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- [00:01]
John Brucato
You're listening to ASBO International's School Business Insider. I'm your host, John Brucato. Each week on School Business Insider, I sit down with school business officials and industry experts from around the world to share their stories and explore the topics that matter most to you. Find out what it means to be a school business official and get your insider pass on all things school business. Hello and welcome back to School Business Insider. Budgeting in a school district isn't just about balancing the books. It's about making strategic decisions that support student success, maximize resources, and ensure long term financial stability. With fluctuating enrollment, changing funding formulas, and increasing operational costs, school business officials must adopt best practices that enhance transparency, efficiency, and effectiveness. Joining me today is Bob Saul, business administrator and board treasurer at East Penn School District in Pennsylvania. Bob brings extensive experience in budgeting, development, financial planning, and communicating complex financial information to stakeholders. In today's episode, we'll discuss best practices for school budgeting, strategies for handling financial constraints, and how to effectively communicate budgeting decisions to boards, staff, and the community. Bob, welcome to the podcast. I'm happy to have you.
- [01:28]
Bob Saul
Thanks, John. I appreciate the opportunity.
- [01:31]
John Brucato
Absolutely. And especially today, because as we were talking offline, you're a very, very busy man. So just carving a little bit of time out for me. I do truly appreciate it. So glad to have your first inaugural episode of School Business Insider. I'm sure you'll have many more opportunities to kind of share your words of wisdom.
- [01:49]
Bob Saul
Thank you. I think everybody's busy. I don't think that's unique to me. I think you're a school business official and you're not busy. Something's wrong.
- [01:57]
John Brucato
Touche. Touche. So, Bob, for those who may not be familiar with you, could you just give us maybe a little bit of your background and tell us about your experience in school business?
- [02:07]
Bob Saul
Sure. I was hired in 1999 in a small, rural Pennsylvania school district of about 2,000 students. At that time, it was probably, I don't know, $20 million budget as the assistant business manager. And I served in that role for two and a half years, at which time the business manager, my successor there, decided to move to a different part of the state and created a vacancy. And so I actually filled in as the interim business manager for a six month period and sort of got my dip my toe in the water, if you will. And I guess you could say I had the opportunity to decide whether or not I wanted to continue in that role. But there was no doubt, like, I loved the role you were in that was for you? Yes, Unfortunately, I had to apply for the position which I was currently holding, but that's all fine as well, because it was sort of cool because there were experienced school business officials who also applied. And to be able to go through that process, process and come out on top, like, it's, It's. It's reassurance, you know, when you first get started that they. They really value you and what you bring to the table. So that was great. So I served in that school district a total of 17 years. So I guess I was the. The business administrator there for 14 and a half years.
- [03:29]
John Brucato
Wow.
- [03:31]
Bob Saul
We. We were going through some school construction. We had a change in the board, a change of sentiment in the community. And so many of us at the district used that as an opportunity to look and see what else was out there. And at 17 years in a district, I was thinking I may be there my entire career, but I also had always wanted to explore what it would be like to be in a bigger school district. And so I got that opportunity. East Penn, where I am now, is a district of 8,000 students. We're now at about a $200 million budget. So it's about four times the size of the district that I came from, which was a pretty good. Right. A pretty good chunk to bite off in terms of the next district. And so I'll share some of my insights when we get into the budgeting about, you know, the differences. I can. I'll be able to compare and contrast a little bit. So in the interim, you know, I've been. Sorry, I've been here at East Penn for nine years. In the interim, I was also involved with our state association, the Pennsylvania asbo. I served on the board actually two non consecutive terms, and then ran for the position of vice president and served as president of Pennsylvania ASBO in 2018-19. And then just as the pandemic sort of came in, I was going off the board, so I took a little time to maybe redirect. You know, I was really involved in a statewide basis, and I took a little time to redirect and sort of. We had a lot of new business officials locally. We had a colleague that moved from an adjacent state from New Jersey to Pennsylvania, so he was sort of new in terms of some of the nuances in Pennsylvania. So I really focused on working with our local group and sort of developing them and lifting them and getting together regularly, which was really important right back to sort of the grassroots of where we really need to support each other. And then More recently, I've been involved with ASBO International. I was on the Policy committee for two terms and on the Editorial Advisory Committee. I'm just sort of rounding out my second term and serving as the chair of that committee this year. And if that wasn't enough, I decided to go ahead and join the Education Advisory Committee committee and see how I could contribute to that committee this year. So I, you know, both in terms of. I guess this is year 2026, 27 for me in terms. In terms of like school business. But then, you know, there's. There's the stuff layered on top, which I think is really valuable and never would. If I hadn't been involved with those things, I wouldn't be able to engage with colleagues across our commonwealth and across the country and actually across the globe. Right. And meeting great people like you.
- [06:24]
John Brucato
Well, thank you, Bob. And I mean, you know, of course we're all busy, but I think you have to give yourself a little bit more credit being involved. And the Editorial Advisory Committee and the Education Committee are huge ask, especially chairing the committee, which I will say I am now an official member and excited for your leadership on that committee. So it should be a great 2025 with that.
- [06:43]
Bob Saul
Thank you. I appreciate your vote of confidence.
- [06:46]
John Brucato
Absolutely. So let's get into budgeting and best practices and really what it means to effectively communicate and assemble a budget year after year. So what are those foundational principles of building a strong budget and an effective school district budget for the communities at large?
- [07:02]
Bob Saul
Yeah. So as I said in my introduction, I have the perspective of two different school districts. And I think fundamentally, a budget is building a spending plan for the future. Right. And as an aside, the first business school business official I worked for, when I sort of assumed his role, he said, look, a budget is a spending plan with emphasis on plan. You know, don't get caught up in the minutiae detail like you do in an audit or closing out your books at the end of the year. You know, it's really about planning. And so that was sort of the first and foremost. Like, keep that in mind. But when I. When I transitioned from the smaller district to here at East Penn, you know, I struggled with the fact that budgets had been prepared differently. Like, so fundamentally, it's the same thing. Right. Planning for the future. But the. The approach was a little bit different. And so I looked at historic documents here. You know, I attended seminars on budgeting, a process that I had done for 15 years. I attended seminars and reached out to my colleagues. And what I Found is there are some underlining underlying foundational principles. And I think, you know, first is like alignment, ensuring that our budget and our budget planning process aligns to, you know, the mission vision values of the district. And I like to take the mission vision values and use those to create guiding principles for budgeting. And I will share an example of what I mean by that. And it's really a hierarchy of what's most important, what's second most important. So as an example, number one in my guiding principles are to preserve the existing educational program. Right. Program integrity, try not to impact the program that students have. We have a fantastic program and so maintain that. Next would be to maintain the operations and any small facility improvements we need. So, you know, our technology, our transportation infrastructure, sort of the next layer out if you're peeling back the onion and then, you know, meet student population growth demand. So looking at the, you know, are we growing, are we shrinking and implement new initiatives? So you know, we, we need again, moving out in the hierarchy. Are there new initiatives that we want to implement and where do they fall? Address long term facility needs and then create, you know, modern equitable learning spaces. So, so those are our guiding principles and really serve as our compass for budget planning. So that as we're working through the process, sometimes you don't see the forest for the trees. And this gives you the opportunity to back up, look back at your guiding principles and say, okay, we're talking about cutting this item. Where does that fall in our guiding principles? If we're talking about cutting something that's our part of our existing educational program and it's going to have an impact, then we really need to maybe re evaluate that, you know, reevaluate whether that's worthy of cutting and maybe it is. But again, so I think that first and foremost that the, you know, foundational principle is ensuring that you have some guiding, you know, guiding principles and guiding. Yeah, those guiding principles.
- [10:37]
John Brucato
I had a couple follow up questions for you. One, back to one of your original statements when you were talking really about those foundational principles, you were speaking to, you know, you know, the basics of budgeting, but it's a little bit different depending on where you go. So you know, I think to your point, those foundations are the same, but how do you learn those nuances of each individual district's budgeting practices? I mean, you may be used to something at your district you were at for 17 years and then when you went to East Penn, you know, the basics are probably the same, but how do you go about the budgeting process, when it's brand new and you're inheriting something from a colleague of yours.
- [11:14]
Bob Saul
Yeah. So like I said, I really looked at historic documents. You know, what has been done previously there was. Fortunately I had an assistant business manager who was here and was somewhat familiar tangentially from the process because it had typically been handled by the school business official. But I think really sort of just digging in, rolling up your sleeves and sort of immersing yourself in the process. What I will share with you is some of the differences I noticed. Like, like there was a big timing difference. So we, I would maybe compress the, the budget process at my previous district, smaller district. We were able to just more move through it maybe a little more quickly with the board at this district. It was a very methodical process, a very public process, a number of budget presentations. It really started in like September and went all the way through. You know, our fiscal year is July to, to, to June. So it started in September, went all the way until June. So it was very different in terms of the, even the approach to budgeting. We had just a couple school buildings. So I could even pick up the phone and call and say, hey, you know, I'm sending your budget information to the, to the buildings for some site based budget planning. Where here again with 10 buildings and multiple central office departments, like you just have to communicate in a different way. You have to give more time for that to occur. And so one of that was, one of the things I noticed is, oh, okay, I need to sort of adjust my expectation of how this comes together.
- [13:02]
John Brucato
And so how long do you wait until you kind of like make it your own? I mean, you put your own spin on it. Is it, is it a matter of building trust with your staff and your board and your superintendent? Is there kind of like a prescribed time of. Okay, I've been through one budget cycle. Now it's going to be Bob's spin on the budget. Like what, what is kind of that outlook from your perspective?
- [13:19]
Bob Saul
So my, I think there's the rule of three in anything we do. So if you go to a new. And maybe you, I know you change districts. Right. So the first year is sort of like a deer in the headlights. Right. You just literally try to do what the person before you did, hoping that it was right. Right. And, and hope that you just hope you got it right. And I, I say that tongue in cheek a little bit. Obviously. Yeah, there's more than a hope. The second year, I think you start to better understand the minutia detail of all the pieces and how they come together. And then the third year, I always say, is mastery. And so that could be budgeting, that could be any, any factor of what we do. I think when you take on a new task or you're new in a district or whatever, like I call it the rule of three. It just really takes three.
- [14:07]
John Brucato
So it totally makes sense. That's exactly when I went from my previous district to where I am now. It was a three year cycle. Year one was just kind of copying and pasting to a degree of what my predecessor had done to make sure I wasn't rocking the boat. Yeah, Year two, you kind of start getting into the groove. And then year three is kind of your, your shows. But that's great. Rule of three, over and over.
- [14:30]
Bob Saul
Even when I hire a new staff in my, in my department, I tell them, look, you realize it's three years. I'm going to give you advice. Rule of three, here's, you know, just if you need help, let me know. But in three years you'll be on top of your game. So.
- [14:43]
John Brucato
Yeah, exactly. And I mean that could, this could be a totally different episode. But that speaks to why it's so costly to hire new people. Right? Because there's like a, an implementation dip and people are just getting to know the job and you know, to become mastery, like you said, three years is a long time to bring somebody out. But. All right, so anyways, I was just.
- [15:01]
Bob Saul
Going to say, you know, I think too, it has somewhat to do with the frequency of the work cycle. Right.
- [15:07]
John Brucato
Sure.
- [15:07]
Bob Saul
Accounts payable might not take three years, but when you have things that you do once a year, I mean that, that's really, that lends itself to that, that three year cycle.
- [15:17]
John Brucato
Right. So you know, maybe let's talk about year one and year two or what, what are some common mistakes you see districts make in the budgeting process? I'm not specifically referring to the school business official making mistakes, but in terms of being transparent in communicating, you know, how can those mistakes be avoided? And, and what are you seeing kind of in, throughout your career?
- [15:40]
Bob Saul
Yeah, I, so some of the, some of, some of the things that I've observed are sort of those monumental mistakes are using one time money for recurring expenses. And a couple examples of that are in 2008 we had the first stimulus, the American Recovery and Reinvestment act monies. And so at least for me and I think many of my colleagues, that was the first time that we saw a huge influx of dollars like that. We, we had our typical Title one, Title two federal monies, but this, this was something different.
- [16:16]
John Brucato
Yeah, unprecedented.
- [16:18]
Bob Saul
Yeah, really it was. And there was a lot of caution about, well, be careful how you spend these dollars. And I think, I think for the most part, school districts were cautious, unfortunately at the state level. They built those dollars in to fund, you know, part of the basic ed funding formula here in Pennsylvania. And so when that money went away, the state experienced a cliff. And their way of fixing that was to say, well, we no longer have the dollars in the state funding formula to give to you. And so we saw a fiscal cliff from the money we received from our commonwealth. But again, it was a real learning experience. And then so fast forward then obviously to the not so distant fast, the Esser money. I can say, at least for me, the approach was very different from how we approached it in 2008. There were also different allowable uses in 2008. It was run through the Title 1 formula, which made it a little more difficult. And more recently, obviously we had a lot more flexibility to use those funds. But even, even, you know, with our district, you know, we tried to use those for, well, what we did is we used them to supplant staff salaries. We set the money aside and then used that money for interventions. And we were able to use it over a period of time, so tried to use the allowable uses to play a little bit of a shell game.
- [17:53]
John Brucato
So you had mentioned that the title 2008 ERA funding was a little bit more restrictive compared to the most recent funding. When you look back, you know, hindsight's obviously 20 20. When you look back, do you feel that more constraints makes a safer approach to these kind of one time funding mechanisms if there's tighter controls on what you can spend the money? Because to your point, you know, I'm thinking through as you're, you're talking through the uses of these funds. Most recently I've had a few guests on the podcast and just kind of anecdotally talking to my colleagues a lot had used to supplant for staff, but maybe didn't set that money aside. So now they're at this fiscal cliff with these staffing initiatives and these new programs for students that are really adding a great benefit, but there's no sustainable measure to it because maybe the guidelines were a little bit too fast and loose. Do you, would you agree with that? Do you think that maybe constraints are good in these instances? Or does it, is it really just very circumstantial to, to a School district's decisions.
- [18:51]
Bob Saul
I think it's very circumstantial. Having lived through the 2008 era and the restrictions on how the monies could be used. Again, think of what you can use Title 1 funds for. And so there wasn't a lot of flexibility in how those funds could be used. And so you were almost put in a position to implement programs that we knew there was not going to be money to sustain at the end of the program. So I felt like, at least with the, with the Esser money more recently, like they offered the flexibility to decide how you wanted to approach that. And I saw colleagues, local colleagues who did those things that you described. Right. They put in staffing. I had the benefit of living through it previously and was, you know, sort of said to everybody, look, here's what happened, and we need to be cautious of this and we need to plan accordingly. Now, admittedly, we created a little bit of our own fiscal cliff with some remediation positions that are. That proved to be really valuable. And we said, oh, we'll only do this remediation for a period of time.
- [20:06]
John Brucato
Easy to say on the onset, right?
- [20:08]
Bob Saul
Yeah, yeah, yeah. But again, that was sort of like. That was a decision to continue a program we saw working. Not necessarily that we are locked in using those monies to supplant for our. You know, go back to what I said earlier. Core. You know, the core functions that we had been doing previously.
- [20:25]
John Brucato
So, yeah, yeah. You know, while we're on the topic of kind of common mistakes, you know, one that comes to mind that I've seen happen a few times both across my state and just kind of popping up in news articles is. I guess the best way I can put it for right now is when a school district maybe takes their community's trust for granted and then that maybe gets lax in their communication or maybe they're not as transparent as they once were. And I'm not saying that's intentional, but maybe they just kind of let a few things slide and then that kind of erodes away the trust and then your. The pendulum may swing the other way. What are your thoughts on that? Have you seen that? Do you think that's an important thing, to always maintain that transparent communication and not take your communities maybe overwhelming support for granted?
- [21:13]
Bob Saul
Not only do I. Not only do I believe it, but I sort of lived it. So when I first arrived here at East Penn, they had a very active local taxpayer group. I'll. I'll refer to them as a tea party group. I hope no One finds that offensive. But you know, they were, they were a very conservative sort of watchdog group that was very involved here. And I think to your point, they became involved because there was a lack of trust and an erosion of transparency by the district to some extent. And so in the time that I've been here, again, you try to build trust in this role. I'm a very transparent person and I have a whole different story about when things come up that could potentially be audit findings. Right. And how to address those transparently with your auditors and if you need to get legal involved, et cetera. But anyway, very transparent. And so I think being transparent with the community is so important and over the time that I've been here that that group is no longer even at present, like they're not even an active group anymore because of putting in things like long range fiscal planning documents and sort of putting everything out there. Here's five years of history, here's five years of projections. Here's where we are here. Like, here it is. Here's everything. We've got nothing to hide, you know, and some of those, some of our board members at the time were part of that watchdog group. And you know, I sat down with them and they wouldn't approve the bill list, for instance. And I sat down with them, I said, well, what, what is your concern? And so we, we went through, you know, their concerns and talked about it. And I don't know that that had occurred previously. They were just sort of shut down, as in, well, here, here's the list. You're, you're expected to approve this and they would vote no. And again, we got to a point where there was a lot of trust. So to your point, like, yes, I think that getting lax and not effectively communicating and not transparently communicating can certainly have an impact on that community reaction and on a sort of take that to the next level. If you need to increase taxes but you've not been transparent about why and the benefit, then there's going to be. They're either going to be skeptical or they're not going to be supportive, etc.
- [23:53]
John Brucato
Right, right. It's funny, you know, listening to your story, I think you and I have lived parallel lives because I went through almost the exact same thing at my current school district where we had a community or a small group in the community rather, that were very critical of the district. And I would say, you know, partially, rightfully so. I mean, there were certain things that I don't think the district was as transparent about. But I went about it the same way. I brought in the naysayers, sat them down and said, you know, let's talk. Just kind of not in public session, like, what are your real concerns? So I can kind of peel back the onion. Right. Because there's only. You can't really get into too much of a discourse in public session, or it's just, it just goes off the rails. Right. So we, I, I took the extra time, as you did, and, you know, long story short, it, It. It paid off. I think that that community, those community members are still out there and they're still watching, but they're not feeling as activated because I think they feel there's more transparency from the district, there's more trust on both sides, so they don't have to be the watchdogs necessarily anymore because they know that we're transparent in everything we do, and we're working in the best interest of not just our students, but our community's finances as well. So. He makes some good points.
- [25:01]
Bob Saul
Yeah. And I, you know, I'm. I'm curious if you do this. You know, when I'm preparing for a budget presentation, I try to think of the questions that people would have, not just our board members, but the community. Right. Like, what's not clear? What's a. What's a question they may have? And, and just address it head on. Just put it as part of your presentation. Don't wait for the question to be asked. Don't wait for a community member to call. Just address it up front.
- [25:25]
John Brucato
Yeah, yeah, I'll, you know, if there's any abnormal variances from when we go, like budget lines. I'm like, well, why is this? Because not only is a board going to want to know, but the community likely is going to want to know. Why are salaries changing by exper when traditionally it's been much lower than that. I always try to define acronyms because we love acronyms in education and just, I assume that anybody watching should be able to understand what we're talking about. And I don't go into too much detail because I'd be presenting for hours, but I try to strike that balance. Right. Because you don't want to have all these questions. You want to be able to answer them, hopefully throughout your presentation and your communication with the board.
- [26:04]
Bob Saul
Yeah. When you make a really good point when you talk about acronyms and clear clarity, like, you know, we. It is so easy to get caught up in, you know, the acronyms and the financial jargon. The classic SBO interview question Right. How do you present difficult financial information to, to non financial people? But like, it's really about using plain language and relating to what people can understand. You know, people have a mortgage, so our debt service is like a person's mortgage. You know, we have expenses, they have expenses. Like just trying to build those parallels in terms of, you know, making the connection so they can connect to it. Another thing that I find is really important in terms of presentations is I try to be consistent year after year and almost using like my previous year presentations as a template. I know it gets a little boring for them, right? But it's that they're seeing it consistently, they're hearing it consistently and they can start to connect with it because they're like, oh, I remember last year that went down and you explained it went down because of this and now I see it's going up. Right. But because the format is similar, they.
- [27:18]
John Brucato
Start, you're comparing apples to apples, right? Because they know that, oh, this slide number six is the same the past three years. So now I can make some linear correlations to how these budget items are changing. So, you know, I was going to say I, I fell into this maybe like five, five or six years ago. I was like, I'm sick of sounding like a broken record. So I started admittedly kind of taking those things for granted and sliding back into acronyms and sliding back into kind of, you know what, it may be the mistakes I made when I was first a school business official, but then I, I don't know when the light bulb went off, but board members change almost every year, so they're new. You never know who's watching in the community. So again, I was taking those things for granted. So although personally I'm saying a lot of the same things every single year. There could be a new person out there that one year, and if I don't say it, they could be totally put off or confused. So I've changed course a little bit in the past five years or so to be a little bit more articulate and sensitive to the fact that not everybody knows what you're talking about. And even those that do, they're just going to have to kind of wait to get through it, even though they've maybe heard it for year after year after year.
- [28:26]
Bob Saul
Yeah, I think it's really important to show vulnerabilities too. Right.
- [28:31]
John Brucato
So I'm going to 100%, I'm going.
- [28:33]
Bob Saul
To share a vulnerability because I can really, what you said really resonates with me. Our board tends to Change on a two year cycle. Right. So we are in a year where we have board members carry over year. And so I might be just a, just a touch more relax in a year like this because they've heard it last year. But in a year where I know I have new board members, right. It's, they've just been elected, they're coming on the board. I really do. I try to present to the, I hate, I hate to say it this way, to the least common denominator. Right. You have to write the person who knows the least. That's who I'm presenting to everybody else, they might get bored. You know, I had a board member who was vice president of a Fortune 500 company we have here locally and he really like, he got the finances inside and out and even actually helped me, you know, he pushed me to be a better cfo, but I always presented to the per. The new person on the board who didn't. And he didn't seem bothered by that. Right, right, right.
- [29:38]
John Brucato
He probably understands. He probably lives it too, right?
- [29:40]
Bob Saul
Yeah, yeah, yeah, yeah.
- [29:43]
John Brucato
So I mean like in New York, we, we, there's, we use consumer price index as, as in a formula that we use to help generate how many taxes we can levy year after year. And for the longest time I just assumed everybody knew what CPI was. And it, it took a board member a few years ago to say, could you explain what CPI is and why that's relevant to this? And I'm like, yeah, why am I not doing that? Because I know you're probably not the only one that is asking this question. And it's kind of a running joke. Now when we do board presentations, I always preface like repeat information with.
- [30:16]
Bob Saul
Most of.
- [30:16]
John Brucato
You probably heard this before, but bear with me, it's worth reviewing again so everybody understands. And to your point and to your CFO board member, he probably gets it. My board definitely gets it. It's important to kind of reiterate these points because what we were saying earlier, you never know who's watching and who's tuning in.
- [30:33]
Bob Saul
Yeah. And I suspect you get board members who say, well, I really appreciate that. Like, you know, they, they really do actually appreciate that. Bringing it down and making it really simple and not, not trying to come across as though you know something they don't know. Right. It's really about educating them, not being something, you know, sort of proving your worth kind of thing.
- [30:55]
John Brucato
Yeah. And I've done exactly what you've done to adopting the, the template every single year. That, that was one of the things I did in my, my second year was I created just a template, not just for me, but we in our district have our building leaders present, we have all of our department heads present. And I took the exact same template and maybe changed the colors so they could differentiate what's a building presentation or a district presentation. But the format's the same. So whether you're talking about facilities or whether you're talking about a high school building budget, the board members know the format and they can make those, those draw those connections regardless. Which has been hugely a huge improvement in terms of just being transparent and being able to talk about the budget, not talk at the budget, you know?
- [31:38]
Bob Saul
Right, right. I'm not trying to steal the host role from you, but I'm, I'm interested in.
- [31:44]
John Brucato
That's great.
- [31:45]
Bob Saul
I'm interested in like the budget presentation process. I know what we do and I'm happy to share that. But do I know, for instance, one of our neighboring districts, they do a board budget retreat. And so in one day they like, they give them everything. And for a board member, that's got to be like drinking from a fire hose. Let me use that analogy. I can't even imagine it's what they are accustomed to. We do it in more of a small, broken up, you know, a little bit at multiple board meetings. I'm curious what you do.
- [32:19]
John Brucato
We sound very similar. So we, we don't have any kind of ad hoc committee from the board that focuses specifically on the budget. We have a five member board and they're all very much involved with the budgeting process. But to what you do, it sounds like my district does something very similar. So we, we start at a granular level. Granular level and work our way up to the first draft of the budget. So in January, or rather in February is when we start having the buildings in the departments present. So the first half of February, we're a small district. So the first half we have like athletics facilities, transportation, operations. They present in one meeting, the following meeting, our building, our building leaders present, as well as special education. And then in March, it's the first real look at how all of those individual budgets culminate into what is our general fund budget that we'll present to the community. So they get to see each individual cog in the wheel and then they see the entire machine kind of its first draft in March. It's all being worked on obviously behind the scenes, and board members have a lot of questions that come up in between those meetings. But in terms of what we present to the public. It's very much parceled out and I have found that I prefer it that way. It's a lot more work in terms of just time commitment. But I was in a previous district that was maybe two and a half times the size and we only presented it at 30,000ft, really at all times. I mean, we would dive into individual components of the budget, but it was always presented in its totality. I like what we do now because it just allows you to kind of delve in and then kind of expand out and see how all of those pieces fit together. Because I feel like we lost a little bit of the transparency and why everything is put together the way it is in my last district when we only presented at a macro level. But I mean, what are your thoughts? I mean is that it sounds very similar to what you're doing.
- [34:16]
Bob Saul
Yeah. So that's interesting. What I will say is, given your experience, small versus large, when I was at a smaller district, I feel like we did really sort of dive in a little deeper in terms of what we would present to the board. I would say while we have a lot of presentations, we are more at that macro level, you know, trying to keep the board at more governance level and. Right. And not have them, not, not. I don't want to say not have them. Not relying on them to feel in a position to micromanage. Right.
- [34:54]
John Brucato
To your point, you want them to be in a government's role, not a management role. That's what you and your admin team are for. You know, they're the financial stewards, but you were the ones kind of making the machine run. So you don't want them to start making decisions that are ultimately your decisions.
- [35:08]
Bob Saul
But we do. But. So, but we, we do a series of presentations. So I'll give you an example. Recently I did the. What our kickoff presentation where I actually go through. The first thing I go through is fund balance and talk to them about, you know, the, the year we just wrapped up in audit, you know, where we ended with the fund balance on all the various components. Because it's always. I suspect it's a conversation everywhere. I know here in Pennsylvania, it's always a conversation about, well, school districts have all this fund balance. So what I try to do is break it down for our board and say, well, yeah, there's. You can look at a number and it seems big, but let's dissect that. And so I start to break it down into, you know, restricted and committed and non spendable and all the different pieces so that they understand that, so they're armed should they need to have a conversation about why that's so, quote, so big.
- [36:03]
John Brucato
I like that. And I actually may steal that because doing kind of like a year in review almost early on in the budgeting process really kind of sets the stage. I do something similarly, but not, I don't review fund balance. And to that degree we kind of just do a very, very high level recap, but focus on maybe what could be some pressure points into the upcoming budget. But I really like that idea of recapping your previous fiscal year.
- [36:25]
Bob Saul
Yeah. And so then what I do is I sort of weave that. Right. I say, okay, well here's where we ended the fund balance, here's how much we had. Here's where we think we're going to start or here's where we are this year, right. In our projections and here's where we're going to start next year. Oh, okay. Let's talk about revenues for next year. Right. Because it's unbalanced revenues. And then we go through the revenues and so that's one presentation, five unbalanced revenues. And then I'll do an expenditure presentation. Then I bring them our long range plan, which I like to refer to as a companion document. Right. You have your budget document and you have your companion document. I think it's so important to have both of those. And we can talk about that later if you care to. But then we have the superintendent and the curriculum folks and everybody talk about any new priorities, any new Sprint spending initiatives over a meeting or two and then we bring it all back to them. Right. So here's. You saw all the various pieces and now we're going to bring it back to you. And now we need to have dialogue around, do you support those new spending initiatives? Do you think the community will shoulder the additional tax burden for those or not? And you know, and then start to have the dialogue around, okay, how do you want to mold this budget or how do you want administration to mold it, but to bring it back to you, You.
- [37:43]
John Brucato
Yeah, yeah, yeah. And I think too, I mean, just by nature of just the economies of scale being in a larger district, it's tough to really dive into it because you have, you know, when I think back my previous district, we had, I think six or seven elementary schools and now I have one. So it's easier to talk about one building and not, you know, six more of them. So it's, you know, I don't think it's a, it's a lack of transparency or not willing to put the effort in. But, you know, we all have lives. We don't want to be at a budget meeting for five hours straight talking about each individual building budget. So I. I think you need to be able to strike a balance, depending on the size of your district, what your board's really interested in, what level of detail they want. But to your point, very well said. Striking that line between governance and management because you don't want them getting into individual account go. Well, I think that should only be 3% and not 4%, you know.
- [38:37]
Bob Saul
Yeah, right, right.
- [38:38]
John Brucato
Exactly. So when we look at budgeting at a macro level, I don't know of any school district who's just kind of sailing by and having no issues with revenues or expenses running wild, especially with driver shortages and mandates that come down from the state. So when school districts are facing increasing costs or potential revenue shortfalls or a combination of both, what really have been your strategies and what can school business officials use to manage their constraints effectively?
- [39:14]
Bob Saul
Yeah, and I think before I get to that, you know, I think we're in this period of inflationary pressure. That is. Yeah, that is. That is unique. I don't know if it's not unique. Right.
- [39:30]
John Brucato
Because over shameless plug tune into last week's episode where I talked to PMA about financial constraints and inflationary pressures, you. You'll love it.
- [39:38]
Bob Saul
Perfect. Perfect. But I. But I really, you know, I just feel like right now we're all trying to do so much, but yet the inflationary pressure is pushing everything else out of the way. You know, whether it's utilities or school bus contracts or if you have your own school transportation, fuel costs, etc. Like, it's just all really pushing everything else out of the way. With that said, back to your question. You know, I think in terms of how do you address. How do you cut quote unquote, or where do you go? Obviously, on the revenue side, I think it varies from state to state and probably Providence to Providence in terms of, like, what options you have. In Pennsylvania, we're really limited to increasing our real estate tax. Everything is real estate based in Pennsylvania, and that's obviously very unpopular. We have a tax cap. And so, you know, on the revenue side, it's really. Can you go get additional grants? Obviously, there's always strings attached to grants. So it's. I think on the revenue side, it's really hard to generate additional. Other than that, one key thing that we have the opportunity to control, which is always the biggest thing the Most controversial on the expenditure side, you know, I think I always try to think of a set of concentric circles, right. So in the middle you have the classroom, and so that's where the student, that's through student learning. So that's the thing you try to preserve the most. And then the next is the building. So the things within the building and then the campus. Right. And so that's me, that's Bob Saul. But if we need to defer maintenance on the track, that's going to be more important than cutting science equipment, for instance. Right. And so I think with that in mind, we always try to go for the low hanging fruit first. Right, sure. Can we consolidate ancillary services? Can we optimize bus routes? Can we cut energy costs? And it's interesting saying those things because I feel like we all have tried to do those for a long time now.
- [42:03]
John Brucato
And you can only do it so many times before there's diminishing returns, right?
- [42:06]
Bob Saul
Yes, exactly. Yeah. So I, it, I think it's the first place you start because maybe over the last few years it hasn't been, things haven't been as tight and you could revisit those. But yeah. So I think the next thing that we look at is, or if we need to go there, right. 70 to 80% of our budget is staffing and benefits, wages and benefits or staffing. And while we don't want to go there, unfortunately, I think it's a necessary place to look sometimes. Right. We, we, we try not to go to that core of the concentric circles I talked about, but sometimes you have to. And I was recently having an exchange with a colleague, actually a mutual colleague, who is currently trying to cut $15 million and 75 staff positions from their budget because of declining enrollment. And that's the extreme. Right. I mean, I think we all hope that we never have to go through that.
- [43:09]
John Brucato
Right.
- [43:09]
Bob Saul
But, but if conditions warrant, you may need to go there.
- [43:14]
John Brucato
Yeah. You know, you make a great point. And I, again, I feel like we run very parallel in terms of how we approach budgeting and our philosophy because I do a lot of trainings with long range financial planning, budget development, and I teach at the collegiate level for New York State to get business officials in the pipeline. And I, you know, I was kind of spurking as you were saying this, because I tell my students that revenue is your, is your biggest constraint. You have the least amount of control over your revenue. Your expenditure budget on the other side of the House is where you have the most control, but also to Your point? The low hanging fruit, it, it only lasts for so long, but you may have to make tough staffing decisions. And it is challenging because we are a service industry. We're providing an educational service. We're dealing with people, you know, 70, 80% of our budget are people, like you said. So when you start messing with people's livelihoods, it gets very emotional and very challenging. It's not just dealing with widgets anymore. So, you know, I, I wish our mutual colleague luck in that adventure because it's going to be challenging and I'm sure they, they know that already.
- [44:19]
Bob Saul
Yeah, yeah. And I, you know, I think there are ways to address that. Right. To try to try to look at programs through attrition, you know, so if you have retirements or you have people who are resigning to go somewhere else, like trying to use those as opportunities, but you don't always have those opportunities. In 2000, it was actually 2010. So on the heels of that era funding we talked about earlier when we had a drop in the state, state funding, I mean we, the district I was in, we had to go to people and say there is the potential, because again, transparency, as we were working on the budget, we went to them and said, you know, there's the potential that you're the last in, you will be the first out and you, you know, we may have to let you, let you go. And again, we felt it was important to communicate that early to them. Obviously I think it, they were unsettled for a period of time until we worked through the budget and we didn't have to do that. We found other ways to deal with it. But again, on our conversation about transparency, we just felt it was more important to be transparent with them. They would be unsettled for a while than to just launch it on them at the 11th hour.
- [45:32]
John Brucato
Yeah, and I think too, the transparency piece with your unions is incredibly important because although today we're talking about budget, it's all interrelated. So we were in a similar situation in 2008 and beyond. And at the time I wasn't there, but we had a good working relationship with our unions and negotiated that they take a pay freeze in order to preserve employment. Otherwise we would have had to take some pretty severe cuts. So although we talk about budget today, maintaining those relationships with your union and not just being transparent with your board and your community, but being transparent with the budgeting process with your union, hopefully will pay dividends because hopefully then they'll have a better understanding of how you are making those Decisions whether they're tough or you're enhancing programming or otherwise.
- [46:19]
Bob Saul
Yeah, I agree. So I'm just going to make a connection here. You know, we, I had referenced earlier long range planning and I think some of what we're talking about is reactive. Right. Reactive to what's occurring. But I think that long range planning and you and I share a passion for this. I know.
- [46:37]
John Brucato
Very much so. Yes.
- [46:39]
Bob Saul
Is so important because in some cases it helps with the things you need to react to. Right. And you don't need to be as reactive. You know, we've talked about this in the past. I know you and I like just looking at your physical infrastructure and start the life cycle, you know, the systems and physical infrastructure. When are you going to need to spend money on that, your technology life cycle? When I first got into this business, you know, there had been grants to buy computers and now back then they're big desktop computers, but.
- [47:12]
John Brucato
Right.
- [47:13]
Bob Saul
But by the time I came into the business, they were 10 years old and nobody had money to, to refresh them. There was no money in the, you know, and we are so reliant on technology now, like planning those life cycles, not only of the student and staff technology, but the backbone, the infrastructure, the core, you know, curriculum materials and life cycling. Those curriculum materials and the equipment, athletic equipment and turf fields and all the things that we need to. If you don't start to put together a plan of okay, well when does that need replace? When do we need to spend money on that? You're going to find yourself in that reactive phase where what we were talking about a few minutes ago because all of a sudden you realize, well, you know what, we're end of life on our building system and you can't get parts for it anymore. And so we need to replace it. We're there with a little few pieces of cafeteria equipment, right. Like hey, you need to replace this. And so it's just so important to like gather all that data and put that into a plan of like how are we going to address that? And then link it to your, just your annual operating budget so you can see the impact over time.
- [48:28]
John Brucato
Right. I may have to have a mini series on school Business Insider on long range financial planning and just maybe you and I can riff for like three episodes because if we try to talk about it at once, it's going to be a two, three hour episode. So I'll have to workshop that with you. Maybe offline. We can do that.
- [48:42]
Bob Saul
There you go. But I, I personally love the intricacies of it. Right. Working with your financial advisors to, to look at your, your debt service and how that flows. And you know, can you can, if you're really up against the wall, can you, can you refinance your debt service? Nobody ever wants to push it out farther, but can you, can you receive. Get a little relief through that? You know, just all those intricate pieces, it's, it's like a puzzle, right? It's a budget puzzle.
- [49:09]
John Brucato
Yeah. It's the best part of the job is trying to complete that puzzle, you know?
- [49:12]
Bob Saul
Yeah.
- [49:13]
John Brucato
So let's, let's talk communication a little bit. So we, we. You mentioned, you know, your communication strategies a little bit when you talk to your board. But you know, in general, what strategies have you found to be most effective when communicating budget decisions to your board and ultimately your community at large?
- [49:30]
Bob Saul
Well, I think we talked, you know, we touched on it. Like, I think transparency is so important. Right. And communicating early. So as soon as you know something, I'll give you an example. This isn't strict. It, this isn't general fund budget, but it's budget related. We are in the very early phases of a grade realignment, which is linked to a construction project. So we are going to take two middle schools and make them two intermediate schools. So instead of being sort of side by side, they will be on top. So we'll have a 5, 6, and a 7, 8.
- [50:06]
John Brucato
That's great.
- [50:08]
Bob Saul
And when the feasibility study was completed and presented to the board, because, because that was what was selected. But there was also a high school project and some elementary school projects.
- [50:18]
John Brucato
Right.
- [50:18]
Bob Saul
There's always, there's always plenty to do. But, but the realignment had the most impact, like impacted the most students. And so what I started to say when the feasibility study was complete, it was a $66 million project. It has now sort of taken on a life of its own. Say that tongue in cheek. No, I'm just kidding. The project has really. Based on the educational program that was developed and really trying to morph into a 21st century learning environment. Right. Doing the best for our students. And while instead of just making capacity for students in those buildings. Right. We want to make it better for them. And so we're now at a $97 million project. And I know the feeling that our administrative team had when the architect came in and first said that number. Right. And so suck the air out of the room. They did bring some donuts. Right. They said, oh, congratulations, we've hit a milestone. You know, you have the educational program complete. Here's. I brought Some donuts to celebr.
- [51:24]
John Brucato
Yeah. When in doubt, bring donuts.
- [51:26]
Bob Saul
Yeah, they were just to soften the blow. But, but getting back to what we were talking about in terms of budget, like, it, it was really important to me that we communicate that with the board as quickly as possible so that they have time to, to internalize that, think about it, understand. Right. But also give them the additional information we had related to that. So, you know, here's the, here's the program, here's the schematic design, and here's the cost. But to the point it being transparent, being timely about delivering the information, you know, we could wait six more months and just give it to them when we're ready for them to approve the next step of the project. But obviously that would be met with a lot of resistance. So. Yeah, I just, I think that's really important.
- [52:15]
John Brucato
Absolutely. And speaking of resistance, how do you handle that if, when you're presenting a budget item, or the budget in general to your board or otherwise, how do you handle that pushback from stakeholders that may not agree with how you're allocating your budget or how you're appropriating funds, or if you have to make cuts. What cuts to make?
- [52:34]
Bob Saul
Well, you know, hopefully our, our decisions are data driven decisions. Right. Or they've been vetted. They've been vetted, you know, through an administrative committee. If they're, if they're, you know, cuts to staff, for instance. And so it's, you know, delivering the hard news. You sort of have to be matter of fact about it, straightforward. Again, present the present, the justification for it. I think it's part of the nature of our job. You're never going to please everybody, whether as a, quote, government official. Right. Like, and we, you know, we sort of fall.
- [53:19]
John Brucato
I don't know what you're talking about, Bob. Everybody's happy in my district.
- [53:22]
Bob Saul
Yeah. Are they really?
- [53:26]
John Brucato
No.
- [53:26]
Bob Saul
Yeah. I mean, again, you're, you're, you're going to please some, you're not going to please others. But, but at the end of the day, we need to make decisions ultimately that are best for students. And really, like, if we have that in the back of our mind, like, this is the best decision that's going to either free up dollars for programs for students or directly affect students. Sometimes I think we sort of forget that. Right. We stray a little bit from the student centered thought process. But I think if you have that in mind, delivering that news is, well, it's ever easier, but.
- [54:06]
John Brucato
Right. So how do you navigate kind of like the political winds of change. I mean, if you're elected to a school board, it is a political position in many regards. And if, I don't know, hypothetically, you have to cut so many fte and there's a beloved teacher or something that might be on the chopping block because they were last in, first out. As you said before, you know, maybe the board says, well, we're keeping this teacher when really it's not something that's in the budget. How do you kind of do that dance?
- [54:37]
Bob Saul
I think it's. It's an interesting challenge because there's the concept that we serve the board. Right. And I really do believe that. But then you also have like your own moral compass, right. And when your own moral compass doesn't align with the board, then you really need to make a decision. And so let's circle back to my introduction. I was at my previous district and the board changed and the sentiment of the community changed or seemingly changed how they perceived public education. And so I found my, you know, I continued to serve that board and I. What they wanted, I provided in terms of financial planning, et cetera, but my moral compass was not aligning. And so obviously, as I said, I'm at East Penn now and I'm no longer at that district. So it's very difficult.
- [55:40]
John Brucato
That had to be tough. I mean, especially 17 years having left after that long. I mean, my last district, I was there for five and it felt like it was this terrible breakout because I loved most of the people I worked with. Right. But it just. There was time to kind of move on.
- [55:53]
Bob Saul
So again, I'll share vulnerability when after 17 years, it really was, it was very difficult. And I actually had to reach out to some colleagues to say, hey, like, I'm really struggling with this. And fortunately I found a colleague who had had a similar amount of time in a district and then went to another, another place. And he said, you know, it's almost like a breakup. You know, you were with someone for a long period of time and now you're not with them anymore. And so you're going to feel an emotional reaction to that. And it took some time. Like, you know, I continue to follow on Facebook and my sister and brother in law are both teachers in the district. Right. So I would continue to hear about what was happening. My best friend since kindergarten is a principal in the district and so can hear from him. So was a. It was mentally challenging as well as the sort of relocation and different part of the state, different educational service agency. We dealt with different county. Like, there were so many new things to deal with. But then there was the breakup. 10 years. So you're right. Like, that's something real to consider when you're.
- [57:09]
John Brucato
Absolutely. And I did the same thing. I moved across the state. New county, new, new everything, essentially. And I realized that I still have some really good friends in my last district. But I, I, I'm like, why am I getting so wrapped up in what's happening there now? I'm not there anymore. You know, I would see like, posts and things. I'm like, why are they doing that? Why are they hiring this? It's like enough like we broke up. Right. So you got to move on.
- [57:32]
Bob Saul
And there does come a point where it really does. Like you no longer really care to.
- [57:38]
John Brucato
Yeah. Time's a healer, right?
- [57:39]
Bob Saul
Yeah.
- [57:39]
John Brucato
Yeah.
- [57:40]
Bob Saul
Yes.
- [57:40]
John Brucato
Yeah. So, you know, we talked a little bit. You brushed on the fact that you use templates to really clearly and transparently communicate your budget. Do you have any other tips or tricks or tools, formats that you could recommend to the audience here that have worked well for you in presenting the budget?
- [58:02]
Bob Saul
Again, things we've talked about, I mean, I really think that consistency is valuable. Right. In building understanding and trust. I think the long range planning and there are different. Right. There are different levels in terms of that. Mine is very intricate, very detailed, probably a lot for some people to consume. But actually I've gotten a lot, some feedback from some community members who said they really like that detail. Very transparent. I wish I was better at using infographics and dashboards and I think they can really help tell the story. I think the reality of our positions is sometimes there's just not enough time to implement those. I know another district that implemented an electronic budget book, which I think is a really cool idea. Yeah, I would love to do it. But again, in terms of time, where.
- [59:04]
John Brucato
Does it fall on the priority list? Right.
- [59:05]
Bob Saul
Yeah, exactly. So again, I think it's one of those vulnerabilities. Why aren't you doing that? It's such a simple concept, but time is a valuable commodity. Yeah.
- [59:17]
John Brucato
It's not for a matter of not wanting to do it. It's just being able to.
- [59:20]
Bob Saul
Yeah.
- [59:22]
John Brucato
So wrapping up here, what advice do you, would you give to a school business official who's listening and maybe just beginning in their career in the budgeting process or, you know, we talked about maybe if you're seasoned, you need to move to a new district. But what about somebody who's just really kind of dipping their toe in the water in this Whole thing.
- [59:39]
Bob Saul
Yeah. I think it's really important to, you know, find a mentor. Find somebody you can rely on, you can. That you trust. Right. And can ask those questions consistently. It's why I tried to really go grassroots and work with our local business officials here so that people had someone to turn to, whether it was me or one of our other experienced colleagues. So find a mentor, ask a lot of questions. It's the old adage, no question is help me out here.
- [60:13]
John Brucato
Too stupid.
- [60:14]
Bob Saul
Yes, exactly. And again, it's that one on one. You know, I know when we have group meetings, people and I was this way, don't feel comfortable maybe asking the questions, but that's why that mentor the person you can rely on.
- [60:28]
John Brucato
It's like a safe space to really kind of say, hey, we were at this meeting and the group was talking about this. What is this?
- [60:35]
Bob Saul
Yes. Yeah, I think too, just because you're new, don't be afraid to challenge the status quo.
- [60:42]
John Brucato
In the old.
- [60:43]
Bob Saul
How many times have we heard, well, that's the way we've always done it.
- [60:46]
John Brucato
My least favorite phrase.
- [60:47]
Bob Saul
Right. But again, don't be afraid to challenge the status quo. I think I'm reminded of the phrase, look before you leap. Right. Like, don't just make a change or don't challenge the status quo just because, like, it should really be based on something. A parallel would be, you know, Covey's seek first to understand, then to be understood. Right. Like, make sure you understand it. Don't be afraid to challenge the status quo.
- [61:14]
John Brucato
Right.
- [61:16]
Bob Saul
I'm reminded of an example when I first started here at East Penn. Such a small thing. But when they would file the accounts payable, you know, or accounts receivable, sorry. You know, there's always some support with the accounts receivable. And they would just sort of lump it all together for a deposit and staple it and throw it in a drawer. I went looking for something one day. I'm like, what, where, where are the items? For whatever it was, I was looking for the receivable. Like, oh, you have to go through that drawer and like look for them. And so I sort of made a pronouncement. Okay, we're, we're going to start to file those in alphabetical order, you know, by like whoever we've received it from. And it was such a small thing, but it was met with a lot of resistance. Right.
- [61:57]
John Brucato
I believe it's a new guy.
- [61:58]
Bob Saul
What's he trying to do?
- [62:00]
John Brucato
Messing up our system.
- [62:02]
Bob Saul
Exactly. But fast forward, even now, the staff member is still here and we sort of joke about that, Right? They finally realized over a period of time, like, oh, that makes sense. And it's so much easier. And now we're trying to, now we're taking the next step and we're going to some digital document retention. So again, sometimes you have to push the envelope a little bit and not be afraid to challenge that status quo.
- [62:31]
John Brucato
That's great. That's great. Well, Bob, thank you for sitting down with me today. You know, I kind of forgot we had, we were recording. I had microphones in front of us. It's just always a pleasure to speak with you and especially since you're so busy, have a lot going on. It means a lot for you to sit down and talk. And I know our audience will get a lot out of your, your words of wisdom and your sage advice. So thank you again, my friend.
- [62:50]
Bob Saul
Thanks so much, Sean. I appreciate.
- [62:55]
John Brucato
Thank you for tuning in to School Business Insider. Make sure to check back each week for your favorite topics on school business.