Finance director says state—fiscal indicators undercount Munster—investments; board reviews cash position

Bill Melby, the School Town of Munster—director of financial operations, told the Board of Finance that the district—earned its highest interest in 2024 and that state fiscal indicators produced by the Distressed Unit Appeals Board (DUAB) undercount the district—because the state—does not properly record investments in certificates of deposit (CDs).

Melby opened the investment report by pointing trustees to handouts showing interest earned by month, a ledger of outstanding investments, and an investment policy summary. He said the district uses a laddered approach to CD purchases, puts investments out to bid to local banks and prefers CDs for guaranteed returns, and that most invested dollars come from construction funds the district expects to spend over time.

Melby said the DUAB data system treats money placed in CDs as an expenditure without recording the corresponding return, producing results that can make the district—appear to have deficits or inflated cash percentages. He called the discrepancy the "Munster and Noblesville rule," saying some other districts that invest CDs are likewise affected. Using his corrected figures, Melby told trustees the district—finished 2024 with an education fund cash balance equal to about 43.4% of the 2025 approved budget (number reported by Melby), and he noted the district's net assessed value was roughly $1.98 billion and fall ADM around 4,084.

Trustees heard that the district—had roughly $1.2 million in encumbrances that will be counted against the 2024 budget, and that outstanding checks older than two years total approximately $2,000 and will be voided and returned to the appropriate funds as a procedural matter. Melby said referendum revenue accounted for roughly 14% of total revenue in 2023 and cautioned that a future referendum loss would represent a large, immediate revenue reduction.

Melby urged trustees to consider DUAB indicators with caution for districts that invest in CDs. He said the DUAB data are typically a year to 18 months behind and that the board should rely on the district's internal records to gauge liquidity. No formal action to change investment policy was taken; the items on the Board of Finance agenda were informational and procedural.

Melby concluded by answering questions about investment types (he reiterated the district primarily uses CDs) and the timing of cash flows tied to construction projects. Trustees adjourned the Board of Finance and returned to the regular meeting after the report.

This presentation and discussion were the most substantive finance items on the agenda and will inform the board's future cash-management and budgeting oversight.