that the dollars are in place to fund the capital
portion I've what we need to do with our buildings over the next several years
not know that not only our buildings but our
are other facilities as well all without really impacting
on the operating budgets and there needs to be a different differentiation
between the operating budget
and the capital budgets and I think we've done a very good job in trying to
separate data out
I we've created the technology fun we've created and enhance the capital on the
capital projects fund
an all those are designed to along with fund balance assignments
put things in their right category cell I am
I guess I don't share the harm
the sense above urgency
harm that supposedly choose accumulative fund balances eighty million dollars
I'll which was done as an exercise I would manifest itself over the course of
the next five years
it's our job to make sure that were proactive which
each individual budget as sitcoms
to fruition to make sure that doesn't happen
I will it sometimes involve painful decisions
maybe I'm I think that
you know one on the board goals has been doubt we will keep our expenditures
budget to actual within a three percent
margin and we've done that on the projection for this year shows we should
finish at about between one and one half percent
that's phenomenal om and you know I don't take the credit for that
I think the year you know we've worked together is a team to make that happen
if we don't need to spend the money we don't if we need to reprogram
we do but always with an eye on the bottom line
I tell people the budget is only good as the revenue you have to back it up
okay it's our job is the revenues are collected let's say we have a very bad
year for tax collection
we have an experience that but let's say we do then we needed mid-year
to re analyze where we are because the revenues of these they are not there to
back it up
so decisions will have to be made at that point can you for C that maybe to
some degree
but the nobody has a true crystal ball on this
be I I can understand your understanding there is no true crystal ball that is
the point is not about the crystal ball but the point here is
that we do have some foreseeable issues that are to be discussed
and we were making decisions today earlier this year in this budget year
where the upcoming budget year
have implications over the next five years it with regard to how we're
stacking expenses
and and so on we need to be talking about those because
we do today matters two years from now and I guess I don't think it's okay to
say no I where deer on a budget at a time
and sound we're gonna just forge ahead because right now we can do this this
and this and we can have a zero percent tax increase
knowing full well that two you two or three or four years down the road
the situation is going to look extremely de France and
and and I think at that point the public and everyone pays taxes in Radnor
Township
as well as every employee in child in our district
we have a right to go back to the sport know what we think and I i agree with
you with alarm
major Kathy of baths the operating budgets
would need to be looked at very long and hard
if those situations develop and other words
I'm there there's a differentiation between
traveling back on fund balance to fund operations
that definitely is a formula for disaster because
those are non-recurring revenues someone argue that in our case they freak urged
but we've got a handle on that and we're bringing that down
we've heard you loud and clear that that's a concern namely the Hox
we have over tax the public over the course of five
plus years and we have adjusted their
over the last two years that's something a multi-year approach
to address that and come to grips with it you yourself made the MMN last year
to cut the military even further
the board decided not to go that far but you did too
a slight tax decrease I'm
we debated his administration whether to command recommend the we restore that
knowledge to what had been the prior year and we sweet decided that
we could present you with a budget that was balanced
haha knowing that om you're making the commitment and you still have the option
I've raising taxes with him the
scope of the index should something manifests itself between now and maybe
you feel is a jewel
legitimate reason to be cell I E funding a part in the peace urs to provide more
of a cushion
that sort of thing that has to be a board-level discussion
from my perspective we as an administration have given you
a budget it's a sound budget and it's designed to
keep our programs in place class at the full day kindergarten initiative
at No increase in the real estate noche
and I feel confident that we've done that
if I 10 thank you if I
were a startup company looking for attention investors
and I did my five-year projection I guarantee my five-year projection would
be lookin like
I had top sales years every year
and kept every cost in mind I'm
you know cuz I'm looking for the Razzies picture out there as I'm searching for
investors in my
in my venture capital company I'm
are from venture capital and likewise I
you know a school budget that by law has to be balanced
five-year projection you have to be it she said
very conservative party on just about every component that there is health
care
expenses you know %uh revenue I'm not going to go into all the details but
I i guess i right I come to the table implicitly trusting
that a you know what you doin and be and
it it it you have our best interests at heart
and that that five-year projection not lookin out there at the end to the
rented to mister webster
and there's the five-year projection and it's your job and it stuck to Kellys job
and it's our job is appointed tired to make sure that the ballot
stays on course magnificent veering off to ride
what would be the worst case scenario know why do we want a situation
and you know where's it it you know we're consistently
having massive massive surpluses had no I'm not sick not interrupt you but
should just
at an interesting aside you mentioned if you were in venture capital that you
would never put a projection I like this
om that's one of the dangers if that's the right word maybe that's too strong a
word that that's one of the dangers %uh making
that kind of projection public for instance are the last bond issue we did
as you know
we get rated by Moody's Moody's
of course did their due diligence they went on their website they found last
year's five-year budget projection
and we're quite concerned about the fact that we were showing a deficit situation
over the upcoming years and I spent a good deal of time talking about that
about an hour and the rationalization behind it
and at the end they were satisfied arm
you know to give us the rating media which is you recall was sa
AA come on a double
capital a double some I om
he know I'm is they're they're the ones who really matter in terms of that bond
rating
might not I am CNN's I guess I T i cant to the table
both kinda implicitly trust in you and the work you're doing
knowing that you have our best interests at heart but also appreciating
and and agreeing with season match we need to be looking at some long-term
things but
I feel like we kinda probably just had
a Bondi you know what we're talking about a bond refinancing which is going
to save us money down the road
that is a benefit for long-term planning that is exactly why we're doing that
take that spank
I'm you know we will be mine for love these projections
every time our I every time I'm
labor negotiations come up to pass we just had a very long presentation and I
look forward to hearing when the finances about
the in taxes the Affordable Care Act so I I
think that we aren't doing the same season in %um maybe
in your in your wee beady be doing much much much more better more consistent
and I appreciate that
but I do think that we are being mindful and those things
and I'm would continue to look at doctor carrie Ann cam
and say yes make sure that we don't actually start during
in that direction at in the far future if I love the
worst case scenario says revenue and not the worst case scenarios
as and expenses really do look like we're headed in that direction
you gotta tell us that's your job sounds and make I'm comfortable with it thank
you
I'm okay we we don't you need to make a decision on this tonight you need
directions specifically and I and I'm
I don't want to be disrespectful the concern that has been raised about this
but I also
wanna want to be respectful the time of our Facilities Committee here
and so I'm unfortunately we're going to have to
I'm suspender discussion was from now not we won't return to it
but some at some future time I'm
I'm happy to entertain a couple salutes a quick period public comment
again with the understanding that some %uh this is going to be continuing
dialogue
by
thank you mister scheck I know you could have made a different decision american
appreciate you not making a difference Ishant I will try to be respectful
100 know how far over we r I would love to just very concerned about some other
things like hearing here right now
this is something that we should and be in complete and total agreement on
if we have a problem we have to recognize the problem
if we put out a budget as eighty million dollar deficits
and we don't think that's realistic we shouldn't put out a projection has $80
million dollar deficits
we should have the description of what the assumptions are the go into that
projection I'm so that them but you can make a decision
are the aggressor from our the conservative I went through
I had to pee as you know if you take a look at my fiery objection I added
percentage changes from year to year
which were not shown on the administration's budget and
taxes are going up by 2.3 percent per year
most other revenues look like they're going up around two percent per year
most expenses other than health care in pieces are going up about 2.5 percent
per year
and stuff seems fairly reasonable to me
Tom we have to understand we can't look at just
year by year and hope that things work out
this is an unusual year and maybe
lot will save another million dollars in interest expense that you have a great
guy cuts the two million dollar deficits to $2.1 million dollars
and many clothes from there but to stick our heads in the sand and and Susan your
financial person I'd
I just wish you I
can't believe that you said that the keeper some course here
because if we don't have charts that are accurate we can't stay on course
if you don't have a compass is properly balance week let's stay on course
and I hear that this projection is
very comfortable with these solutions were using a reasonable and I hear
they're very conservative as well and that just that's the issue we've been
having year after year here in terms of
the surplus discussion do you want to be conservative her do you want to be
realistic
will be very very conservative on the revenue side it is we should
and agree on this weekend we can only raise taxes so much if we get in a bind
here
and yes we can go and then cut services
like you said mister dale make some painful decisions I don't think anybody
wants to do that
especially when you have the opportunity here to look ahead
into the future agree on the projections are reasonable
the the most realistic cue release and then plan ahead for that
my analysis shows that yes you can I'm spend down the ten million dollars you
have saved for capital projects two million dollars over five years
is that okay well you have ten million dollars you spend $50 million per five
million more in there so you are $15 million to spend you be down to 10 K
for those lot of money on the farm that's good is that where the broom
wants to be
there's no taxi for that and if you want to raise taxes for the you never really
hard problem doing it
so you just have to look at this again there's no good reason
this isn't political this is just reasonable
management from the organization cya I hope you will see that not just cross
your fingers and hope everything works out
next year and the year after that we have an opportunity here to address this
issue
if there's not an issue what's let's let's be realistic and say there's not
an issue but
let's get some realistic assumptions are table so we can make that decision
penny poker
free comments public versus private
I'm for me listening to this comment I'm really glad they got here in time to
hear it
I'm concerns me because it's the real difference between public versus private
Rundberg physicians bring a five million dollar entity
and we should be planning is such practice versus reactive
other two words that come up practice when you have a tool that can look
several years out to be a complaint against it
reactive is per what mister vale brought up which is wait until we have a
a concern and start finding ways to cut the budget
that really is not good planning and not good governance
conservative versus aggressive I would ideally I agree with mister webster
like to understand what about the projection I don't understand a caveat
in the projection what is conservative white is
aggressive I'm and so that we can use it as a tool because otherwise why do we
haven't
oMG for me immediately state three-year plan
that we feel has some hold some merit
I'm I know you can't look at me now expecting a crystal ball we really
aren't
I'm I know you're doing a great job and finding revenues when we need to find
that amusing getting every dollar
for the district that we can possibly get and you are doing a great job with
that but we do need a tool that we can use to plan multiple years
I'm is five years is too far out and and unpredictable
is one you're predictable this time next year he's made you can not find your
projection predictable for next year
it said predictable for the year after that in my mind it needs to be at least
two to three years where we feel like it gets pretty close to what we can expect
we don't hesitate school district I'm really bring in revenue large amount of
revenue
from any government entity other than our taxpayers and
so we need to be able to come to plan around that I realized the state budgets
change and we can't control that
I'm but we can make some pretty good predictions on what ratner's gonna get
and I think we should plan and be in terms in the bond rating
I'm I appreciate the tabs by not because I do think that that is important
I'm that at least my perspective having sat on the finance committee at the time
we talked about the bond rating
it was more about our taxing authority ability not so much what r
five-year deficit plan is there I'm quite certain you had to answer these
questions
but I think our I rating was more than our ability to tax
and Treme as far as i'm concerned. I think this is more about being
transparent to this community
if we can project five years great sleep free be able to project one to three
years out
and we can explain that to the community then I think we've got more for
transparency issues and
anything else thank you
just says on nature
okay sir to say a couple points I'm
presume if if we hadn't done for the kindergarten in the five-year
costs the administration would be certain roughly 92 per year so that's
about six million
facilities around seven million I understand that he's saying that site to
make it through the operating budget that's more
a balance sheet I am but presumes some point you're
if your gonna deplete their capital reserve fund and make that up your
balance sheet I did not run through
I'm the operating budget as some point you're gonna need to replenish sense
really analogous to a condo river they have a futures are fun
the prawn new roof at some point need to replenish the reserve fund so
Italy will follow through the income stream so that deficit
problems can be worst on the road than 80 million dollars so
I guess my point I like them make clear if this had been done
and god knows what portion at seven million depletion Thrissur budget only
will flow through
and increase at budget deficit the causes for the kindergarten
had not been implemented maybe with the you
five-year budget deficit maybe eight million 10 million I'm not sure but
I'm disappointed at the border that that wasn't discussed wrong
and at on the 120 meeting I'm did Kelly from my impression
made it pretty clear that the numbers were completely erroneous that they
should be relied on at all
now so I worked understand in order to be relied on so I don't
quite get what's going on and I'm not sure why if those budget numbers were
presented on December 25 believe
wyatt the january twenty-eighth meaning we're still debating whether that their
act you're not and 10 beatrice that more clearly
some very disappointed the board I think you should
when you write your next piece to the public clarified that
what was shown as a 20 dollar budget deficit
is accurate and that you note for a kindergarten
wasn't fully vetted in ninety two million dollar budget absent if there is
some reasonable replenishment
others are fun the times I miss you can we take a moment to sign in required
shop okay I apologize for for 30 minutes
over schedule my apologies to
miss brown skin the Facilities Committee I'm
I'm oMG I'm sorry if anybody else had more common marlin you call it at this
point so
on speedy was adjourned thank you on
you