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Finance committee discusses borrowing parameters

The Salisbury Township School Board held a finance committee meeting Nov. 10 with four members in attendance. Topics discussed include the borrowing parameters for the Guaranteed Energy Saving Agreement resolution which was approved in October, an overview of the district’s finances as well as state funding and its impact on the budget process.

Finance committee Chair Chris Freas deferred to Chief Financial Officer Dawn Nickischer who led the board through the process of moving forward with the resolution to secure the bond for the $8.1 million capital project.

After reviewing the resolution, Freas questioned the accuracy of the $9.5 million amount shown on the document. Board member Joe Gnall, reflecting back on a previous conversation with Zach Willard from Public Financial Management, explained the amount shown is the maximum amount you can borrow. He also suggested it would be prudent to have Willard present at the next board meeting to offer the board some clarity before they vote on this issue.

Pending board approval, the next steps in the process would be for PFM to investigate the district’s bond rating, find a lender who will offer the best possible rate and then issue the bond in January 2023.

Nickischer also presented the board with a two year comparison of the district’s revenue and expenses. It appears more tax revenue has been collected earlier in the year as compared to the same time last year. Expenditures are higher than the previous year but this should level out as the year goes on.

Nickischer also noted she will be looking to invest in short term CDs at varying rates in an effort to earn more interest.

The business office is working on several projects simultaneously including an audit, contracts for support staff, building budgets and the 2023-2024 budget.

The variability of state funding has been top of mind for board members and the business office as they look to finance the necessary capital projects in the coming years. Tasked with estimating what the financial picture would look like if funding were to be cut by 10% or 25%, Nickischer estimates a reduction of $431,207 and $1,078,019 respectively.

When calculating the recent $8.1 million expenditure, no increase or decrease in state funding was assumed. She noted all indications point to flat state funding in the coming year but will not be known for certain until June 2023. This calls for the board to prognosticate what might be coming in terms of funding and build the budget based on an educated guess.

The rising cost of fuel, energy and utilities also impacts the bottom line and trickles down into the facilities and building budgets.

The next meeting of the finance committee will be announced after dates are approved at the December reorganization meeting. Meetings will be held at the administration building, 1140 Salisbury Road.