Independent School District 196
Rosemount-Apple Valley-Eagan Public Schools
Educating our students to reach their full potential
Budget Advisory Council Minutes
6:30 p.m., March 11, 2015
Present: Budget Advisory Council members, Colleen Dolan, Jason Elias, Gary Krueger, Jeff Little, Chas
McCready, Kris Nelson, and Kathy Cason; Director of Finance and Operations Jeff Solomon; School Board
Audit and Finance Committee member Gary Huusko.
Absent: Budget Advisory Council members Michael Groneberg, Karen Harrold, Chad LaBahn, Bob Leuth
and John Wollersheim.
Guests: Laura Beem, Farmington School District School Board member and Joe Bertram, Financial
Systems Supervisor (ISD 196).
Co-chair Colleen Dolan called the meeting to order at 6:35 p.m.
Public Input
Laura Beem introduced herself and told the BAC that Farmington School District is considering forming
a Budget Advisory Council and was interested in how ours works.
Review Agenda
The agenda and the January 14, 2015 minutes were approved.
State of Minnesota February Budget Forecast/Year-to-Date Performance to Budget/School
Board Direction on Five-Year Plan Scenario
Mr. Solomon began the discussion with the State Budget & Economic Forecast he shared with the Audit
and Finance Committee on March 9. Higher revenues and lower spending increased the FY 2016-17
budget balance to $1.869 billion. There has been discussion at the state regarding increasing the basic
funding formula between 1%-3%. At this time there is no final word on what the funding for K-12
education will be. Solomon shared the initial Financial Planning model from late fall and early winter.
The model used the assumptions suggested by the BAC, the estimated performance-to budget savings of
$5.75 million and a Basic Funding Formula of 1.5%. This model showed two years of no budget
adjustments and possible future budget adjustments of $9.75 million in 2016-17 and $12 million in 201718. There have been some positive updates since that time. The Expenditure Trending system was
updated with February numbers and this indicated a more favorable performance to budget than what
was initially estimated. The recommendation to the School Board at their March 9 meeting was to
increase the savings to $7.5 million. Now that we are more than half way through the school year, the
finance department looked at the revenue side of performance and due to positive adjustments of
formulated revenue as well as gifts and donations, recommended that revenue forecast be increased by
$1.5 million. In addition, our insurance committee is recommending a 1% rate increase for the next two
years instead of using the industry standard of 7%. Mr. Solomon provided four updated five-year plan
scenerios using the changes indicated above and with increases to the basic finding formulas of 1.5%, 2%,
2.5% and 3%. Future budget adjustments are estimated to be:
With increase to basic funding formula of 1.5%
With increase to basic funding formula of 2%
With increase to basic funding formula of 2.5%
With increase to basic funding formula of 3%
2016-17 ($3 million) 2017-18 ($12.5 million)
2016-17 ($1 million) 2017-18 ($16 million)
2017-18 ($13.5 million)
2017-18 ($8.5 million)
These projections are based on what we know now and are good parameters to begin preliminary budget
planning. The School Board did not express a preference for a scenario but Mr. Solomon recommended
using a 2%-2.5% increase to basic funding formula scenario.
Update of Facilities and Equipment Task Force
Mr. Solomon shared a copy of the PowerPoint presentation and Strategic Planning Facilities and
Equipment Task Force recommendations Dr. Julie Olson presented to the School Board on March 9. The
recommendations did not change dramatically from the initial recommendations presented to staff and
community focus groups in December. After gathering feedback from site councils and focus groups a few
changes were made including expanding the space for learning (STEM facilities improvement to all
middle schools, added classroom furniture replacement at a higher level and renovation of classroom and
learning space to meet district standards, specifically the Rosemount High School front entrance/lobby
and Performing Arts Center learning/practice space). The School Board will contract with an outside
company to conduct a scientific community survey to test the recommendations. In late spring the School
Board will decided if they need to make any modifications to the recommendation and will decide if they
should move forward with a bond question if they receive approval from the Minnesota Department of
Education through the Review and Comment process.
New Budget Format
Joe Bertram reminded the BAC of the new budget document the district is working on preparing. (BAC
members received a template of the new document via email after the January meeting). This new budget
format will provide more transparency to the community. It will contain a one page, easy-to-read budget
information recap for each site and can be used to compare to how well it performed at the end of the
fiscal year. The 2015-16 preliminary budget will be in this new format.
OPEB Trust and Investment Update
Mr. Solomon began by sharing the most recent post-employment benefit valuation report which indicates
the district liability of $47,515,898 as of July 1, 2015. The value of the OPEB Trust as of February 28,
2015 is $50,445,325. The district’s budget includes a plan to draw $1.4 million from the trust this fiscal
year, leaving a balance of approximately $48.5 million. Solomon reminded the BAC since this still leaves
the liability fully funded the district does have the authority to draw more if needed to assist with the
expenses tied to the other post-employment benefits. The district has a valuation report done every two
years to make sure the trust is keeping up with the liability. Solomon referred to page 9 of the valuation
report which shows the amount the district is able to draw annually from the trust.
A question was asked as to why we did not fund the liability at %100 initially. Mr. Solomon said he did
not recall but would do some research and send the information to the members. (He sent the information
to members on March 13).
Next Meeting
The next BAC meeting is scheduled for June 10, 2015, 6:30 p.m. at the District Office
Adjournment
The meeting adjourned at 7:40 p.m.