Independent School District 196
Rosemount-Apple Valley-Eagan Public Schools
Educating our students to reach their full potential
Budget Advisory Council Minutes
6:00 p.m. November 18, 2015
DistrictOffice
Present:BudgetAdvisoryCouncilmembersKathyCason,GraceKeliher,ChrisKnight,GaryKrueger,ChadLaBahn,
JeffLittle,ChasMcCready,JohnWollersheimandChrisWong;DirectorofFinanceandOperationsJeffSolomonand
CoordinatorofFinanceStellaJohnson;SchoolBoardAuditandFinancecommitteememberGaryHuusko.Absent:
BudgetAdvisoryCouncilmembersJasonElias,KarenHarroldandKrisNelson.Guest:JoelSutter,SeniorMunicipal
Advisor,Ehlers&AssociatesandJoeBertram,ISD196Controller.
TheBudgetAdvisoryCouncilmetwiththeLegislativeAdvisoryCouncil(LAC)for40minutespriortheregularBAC
meetingtoreviewthedistrict’s2015legislativeprioriesandsuggestlegislativeprioritiesfor2016.TheLACwill
takethosesuggestionsandalongwiththeSchoolBoardandadministration,prepareaformallistofprioritiesfor
E‐12educationinthe2016legislativesession.
Co‐chairChadLaBahncalledtheregularmeetingtoorderat6:40p.m.
PublicInput–None
ReviewAgendaandMinutes‐TheagendaandSeptember9,2015minuteswereapproved.
BondReferendumOutcomeandBondIssuancePlanning–Mr.SolomonprovidedtheSpotlightpages
announcingthevotersapprovedthebondandre‐electedtheboardincumbents.Abreakdownbyprecinctison
page2.Severalcommitteesareworkingontheimplementationofthethreeinitiatives;SafetyandSecurity,Space
forLearningandTechnologyforLearning.Theentireprojectisestimatedtotakethreetofouryearstocomplete.
Thenextstepisbondissuance.
JoelSutterofEhlers&Associatesbeganbyreviewingthepotentialcalendarofeventsfrombondelectionto
closing.KeydatesareNovember18,2015,meetwithBACtodiscussbondsaleoptions,December14,2015,School
Boardreviewsthepre‐salereportandconsidersaresolutionauthorizingthesaleofbonds,December30,2015‐
January7,2016,officialstatementsenttounderwriters,ratingagenciesandbondinsurancecompanies,January
13‐21bondsaledate,andFebruary9‐17,bondclosingdate.Mr.Sutterreviewedtheanalysisofpossiblestructure
forcapitalanddebtleviescomparingtheinitialJuly7,2015table(3.25%avg.interestrate)andtheupdatefor
November17,2015(2.85%avg.interestrate).Hesharedagraphthatindicateslittlefluctuationintheestimated
taxratesforcapitalanddebitserviceleviesthrough2029.Thetwooptionsforissuingbuildingbondsaretosell
themallatonceorsplitintotwoormoreissues.Themainadvantageofsplittingintotwoormoreissuesis
reducinginterestexpenseoverthenextyear;e.g.,delayingtheissuanceofapproximately$60millionfor15
monthswouldreduceinterestbyanestimated$2.5million.Themaindisadvantagewouldbetheriskthatinterest
ratesaresubstantiallyhigheronthelaterissue(s).Afterreviewingthe10‐yeartrendinmunicipalbondsand
furtherdiscussion,theconsensusoftheBudgetAdvisoryCouncilwastosellthebondsinasingleissuance.Mr.
Sutterexplainedthecreditratingprocessthedistrictneedstogothroughpriortoissuingbondsandhowhavinga
secondcreditratingbyeitherStandard&Poor’sorFitchRatingscouldbenefitthedistrict.Theconsensuswasto
proceedwithasecondcreditrating.
AuditReview‐Fiscal2015‐AcopyoftheSchoolBoardexhibit,summaryofthe2014‐15AnnualFinanceReport
andmanagementreport,weregiventoBACmembersfortheirreview.Themanagementreportisanexecutive
reviewofthedistrictfinancialpositionandtheauditfindings,inadditiontoanoverviewofthedistricts
performanceinrelationtootherdistrictsinthestate.TheSchoolBoardapprovedtheComprehensiveAnnual
FinancialReportatitsNovember16meeting,Thedistrictperformedslightlybetterthanforecastedandwereable
tocontributeapproximately$800,000tothefundbalance.TheCommunityEducationandFoodServicefunds
alsoperformedbetterthanbudget.Thedistrictreceivedaclean,unmodifiedaudit.Therewerearefewfindings
andthosearereportedinthemanagementreport.TheComprehensiveAnnualFinancialReport(CAFR)canbe
foundonthedistrictwebsite.
EnrollmentReport/Forecast–Enrollmentprojectionsfor2016‐17through2020‐21werepresentedtothe
SchoolBoardatitsNovember16meeting.Thedistricthasusedavarietyofmethodstoforecastenrollment.The
enrollmentcommitteeischoosingtousethecohortmethodforforecastingenrollmentwhichseemstobethemost
accurateforourdistrictinourcurrentpatternoffairlystablestudentnumbers.Thesenumbersarethefirstcritical
assumptionusedinthefive–yearfinancialprojection.Thedistrictisprojectingaslow,steadygrowthandexpect
about100‐200studentgrowthineachofthenextfiveyears.
FinancialPlanParameters–TheBACwasgivenlastyear’sbaseplanassumptionsusedforfinancialplanningand
askedbyMr.SolomontomakeanysuggestionforchangetotheassumptionsthatcanbegiventotheSchoolBoard.
Thesuggestionswere:
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A2%‐3%increasefromcurrentbasesalary&benefits.
Medicalhealthinsurance6%‐7%(BeginningSeptember1,2012thedistrictswitchedtoself‐funded
insurance.)
Generalinflationtrendof2%‐2.5%seemedacceptable
Transportationfuelcostscouldbeheldat0%increase
Felttheremainingassumptionswereinlinewithtrends
Keepinmindpensioncostsareincreasing(TRA,PERA)
AttheJanuaryBACmeeting,Mr.SolomonwillprovideseveralscenariosofthefinancialplanfortheBACtodiscuss
andrecommendtotheSchoolBoard.
2015(Payable2016)PropertyTaxLevyCertification–Mr.SolomonsharedacopyoftheSchoolBoardAudit
andFinancecommitteehandoutfromtheSeptember28boardmeeting.OnSeptember28,theSchoolBoard
adoptedatotalproposedpropertytaxlevyatthestatemaximumlevylimitation.Theproposedfinal2015levy
(payable2016)atthattimewas$77,755,203.65,a0.99%decreasefromlastyear.Thisamountdoesnotinclude
theauthorityaddedwiththesuccessfulapprovalofthebondreferendumbutwillbereflectedinthefinalproposed
propertytaxcertificationpresentedtotheboardforapprovalonDecember14.AtthatSchoolBoardmeetingthe
publicwillhavetheopportunitytoprovideinputtotheSchoolBoardregardingthelevy.
Other‐Ms.JohnsonsharedaDRAFTofthe2015‐16FinalBudgetdocument.Theformatisconsistentwiththe
preliminarybudgetformatbutthenumbersarenotyetfinal.Thefinalbudgettakesintoconsiderationthe
elementsthathavechangesincetheboardapprovedthepreliminarybudget.Thefinalbudgetwillbepresentedas
newbusinesstotheSchoolBoardonDecember14withfinalapprovalexpectedonJanuary4.
Acopyof“FinancingEducationinMinnesota2015‐16”wasgiventothemembers.
NextMeeting‐January13,2016
Adjournment‐Themeetingadjournedat8:10p.m.