We did not directly address the Five Year Forecast that evening, although it was mentioned in passing a few times. The main focus that night was to familiarize the new board members with the financial packet that is part of each monthly meeting. General topics were:
- What are the accounts?
- Where does the money go?
- Where does the money come from?
- The Board's role in the financial process
- Review of board reports
Of course, out of a school district's expenses, fully 85% is on salaries and benefits. Board President Jeff Michael reminded everyone that the difference between the salary we had originally offered to the SEA and the final contract is $1 million annually - which goes on forever, each and every year. He made the point that salaries and benefits are the largest expense over which a school district has any control, and that decisions made on contracts have an everlasting effect - good or bad - on a district.
Cheryl spoke about the differences between the various types of funds and how certain funds can only be used for specific purposes. For example, the Permanent Improvement fund holds money that cannot be used for operating the district, by law. It can't even be used for repairs of our buildings! She used the example of a broken pane of glass in a school building window. PI money cannot legally be used to repair that broken pane of glass - but it COULD be used to replace the window completely!
There was a short side discussion on the prospect of a new Middle School. Our "turn" for receiving state funds is coming up soon, but in order to qualify for a new building the enrollment must be at a minimum of 350 students - we are currently at 312 in the Middle School.
Cheryl explained the Board's role, and suggested we ask the right questions:
- What is our district's current millage rates?
- Are any levies expiring and when?
- When is our property going to be reappraised and how will that affect us?
- What are the assumptions in the Five Year Forecast?
- How is our health insurance funded and how does it compare to other Districts?
She was very thorough in her presentation, and shared a lot of valuable information. In her summary, she cautioned that the school board must keep the overall financial picture in mind when approving contracts and staffing, and must make certain that what is approved is allotted for in projections shown in the Five Year Forecast.
This first training session was very well done, and a subsequent session on the Five Year Forecast should also be enlightening for the new board members.