- Hey everybody, I'm Doug.
That's Connor. And welcome
to the Bethel School District Presents podcast.
Connor, we are gonna play a little game
to start this week's show.
I'm gonna give you a million dollars.
- Wait, you're giving me a million dollars?
- No, no, no, no. Sorry, this is hypothetical. No,
- No, no, no.
You said you're giving me a million dollars.
I think you have to gimme a million dollars, don't
- You?
No, this is, it's a game. It's a thought experiment.
- Ah. Like Brewster's Millions.
- Maybe I wasn't allowed to watch
that when I was growing up.
- Oh, it's an eighties Classic Candy Pryor. Can't beat it.
- Okay, I'll stop by. Blockbuster on the way home.
Anyway, back on topic.
If you had a million dollars to spend
and you had to spend it in one day, how would you spend it?
Now keep in mind, whatever you don't spend by the end
of the day goes to your mortal enemy.
- Oh, so you'd get it. - That's right.
- Easy. Buy a house. Well,
- Okay.
So the aim here is to have a fun conversation, Connor, not
to be a basic broadcaster.
You also can't invest it. So no houses, no investing.
- Okay, well what if I go to Costco,
I buy a million dollars in hotdog and that's an investment.
It's just an investment in my future. Happiness. Well,
- That would be a choice, but I'm still gonna say no just
'cause I'm concerned about your health. Connor .
- Okay, let me see here.
Well, I guess that could go a couple of ways.
If Superintendent Siegel's listening, hi Tom.
I would donate the million dollars to our district.
If he's not listening. If I'd rent a hot air balloon,
spend the rest of the million on glitter
and dump it over a major city,
- That would make you a very sparkly supervi.
I like it. That's a great use of the money.
Speaking of money, today we're talking
with our Chief Financial Officer one, Mr.
Brian Burley. Brian, welcome to the show. Well,
- Thanks for having me. I'm excited.
- I am two, in fact, I've been preparing
all morning for this interview.
I've done tons of research, made multiple charts and graphs.
I even brushed up on my multi-variable calculus
and a little bit of matrix algebra just for fun.
And Connor, well Connor just finished a ball of lucky charm,
so I think we're both prepared for this.
- Absolutely a full tummy.
And with that said, before we get started, I do want
to preface our conversation
by saying we're gonna have some fun today
and we're gonna be a little silly at times.
But for the record, Brian, your job is incredibly important
and you, and we take it very seriously.
You're in charge of millions of taxpayer dollars
and we want to thank our voters
and local taxpayers for entrusting us with their money so
that we can make sure the students in our community get the
best quality education they can possibly have.
- That's right. My team works very hard every day.
We do like to have some fun on occasion,
but we do take our jobs very seriously
and we do again, thank the taxpayers
and we're doing it all for the students in the future,
the community indeed.
- And to get us started, as we all know,
the biggest percentage of a school district's budget goes
to paying salaries for our teachers, bus drivers,
paraeducators, child nutrition workers,
maintenance personnel, administrators, custodians.
It takes a lot of people.
In fact, Bethel is the ninth largest
employer in Pierce County.
And part of what your team does is make sure everybody
gets paid on time.
- That's absolutely true. And in fact, I've heard it said
that everybody says they're bad at math
until their paycheck's just a little bit off, then all
of a sudden they have a doctorate calculus.
Brian, what are some of the most frequent questions you get
from staff about payroll?
- We do have a new employee orientation
that does a great job
of going over payroll, how it's calculated.
However, that's like drinking from a
fire hose for a new employee.
They're thinking about a million other things.
So some of the big questions, well maybe not big,
but the coming up often is how am I getting paid
during the summertime when I'm not working?
Another one, what is FICA ?
Some are have to do with what's the difference
between a deduction and a benefit.
Um, those are some of the common ones.
I do wanna spend a minute
'cause the biggest question again is
I work this many hours in a month, why am I not getting paid
for that many hours at the end of the month?
'cause your annual salary is calculated by looking at
how many days you work a year, how much you make per hour,
and finding the number of hours per year, multiplying that
by your pay rate and then dividing that by 12.
So you get an even check every month for your position pay.
On the classified side, a certificated side,
it's an annual salary, so it's your annual salary.
A salaried employee divided by 12.
But then overtime hours are different than
if you change positions.
It gets complicated.
I could go on, but there's many questions.
Payroll does a great staff
and we do pay over 2,700 employees a month
and there's five payroll specialists who do that.
So keep that in mind. We do have a some, a support team
for them, but it's those five people paying
2,700 employees per month.
- And we here in communications,
we actually work right next door to the payroll team.
They're amazing people. Always open to answering questions
and doing a lot of work over there.
It's a heavy lift.
Now I know for a fact on the first day of school, Brian,
this year you were actually out at schools.
You weren't there to teach kids accounting,
but just to help out on the first day as needed.
What was that like for you
and is that something you get to do very often?
- I enjoy that. Um, this is actually my third district
and the other two are smaller.
One is about half the size of this
and one was even smaller than that In those districts.
I actually got to see the students more.
The district office was right next to the high school,
my most recent district.
And so you got some more involvement here, not so much.
And as a bigger district,
as more levels remove you, I do enjoy that.
And remember we're doing everything we do is
for the students and for their
learning, for the development.
So I like getting out there and talking to kids and,
and just seeing what's going on.
One of the schools I went to, it was neat.
I got to help the kids on the first day
of class find their classroom.
I got handed a sheet of paper that had all the student names
and all the classrooms and a map of the school.
So that was kinda my highlight of the year so far,
- The most overqualified hall monitor
in our district .
But let's get back to some budget talk if we can.
Uh, Brian, what's the most common misconception people have
when they talk about school district budgets?
- Well, there's multiple misconceptions with budgets.
I think a few I'll talk about,
I can't just answer without with one.
One of the most common misconceptions is
that budgets are fixed.
They think that's what's submitted to the state is
how you're gonna spend all your money
and how you're gonna receive all your money
will think about this.
Do you know what the cost of fuel's gonna be next year?
Do you know how many miles our buses are gonna drive?
Do you know what food's gonna cost next year?
Do you know what parts
of buildings are going to need repair?
Do you know of a broiler that's gonna go out?
There's so many variables.
We look at trends over multiple years to make the budget.
But again, it's not a fixed thing.
It's it's variable and their guidelines
and it's a projection in time.
- That is a big one. People don't realize, I don't know
what the price of gas is gonna be
tomorrow, let alone next year.
So that, that's gotta be a big thing
for you all to forecast.
Not to mention we don't know
how many students we're gonna have on a given year.
And funding is based on the number of kids you have?
- Yes. Funding is based on the number of students we have
and we actually report the number
of students we have once a month.
So in the budget we're projecting how much we're gonna have
for the year, but that changes on a monthly basis.
And our apportionment
or how much money the state gives us changes monthly as we,
the following month is we report the numbers for enrollment
and then at the end of the year they average all the
enrollment for all the months
and they true us up to a number.
So even revenue, our biggest portion
of revenue is variable. So
- With all that money coming in, we can at least just
spend it where we want to. Right.
- Well no, that's not exactly correct either.
And in fact, that's another misconception.
A lot of members of the public think
that the revenue's interchangeable.
But the truth is we have both unrestricted
and restricted revenue.
And the unrestricted revenue, which is about two thirds
of our revenue, can be spent on any
allowable activity of the school district.
So as long as it's allowable by law for district spend.
So we could pay salaries, we could repair buildings,
we could buy district buses, anything
that's allowable textbooks.
But then we have unrestricted funds
and I like to compare these to like store gift cards.
So if you have an Olive Garden gift card, great,
you can buy food but only certain types of food,
prepared food at a restaurant.
Subways the same way.
You got a Footlocker card, you can buy shoes
but you can't pay your mortgage or rent with that
and you can't repair your vehicle with that.
Restricted funds are like that and that's about one third
of the total revenue we get.
And a subset of that are grants.
Grants are where you have to spend the money first
and you get reimbursed for the expenditure.
And there's actually more strings attached with those.
And they range from the smallest, about $350
to the larger ones, about 4.1 million for Title one.
And we have over 70 individual grants we
have to manage annually.
- Okay. That is a lot of information to take in.
I'm thinking my charts and graphs now are probably 90%
wrong, so I'm gonna discard those.
It seems like every time we've talked
to you in the past year, years since you've been here,
we've talked about regionalization
and that is a big change
that's happened this past legislative session
and went into effect this year.
Bethel now gets 6% regionalization, which helps,
but it doesn't fix the problem
because there's a bigger problem than just that. Well
- That is correct.
In the state of Washington we have a somewhat regressive
allocation that's calculated by the state for
how much individual districts get
where some states they have a progressive model
where districts in the poor areas
of their state get more state funding to compensate
for social economic differences.
Between districts
and Washington, we get mostly flat funded.
That's kind of the goal of the legislature overall.
But they do have regionalization, which is part
of the prototypical formula.
So to figure out how much money goes
to individual districts, which means those districts
that on average have wealthier
households are getting more money.
- I thought the motivation behind that was uh,
kind of staff based.
So the staff that have to live in those areas
to work in those areas would need to be paid more
so they can afford those areas.
It's is that the mindset that they had going into this
but it's creating a different problem?
- Yes, that is the mindset and that is logical.
However, when you look at nationwide studies that are done
by experts in the education field, the number one predictor
of student outcome is actually social economic
background of the student.
So those students that come from poor areas all across the
country and the state of Washington perform lower.
And those that come from more wealthy areas perform better.
So if you want to bring up those poor performing students,
you need to put more resources there.
And we're actually doing the opposite.
We're putting more, more dollars in
those wealthy communities.
On top of that, in the state of Washington, a sizable chunk
of money from 10
to 20% per district comes from the local levy.
Well those areas that have higher property values have the
ability to collect more money, both per student
and actual dollars from those local levies.
So it's another thing in Washington that makes funding
actually regressive and not progressive.
- That's really fascinating.
Uh, you did mention levee,
so let's talk a little bit more about that.
So when we're looking at our general fund
where most things are paid out, 73.5% of the budget,
it's coming from the state, 12.1 from our local levies
and 14.1% from the federal government.
With that said, thank you voters
and to our taxpayers, we couldn't do this without you.
Everything added up that's about $354 million.
Percentage wise, where does that all go?
- Like we talked about before, most of it goes to salaries
and benefits of employees varies per year,
but somewhere between 83
and 86% less than 5% goes to supplies and materials.
We have about 12% that go to purchase services
and that's all of our utility bills.
But it's also areas where we can't hire expertise.
So when we have to hire a law firm
and sometimes in the special education arena, we're unable
to hire certain personnel.
So we contract out for those services
and then less than 1% for capital outlay and travel.
That's one way of looking at where that money goes.
Another way of looking where the same dollars goes is
to break it by kind of activity.
So what is being done as a whole, both with the people in
that area and the supplies
and purchase services you need to spend in that area.
And if you look from that way,
instruction is about 75% of where the money goes.
About two and a half percent goes
to district-wide administration, uh, about 3%
to food services, another 5% to instructional support.
So that's like training the teachers how to teach
and then the technology that supports them.
Uh, maintenance and operations.
'cause we have over 30 school buildings
and some support buildings will go to a maintenance
and operations support of those buildings.
Those are the big areas. Pupil transportation,
maybe about 5%.
- So notice in that you haven't mentioned any type
of new school construction or, or anything like that.
So is that bond budget kept completely separate
from our regular budget?
- That is um, I don't want any to get into the details
of governmental accounting,
but there's generally accepted accounting principles
and the government accounting standards board sets those
principles on how we do that.
And then the state legislature
of Washington also puts some rules on top of that.
But school construction is not the
general activity of the school district.
So we do that in a totally different fund.
We call it our capital projects fund.
We keep both the revenue for that
and the expenditures separate from the general fund.
So when we sell bonds, when the voters approve bonds
and we sell them, the revenue goes directly
to the capital projects fund.
We also pay for our tech levy out
of the capital projects fund.
'cause the state legislature has guided
us to set it up that way.
- Well Brian, that has been a lot of numbers
and percentages in a very short period of time.
Let's give everybody's brains a break for just a second.
What got you into the financial world in the first place?
Were you always drawn to the mathematical arts?
- I don't know if I was drawn to them.
I think we all have strengths
and weaknesses as kind of an aptitude growing up.
Math always came easy to me.
No one, I think dreams of being a uh,
chief financial officer for a school district
or chief business Officer or anything like that.
It just, life happens and you end up there.
When I was young, I wanted to be at one point a firefighter.
I don't know if you remember back in the seventies,
probably when I was five or sixth, my favorite TV show was
emergency and wanted that then, um,
professional football player, I used to run, you know,
with my best friend who lived a few houses down the street
routes and I pretend like I was like Johnny Jefferson
or Steve Largent running routes and catching.
But then my high school, I did play football.
I tore my ACL so the odds were
against I'd never make football.
The odds are just against everybody.
But I had no chance with that.
The other thing I wanted to do is become a commercial pilot,
but my poor vision, uncorrected vision didn't allow me
to join the Air Force or any military forces which
where you can really learn to become a pilot at a, you know,
where the government pays for it.
Otherwise it's really cost prohibitive.
During college, I wasn't exactly sure
what I wanted my major to be.
My strengths were math, but that was not really my interest.
My interests were more the sciences
and part of me thought,
well maybe thinking about becoming a doctor,
thinking about becoming a physician's assistant,
thinking about a physical therapist,
something in those areas which you know,
have good job opportunities, a lot
of schooling Well in those number of years.
Um, I took a emergency medical technician class
and I started to work on a local rescue ambulance
and I ended up staying there way longer than I had planned.
I ended up working there for 16 years.
There were some mergers
and acquisitions in the company changed,
but I had never finished my college degree
immediately after high school.
But about eh seven
or eight years into working on a rescue ambulance,
I figured well I need to go back to school
and finish my degree.
But my initial degree was gonna be in biochemistry
and I kind of, after years in this, I decided no,
that I need to figure out what I really want to do
if I'm not gonna work on the ambulance.
A lot of people they end up going
to fire services like I did think about that,
but I decided that's not the route I really wanted to go.
And so I looked at the federal government does a national
occupation outlook guide
and where can you make the most money
with the most job openings with a bachelor's degree.
The first three things were three
different types of engineers.
And I was like, I took through calculus three,
I don't really want to take differential equations
and that's not really my interest.
Number four was accounting.
I go, huh, that doesn't seem that hard.
Over the years I'd had an interest in watching markets
and how the economy works and everything else.
And so I went back to school while I was working full-time,
um, two days a week to get an accounting degree.
Technically it's a degree in administration
with a concentration in accounting.
And I got two other concentrations to finance,
which I actually find a little bit
more interesting than accounting.
But they go together and then real estate
as the concentrations go with it.
My favorite classes in that world were actually economics.
You had to take a number of economics courses
in that arena too.
And I won't get into all the details
how I actually ended up in a school district,
but it started with the accounting degree.
- Wow, that is an incredible background.
Really interesting to hear about.
I'm wondering if you have a PG to PG 13
ambulance story you can share with us.
- Well at the time I was working in California
and the ambulance service provided services in Ventura
and the very west end of Los Angeles County.
And I had a number of celebrities, I can't mention the names
that we provided services for that were in the ambulance
for different reasons, including overdoses.
- Wow. That is quite the revelation.
I'm really glad I asked that question.
The seedy side of Hollywood.
Connor, that was my last question. Do you have any left? Of
- Course.
And I've put them all together in a little segment.
I like to call the lightning round. Ryan, are you ready?
- I'm ready. What - Is your ideal temperature outside
- 72.
- What's your favorite movie about accounting
or math or anything with numbers?
- The accountant. - What's your favorite comfort? Food?
- Pizza. - Is it wrong for a vegetarian
to eat animal crackers?
- No. - , what was your first job?
- I worked at uh, six Flags Magic Mountain in amusement park
that worked in the games area.
- Dogs or cats? - I have both
and I actually am not gonna make that decision
because someone will be unloved.
- What's the place you most want to travel to?
- Italy. Have - You ever ridden a segway?
- No, I have not. Um, I've ridden those hoverboards
and almost killed myself, so I don't know if it'd be close,
but a hover, uh, segue's supposed to be way easier.
- Would you rather come face to face
with a miniature hippopotamus or a giant cockroach?
- A giant cockroach.
I know I could kill it even though it's a
giant cockroach .
- And that's the end of the lightning round.
You did very well. Brian. I'm gonna give you 10 points.
- I I think there were only nine questions.
- Okay, then let's add a 10th question
and circle back around to the top of the show
with our Brewsters millions.
Question. Brian, if you had a million bucks to spend today
and you had to spend it by the end of the day
or your mortal enemy got the money,
how would you spend that money?
- A broadly diversified mutual fund And I could live off
the earnings off that.
Or is it grows in value? I could take that out .
- That's the kind of wise business decision you can expect
from a school district CFO.
Brian, thanks for joining us today
and thank you so much for the work that your team does.
We loved having you on the show. Thank
- You very much.
It was enjoyable.
- And that's gonna wrap up this week's show.
Connor, we started the show talking about a million dollars.
If you had it in your pocket, what would you spend it on?
You never got around to asking me what I would spend it on.
Don't you wanna know? No. Well that's too bad.
I'm gonna tell you anyway. I would rent
the services of one Mr.
Gerald Seinfeld.
Jerry as I like to call him
'cause we're we're cool like that.
I'd have him come out, drive me around in a fancy car
and we'd just chat and probably have somebody film us.
- Oh, kind of like comedians in cars getting coffee.
- Exactly. Except it'd be podcasters in a pinto.
Getting panchetta.
- I like the sound of that. And now I'm hungry. Well,
- There's a IHOP right down the street. Let's go there now.
- Deuces.