On the simplest level I see two separate issues here:
1) Concern about a conflict of interest
2) Concerns about the school district annual meeting, with the potential of 'the school people' loading the meeting to sway the vote
My response:
1) If the policy is followed there should be no problem. In Alton, we have a Board member who's mother is an employee of the school district and he recuses himself from discussion/voting when appropriate - and it's only been a handful of times. No problem, really.
2) Again, that logic can work both ways - the 'non-school people' can also attend and vote. It's called democracy. Encourage people to attend and vote. Whether they are for or against the school's budget, at least they CARE and are active in the local decision making.
I would like to see the author of issue #2 teach at a local high school for a day and see how he fares with that "they just show up" attitude. He wouldn't last long.