WSESD Finance Committee Meeting Agenda and Minutes

Windham Southeast School District

Finance Committee Meeting – Thursday March 18, 2021

6:00pm Via Zoom Meeting

Members: Shaun Murphy – Chairperson, Liz Adams, Jaci Reynolds, David Schoales

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Agenda

1. Academy School Addition project financing method and project timeline

2. Use of Reserves and Fund Balances for capital improvements

3. FY21 Fiscal Year to Date Statement

4. Approve Warrants and Payrolls

5. Approve Minutes – February 11, 2021

6. Other

….

Note: These proposed minutes should be considered preliminary until they are approved by the board at a future meeting.

WINDHAM SOUTHEAST SCHOOL DISTRICT (WSESD) FINANCE COMMITTEE

THURSDAY, FEBRUARY 11, 2021

REGULAR MEETING – 6PM

REMOTE LOCATION

DRAFT MINUTES

WSESD Finance Committee Members Present: Shaun Murphy (SM), Chair; Liz Adams (LA), Jaci Reynolds (JR)

WSESU Administrators Present: Andrew Skarzynski (Superintendent), Frank Rucker (Finance Director).

Media Present: none

Others Present: Wendy M. Levy (Board Recorder)

I. CALL TO ORDER

Chair SM called the meeting to order at 6:01pm.

III. PREPARATION FOR FY22 WSESD BUDGET 2.23.21 INFORMATION HEARING

Finance Director Frank Rucker led the discussion.

Frank gave a summary of his work—to-date and upcoming—with the Communications Council on information regarding the proposed FY22 WSESD budget, and how the possible dissolution of the merger would affect school budgets.

Frank shared and reviewed a document, “Historical Statistics: WSESD and Legacy Separate School Districts,” which is on the website. The document covers FY16 through (projected) FY22, including the years prior to the district merger, and offers readers a comparison. It includes information on annual funding statistics established by the Legislature, equalized pupils, historical homestead equalized school tax rate by town, and historical homestead equalized school tax rate adjusted by the CLA.

Highlights from Frank’s review included:

• An explanation of how this document is useful.

• Changes to the Legislature section of the document—specifically, the yield—and how it affects the tax rate.

• Changes to enrollment, explanations for some of these changes, and the implications of these changes.

• By reviewing the section covering the towns’ tax rates, Frank demonstrated the district’s fiscal sustainability. He noted the proposed FY22 WSESD equalized school homestead property tax rate for the merged district is the lowest tax rate in the WSESU region, when comparing to the average of the four town school property tax rates, for the last seven years.

• A history of the merged district and its relationship to the budget.

• That FY22 is the third year as a unified system, the tax rate is lower, and this is even with a decline in enrollment, which usually raises the tax rate. Frank emphasized this point, and asserted it should be shared with the public.

• An explanation of the CLA adjusted school tax rate and how it relates to the real estate market.

Frank noted this is not a meaningful comparison because it is determined by the real estate market, which is nothing the district school board can control.

SM asked questions about enrollment, the merger vote timeline, and the upcoming vote. Frank responded, and a brief discussion ensued.

Frank continued his presentation by sharing documents related to the Communication Council’s request for information about the two dissolution articles on the March 2 Town Meeting warning. He explained the Council requested a financial impact analysis, which he developed. The documents assume a return to legacy governance structures of independent school districts before the July 1, 2019 merger. Frank reviewed these documents and explained where he got the information for them, the context, and how he made the calculations. He noted anyone can review and analyze the data, provided the Legislature makes no changes, because it is fairly simple math.

LA asked how these documents reflect data on Putney students who attend BUHS and WRCC, because it looks like this information is missing. Frank confirmed this, and said he will explain it later in the meeting; he also noted he is still working on this information. A discussion ensued.

Frank continued his review of the documents. He explained the Act 68 revenue allocations, and how he got the figures for each school. He explained how the numbers relate to one another, and he pointed out some information that answers LA’s question. A discussion ensued.

Frank explained the comparison of figures and his methodology for calculating the FY22 budgets for the district and the un-merged district, and their associated tax rates. The bottom line: a dissolution will increase tax rates by between 2 and 16% across the district’s towns. Frank explained why, and noted this increase is due to math formulas, not any particular philosophy.

SM mentioned “the cap” and how it affects educational funding, and how the BUHS debt service affects the cap. Frank explained how SM’s example affects the district’s budget, and how towns (other than the successor entity to Brattleboro UHS) would lose that credit if the merger dissolves.

Superintendent Andy Skarzynski added it would have a compounding effect on the outlying towns. LA asked a clarifying question. A discussion ensued on the implications on each town—their budgets, school boards, tuition, and BUHS/private schools—of dissolving the merger.

Frank shared a document showing WSESD enrollment statistics, and he noted it is in the Annual Report. He explained how the state pro-rates the tax rate, which responds to LA’s earlier question about Putney’s pro-rating should the merger dissolve. Frank pointed out it is important for the Board and the Finance Committee to understand this information.

Andy shared some information he received from an attorney: if the merger dissolves, the BUHS District dissolves without anything to automatically replace it; it must be recreated. This, he said, will be destabilizing. He explained further: if the merger dissolves, BUHS will only be the high school for the town of Brattleboro’s students and other towns’ tuition students. It will not automatically be available for students from the current district’s other towns.

Andy explained the process, and noted the attorney said this is all uncharted territory. He detailed how this will affect the school boards, and which statutes support this.

JR asked about the procedure for dissolving the merger. A discussion ensued, in which it was explained that if the towns vote to approve the dissolution, then it goes to the state Board of Education for their approval. Andy noted that because the WSESD merger was forced, this may affect the dissolution, and about this there are many unknowns.

SM asked about the former District 6, towns’ equity in BUHS, and how this affects the possible dissolution of BUHS into Brattleboro High School. What, he asked, happens to that debt and equity?

Frank responded: the towns would have to draft an agreement. There is precedent: it happened when Vernon left the district, and that agreement was developed with legal advice. Frank explained some possible scenarios and what is addressed in statute.

IV. ACADEMY SCHOOL ADDITION PROJECT FINANCING METHOD AND PROJECT TIMELINE

Frank expressed his wish for a definitive plan to fund this project on the upcoming Town Meeting warning. He reported he had contacted some funding entities for information. He recommended that after Town Meeting, the Board should move quickly to hold a special meeting to decide on how this project should be funded. Until then, the Board should still proceed with the design of the project.

Frank pointed out that waiting longer will likely lead to increased costs because of the post-COVID construction boom.

Frank reviewed the bidding timeline and how this is addressed in statute. He recommended a shortterm five-year loan with a bank, and noted interest rates will be similar to a municipal loan, which is the other debt option. An additional option is to self-finance this project, but Frank does not believe enough funding is available internally to finance it. Self-financing does not require a special meeting.

Frank said the Board needs to commit to a timeline as soon as possible on either municipal funding or debt, and it has to be a warned meeting to the electorate.

SM and Frank agreed that March 9 is a good date for the Board to set a date for the electorate vote on this, sometime in April 2021.

Frank asked the Finance Committee to work with the Board to keep this item on the agenda. SM said it is not on the agenda for the February 16 Board meeting.

SM asked what will happen to this project if the district dissolves. Frank responded: he does not know, and this presents a problem for the learning environment for Academy School’s children, especially the Title I students. Frank reminded committee members that the district has known about the need for this project for three years. SM agreed with Frank on the project’s urgency, and asserted it is imperative that a structure be ready in August. A discussion ensued.

V. FY21 FISCAL YEAR-TO-DATE STATEMENT

Frank led this discussion, shared a document, “General Ledger: WSESD FY21 YTD School Summary,” and said the document demonstrates how the current operations are working.

The document is organized by site. Frank pointed out that the district is a little over half-way through the fiscal year, and, to-date, the district has spent a little over half the budget. This, he said, means they are “pretty much on-track.” Frank noted the encumbrances, and funding that is left for unforeseen expenses.

Frank shared an additional summary, which is organized by function consistent with Agency of Education structures. This, Frank said, is another way to evaluate how the district is doing against the plan. He pointed out that most of the budget pays for instruction. Frank explained some of the functions, including student support services, the Board, and the SU. Frank explained why some line items are greater than 50%.

Frank shared and explained a third summary, which is organized by expense object, such as salaries, benefits, supplies, and debt service.

Frank shared and explained a section, “WSESD Gen Fund Expense; Loc; Lev; Prog; Func.”

SM asked about the money left in one of the school’s budgets, and whether this is a comfortable place for the school to be. Frank responded: yes, because of funds in the encumbrance. A discussion ensued.

VI. APPROVE WARRANTS AND PAYROLLS

SM reviewed the warrants and payrolls, and made a suggestion about how the Board and Finance Committee can discuss them. A discussion ensued.

MOTION BY JR TO APPROVE THE WARRANTS AND PAYROLLS. LA SECONDED. MOTION CARRIED UNANIMOUSLY.

II. APPROVAL OF MINUTES — DECEMBER 2, 2020 and JANUARY 12, 2021

LA asked to divide this into two motions because she was absent from the January 12 meeting.

MOTION BY LA TO APPROVE THE MINUTES OF THE DECEMBER 2, 2020 MEETING. JR SECONDED. MOTION CARRIED UNANIMOUSLY.

MOTION BY JR TO APPROVE THE MINUTES OF THE JANUARY 12, 2021 MEETING. SM SECONDED. VOTE CARRIED 2-1, WITH LA ABSTAINING.

VII. OTHER

SM thanked Frank for his reporting. Frank thanked the Central Office team and staff.

MOTION BY LA TO ADJOURN AT 7:47PM. JR SECONDED. MOTION CARRIED 3-0.

Respectfully submitted by Wendy M. Levy from minutes taken by Wendy M. Levy.

This represents my understanding of the above dated meeting. If you have any changes, please submit them at the next Finance Committee meeting.