Financial Audit, Budget Presentation, and Board Vacancy… Oh My!!

audit-magnifying-glass

The Octorara Finance Committee and Board of Directors met on Monday, December 14, 2015. The major topics included the Financial and Compliance Report completed by Herbein+Company, Inc, the 2015-2016 Budget Presentation given by Jeff Curtis, and the vote to fill that board vacancy left by Stephen Spoto. So, how do you think all that all went?

Financial and Compliance Report

The Financial and Compliance Report of Octorara’s 2014-2015 school year is described as “clean,” which means there was no issues with compliance or accounting practices. However, issues that were mentioned include:

  • There was a deficit of $241,974.
    • It was recommended that the District take action to protect the Reserve Balance, and maintain it at a sufficient level.
  • The Capital Expenditure Fund was described as small, but the auditor was unable to recommend a level that it should be maintained due to lack of information.
    • It was recommended that the District create and maintain a 5-10 year Capital Expenditure Plan. (Mr Curtis is working on this and it should be completed before June.)
    • The auditor also suggested creating a strategy to replenish the Capital Expenditure Fund in order to have sufficient funds to pay for capital expenses.
  • A Medical Expense Fund should be created to manage the volatility of being self-insured.
    • Something similar was suggested and suppose to be started when Mr Carsley was the Business Manager, but the auditor and Mr Curtis agreed the way that was set up did not meet the District’s needs.
    • The proposed Medical Expense Fund would pay insurance claims rather than act merely as a reserve.
  • The District has been seeing significant savings from bond refinancing. The District’s ability to do bond refinancing is limited and coming to an end. This will essentially be a loss of hundreds of thousands of dollars in revenue. The District must be prepared for it.

So, for readers of this blog, nothing really new. We can’t keep deficit spending, and we need to properly plan for capital expenditures (such as aging vehicles, heating systems, and field development).

2016-2017 Budget Presentation

The Administration presented to the Board what can be described as a generic initial budget with a typical spending increase of 3%. Along with this initial budget, Mr Curtis provided 3 options to pay for it.

  • Option 1
    • No tax increase/redistribution only
      • Chester County taxes would decrease by 0.107%
      • Lancaster County taxes would increase by 2.483%
    • $2.96 Million needed from Reserve Fund to balance
  • Option 2
    • Take exceptions to tax beyond Act 1 limit
      • Chester County taxes would increase by 3.789%
      • Lancaster County taxes would increase by 6.434%
    • $1.76 Million needed from Reserve Fund to balance
  • Option 3
    • Tax to Act 1 limit
      • Chester County taxes would increase by 2.986%
      • Lancaster County taxes would increase by 5.625%
    • $2.00 Million needed from Reserve Fund to balance

The Finance Committee did discuss the fact that in order to protect the Reserve Fund, as recommended by the auditor, that if the Board wanted to keep the 3% budget increase, they would need to take the Act 1 exceptions in order to tax beyond the limit. Otherwise, the budget will need to be cut. All seemed to understand this. During the Board Meeting, members voted on an opt-out resolution certifying the tax rate will be within the index. So, the real fun is about to begin.

Octorara Board Vacancy Filled

Anthony Falgiatore received a unanimous vote to fill the vacancy left by Stephen Spoto. You may remember Falgiatore threw his name into the ring, as a write-in candidate, less than a week before election day. How did Falgiatore received a unanimous vote? No one else showed up. It is that simple. There is nothing more to say. So, no complaining if you don’t like the way he votes… right?

I had prepared questions for candidates. I wanted to know the motivation of why they wanted to be a board member. I wanted to know about thoughts on budgets, deficits, and spending. I wanted to understand their position on Octorara’s academic performance. I wanted to know why they thought I should vote for them to sit on the board. This person would not elected by the people, but by the Board. At the end of it all, the only thing that mattered was who was willing to just show up.

3 thoughts on “Financial Audit, Budget Presentation, and Board Vacancy… Oh My!!

  1. Thank you again for taking the time and providing this information. I just want to say that Octorara residents need a break on these school taxes. Maybe it is time to sell our house while we can.

  2. Viewing the board meeting online, there was plenty of opportunity for you to ask questions to Mr. Falgiatore, which you did not do. So no complaining from you when regarding the way he votes.

    • The Board had a legal obligation to fill the vacancy within 30 days. If you watched the video, you know Mr. Falgiatore was the only person who showed up. It doesn’t matter his positions or thoughts on budgets, deficits, or academic performance. Mr. Falgiatore was awarded the position because he was the only person to apply… period. The Board could not have a vacancy going into of January work session meeting. Yes, I did not ask any questions, but neither did any other Board member. Why? Because it did not matter. Mr. Falgiatore met the minimum standards to sit on the Board, the vacancy needed filled, and he was the only person to showed up.

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