Weslaco ISD Board Workshop (April 13, 2026)

001Mhm. >> Mhm. >> Good evening. I'm Armando Cuellar, Vice President of the Weslaco ISD Board of Trustees. This board workshop is being conducted in compliance with the Texas Open Meetings Act. Notice of this board workshop has been posted online for at least three business days prior to the meeting date. The time now is 5:37. And I will call this board workshop to order. And I'll begin with roll call, calling each board member by name. Is Jacqueline Sustaita? Present. Dr. Jaime Rodriguez? Myself, Armando Cuellar, present. Fidel Olan will will be attending in about uh 10 minutes. Mr. Benjamin Castillo? Present. Mr. Eduardo Lozano? Present. And Mr. Marco De Los Santos? Present. Let the record reflect that we have a quorum present, although it's not required for a workshop. We go to number two, public comments. There

002are none. Item number three, insurance workshop. Yes, Dr. Rivera. Let me call on Dr. Cantu to start the meeting. Dr. Rivera, members of the board, we will be hearing from two uh brokers or third-party consultants that would be coming in to present, uh give you some information, the same information that they shared with our employee benefit committee, of which we have three members of the employee benefit committee here uh tonight. And to begin, we'll have uh Gallagher Partnerships to come in or uh Gallagher to come in and present. Good evening, Mr. Vice President, Board Trustees, Dr. Rivera. Uh my name is Adrian Farias. I work with First Public. First Public is a wholly-owned subsidiary of TASB. And under First Public, we administer the Lone Star Investment Pool, which you guys are a part of, so

003thank you for that. And we also administer the TASB Benefits Cooperative, which I get to spearhead. I am the VP of Business Development for that division. I've been with First Public since January of 2015, and at that time the Benefits Cooperative board awarded Gallagher uh as our consultant, and since then have awarded them multiple times, and re-awarded them again this past January. Uh I've really enjoyed our partnership with Gallagher, and we continue to grow uh together as well as with our clients. Um what separate I what I truly believe separates Gallagher from the rest is all the resources it has available. Kind of like what your district has, you guys have attorneys that are looking at contracts. Gallagher also has attorneys looking and dissecting your medical contracts, your pharmacy contracts, your stop-loss contracts in order

004to save districts money. Uh they also have a pharmacy team, which are continuing to look at the market trend, finding ways to save districts money, as well as for your employees. Uh I think another key indicator that they have that's uh really important is they do have uh fiduciaries. And what they do is they're looking at uh at your high-cost claimants, all the claims, and making sure that those are adding up with your member ID. Uh we recently were transitioning a district in Central Texas, and uh during that process of analyzing their claims, there was a lot of claims that weren't matching up with members' IDs. So, that was a a big finding and a big savings for our district. Uh so, Gallagher has an amount of uh resources that we really value, and we

005believe they can be a a big value as well to you. Uh today I have Brandon De Bar, and Natalie Haskett, which will uh come up and give you a little bit more information on their capabilities and the services that they offer. Good evening, Dr. Rivera and Board of Trustees. It's nice to see you all. Um thank you for having us today. I'm going to talk a little bit about Gallagher first, and then we will transition into some of the findings that we have provided by Dr. Cantu. So, thank you, Dr. Cantu, for providing some data for us. Um if you have any questions, please stop us. Again, we'll be brief and concise. You should have a packet in front of you. I know it's heavy. We won't go through all of it. Some of

006it is a leave behind. We'll be clear and concise and get to questions as fast as possible. But, um again, stop us with any questions. I will transition here. Um so, a little bit about our team. I'm one of the leaders on our public sector team. I'm responsible for growing our business, developing client relationships, and making sure all of our accounts are satisfactory, establishing relationships, taking care of the board level, top administration, and everything under the sun from our team. Um we have a large team. All we do is public sector. We have school districts, cities, counties. A bulk of our book of business is school district business, about 70% of it, ranging from some of the largest districts in Texas to all the way down to two employees. So, we do it all. No

007size is too big. No one's too small. Um we know that health care is a major concern not just across Texas, but nationally. Here in Texas, we're seeing trends that we've never seen before in terms of cost increase projections. The cost of care has gotten incredibly expensive. Blue Cross Blue Shield alone is at a 14% inflation rate, which is the highest we've ever seen. So, there is a lot of help needed. A lot of people are knocking on the door asking for help, and it is quite a challenge. Um we have a large team to help with that process, ranging from myself to Natalie, who will talk here in a little bit, um to again what Adrian said from compliance, attorneys, underwriters, HR consultants, workers compensation, property and casualty, uh retirement, 403B. So, everything is

008in-house. We don't outsource anything. Anything that you all need, administration needs, employees needs, is from Gallagher. Um we don't have any additional compensation that goes out the door to third parties or anything like that. So, anything that you need our team can certainly provide and help Weslaco ISD Um, we're a large organization in the healthcare space. Size and leverage has become very important. Um, a lot of our relationships and contracts are at the national level, which is impactful for our clients. You get a lot of favors along the way, too, being so large, which is also helpful for our clients. Um, we consider you all and the insurance market considers you a large employer. So, it's important to couple that with a large consulting firm that can help get better buying power. That's important in

009healthcare. So, we tell you that as as a value add, not to talk about how great we are, but to tell you that leverage is important. Um, and again, we're all over the country, all over the globe, so we're a large organization. Um, we've done a lot of things that are unique to the market. Um, we call the Bukas, which is Blue Cross, United, Cigna, Aetna. Those are the four large insurance carriers. That's it's almost gotten to the point where going to those four is old school. There's other things out there that are disrupting the market, boutique firms. Bending the cost of care is important. As a large employer, it's important that we go out and find some things that are challenging the norms of healthcare. It simply has to be done. Going to the

010big four is just not enough anymore. Um, so, if we are to work with you all, and we hope we do, those are the things that we eye in and hone in on, especially on the contract side, go into other TPAs that are changing the narrative of healthcare to see if they can help Weslaco ISD bend the cost of care at some at some point. Um, it's not uncommon. We've seen a lot of budget deficits out there. And we've Some of our large districts have multiple multiple hundred million dollar deficits. Some range from 30 to 50 million million dollar deficits on the healthcare side, and they are asking and pleading for alternatives. The big item has been the TPA side. So, Natalie can talk about that as well. Um, Those are some things that we'll

011bring to the table for West Waco ISD. And I will turn it to Natalie. Thank you. Good evening, y'all. Um just wanted to touch quickly. As Brandon mentioned, I know in lieu of time I might skip around a little bit, but do you do have your leave behind and happy to answer any questions. Um but did want to first and foremost give you a flavor of what it would look like to work with our team. Um as Brandon mentioned, we have a strong bench and we bring in those experts um as we need them, but outside of that you do have a core team that is available to you on the regular. Um so, when we're doing things, we're looking at, you know, developing goals. We want to make sure we're understanding your data cuz

012data drive decision. Without data, we don't have a direction. And so, um Dr. Cantu has been very kind in providing us some data and I have some of that to share with you a little bit later. Um we want to use that data again to identify opportunities. What are we doing that's working? What have we done that is not working? What kind of solutions and strategies do we need to move forward with? Um we want to do all of these large strategic items, but we never want to lose sight on the day-to-day blocking and tackling that your HR and benefits team has to deal with. And we're there to support that, whether it's preparing for open enrollment, we have compliance questions, we need to make sure we're communing communicating something to the employees. How do

013How do they receive communications? How do we can push that out so that they can understand um what we're trying to do to help them better their health. So, all of that is going on day-to-day, but we're never losing sight of our overall strategy. And when I say strategy, we can't just do something for year one. We have to work for a three-year strategy. Knowing that might change at any any moment, we're very nimble and can pivot um to address the needs of the market. I think really where I want to kind of dig into are some of your key opportunities. So, this is an illustrative look of your financial um summary as of when we originally started working with you in about February-ish. So, this data is a little bit old. Um but what

014I want to kind of draw out here is, you know, based on um our current budget year um you know, from from last year in 2024 to 2025 on your fiscal year, um your plan gross cost and I took some liberties and I I had to to make some assumptions, but we are about $23.8 million in spend. Um based on where you are today, I'm kind of re-forecasting how we're going to end this year, you know, we're inflating about $4 million and that's probably conservative. We're probably already above that or or trending to exceed that amount. If we do nothing and we stay stagnant, the following benefit year, we can expect an additional 6 and 1/2 $7 million in additional spend. Again, very conservative. I had to make some assumptions. So, the question is what

015do we do because we have to absorb what happens this year and then we have to try to counteract what's going to potentially happen the next year. Trend is not slowing. There are other variables in the market that I'll talk about. So, we have to find out where those top opportunities are. And just taking a quick look, we found some top opportunities that I will explain in just a few moments that would bring us back to potentially where we were in 2024-25. Now, there are some other things that we you know, we might need to do around contributions and plan design, but just taking a look at some of these top opportunities. And again, we don't have to do them all, and these are just some recommendations, but we have found a tremendous amount of

016cost avoidance when we're partnering with a direct primary care network, whether that's partnering with a near-site clinic, kind of if you promise the the headcount, they will build a clinic, um such as Frontier or Next Level. That's more of a per employee per month cost that we can budget for, but it's keeping a lot of that spend off of our um health plan. So, that's one thing that we've had found very successful. Um pharmacy. Pharmacy contracts are written to make the pharmacy money. The the pharmacy benefit manager money. And so, oftentimes when the first thing we do when we take over an account is look at your contract. Sometimes a simple sentence can shift and save us a tremendous amount of dollars. So, whether we market that or not, a lot of times we can

017find some plan savings within the pharmacy contract. Um Brandon touched on TPAs. The traditional, you know, we used to just go to Blue Cross, Aetna, United Healthcare, Cigna. There's only There's only five now, right? The old days of partnering with what we called a true third-party administrator, they were very clunky, and they kind of lost traction. They have been rejuvenated in a way. They are running very nimble. You're able to plug and play your own strategies because remember, we're self-funded. This is our plan. You can make it however you want it. And so, if we don't want We We always want like a Blue Cross or an Aetna United. We need those discounts from a claims payment perspective, but if we don't want to take a Blue Cross program for, say, musculoskeletal, they want you

018to use Hinge. We don't want that. We found better ROIs with a third party. We can plug those in. We can carve out dialysis. We can We can steer our employees to better outcomes and lower costs of care. We can do this um very strategically. It is a heavy lift. Um but they have come such a a long way and that is how we're saving some dollars right now. Um we I kind of touched on con um contracts and then there's, you know, carve-outs. Where does it make sense? Do we have, you know, large populations where we're spending buckets of money? Can we steer them to one place? So, those are just some of the strategies and ideas that we have found have been successful. Yes, of course. Being cognizant of timeline as well, being

019a a 9 September 1st effective date, you don't have to do all of this at once. As they these are buckets. And so, maybe you start with one or two of these buckets first year. We talked about a two- or three-year strategy. It's This is This is a heavy undertaking. And it you know, we're getting close to May almost. So, being cognizant of of timelines and everything else and disruption, employees, open enrollment. So, maybe you do one or two of these at a time over the course of two or three years. I mean, some districts will up the main eight off and do all of it if they can. Um but just just wanted to to mention that, too. It's not >> Can I stop you what you're saying? I'm looking at cost avoidance opportunity

0204.1 to 5.5 million. You're saying we can save that within a couple of years or in one year? Or what does that mean? If If we do and and again, these are estimates, right? Um if we do all of these things, we potentially could garner that amount of of savings year one. Yes. Oh. Yep. Yep. And there's some other things we can do. Those are just the ones that stood out uh stood out to me. And you know, we are you kind of thinking outside the box. We're having districts do things they've never done before off plan year. You know, we we maybe move to a 1 1. Or we're going to still stay on a 9 1, but we exercise this large RFP and we make a change mid-year. We're starting to explore things

021that we've always said no to in effort to kind of bend the trend. I won't spend a lot of time on this. This is more where we have found some not deficiencies, but some ways we can save dollars for the employee. These are all voluntary benefits. These would be employee paid, but again some opportunities to save dollars for the employee. So question. For the combined cancer and critical illness coverage with the right instruction, what does it So right now what I saw in the enrollment guide is you're offering a separate cancer policy, a separate critical illness policy. It's become more popular and cost-effective to combine those. And and either have a critical illness policy with a cancer rider or a cancer policy with a critical illness rider. So you're not having two separate policies and

022often you're saving you're getting more coverage for less dollars. Thank you. Of course. We talked you know I spent a great deal of time talking about the third-party administrators, those TPAs. I wanted to kind of illustrate you know our traditional carriers like I said are we call them the Bukas. Some third-party administrators are you know Collective Health, Meritain, Maraben. Of course you know if we were to do a RFP of this nature, we would send it out to everyone. We would want to analyze everybody's proposal. And there are also things that are alternative medical plans like Curative, Surest. These are plans that are taking you kind of from a self-funded to more of a level funded fully insured. Their model is more if you get a primary care visit within the first 90 days, your

023you have zero dollars at the doctor for the rest of the year. However, it I I won't lie to you. It's a It's onus on the employees because they're essentially shopping for health care. You know, if you go to this doctor, your copay is 30. If you go to this doctor, it's 50. So, there's a lot more onus on the employee and it's it's it's a drastic change, but these things are coming to the market in an effort to try to save additional dollars. So, all the things we want to look at might not be a great fit, but we want to at least explore. So, the third-party administrator uh will benefit those uh staff members that have critical illness and or cancer cuz that's was one of our in the last couple Yes. >>

024Yes. So, so that that's the beauty of um partnering with a third-party administrator. Um you know, where we're partnered with Blue Cross, they're excellent. We get great discounts. We can't plug and play things. So, if we have a large cancer population, infusion drugs are expensive. We don't want them going anywhere. We want to drive them to say one side of care that is cost-effective for the district and the employee, but their um outcomes are much more successful. That's where we can plug and play some of those point solutions within a TPA where Blue Cross may say no. And that third party also uh their primary doctor, they'll be able to visit or or you know, or they have to go out of the network? No, they would We would still have a a a network

025like a Blue Cross that would drive some of those uh hospital and doctor relationships. Okay. Mr. Newton, may I may I uh speak really quickly? I have questions. Because this is we I had I had a hard time understanding this last time we had a the presentation when uh one of the committee members and I actually see him here today. Thank you for being here, sir. Uh he came up and what I understood is you guys are like consultants, right? Correct. There there was two of you who presented and then the committee also got to hear um third-party uh yet the TPA, the third party's administrator that we have now with and they got to look at the plan that we had currently and kind of like adjust the plan to see how we could

026save. But what I'm understanding and I was I was uh reading through what are the pros and the cons and the similarities and differences between the TPA and a consultant and a broker and there's just so many levels of that go with this. But can you tell me cuz you guys are consultants, right? >> Correct. So so you can offer you >> You go and find the best deal. You're more strategic. Correct. >> You're you're going to help us as a district if you know we would the district decide to do this. You your your job is to be strategic and help us look for savings and help us look for verbage here and there like contracts you said. And a third party administrator does not do that. They're just They're just the carrier. They're

027just the insurance. >> Correct. Yes. So we're we're So our role would be consultant. Yes, we we think broad picture, strategy, bring the ideas, but we go down to also hear a plan designs, you know, if we change this copay we could garner these savings. So we do all of that from top to bottom where a true third party administrator, and I think that term is interchangeable from a TPA that does maybe voluntary products. That's different from what we're talking about. We're talking about a true third party administrator of medical coverage. So you're overseeing everything making sure that we're getting the best bang. That doesn't mean we we're not going to have Blue Cross Blue Shield. That doesn't mean we're going to get rid of our It's just someone overlooking strategically. Okay. So so there's

028there's a few different types of TPAs. The For example, the TPA that's on the screen is for for essentially the medical portion of it. And it's where we go out when we do the RFP we'll go out and vet a TPA that will essentially rent the network of one of the Bukas, the Blue Crosses, United States, that's that's on the medical side. I I what you're asking for the TPA is essentially a TPA {slash} broker {slash} consultant. They They will, to your point, we're on the consulting side and we'll do more of strategy, contract review, especially on the pharmacy side. But within Gallagher, we have the TPA service essentially wrapped into that, too. So, we offer that as well. We're just labeled as a consulting firm cuz we're more strategic on the medical portion of

029it, as well. So, it's It's all in-house, but you'll get more on the consultative side, saving side, kind of horsepower from our team. I I hope that answered I cuz it it TPAs can be multiple different things. >> Because you don't have anybody doing that for us right now other than Dr. Gantul, right? You're the one that Oh, we do? Yes, we Yeah. consulting through the One Digital. So, they've been working with the employee benefit committee to do the same thing that you were talking about, adjusting the plans and making changes. So, that was what was presented. The work that that the committee did, starting back in October, was looking at all those different How long has One Digital worked with us? Since 2023 when it first came on board. Oh. Our costs have gone

030up 65% from last year to this year. 30% on this. Well, 30% around that on the pharmacy, but on the medical claims, it's about 65%. It's You go from 8 to 13 million. >> Yeah, it's been going up. This year was the year that really was the tipping point. Well, with that See if I can ask my question. So, our costs are up 65% this year compared to last year. What should a broker have caught, when, and what and that could have flagged this earlier? Hm. So, there are a few I'm just going to skip ahead here. Um so, there are a few things that have been happening um with trend. Um I think, you know, a lot of things are at play here, but I think sometimes being upfront with the conversations about what

031is happening helps you prepare for what is coming and how are we going to counteract that. So, we know right after COVID, um you know, a lot of contracts were renegotiated at the carrier level. I You know, Blue Cross is in the news all the time, right? They just They They lost Memorial Hermann in in Houston. Well, they got it back at midnight on Sunday. You know, a lot of that happened and where that push push and pull is, the providers are holding out for more dollars. And so, the carriers are having to settle to keep them in the network, but we knew all this was happening. And so, you know, in the Houston area, we were telling our clients, "Okay, look, this this contract may end. We need to look for alternative care. Do

032we want to move from Memorial Hermann to say Kelsey? Do we want to direct contract?" So, those are the types of things that we know the trends are coming. We can't solve for them all, I'll be very honest. Um I think everyone tries tries their best, but we should be able to use some of that trend data to get ahead of and or start planning for. Um that's one thing we know um GLP-1s. We have taken over a lot of groups that covered them for weight loss. Why in the world would you do that? I know it I know it is an employee feel-good and I understand it has proven outcomes, but at this point it's being approved for more than diabetes. And so, eventually we're going to have to start covering GLP-1s in a

033broader spectrum. Why would we do that earlier? You know, how can we help our members get these cost these these wonderful drugs at a cost savings, but off the plan? So, those are some of the things that we should be preparing for. Um we have a big thing in Texas. We We are one of the five wonderful states that allow free-standing emergency rooms. Um I know in Central Texas and and kind of up, we have a really big trend with free-standing ERs. And not just that they're marketing to the employees, especially when you have fire, police, and teachers. It's a large concentration of people. They're sponsoring um lunches. They're sponsoring physicals for the football team. It's how they're getting in, and so they're establishing themselves as a primary care physician, not charging the employee the

034ER copay, but what is happening is, and I'll just kind of move I don't know if you've heard of the No Surprises Act and the independent dispute resolution. What they're doing now is they're establishing these relationships, and because they are free-standing emergency rooms, and they are coding everything as respiratory and emergent, we are seeing them they'll go to they will they will they will send their bill. Blue Cross will only pay Medicare rate. They will say, "Nope. I don't I don't I'm not going to settle for that." They They go through an independent dispute resolution. They are getting 300 to 500 times what they originally billed for. It's out of control. Um there is not an easy solve right now, um but but how do we count How do we counteract this? How do we

035keep people out of the free-standing ER? We partner with a near-site clinic. We get them back to their primary care physicians. Those are the kinds of things that we know are coming and are here. How do we counteract them? So, those are some of the kind of things that we're doing or would have recommended you do. If that helps. I know that you you you uh you're part of TASB or something like that or We are the We are the awarded consultants that partner with TASB. >> So, how many school districts like in Texas uh do you guys work with? >> Oh, um 45 or so? >> 45. Okay. And you you work with the local uh school districts here in the Valley that are listed here on one of the pages. I I'm I'm

036ahead, so >> Oh, oh, on the benchmarking. No, that was just providing you some benchmarking. >> Okay. Yes. >> Okay. We always like to show you where you are in comparative to where you might be competing for talent. >> Okay. All right. Well, since you mentioned benchmarks, uh if you were our if you were our provider at this time, what specific benchmarks would you hold Blue Cross Blue Shield to and what happens when they miss them? You mean their guarantees? But >> Yeah. So essentially So yeah, so um when Blue Cross when you go through an RFP, we write our RFPs to protect our districts, right? We want If they're going to promise something, I don't want you to say there's a return on your investment. I want you to guarantee there's a return on

037your investment or we get our money back. Um so when we RFP, we we we've put certain terms in there to protect the awarded vendor. We're again making sure those are in the contracts, black and white. There's no way to get out of those. And then we are auditing them. They audit themselves every year. You know they're going to make themselves look good, right? So we audit them as well um to make sure that what they're um putting out as a return on investment is actually what was achieved. Do they let you audit them? They do. All right. >> It's in their contract. They have to. They don't let me put that in their contract. All right. And then I'll just I'll This will be my last one. At renewal, walk us through exactly what

038triggers your recommendation to go through go to market versus stay with the incumbent. I'm sorry, can you repeat that? At renewal, walk us through uh what exactly triggers your recommendation to go to market versus stay with the incumbent. Sure. So typically, and I don't know and I apologize, I don't know where you are in your contract with the Blue Cross. We're towards the end. I'm sorry? We're towards the end. >> We're toward the end? Okay. >> This year is a RFP. Okay. Oh, perfect. That's perfect. Um so typically, I wouldn't automatically recommend RFPing, right? Because often times we when When go out to market, we um negotiate um um rebates, we negotiate um wellness credits, admin credits, whatever that is. And sometimes if we go out too early, we're subject to pay those back and

039or we lose out on rebates. And rebates are real dollars on the pharmacy side. Now, we're moving away from that structure, but we want to be cognizant of is it worth our move, right? First of all, are you happy? Are you unhappy? Could we try to renegotiate some terms to extend um in an RFP year, I always recommend going out. There's always something out there that we can pick up. Whether it's moving to a something radical like a a TPA, they're coming back. Um whether it's adding something into our existing Blue Cross contract, you always want to look at the market at Some like every 5 years, I like every 3 years. So much changes year to year, especially in the volatile trends that we're seeing now. We can't be stagnant. We have to do

040something or we will never get ahead of the trend. And then of course, once we RFP that, then you come back and look at it. Is it worth a move? And who do we want to move to? Is it worth the disruption? Is it um you know, is it only a a dip in the bucket of the much larger, you know, deficit problem? So, we want to look at all all aspects of that. I have three more questions. I don't know if you guys want me to do them or you guys want to ask your question. Yeah, go. Go ahead. Oh, all right. Go ahead. So, we've had a $5.24 million year-over-year increase in just the first 6 months. Before you tell us how you would manage this plan going forward, tell us right now

041based on what you know about our data, what do you think is driving that spike? Um so, I don't have a ton of granular data. Um I can say Let me go back to my key opportunities. I can say just generality what I'm seeing in the market is we are seeing a large cancer prevalence and I know we don't like hearing about COVID but COVID is still impacting us because where we quit going to the doctor we've stayed out of the doctor and so where we were can't catching cancers you know stage one two now we're three four and we're in the the surgical round and it's very very expensive. We've also seen a really large spike in musculoskeletal and mental health. Mhm. And so if I had to venture to guess I'm guessing at

042least two of those are impacting your plan now. And so what do we do about that? Is it musculoskeletal? Is it cancers? And where can we carve out and and drive people you know to the to the right level of service? The other thing we're seeing kind of in the pharmacy world is biosimilars are coming out which which are great because they're a lower cost to say a Humira. But we all anticipated those savings. Well where Humira is now a biosimilar now their sister Stelara is coming out and she's priced way higher and so no one could have anticipated some of the volatility in the pharmacy market and we're all chasing rebates. You know we're basically paying for our services and getting it back. We can't continue to do that. Um you know I think

043some of the legislation recently passed with transparency will help with that but we will not see all the fruits of that labor until 2030 and by that time we potentially will have another uh legislative change so some of that may never come to fruition. So we have to figure out how we're going to um combat those two. Um but there's lots of things you can do with pharmacy. It's changing the formulary. A lot of times we can make changes that impact I know we don't ever want to impact an employee but sometimes we can garner a lot of savings by impacting five employees. We're communicating with them and getting them you know, to the the right level of of treatment and and things like that. >> Well, that kind of segues into my next question.

044Okay. Our pharmacy costs went from 3.59 million to 5.1 million over year over year, a 42% increase. What is your approach to pharmacy better benefit manager selection and management and how quickly can a new PBM arrangement affect cost? Sure. Okay, that's a great question. So, a lot of change in the pharmacy space and I actually have a pharmacy trend slide here somewhere in in here. I'll let you read about that later, but where we are again seeing, you know, the big players, CVS, Express Scripts, they're all about we're going to get you these large rebates. Well, that's all great in nature, but it's hard to budget for rebates because they come in 180 days after the close of the quarter. So, it doesn't help us with our cash flow. Um there and and and there's

045no driver to making sure that the medication is correct for the employee or the or that member. Um we so we're seeing a shift to some of these smaller boutique PBMs that typically did not have the leverage in the market like the big CVS's and Prime. They now have the same exact contracts, but their value add is member engagement. They're not so worried about the rebates. They're not a big, you know, churning. They don't own a retail pharmacy. You know, CVS owns CVS, uh you know, Prime. They all have their own. These do not. They're agnostic of where you go. HEB or they don't care. And so, they're more focused on the employee engagement and outcomes and following that, getting nurses engaged, uh making sure they're not taking too many medications, um you know, all

046of those things and where we're not expecting those big rebate dollars on the end, what we're seeing is the discounts are much deeper. So, we're saving those dollars day one. We're seeing it on our claims. There's also another model that's newer where pharmacy were were seeing to where we are starting to negotiate contracts where I want to see every month I want a per member per month rate of $40. You can budget with that. There's no other spend. No matter what happens, that is our rate. Now, you're not going to get your rebates, but you can budget, and sometimes it's much more advantageous to go that way. Now, my last question. So, uh part of this discussion we've been told that if we go to the broker route that we lose control of our plan.

047And so, I want to ask you, what control do we lose? What do we still have oversight over? Or what does that look like if we were to switch to this type of uh program? Um so, with us, I mean, it it's your plan. You have absolutely control. We are here to consult you, help you, walk walk hand in hand through the entire process from picking a vendor to deciding how much we're going to um contribute as a district or how much we're going to pass on to the employee, what our plan design looks like, how we're going to communicate it, how we're going to set up open enrollment. You are self-funded. You have 100% control of your plan. You should never be surprised in your financials. We will supply financials monthly. Um we can

048tailor some of those reports so they are easily digestible. Um but I think the the short answer is you have complete control. We can get very creative, or we can stay very stagnant of what we're doing. We're going to do what is best. We're going to make recommendations. You don't have to take them. You still have 100% control of your plan. So, that's what I would like to know. Uh you know, just listening to you say all these recommendations and things I I it's very interesting to see to hear how we can save or find benefits or solutions to our problems. Um but my question is related to Dr. Gantt Dr. Gantt. Since you said we have one digital, what was there uh you know how she's giving us, you know, recommendations or maybe strategies?

049We obviously went way over our what we thought we were. So, what were what were their recommendations or strategies and to to to say >> So, right now we are looking at what they called a direct care, right? So, we're looking at Frontier. Frontier direct care would be a near site um I guess provider. There there would be a primary care provider that actually has contracts or direct contracts with different hospitals, different uh uh imaging centers, different labs where if they were going to be billing a $500 expense to um the insurance, we would end up paying whatever that clinic pays plus a 10%. So, instead of play paying, you know, exorbitant amounts, we would work out that direct care. So, that's something that we were looking at. We haven't gotten into that part yet,

050but that would be one. The other thing that we were we were doing with the One Digital was securing the funding first because if we are looking at banking on the savings without having the proper funding for the for the plan, first we would fund the plan and then we move to the second stage, which is securing those uh opportunities like they were talking about. Uh so, they they talked about moving um the levers. Well, that's what the employee benefit committee has been doing. Uh we've been looking at that now for a little while. Uh really since October is when we started. I know we had a couple of board members that were part of those discussions. So, when we're looking at those adjustments, when we're talking about the plan design, they've worked very hard

051to come up with compromises and and figured out where we're we're at. I know that when we do end up going with a um consultant they're going to take a look probably, I would hope that you're going to take a look at the work that the committee's already done and can take those into consideration, but also I would imagine that you're going to also come up with your own uh different options that we can take a look at and move forward with. So, what what I'm hearing is we haven't yet, but we are thinking about maybe using a clinic. We haven't yet, but we're thinking about maybe Correct, because >> But that's already Well, when you're talking about When you're talking about contracting with that clinic, now you're looking at a return on investment. Uh

052it is a $3.3 million spend that we're hoping is going to at least save us $3.3 million, so we stay within that funding source of 26 million. But we're also looking that we may end up having additional savings to that. So, in previous years, we haven't had that need. We were hitting our marks. In fact, this time last year, everything indicated where we were where we're supposed to be. >> Right. I know I know that you took You had a question. You said, "Why did we go up $1.3 million?" Right? For this this school year, this 25-26 >> Well, we went up from >> the fund balance what 2 million? >> Well, we went up $1.3 million in funding, right? Because we had a 6% increase. Uh Now, your question was, "Where did that 1.3

053or why did we move 1.3?" Well, 1.3 was what we were short the previous year into that policy year. The the the the Google slide that I sent cuz the last time we had gotten um a self uh update on the self-insured the self-funded insurance, I had to go through every month on BoardDocs. The last one I found was in December. We didn't get one January, February, or March. And I saw that it said there we had to add 1.2 million from our health for health from the fund balance in 20 in 24-25. And I thought, "Hmm, I didn't even know that. I don't remember hearing that we added 1.2 million from the fund balance for the for health. That was last year. We may be talking about different things, but I know that we

054increased from 21.5 million to 22.8 million as far as the funding levels. That the contributions that we were looking at increased by 6% across the board. Let me read exactly what you guys gave us. It says here um 1.3 million additional funds were budgeted for 25-26, yes, compared to the previous year. And it says here on the bottom, the 24-25 health insurance budget had a deficit of 1.2 million that we paid from fund balance. Yes, so those are >> So we already knew. So right, and that's why instead of um looking at a 1.2 million dollar for this coming year, it was increased. Right. >> We we were we were planning for a 1.3 million dollar we said we were short. We know that, so let's increase it so that we can make up that

055difference. So you'll notice that 1.2 and 1.3 kind of cancel each other out. >> I I get all that. I get it. What I'm What I'm saying is if we already saw this and we already knew this from before, where was One Digital or whoever's consulting us to tell us this is what we need to do. We can't be just thinking about a clinic now. That's the way I'm feeling. You know, as a board we have to take action and do something about it, not just think about it. Why didn't we do this earlier? Earlier? This time last year, we were hitting all our marks. We were not short. We were actually on track to break even with a level of funding that we had in place. We increased it by 1.3 million dollars at

056the end um It was a good thing that we increased that to make up that difference because as you saw that fiscal year we were short 1.2. So this year we were funded at 1.3 higher than we were last year. And by last year I mean policy year. When we make our adjustments, it goes from September through August. So looking looking at where we were at and we can only make decisions based on the information that we have. >> Mhm. Right now, we know that we're going to be short at the end of this year, but if you go back in time, we were looking at this time last year, we were hitting all our marks. The difference has started in September, October, and that's when I sounded the alarm and said, "Hey, wait a

057minute, we're spending a lot more that's actually coming in. That funding isn't going to get us to where we need to be." But, when we planned for that funding, it was. What I'm confused about is this sentence right here on my slide that I was given that says, "The 24-25 health insurance budget had a deficit of 1.2 million that we paid from fund balance." That's where my question is. You said in September that but that was already 20 2025 September. This is from the year before. Mhm. Uh that was a transfer in that we made at fiscal year end once the the rest of the lag reports came in up to fiscal year June 30. Like I think we were still receiving and I actually got this information from our finance team this afternoon. Uh

058the the lag report that we received, I think even up to August was still had claims for June 30. And so, those claims did get booked into previous fiscal year as the operating transfer back into the to last year's um uh finances. So, that 1.2 million was a transfer I'm sorry, transfer out From our fund balance. Correct. Yes. So, the first trick is to fund it where it needs to be. Then, we look, in my opinion, look for opportunities for savings. Sometimes, you're going to need to invest money to find a savings. At that time, we didn't need it. It was on It was on the um uh radar. I've been Mhm. talking with Frontier uh direct care, I think since 2023-24. It's been in the works, but we we didn't need it to take

059the risk of not getting that ROI or return on investment. It's going to cost the district $3.3 million to contract with that clinic. Mhm. Mhm. So the transparency and trust is very important when and we would just talked about it last month or when we had our last workshop. When I have my my budget sheet that we get as as board members every month and we're looking at the the fund balance. There is like I said last last time, there was no item that says we took away $1.2 million from the fund balance to give to insurance and this was the the budget for the insurance. Nothing is there. And I just don't feel like it's very transparent for us because when I read this I said, "Wait a minute. You know, who's guiding us

060to to to to look at this or understand this?" I feel very lost as a board member seeing this. Yeah. I think um Well, I don't know how best to put this, but the $24.5 million that you had a negative in last year, part of that was that one point something that one point $2 million that you're talking about. It none of that was disclosed to us going into 25-26. That's why you didn't see it. Usually it typically would be under others. I think it would be listed under the other category, Ms. Rodriguez, right? Yes, it's at the bottom of the financials in the audit book. Right. >> So it is you'll see it on the transfer So So you didn't see it because well, none of that was shown. The salaries weren't shown, the

061insurance negative wasn't shown, and all those other things. That's why it wasn't on that line item. That's why you didn't see it at the bottom during that during that expenditure report. That's why I just wanted to jump in and clarify that. That's why she's asking. Yeah, I'm okay. Well, sounds good. Do you have any other questions? Any additional questions I can address? I think we've kind of gone through most of the presentation. Mhm. >> I think I would probably end on a potential timeline. I know the RFP question was asked. Um, you know, we should have started a long while ago. It It's a large undertaking, but we can do it. We feel confident that it can be done. It will be very very quick, um, but I I get the feeling that everyone is

062rallying behind this initiative um, with the benefits committee and and Dr. Candu and uh I think it's a very doable um, for a 91 effective date. Well, you know what? Let me ask you one last question. So, the committee has recommended we go straight to TPA RFP without a broker. Make the quick Make the case for why that is the wrong sequence. You're going to get a response that you're not necessarily going to understand. There's a lot of layers to a TPA. You have to make sure you have the right fit. What do they offer? Um, you have to have someone that can analyze the claim savings, the member impact, um, how you're going to communicate it, what point solutions you need to trigger your large cost drivers, whether it's cancer, whether it's, you know,

063ER and we need to partner with a frontier. How are we going to get those claims fed into the system, etc. There's a lot of moving parts to a TPA. Let alone just thinking about moving to an Aetna or a Blue Cross, you know, renegotiating Blue Cross. That That's a huge undertaking in its own. This bumps it up a whole 'nother level. Okay. Thank you. You're welcome. You just reminded me of something. When we were I went on to the district website to the risk management department and I was looking at the 403B, you know, the plan or the the the paperwork and who we turn TIA Is it TPA? TSA? What is it? Um, who do we have? D TSA, CGE, or something like that? Whoever gets the paperwork from us, right? Yes. They

064get that paperwork from the employee who figures out what their contribution is, whatever they pick. And then from there, so you can explain. From there it goes to the insurance agent, or how does that work? No, National Benefit Services, NBS. No, it's TS, it's on your district website, on on the risk management 403b, who's your 403b? TSACG? TSACG, I think so. Oh. That's that's a 403b. That's something different? Something Oh, okay. I was going to say, is there a difference between cuz see this is so confusing, like I wanted to know what what How many layers or levels of people do we Is it better to get to the best solution and price? Okay, that's something totally different. Retirement. Okay. No, no, it's not TCG though. Let me look. Any final questions? Um well, you

065have to a lot to process. Does anybody I guess come back to me after you all ask yours. Gus Sedda, any final questions? A lot of good info, good information. How many schools do you service our size? 6A. I'm a 6A school. Mhm. Yeah. Yeah, most are 5A or 6A. They're on the larger scale. But we do have, you know, some smaller that are still fully insured. Mr. Castillo, I know you had several questions, I think. I already asked them. Okay. The only thing is, for the committee members that are here, have you heard anything different than A whole lot different. So, what do you think now? Yes, I feel the same as you guys, a whole lot different probably from what you were and a lot of questions still. But, um Well. I think

066we're all in the same Well, what questions do you have? Well, because we know we're not going the traditional route, let's say we let's say we go out for RFP, then that's when we go back to our we are right now. We can talk about the machine. Going a broker route, your typical 5A, 6A school, what networks are you using? Are you using a Blue Cross Blue Shield? Are you using the United Healthcare? Very true. Yeah, so um so when you go out for an RFP, even just a Blue Cross and what we call the Bucas, you want to find the right fit for the district. You want to find the right fit for where your employees are buying their care. So you don't want to move to say, I'm just picking on Aetna. You

067don't want to move to Aetna if you're going to have um a fallout of who they're seeking care from. So you want to be very careful, but you also have to be mindful of what discounts and programs they offer to achieve savings for not only for the district, because if the district isn't saving money, we can't pass those savings on to the employees. So it'd be like getting to know our employees, what hospitals, what doctors they use, uh making it really tailored, customized to what we need, and what who provides best. Correct. And and if I can just maybe um clarify, when I say go out to RFP, yes, we want to look at TPAs very heavily. We want to take them seriously, but we don't want to forget to also ask for the traditional

068arrangement that you're in today, because we might be able to find some savings in a carrier switch that could significantly save, which wouldn't be as much of a I don't want to say burden, but um but I think you know, I think that's a short-term play. We're going to have to be more strategic. We're going to have to get something in place that's going to be able to hopefully sustain itself. And and that's kind of moving to toward that true TPA um model where we can pick and choose and plug and play. I Well, I have some questions. Oh. Well, you know where I stand with this. Yeah. Ultimately, whatever we decide on, it's got to be what's the best interest of our staff. Of course. Yes. I mean, I just came back from a

069conference where we heard some dynamic very successful people who had teachers make a difference in their life. Mhm. For that reason, it's important to make sure that we get what we need. Right. I know that money is is is is is is an issue, and I've said it before. Cuz my my dad, who was a physician for many years, told me whatever you invest or whatever you pay is going to be worth it because when you need it, you're going to have it. Right. Absolutely. >> And it's better to have it and not need it than to need it and not have it. Yeah. But ultimately it's what we're going to do for them that's going to make their lifestyle more comfortable so that they can be a factor in what we're supposed to be

070doing is taking care of our youngsters and getting them ready for what's out there in in the world they're going to be exposed to. So. Yeah. Yeah, no, and I want to be very clear. I'm not here to place products. I'm not selling a product. I'm here to find the best solution for the district and your employees. Retr- you know, recruit, retain, you know, try to keep the costs as low as possible, but my my job here is to be strategic and figure out how we can fix something that is trend level. We're never going to be able to keep up with, right? But I'm not not trying to say, you know, who we should go with or I am carrier agnostic. Okay. Yeah. I'm going to base my decision on what Yep. the ones

071who do more of the research and have more cuz you start throwing numbers at me and letters at me and I don't know. All I know is when I go to the doctor, is this going to be paid for? Right. Mhm. And you guys are the experts you know, the consultants. You're the experts at contracts. You're the experts at getting to the employees. You're the experts at It's a whole system. >> Right. That's our job to help. I had a question. I have a few. Okay. Does that work for anybody? So, I think that I just want to get clarification. Oh no not at all. No, no we would we would analyze everything for you and then bring you the results. This is what Etna would would offer. This is what Blue Cross is United.

072This is what Curative would look like and you as the benefit committee I would assume as it works in most most districts is your recommendation then goes to the board with our help. We're going to help you analyze that data and figure out what is best but you have absolute say in who you go with and and what you do. >> So we could just see all the carriers and compare prices >> we would anything that came in and and was an accepted bid I have to show you. So Yeah, we we would do it all. So I have a question. You guys My question here is I've always look and and and and this is nothing against your company and I think it's a great presentation the size everything you guys offer the services

073and whatnot but I've always been a supporter of open market. Okay, I really believe in it. The only thing here that I hear is that I'm losing that that leverage and that ability because in the past since I've been here we we put it out to RFP and then you have all these these local these agencies. I guess they're the ones that bring it, right? We have these insurance agents and or just agencies and brokers here in the valley that you have that are that would go get the policies and they'd all come back and compete. Everybody brings their different brands and and then those agents I guess speculate and deal with it create criterias for as far as what the costs are going to be and just pharmacy for instance. I can charge you

074$2 per script or I can charge you four, right? So those type of things and I think that so what I'm hearing here is it's a great company. I think you offer great services as far as evaluation maybe and reviewing but I just don't see how losing the ability will because you're going to and I'm not saying I don't trust you, but I don't don't even know you, right? But you're going to go out and you're going to talk to the company then they come back and then bring back what they offer versus every agent like in the past where you had all these agents going out there and battling for Westaco's business, right? And they all had to go out there and come back and then submit and you got a lot of uh

075good local ones as well, too. I don't know you all are based locally in the valley, too? >> And and so they so I I will >> Oh, no, I know you are. I know you are. I I will tell you that they're going They're going to the carriers just like I would, but they're packaging it and bringing it back to you. I'm taking the middleman out of that. I'm just bringing it direct from the market. So That's it. So we're still getting those bids that they would. They're just They are going to a Blue Cross and getting a bid and then bringing it to you. >> But like terms, cost, and fees, and things like that? >> We Yeah, we do all We negotiate all that. >> See, cuz my thing is I've been

076here in the past and we had brokers in the past. And then I was it was me. I Me and some others, we had pushed to remove that system in the past because and then we saw changes as far as like the per per employee cost for when it was like instead of it being $10 a month same for your medical then they dropped it to five or four etc. And you saw that difference in savings when when we made that switch. So it's kind of like going back to something that I already had a bad bad experience with and so losing leverage. I'm looking at leverage here. How does How does How does I'd rather have multiple people go out there and shop for me and try to get me the best price versus

077like one. And then because then how do I guarantee that like because when you bring it at the end of the day it sounds like it's going to be the no wall sale, right? With a broker system. This is This is the nine companies we got responses from and this is kind of the rates, fees, etc. etc. etc. But will we still be able to go back and say we want this one, but we want them to renegotiate the this cost and this cost etc. >> have the best and final process for that reason. And then and then we wouldn't need to even worry about agents and because it would just be all one company. So, we wouldn't have any agents anymore. >> Yeah. And I think the difference I I guess I'm getting to

078your question is yeah, you have people just throwing your RFP and throwing your products. In this instance, we're actually going to be talking to your committee, knowing exactly what you want instead of just throwing you a product. So, when we're going out to the market, we know exactly what you want and we're getting what you want instead of just throwing you all these numbers and all these different products, high deductibles, low deductibles, HMOs. This way we know exactly what you want, so we go to the market, it's already clear to the committee of what we what they want and then they'll be presenting that to you instead of it being blind cuz you're saying you just go to a market like what you typically do with your broker, they just go to the market and

079bring it back to you. But in this instance, we're working with your committee, we're working with your staff on the front end to get to know what they exactly what they want and then bring that back to you at the end of the day. Mhm. I think that's the biggest difference. Uh are we taking anything away? No, we're not. I think uh we're bringing >> the same though. >> It we're bringing you the same thing. We're going to the market, you know, and with the leverage that that Gallagher has, we're fighting for that to bring those uh better rates to you at the end of the day. Well, then like so once you once a policy selected, our staff then knows okay, I can still go to my local this office and get service there.

080>> Correct. And that's part of the evaluation. I think uh coach uh Sedna, you asked, you know, what are these big districts uh what carriers are getting? Well, you know, in in El Paso, they have Aetna in Central Texas, we have United Healthcare, Cigna. In Austin, they have Aetna. In the Valley, it's strong with Blue Cross. So, depending on the region and so that's something that's part of the evaluation that we do when we're going to the market and looking at your claims, that we get to see where your what doctors are your employees are going to, what hospitals, what medication and then from there we're able to pick a and select a plan at that time. But they wouldn't be So, I guess they would So, this whole process would eliminate currently what's the

081structure that we have now. Like as far as like the offices like they would go to Gallagher's office and they got a problem because that's the agent or how does that work? >> Yeah, they they'll be >> they had like multiple agents and things like that. Now it won't be that. It would be Gallagher would be we would have a dedicated account manager, you have a call center, and then you get the you get me on the side as well. So I've been with with that because in my my role is very my role is very the bonus the bonus right now it's very unique that we had additional customer service. So we're they're additional to Gallagher to help with any kind of question you guys have as well. So we still bring that local

082presence at the same time. Thank you for the presentation and then I mean yeah we things we have to think about. Thank you. Great, thank you so much. Do you have any other questions or All right, we're we have another presenter right? Do we need to stick around or just no we're good. You're good. Thank you for your time. Thank you guys. Okay, we'll get the other presenter. This one was Gallagher right? Well there's another company? Yes. Okay. Who basically does that? This thing is still running right? It's still on? Yes. Yes. Okay, never mind. And and this Who's this company? Who's this presenter? Hagen button. I'm I'm not the one questions that I have so I'll ask him the same one. All right, next we're going to have a Gil Gonzalez with a Hagen

083button present. Okay. Good evening ladies and gentlemen. Honorable board members, superintendent, it's a pleasure to be here. My name is Gilbert Gonzalez. Um I should start by saying I never wanted to be an insurance agent. I thought of them as used car salesmen. Other people have heard this story. I've never thought I would be in this position, be selling insurance or protecting people this way, but when I first started my life, I joined the military when I was 17. Um I lost my dad to a drunk driver when I was 11. Um when I was in the military, I lost my mom lost her ability to work. And then my little sister died of cancer. Um I come to you with passion. I come with you with life experiences that have made me what I

084am today. Everything I bring to you is is a determination and tenacity to do right. We just In our company, Higginbotham, we just don't do wrong. We We strive to do our very best to bring the very best to you. Um I'm very proud of Weslaco ISD. I too am from the Valley. I grew up and graduated from PSJA. I'm Soy also Reynosa, so no offense. Okay. I I I take a lot of pride from being from the Valley. Being in Korea and Panama and other foreign places, uh we spoke of our our piece of heaven with an immense sense of pride. Uh my grandfather used to say Okay, and please excuse me for saying this. Que nomas Dios y los güeros saben. When I would ask him challenging questions, I says, "Why is that,

085Dad?" Uh because I lost my father, my grandfather helped raise me. Well, we have changed the way employee benefits are viewed and received. It comes with a lot of love, tenderness, and understanding, and patience. I'll begin by saying that Higginbotham has been in business for a very long time, similar to Weslaco ISD. Um Higginbotham is the leader, not just in the state of Texas, but in the nation. We're ranked number one um by five-star brokerage. We're the 20th largest brokerage in the United States. Uh we only represent 200-plus A-rated carriers. Uh we're very We want to make sure that the financial wealth and health of the organization is there when you need it. Um This is a sampling of our current clientele. Um We are currently representing 14 out of the 20 educational service centers.

086Sometimes it's difficult for people to compete with us because there's very little room for them to to compete with. In the state of Texas, we are currently um we have five 650 clients, plus. Uh right now there's no other organization that's leading the way as Higginbotham public sector. Higginbotham public um is actually uh headquarters in Fort Worth. Here in the Valley, we have um we have an an office in McAllen, Edinburg, and Lyford, and two satellite offices, one in San Benito, and one in Roma. Um Our major enroller population comes from the Rio Grande Valley. So, not only are we bilingual, we're bicultural. We resemble that of of our clients. Our day one services, when we start talking about day one services, it means what is it that we're doing for you? Currently, we are

087consultants for our clients. We go out and we get the very best in medical and voluntary. There's some highlights I've discovered while uh looking into Weslaco ISD. I'll I'll hand them out here shortly. Um Once you acquire Higginbotham public sector, you get two benefits consultants dedicated to Weslaco ISD constantly at any time of the day. You also have two account managers, two customer service reps, two dedicated billing specialists that help ease the the workload from the from your district onto us. When we come in, we contractually take on the responsibility and the liability. We also give you two dedicated benefits technologies. Um part of our relationship with our clients is that we we create comprehensive plan designs. We work We get to know you. We want to know more about you, your short-term, long-term, and

088intermediate goals. We want to know your budget, your objectives. Those are our thoughts constantly. We're constantly uh tapping your employees to make sure that we understand you, that we understand the time that you're in because your marketplace, your environment is constantly evolving. So, we want to help you evolve with it. Uh as you know, there's been some legislative changes here shortly, right? Or this past few months. We want to keep you on track of those uh changes and help you find designs to help you mitigate uh any costs. Uh we improve underwriting guidelines. Because of our size, our leverage, uh we're able to negotiate um underwriting guidelines that protect your employees. For instance, me. You look at me and say, "Okay, doesn't look overweight, but I do have high cholesterol." There's many in in your

089district that have um health issues. We want to protect them. We want to make sure no one's asking them too many questions, and that we are able to bring them into the fold. Cuz once they satisfy the the uh pre-existing condition clause. A pre-existing condition clause, too, is defined as having received medication, advice, diagnosed, or any treatments within a certain time period. That time period is sometimes that we negotiate. Many have a 12 month look back. We we normally negotiate to 3 months, or we we remove them all completely. Our job is to help you understand employee benefits, provide recommendations, and also remove any boundaries that would hesitate to bring in a new carrier or analyze a new carrier to make sure that they're providing the right protection. Um we negotiate these rates. We provide

090rate guarantees. We make sure that you get the lowest rates. Um during enrollment, we have three enrollment phases. In person, which I believe is the best way to communicate, cuz sometimes some of your employees may not verbalize. Uh they may have nonverbal communication. And they may show, "You know what? I don't trust you." Or "I don't like that." And we read the person. Um our employees, when they sit down with their employ- your employees, they're not in there for the sale. We're driving education. We're ensuring that um your employees understand what they're buying. One of my biggest uh gripes when I was growing up, how come no one told my dad about life insurance? How come no one told my mom about disability insurance? How come no one ever educated my little sister about cancer

091insurance or critical illness, hospital indemnity? Um our passion at Higginbotham lies in education. We want to make sure that your employees, your community, even the providers understand what is Weslaco ISD, what are the products found in Weslaco ISD, how can we coexist not just as a community, the providers, right? The dentists, the ophthalmologist, optometrists, the medical doctors, the hospitals, the clinics. We want to make sure we all understanding what you're offering. Um the Benefits Hub, it's a proprietary enrollment system. We don't lease out Seller Rex. We don't lease out any other organization to come in and enroll you. That enrollment plat- platform belongs to us. We provide it to you at no cost. Now, there is a cost associated, but we we pick up that cost. A lot of times people don't understand where all

092these commissions are going to pay, what they're paying for. Well, with us, we make it very transparent. We we pick up a lot of your costs. It's a privilege to be representing Weslaco ISD. Um employee benefit education platform. We have evolved with your community. A lot of us spend a lot of time with the iPhone, iPads, computers, right? We make it very easy. Everything's found in a touch of of your finger to be able to acquire us and the information that we provide. Public sector self-funded center of excellence is what we lead with. Um during our discovery phase, just when I first met Weslaco ISD and I asked Dr. Gantu a few questions, I noticed that you have your medical insurance and your dental um not aligned with your Section 125 with the cafeteria plan.

093That's your where your voluntary benefits are at. Normally, our clientele should be together. Our clients, we migrate either the medical and dental over to the Section 125, but in this case, because of your timeline, um I would recommend if you would hire us, that we create a short plan year for your voluntary benefits cuz they currently are have they have a January 1 plan date. We would make it a short plan year from January 1 to August 31st. And then the year next following, we move on to a September 1st. Now, the medical and the dental are underneath the Section 125 cafeteria plan moving forward from September 1st. I don't know how it got uh disengaged, but in in very simple discovery phase, we noticed that. Why am I concerned about that? Why should you

094be concerned about that? Well, the medical premiums are a very big ticket item, and they should be placed under the Section 125. I mean, if people want to make changes, it's outside. And if you do make changes, uh we have some challenges, right? I I wouldn't want the family members or the employees or the community or yourself to be dealing with that. That would be a recommendation, just in passing. It whether we we acquire you as our client or uh TASB. But I would recommend you do that. It's very easy. I wouldn't recommend you change the cafeteria plan the medical to the cafeteria plan. It's hard. I It's too many moving pieces and it would be a challenge for everyone concerned. Mr. Gonzales, if I may ask you a question really quickly. Um as you

095know, we're over budget, you know, with the insurance. Is it 6 million? Uh why four or is it Did it go higher? Five? Five million? Okay. >> So um we're self-funded, yes. It's like you we have our the employees are putting their money in the bank account and and those the district gives the other half. It's like going to a casino and gambling your money saying, "Hopefully this risk we don't go over, right?" So my question is because this is this is my question to Dr. Ganthu earlier. He says we have somebody else doing One Digital who gives advice and strategies, like what you're giving us right now. Um let's say that we would get kicked in the bottom next year for for next year. If something like that starts happening where you start seeing

096red flags, where you start seeing that the spending is going What would you guys like What is the way that you guys help us to control those costs? >> Well, we're very actively involved. We're meeting with you on a monthly basis, we even bi-weekly. Um we have experts in every single facet of our wheelhouse that's designed to catch and forecast these increases or whether you're staying within budget, or if we notice that you have a high-cost claimants, if you have your uh pharmacy out of whack as well, we find solutions. Uh we are very transparent. We will have a very close relationship with your CFO and your HR department. Our main strength lies in understanding our clients. The only way we can do that is by having an active conversation. Um I will tell you,

097not then I most pelos en la lengua. We're going to give you, and I mean, we have no hairs on our tongue. Please forgive me. My abuelito's still talking to me. That transparency gives you the ability to react immediately. We're catching those errors immediately. When you go to our implementation phase, um I was talking about our evaluation to alternative strategies, we can give you all that. But we capture errors before we begin. W- When we come in, we're looking to see how you do business. Why were you structured that way? We're looking at your contracts. We're looking at your at your current provider. We're asking very challenging questions. Of course, we're polite. My mom take taught me how to be polite, right? Uh these procedures are done You see me here by myself. But when

098our team comes in, you'll see a minimum of eight to 10 people in every meeting. This group I was telling you about earlier, our team in every bi-weekly meeting or every monthly meeting, they attend. They might not contribute anything. They're there listening, but they're listening to little find things that impact the way they can help you. If you're having a billing or reconciliation issue, then we address that immediately. Uh I see a lot of districts uh having um 200 discrepancies on their payroll. And it's like that year, I mean, month after month. When I sit down with our groups and I oversee these groups, maybe five at the most as far as discrepancies. We remove it before they become a problem. When we implement you, day one, we our teams are often running. You're probably

099just going to meet our consultants. You'll see our actuaries. You'll see our medical doctor, Dr. Ritter. You'll see our medical consultants. And then you see me. I oversee everything. I'm just making sure that what promises they they make to you, they keep. And I'm the overseer of your kind of um our team is very proactive in making sure like the section 125 being out of whack, I catch that. If not me, my rest of my team. These uh These administrators, I'm sorry. I moved over here. My team was designed to be um uh being fiscal honest. Very intimate in how you do business. And if we catch something in accounting or something in the way you process your bill, uh electronic data feed, we capture those errors. We capture them before we start enrolling. You

100should see the meeting after meeting that I listen to. And the implementation manager that takes every single um sector or cuz we have a wheelhouse. Every one of those teams is in that meeting. The I step in when it's my turn, but when it's the implementation manager's turn, she steps in and she's asking specific questions, making sure that what we asked in the RFP is found in the benefits up. That it reads correctly. Verbatim. And if it if it's not if it's something I should feel I should jump in and negotiate, I'll come back to Dr. Cantu and says, "Look, the this particular carrier, I can go back and negotiate and strong-arm. I'm going to see if I can get a two-year rate lock or a three-year rate lock. But it's not just me. It's

101Frank Hegeman Hegemanek who would be your medical consultant. He would be the one that would be addressing the medical needs. Everyone has a very detailed focus attention to detail. Dr. Cantu, who do we have doing that for us in one with one digital? Sean Cook. Sean Cook? >> Yes. He does the accounting? Uh he he does the analysis of of our expenditures. The accounting? Yes. So, who does like the the the client services, the representatives? Client services? Like if they have a question and they call they have to call or We do that here. If if they have a question, they'll call us or refer them to Oh. Uh or we will refer them to Blue Cross. Who who finds like he says, "I strong-arm them and I try to get the best." Like who

102who's Is it Sean doing all that? When we're going for RFP, we're getting that's usually me doing baffles and working the uh the different uh deals that need to be worked on. We we also work through Sean. But depending on on you know, the different products. Okay, cuz I'm hearing we have a team who does this and we're specializing and that laser-focused on everything. And then I'm thinking, okay, why didn't we do this already? That's why I'm asking, who's doing this? We do that with One Digital. Cuz obviously we're over budget. They they do have a a whole team of actuaries also. They have, you know, a whole pharmacy team. They So, the services right now that we get with One Digital is really what we do all our shopping out for. Do you have

103I'm I don't know if I can ask this or not right now. Do you have clients right now that are over their budget in insurance? Um Cuz I know that the law there's a lot of legislative, you know, different things going on with the government, but is it something that you're seeing a lot with a lot of districts? We we are. Normally, um it's around 9% on their renewal as an as an increase. Um but we manage them correctly and then we find solutions. But if we see a forecast where there's a high-cost claim, then of course we're going to practice um our procedures to laser some of them out and negotiate. Um we will tell the school sometimes it's time for you to leave a particular carrier. Sometimes your employees or your community or

104your board, your leadership, don't want to do that. And again, no tengo pelos en la lengua. I have no hairs on my tongue. I'm just going to tell you how it is, but you need to hear the good, the bad, and the ugly. Sometimes you don't want to believe in the ugly and you don't listen to our recommendations. When you don't listen to our recommendations, yes, that happens. >> And that's the reason why as a board member, I really I wanted to hear the good, the bad, and the ugly because if we're over budget here, then guess what? We can't give stipends to the um teachers anymore. We got to take away supplies or things from the kids from their classroom. It's all interconnected. So, that's why I'm I'm asking um There's been a lot

105of school districts who have opted out of being self-funded. And many are jumping into TRS. We're doing feasibility studies for for schools who are wanting to leave TRS. So, we've seen every single combination. Again, you won't have another organization here that does what we do. We are a true one-stop shop. We're the leaders in the nation. We're number one ranked. Normally, they don't select us, and I'm going to say it. Please forgive me. I Look, I get in trouble a lot with my wife and my mom cuz I I tell the truth. And they said, "Man, we're going to wash your mouth with soap." The only The only reason why we lose business is politics. And I'm going to say that. I I don't want to get myself in trouble, either. I don't want it

106to be about local politics because I want to take care of you. And I get that. I I mean, I don't care. I don't care if I don't get reelected anyway. Whatever. I just want to take care of the money here in the district. And if it means we might not you we might or we might not, who knows, use the local people, let's just get the best value for our our The luxury that you have today is I am local. But you need only one. When you include four, five agents, uh that strength that we provide gets diluted. Remember, a lot of the services that we provide come at no cost if we are the one. But when you have four, five agents, it gets diluted. So, a lot of the strength that should

107have come back because it's going to separate organizations, gets diluted. And please forgive me for saying that. In our clientele, we come in and we are the one. We're the ones who are handling a one-stop shop. I can offer you property and casualty, HR services, cybersecurity. My team was supposed to be here, and I apologize they couldn't make the travel. They their flight was canceled. But I was supposed to have a full team. I know you're having some issues with fishing emails, right? Spear fishing, is that what you call it, Dr. Cantu? It can that technology, we could help you with that, too. We're a one-stop shop. Higginbotham is massive. Higginbotham public sector that I represent, we're the boutique of Higginbotham. We're the experts in medical voluntary employee benefits. So, we bring that to you.

108Um This next slide is an illustration of how the medical costs have been going through the past few years have been rising. It And it's because of rare illnesses. This next page, um is another uh illustration of I'm sorry. My fingers are fat. Um This is another illustration how the cost of healthcare has been rising over the years. You need somebody like us to be on top of this. The cost of leave if the we We at Higginbotham public sector have to evolve with you. We have to show you where you need to make a turn, a left turn, or a right right turn. We have to be in a very heated conversation with all of you in this room. The insurance committee mainly cuz they're the ones who feel it. They're the ones who

109are the their teachers are talking to them. I share this only because um the market has been changing. A lot of these market challenges are making your cost go up if you don't have a solution. And if you if you've been with a certain carrier for very long, remember that carrier is in it for a profit. You have to understand that if they if if they had a loss last year and the year previously, they're going to want to make sure they make up for that loss in the future. So many a times when I sit down with a district who's hurting, I I tell them it's time to move. Go to a safe harbor for 1 year because once you accept the rates and the renewal the way they provided them to you, if

110you don't have us negotiating for you, guess what? That is your new floor. If your floor was down here and they offered you a 20% or 18% rate increase, you take it? Guess what? That's your new floor. What we would like to do sometimes is offer you an alternative. Let us find a solution for you. And that doesn't mean changing our employees. They like Blue Cross Blue Shield, they keep Blue Cross Blue Shield. >> It's just you negotiating different Yes, from the get-go. And I know some your timeline right now, when I was looking at it, is very short. We normally look back 6 months prior to the effective date. You're in September 1st effective date. Now do the reverse engineering. Where are we right now? Mid Tax time is right around the corner, right?

111So Mhm. That's a very short time period. If you were to hire us, we would want to start immediately negotiating and finding everything about your contracts. Um The district needs a lot of insight that we can provide. We can provide you practice practical strategies that you might not have employed. We don't know that until we come in, until we understand with your people, sitting down with them, immediately, asking very challenging questions. Um We need to make sure they're tailored to fit your solution, because if you're already in the hole right now, how do we get you out? Um Let me catch up. Um Our self-funding has not started and then forget about it. Going back to you, ma'am. Um We will meet with you I would recommend bi-weekly until we get a good feel for

112where you're at and how you're going. But you're definitely going to see us once a month. We're going to be providing um conversation with Dr. Cantu actively. And when you involve many different carriers like TASB and Gallagher, you have separate elements. With us, it's just one. One line with many experts. And they're all on that same path to help you. Um We have built a specialty practice dedicated to helping districts across the state of Texas. I would like to say we are the second largest provider of of medical insurance underneath TRS medical because of our size. Uh that wheelhouse I was telling you about um comes with strategic account management for self-funding. It's led by a medical team that only focuses on medical team. All the other pieces that you see there, we these are

113all other teams that are working together to find solutions for you. Uh when it comes to uh clinical cost management, we have a doctor rater who has a team that looks at high-cost claimants. That's looking at hospital stays and how much it costs, make sure that we're providing the best health care, but at the same time, are these hospitals taking advantage of our plan and the employee? We want to make sure that we treat our our Blue Cross Blue Shield or whatever carrier that you wish with respect because they are partners of ours. They're working to find solutions for you. So, we're actively working with them. We have an outreach. Many a times, they give us a lot of attention to detail cuz they look at our book of business and they want our book

114of business. They want us to migrate that business over to them. Um when it comes to pharmacy, we have a hig pharmacy team that's also looking at moving your pharmacy away from your current carrier and making it 100% transparent. And we we estimate around 30% savings in that. Let me let me Yeah, let me stop you real quick. Let me ask my question on that. >> Sure. So, on our pharmacy costs, right? You're you're right on that topic. So, our pharmacy costs went from 3.59 million to 5.1 million from this last year to this year. Mhm. Uh what is your approach to pharma pharmacy benefit manager selection and management and how quickly can a new PVM arrangement affect cost? Uh it immediately. 30% Immediately. Our team was designed to find that those solutions. Uh we've

115been very successful in the past. Our average was around 25 cents per prescription. Many of times we work uh cuz what's affecting you is high is specialty drugs. They're out of control. Right? So, we normally because of our book of business will work with that carrier or or or the producer or the manufacturer of that specialty drug and we work with them. There's certain programs that we know how to find coupons and make it either free or find a solution where we can negotiate a lower price. But, our pharmacy team immediately can around 30% savings. Why can't we do that immediately with what we have right now? We would have to study that and see what we can It's our size, too. I was going to say, is it because you're privileged? Because you're a

116bigger uh We come in maybe not here. Maybe we're not recognized here as well. You know, I like I used to think like lot of clients would come to me because of my personality. It wasn't that. It was our billing and reconciliation. Our reputation for billing reconciliation was better than my personality, better than our customer service. But, each each uh client's a little bit different. But, yes, our our leverage, our size brings a lot of buying power. We have a lot of cooperatives. Going back to 14 out of 20 educational service centers. Okay? Those service centers have cooperatives. You're members of it. The PACE cooperative Allied States cooperative out of Region 19. PACE cooperative is out of Region 20. The Coastal Bend Employee Benefits Cooperative is out of Region 2. These cooperatives are very rich

117in in a lot of these carriers' interests. That leverage is what helps us negotiate better rates, better plan designs, guaranteed issues. Um It so sometimes it's not fair to your current provider. Um I've I've never said anything bad about anybody. I never will. I think just understanding the market, understanding who you have and what's what is out there that as as um as a tool for the district, then you can understand the wealth that we bring. All right, you know, I'm going to go through my list of questions, okay? >> Yes, sir. Yes, sir. So, our costs are up 65% from the year before to this year with respect to our total medical plan. Uh under our current TPA, what should a broker have caught and when that could have flagged this earlier? Say that

118again? So, our costs are up 65% from the previous year under our current TPA. What should a broker have caught when that could have flagged this earlier? Ooh. Immediately. Like I said, we are watching month to month, bi-weekly, bi-weekly. We're keeping track of everything. Uh we're we're creating rate guarantees. We want to make sure we negotiate rate guarantees. If no one's doing that, it it hurts you in the long run. Um we come in. Um I My favorite quote I I I can't believe I'm going to say this. Teddy Roosevelt uh used to say, "I speak softly, but I carry a big stick." Right? That was his claim to fame. Um I I've just thought of another one. Abraham Lincoln once said, "Every man can withstand adversity, but give him power, then you can judge

119their character." The reason why I say it say that is because many a times you sit in a position of power, you can you have so much strength to help choose the right entity or third-party administrator. We are a third-party administrator. We see these costs. We can negotiate these costs from the get-go. We forecast. We have We have underwriters that used to work for Blue Cross Blue Shield that are now with us. And our wellness team, they came from NASA and they are now with us. We have a doctor in staff, Dr. Ritter. We have experts in every facet of the wheel that you see there. We're analyzing every facet of what you are on a month-to-month basis. We meet as like I said, bi-weekly. Keep on hitting that horse. But as a team as

120of consultants, we also have a consultants meeting. And in that consultants meeting, we're talking about innovation. I'm constantly pushing the envelope, but not from an insurance point of view. I'm doing it from what I used to know previous to becoming an insurance agent. I was a military intelligence officer. And I had to know the enemy better than I knew our capabilities. In order for us to survive out in the in this environment, we have to know where uh you're going. How can we project uh a savings or a cost analysis? We do it on a monthly basis. We will tell you We can provide a report quarterly if you want. We'll do that in a heartbeat. In In fact, the more transparency that you ask us to provide, the better you are to provide them

121benefits. I will tell you the benefits that we'll bring are second to none. I had a question. Yes. >> I can piggyback off his real quick. Um Cuz I didn't ask it last time, but he asked last time and I didn't ask. So, like our When you're talking about responsibility right now, like we have three insurance groups that represent our school district, right? >> Yeah. Um what they going to have written in Thomas? So, when you all are talking about who's supposed to do these monthly reports, are you talking about Mr. Cantu or you talking about them or who's? >> These are different. I think he's he's talking about different things because you're talking voluntary products or Thomas or Tegon. Oh, okay. Voluntary products It's something different. >> different than the health and pharmacy. and

122pharmacy. So, this right here is just health pharmacy cuz I know the other one was everything, right? >> It's everything. So, this is everything, too? >> Yes. Part of your categories. So, this will be medical, also? Cuz they the last firm that came was medical, pharmacy, and voluntary. So, this one will also be medical, voluntary, and pharmacy, all three in one? This this Well, what Mr. uh Gonzalez is talking about is a turnkey operation with everything wrapped up for voluntary products, uh health insurance, >> the whole thing. They would they would take care of all of those different aspects. We have health care, pharmacy pharmacy, dental, and then we have voluntary products. >> Like insurance, eye, vision, etc. Cancer, indemnity. Thank you. Just wanted clarification. Thank you. Yes. Now, our because of our size, Mhm.

123we are recognized by the largest insurance carrier by by the name of Chubb. They're the largest in the world, not just the United States, in the world. And they come to us and they ask the leaders, which are us, "What what do you need?" So, we create plans. We're the ones who are leading and like for instance, I'm going take curative. Curative last year wasn't anywhere in the valley. Now it's everywhere. They're hosting uh luncheons and dinners and inviting you to come and learn about curative. But we were the ones that placed them in the state of Texas. We're the innovators. We're the ones who are finding medical plans and and bringing them to the marketplace. And then somebody else runs with it. But it's not for everyone. And sometimes when you feed it to

124every the whole population, it's not good for everyone. It we have to be selective. If it was me and you were all school just different school districts, uh maybe the three of you here on the right would be a fit for curative. But the other four wouldn't. We have to educate the need, be be strategic in how we provide the need. And and going back to the safe harbor, ma'am, that was the reason why I brought them in. I brought them in because there were medical carriers that kept on asking for more and more and more and increasing the price and the and the benefit was going down. And I said, "Man, let me bring in curative." And I brought them in to Cal Allen. I don't know if you looked at the uh references.

125There's one for Cal Allen and one for Los Fresnos. Well, in Cal Allen, I brought in I brought in curative with a 2-year rate guarantee. And they're happy. There's their letter. I did that with understanding that I can always bring them back. What I didn't want them to do was accept the new floor of the renewal as far as a rate increase. Because once they do that, they're locked. And that's them for the rest of their lives. I don't want to do that. So I brought them as a safe harbor. Other people are seeing them as something that maybe we should try. But what's going to happen in the second year, third year? Well, let me ask my question then. There you go. That's kind of Sorry. It kind of segues into that. So, if

126you were a broker at renewal time, walk us through exactly what triggers your recommendation to go to market versus stay with the incumbent. Well, first of all, we're going to we're going to discuss have a very intimate conversation with the with Blue Cross Blue Shield. Right? We want to know what is it that we can help them with. Sometimes when I when I look at the medical and dental over here and the voluntary, I find that disturbing for me. Cuz it shouldn't be separated. I was about to ask you that, sir. I can cuz we're we're going to have an upcoming meeting and and the way that I'm thinking it's going to be worded according it's either we pick um either a consultant or we pick a TPA and then we pick a PBM and

127then we it's all separated, right? So So what the difference is with a consultant, it's all wrapped into one. Pharmacy, everything you said. And the other way, if we don't get a consultant, you have to go one by one. Now we got to pick a pharmacy. Now we got to pick a Blue Cross uh insurance. Is that how it is? No, we pick what they recommend. Well, I um Or Okay. >> recommend you do that. Uh the work's already been done for you by the PACE Cooperative, which you are a member of. They've already done all the work that you need to do. >> you want to pick off Interlocal? Do an Interlocal agreement with the PACE Cooperative. It's it satisfies the purchasing laws of the state of Texas and it removes a lot of

128extra work, a lot of You're already in the hole. Why are you going to spend more money? Exactly. You can turn the key. You're already a member of the Interlocal agreement with the PACE Cooperative. Just bring us in. You can to make the make it action item to approve the interlocal agreement to the PACE cooperative. No, not for your services, for the actual carrier and the PPO. Okay. There is when once we come in, we go out to market for you for all these things, not just the medical, the PBM, um the voluntary, everything from right to left. We take every single benefit and we use that leverage. And then they pick the committee this is who we want, but you bring them all the work done. I'm doing currently doing it for Cal Allen.

129I when I took them out to market, many of the medic the medical carriers will not give you legally a renewal until it was 2 months or 60 days prior to the effective date. Uh because of our actuaries, our team, we're able to forecast where where they're at and then take them out to market early. Because if you draw real close to the effective date, then they're negotiating with pressure on you to make a decision and sometimes making a decision with pressure is not good. It's always good to plan it out and see the forecast way in advance. I You asked earlier, "Can you see this coming?" Yes. We can forecast it right now. Once we get in, we we start to work, we can start forecasting. That's why we have these experts in house.

130Our expertise Mhm. was our methodology of operation thought was to implement a plan that was specific towards Weslaco ISD. My mom taught me a lot with this hand. When she when my dad died, she was the thumb. I was the index finger. She's the same me too. All of you are different, the way you listen, the way you talk, the way you respond. That's the way you are. You're one of these digits. I was the index finger and she said, "You're the one that listens. You're the ones that follows instructions. My sister didn't." Like I was with her. Anyways, I say this is because you cannot compare yourself to other districts. You cannot be comparing yourself to what the industry is is forcing you to conform to. Let us find solutions. But we're going to

131give you the good, bad, and ugly. Oh, so I know you I know you're getting peppered with a bunch of questions right now. But what would trigger your recommendation uh to go to market versus stay with the incumbent? Um if if our conversation with them of course we would immediately be pick up all the data. We request all the data and that data goes to our team. Our team starts analyzing. Just like your current incumbent's analyzing. So now we know exactly what they know. And then they can't lie to us. They can't bluff to us. They We're We're playing cards with them. We know what they're holding cuz we're We did the work, too. This is what stands out to me when you said, "We can already forecast it." Like right now. Because I've been

132hearing we can't we couldn't forecast it. We didn't know. We couldn't assume how high it was going to go. That's what I we've been hearing. So when you're saying you can forecast that? We can hit We can show you when you're going to get hit and when. Cuz we'll give you a Blue Insight report and we'll give you how you're running. What's your experience? What's your your high cost uh Yes, no, but we'll be working with HR department because sometimes in the Blue Insight report it might not give you a specific person's name or identification, but we'll we'll kind of figure out who it is. And then we'll work with with your team and okay, we'll find a solution. And we'll ask Dr. Ritter, "Hey, do you think this person's going to be on for

133more than a year? Is this person retiring? Is this person going on? What are they doing?" We we gather every little bit of information. We want to know some of those van fees going on this. We get into every nook and cranny. But it's not just me. It's our experts. Dr. Ritter, our actuaries, our medical consultants. The whole team is is nosy and snoopy. We want to know what is it that's causing you to be this way. If you're running hot, we'll tell you when you're running hot, whether you're improving, if you're finding solutions. I was just thinking too, you know, we were told that we couldn't even listen to the presentations because we we we were going out for RFP, but then we I remember we had said, "Wait, we are part of the

134interlocal agreement." So, those are things that I I think why me as a board member or anybody else has to tell you guys like, "Hey, wait, we can do this. We do have this agreement. Who's telling us that we can't?" Or who's not being clear with the communication or misunderstanding that we're not getting the full picture. That that's what worries me as a board member cuz the ones who take the heat is us. That we're misspending the money and this and that. I just want to be smart with the money and I want to have a clear picture of everything. I don't want to be told, "You can't hear them and you can't hear him because of this and that." When I want to know that whoever's in charge knows what they're doing. That's what

135I want. That's I want to feel comfortable knowing that. And I can sleep better at night. But yeah, that's that's where I'll end. All right, Gil. And The committee has recommended we go straight to a TPA RFP without a broker. Make the case for why that is the wrong sequence. Um A TPA is a broker in our case. We're the largest 20th largest independent broker in the United States and a TPA. We're all in one. So, when they're making that argument not to do that, I mean, sometimes you've been doing business differently. I don't want to say wrong, but differently for many years that you don't see that we are the choice that you've been missing all these years. But, you haven't been able to approach us or us approach you. And this opportunity, this

136rare opportunity, Dr. Martin Luther would say Dr. Martin Luther King would say, it pains some people to think. I challenge you to think about doing an interlocal agreement and getting the best of both worlds. To be able to have a TPA and a broker that has leverage, significant in size, ranked number one, that's already proven in the state of Texas, because we do have the bulk of the school districts here in the state of Texas. Not only that, we're leading, we're the stewards for 14 out of the 20 educational service centers. Mhm. That was my question. Those were my questions. Thank you, Gil. Any other questions? Mr. Turner or Mr. Losantos? We're good? No, I just I just want a clarification on that and the breakdown and then also um I know where the committee

137stands and whatnot, you know, and that there are staff. And so I've always supported them, just you know, um and also just the fact that just, you know, as far as predictions, like I you know, you hear trustees who said asking Part of the reason why we used to get monthly updates all the time on on our medical and and pharmacy. Do you remember when Dr. Gatou, do you remember the month that you disclosed to us that we were had a negative in pharmacy? In fall? It wasn't in August and it wasn't September. But do you remember exactly what month you were like it was disclosed to us that we had a that we were projected to have a negative? This slide, that was the last present. The last last presented was in December. Right.

138And then we I believe we did one in September when we closed the the policy. Mhm. So it was December, the last one? December was the last one. Yes. Yeah, but but it used to be monthly, you know what I mean? And so >> Yes. So that's what I'm saying. That's an internal breakdown, right? Like that we we didn't get those numbers. I understand that. And as far as predictions on like I hear everybody everybody's going to say the same thing, right? I know you're here for the business and whatnot and you're very impressive as well as a company presentation, your resume and background. Thank you extremely. Um but also like on predictions, like I understand that predictions are made based off of staff, staff's health, you know, age groups and health and you already

139know that we currently have staff right now that are that are suffering probably the biggest challenge that anybody could face, right? And some of our staff out there. And and we pray for them and God bless them. Um I I'm just think I I just want to thank you for the presentation. I wish it was sooner. Okay? Because like I said, I I I told my fellow trustees too and the administration, I don't like doing things in the 11th hour. And we got here. Yeah. But, you know, thank you for the presentation. I know You know, have multiple options. You know, speaking to my trustees as well, we have the committee's recommendation, we got this this other option and and um you know, I just think that that's something I guess for closing closing comments

140I'll I'll kind of save my last comment for that. I'll let everybody else talk and ask you questions, sir. We can help you correct a lot of the things that I see so far. We can create a short plan year for your voluntary, move you to a 91. That would be my first step. Right. >> Like that. We would handle all the plan documents. We would do everything for you. Mhm. At the end of the day, our implementation phase is to make sure that we don't miss anything. We have an implementation manager designed just to connect all the everything together. Right. Put everything back together. And um you will see significant savings. Right. I have delivered uh in the past few years uh on the voluntary alone between 25 to 20% in savings. Um I

141get um I'm going this whole week I'm going to board meetings for for school districts that are adopting us. Mhm. And we find a lot of errors. Sometimes it's not the fault of the school district. >> Mhm. It's because one time when I asked a particular business manager, "Do you guys have FSAs?" and they told me "They haven't made their way down here yet." I was like, "Okay." So, my tongue has been shortening a little bit at a time cuz I've been biting it. But, there's a lot of challenges based on the people that you hire. Mhm. Make sure that they're qualified. Mhm. Make sure I have three decades of experience. I hate saying that and then looking in a mirror cuz I can't believe where where all the years went. But, our passion at

142Higginbotham Public Sector is driven to help you. Is driven to correct things. Is We have a Our retention of our clients is 97%. We just don't lose clients. Once you acquire us, you know. What is the I have another question that came to me right now. >> Sure. What is the difference between that that other company that you said that he's bringing up? I forgot their name. What company is Which one? Oh, the He's bringing up some company asking them what they do and he's asking you the question. Same company. One digital solutions. Who are they and what do they do? What are their consultants. We brought them on when I first came on board. Mhm. Uh we didn't have So, uh One Digital are current consultants. We brought them on when we were doing

143the first analysis. Uh when I first came on board in 2023 in May, we were actually also bringing the recommendation of that first uh RFP that had gone out for the health care Mhm. the the pharmacy benefits, the We were moving away from Mariah at the time. You remember that we were with Mariah? So So, all of that process was the same process that we wanted to get started this time. One Digital has been our consultant since that time. Okay. And And are they the same as Are they completely different than this this a whole different consultant firm? >> Uh we we it's completely different, but we're Yeah, this is actually insurance brokerage, correct? Right. I think what And I think you touched on it when you when you talked about different models of how

144to do things. At one time we did have a 100% you know, turnkey operation. They came in. They presented everything. They worked with the employee benefit committee. They brought the suggestions. Um and I think the board moved away from that and expected more from the person in the position, less leaning on the turnkey operation, but they still had the need for a consultant. And And I had a need for a consultant at that time. Right. And even now, right? So When when I need an expert to, you know, lean on, "Hey, what's going on here? What do you That's who I have. It's not a turnkey operation. They don't they don't come in and say, "We want these people or we're suggesting these things." But they do take a look at They have actuaries that

145take a look at everything that we've been doing. Okay. Thanks for the clarification. Yes, sir. Also, too, in my 30 years I've never seen a perfect RFP. If you allow us to do it then you'll get close to it. Cuz we negotiate. When you go out for an RFP by yourselves there's a lot of glue that gets taken out. When we come in, we put the glue in to keep it all together. And you commented that the main office is in Fort Worth, but you all have an office here in McAllen. We have a an office in McAllen and Edinburg, Lyford, a satellite satellite office in San Benito, and in Roma. Okay. But I also have an office, two of them, in Corpus Christi, one in region two. Oh, region two. Okay. Any final questions?

146I would just like to know that that the committee's here if the first time they heard them if you have any other follow-up questions right now. Coming up over here. Really quick, that Okay. presentations that we're getting today Thank you. Okay, I just wanted to say that the presentations that we got are not similar to the presentations we're hearing today. So, one of my concerns, and I am going to direct it to Mr. Gonzalez, because I asked him this at the meeting when we were together, right? I didn't vote for this because one of my questions was, "Okay, well, what do we you to stick to, like Blue Cross or to like a well-known um what do you call it the carrier carrier or like Aetna or like a bigger known, right? And he kept

147bringing up Curative. And he's like, "Well, because we want to save money cuz we're in a hole. So, like how can cuz he's guaranteeing that he's going to save us money." So, one of the questions was the way he was presenting and everything was like, "Well, it's because we are going to save you money, but we may not be able to go with who we currently have. Mhm. Maybe like a different one. And And but eventually maybe we can go back to Blue Cross. And I So, the way he was explaining it was like, "Okay, well, let me be just be transparent, black and white." Do you remember what it what I said? >> did. I said he basically said that we might not be able to go with Blue Cross or like a well-known

148carrier in the beginning because we want to try to get out of where we're at and that um we might go with a different company that we're not we're not too familiar with for maybe a year, two, three, and then later go back to Blue Cross. I think basically what our question is, are we going to have to go to a sub par carrier to make up the money? And that's what we're going to offer our employees. Mhm. The answer is no. You would never go to a sub par cuz we only work with A-rated companies. Mhm. Period. Now, the That's an alternative. The majority of time when people feel that passionate about Blue Cross Blue Shield, guess what? They stay there. But that is also part of the problem, too, because they're not wanting

149to approach change. Right. Then that company realizes that and they use that. And they And they Okay, "We have passionate people there. They don't want to get rid of Well, Blue Cross Blue Shield, so now we got them. We're not going to let them go." And their rate increase goes up. Plan design goes down. But even if you don't like >> recommendation. Yes, you can keep it and many a time And you would negotiate with them still if we would if we keep Blue Cross Blue Shield. >> what we heard that day. That day he said we wouldn't be able to negotiate and he also said that if we were to stay with them that we could get rid of them get rid of you at any time, right? Like in the same month or

150whatever. I do remember that. But I remember also asking because he says that everything he would take over everything like our dental, our vision, our life insurance, our disability and so forth because everything's combined. Remember you saying that? Everything's combined, blah blah blah blah. And that we had to make change because of the money that we had to make up if there had to be like a major change. >> Yeah. He kind of made it sound like we had to go with whatever they said. And that's why when we voted and that was for the other one, too. That's why when we voted I was like, "Well, no. We don't want that because Well, the reality is I mean that we've we've had third party brokers before. So, they are going to come. I mean,

151I'm going to be transparent here, right? And the reality is they will come with the options to the school board and tell them what companies That's what That's what the broker's going to do. They're going to say, "These companies came in. These are our recommendations of here." Um some cases they may leave Blue Cross on there because it's on there, but that was kind of what That's kind of what's going to me, sir. That was kind of my justification saying open market, right? You cut it loose, you let everybody go out there and fight for it and let's see what they bring back including Blue Cross, right? Not renewing them and saying, "Hey, we're going out open RFP and let's see what you can bring back and let's see what everybody can fire back because

152agents do Agents play a role in the cost and fees, too. That's a reality. Am I correct? >> That's correct cuz they're built in. Okay? And so that's kind of always been my argument here, right? Listening to this now is that by going through with with the brokerage of that of isolating everything medical, pharmacy, and voluntary, right? And under one umbrella I just don't see how that's going to That was the argument I want to hear where how's it going to benefit me that you're going to cut your costs? Because I don't have to cut my costs once I have everything now. You see? Now I have everything on my plate. I don't got to share. But it's all mine. >> that we bring you, we spreadsheet everything. Right. We bring you the top five

153in every category. Right. In every category. We'll give you the ones that we recommend. But at the end of the day, we don't make the decisions. It's the insurance committee that say, "Hey, we want Blue Cross Blue Shield no matter what." >> Yeah. Then you stay with Blue Cross Blue Shield. But then how would I be able to guarantee us all the savings that you're saying that we're going to get? Cuz you were also mentioning on the pharmacy part, right? That you're guaranteeing that that 30% back or whatever, right? So we're here we're here to discuss it. Okay, how are you going to do that? By denying By denying people the medication that their doctor wants? >> No, we don't do that. Now, the the pharmacy >> it difficult for them to get it? >>

154No. It's It's full transparency. In fact, we have a history and a record of lowering that cost. Wow. We have done that. >> Okay. Sometimes misinformation will get misconstrued. Okay? I don't want that to happen. >> Right. At the end of the day, we only provide recommendations. We don't come in and say, "This is it and this is only it." We never have done that. We work in concert with your insurance committee, with your staff, and with the board. Along with the providers in the community. Every 2 years, I would meet with dentists and ophthalmologists and and optometrists to make sure who is the best carrier. And I would ask them, "Hey, which one do you like?" Just like I'm asking her, "Which one's the best carrier?" Obviously, it's Blue Cross Blue Shield for her.

155Everyone wants to pass it on. >> not saying that. I mean, I want to hear it. Yeah. Yeah, we want to go to open market. >> Well, we're going to go to market. Right. We're going to spreadsheet every single category. Mhm. Dental, vision, medical, pharmacy, and you get to pick. But, we're going to tell you, out of these five, we recommend the thumb. Mhm. But, there might be some passionate people that said, "You know what? I like the index finger." And then you vote. And the index finger gets the vote, then it's the index finger. Right. But, the negotiation never stops just because one wasn't selected. Mhm. The negotiation is very active. In fact, that's where our strength lies. Yeah. Our leverage lies with all the five carriers in every category. >> So, my my

156next question then, since you're there too, and tapping into what the piggybacking off of the employees here, Mhm. in the past, I'm going to go by my past experiences, even like in pharmacy for instance, I could say going back to this per script cost, right? Per script cost, reminder for everybody, that's what the company was charged was receiving for every prescription that employees wrote. Right. And at first it was like at four or five dollars, and we kind of pressed it. Yeah. And but that's that's the brokers, right? And and so and we pressed the broker and then but they had to drop it down, you know, to two, and then the next year we changed to another pharmacy and went back up again, but but we had So, we had that leverage to do

157that. My question is, with a company like yours, where you already have everything under one umbrella, and we're signed into a contract with you, Yeah. kind of, right? We're locked in. Yes, sir. Then how do we press you once you're already you're like like in other words, like I already did How do I how do I say this? I can't negotiate the cost of the truck once I've already signed for the truck in the contract, yeah. >> you you always do. In fact, we're very transparent. That would be one of the first things we would want is to move the pharmacy away from who you currently has it over to us, and then you get 100% 100% of the discount, rather than a a rebate. Mhm. Over here, you gain a rebate. With us, you

158get 100%. Mhm. So, many a times, not having a full breath of knowledge of 30 years of of insurance can hurt you and I and Right. What do you do for a living, ma'am, if you don't mind me asking? I'm a special education teacher. My daughter's a special ed education teacher. She's an angel. Mhm. Every time I go to her class, I want to cry because of the dedication that they do. Right. It takes a special educator. We are that special ed for insurance educator. This is all we do. We're very passionate in what we do. We care. We're we're humbled by this opportunity to serve. Right. Um I love her passion. Mhm. This is what we have. What you see in her is what we provide you in insurance. Okay. We're No, tengo pelos

159en la lengua and I and I'm going to say it again. You won't find another more passionate, committed, driven, full of tenacity to work on your behalf. And it's contractual. You got an amazing presentation. Yeah, I've I've got a couple of questions. Well, I don't want clarity. At the very beginning you started with that if let's say for example right now we have Blue Cross Blue Shield that if they lost money last year and they lost money the year before that, that obviously they're going to try and make that up this coming year. How would they lose money? We're self-funded. Um It depends on what we're talking about medical insurance. Some have an interest in making more in premium. They make more in money. Um I know we're self-funded here in Weslaco. How does the

160insurance company make money? Okay. So, who's making the money? Well, Blue Cross. Okay. In that negotiation, we're the ones negotiating with them to accept a reasonable cost that's affordable for Weslaco and and the employees. So, part of our negotiation if you want to stay with Blue Cross Blue Shield, now that we know, matter of fact, that's the first step that we're going to come in. We want to know where their passion lies. If it lies there, then now we know Blue Cross Blue Shield, we're leaning towards this. So, how do we work with >> not that we're leaning towards any carrier. It's just It's a misrepresentation cuz we're not They didn't lose money on us because we're self-funded. We we pay the bills. Yes. So, they didn't lose money on us. So, we have a

161contract with them. We pay them as a third-party third-party administrator and as our carrier. Yes. But, so they don't lose They didn't lose any money on us. So, that that's not leverage they're going to use on us cuz they didn't lose any money on us. Well, um >> It It's I'm just trying to get some clarity here. No, no. The clarity is very simple. We We would never do anything to hurt the school district or the employees. In fact, we're we're more your advocates than anyone else. Perfect. Yeah. So, as far as our description goes, you say you you threw out the right away 30% >> 30% Okay, so at the end of the first year, you saved us 19%. What's your repercussion? Um you can fire us if you like, but if you see

162savings across the board because legislation, there's a lot of things that are happening right now in petroleum, right? >> Right. A lot of drugs that are manufactured, right, are overseas. So, is there going to be something that's impacting that? >> Yes. But, we are keeping track of it. We find other avenues of approach. Every single month, we're tracking that prescription pharmacy. When we're going to be tracking it, but worst-case scenario, if that does happen, we still save you 19%. Right? As uh losing money. But, at the end of the day just a thought. that's that's right now what we're seeing in our clients. All right. Well, we have a budget workshop after this. You all did a You all did a great job on the questions. It's It's challenging, I know. It's a very challenging

163element to deal with budget-wise. Mhm. And I love this passion. It's the same passion that we bring in. At the end of the day we do not have a reputation of hurting clients and their employees. More importantly, their children. The letters I I I handed out with you for you to read those are just two of our 650 clients that we currently have. I can get you more if you like. No, thank you. Thank you, sir. Thank you. Appreciate it. Thank you. Committee members, thank you for your input. Very very valuable. All right, Dr. Coach, I just want to ask you before we move on. Okay? I don't know what the plan is for the for the agenda for the next week, and I know we had these great presentations from these two great companies

164and whatnot, but I also want to I mean the committee members did an excellent job. I mean talk about going into the detail and really knowing your stuff. You guys did an excellent job voicing and standing up for your staff and looking out for them and whatnot and and doing those questions. And I know it's hard. Not everybody likes to go up there and get in front of the camera, right? Or or that podium, but you did an excellent job tonight. I just want to make sure that that we respect their wishes as well. I don't know what the agenda's going to look like. I know that you have this on the agenda, but I'm also asking that you also put Well, if you can serve it Yeah. Right. Well, one of the things too

165is the RFP process. I don't You don't have to vote for that. I mean you can you can I mean cuz right now we're in the 11th hour. That's what I'm trying to say. And I don't know why I I don't know if you can survey the board on what they want to do so that we can save time or if you want to put it on the agenda for next week. It's right around the corner as well, too. But did you put the two options on there? One We Dr. Vera both of He has >> both of them already? Yes. Okay. I sent I sent the update. Just out of respect, it's going to be on there as well, too. >> I said earlier. Okay, I didn't catch you there. >> He sent an

166update today. Okay, perfect. Yeah, I was working on it. You all can decide on Monday which way you want to go. All right, so he's got both standing. Yes. Okay. Let's continue on. Thank you everybody for the presentations. The budget workshop, Dr. Vera? Yes. Okay. Let me call a meeting. Make the presentation. And I sent the workshop to you. I don't know if you received it or not. Yes, we did. All of you have it? Right here. Okay. I didn't receive it on the email or email. Also? Yes. Yes. Yes. Good to go, sir? Yes, yes, ma'am. You may start. Good evening, everyone. Um I will try to get through this and then answer any questions that you may have. Um so tonight the agenda actually um we're still reviewing the current fiscal year's numbers

167and comparing to fiscal year 26 projections. Um 26 27 preliminary revenues that we're looking at based on 88 options for preliminary um and then our preliminary action plan to reduce the deficit. Um the expenses for 26 27, we're going to present those probably in more detail at the next workshop that we're going to have. Um I do have a salary analysis already prepared for next workshop. Um and then we're going to dive deeper into those individual department and campus budgets. Um next meeting. So this is just an overview of what we're going to cover tonight. So for revenues, um we're looking at fiscal year 25 and fiscal year 26 where we ended on the actual fiscal year 25 and then where we're projecting to be at the end of this fiscal year. So for 2025,

168you'll see that we ended at 182 million and then for our projections this year are a very conservative 180 million and that's at 14,000 14,280. Um right now the budget is based on 14 five, but as you're going to see as we continue to talk about expenses next um at our regular April meeting we're going to have the amendment presented to you guys on the consent agenda for to bring these projections to bring our budget actually to where it should be. So the 180 million projected for 2026 will be reflected after our April meeting if the budget amendment is approved. Um and so on the 2025 you'll notice that the variance between the two fiscal years is about 2.1 million. I just want to state that in 2025 we received about 2.4 million in property

169value audits for past fiscal years that we received that funding. So had we not received that funding our revenues would have been pretty well matched, you know, so at about 180 million. We don't know what property value audits may come in for this fiscal year's money, so that's why we're leaving it at the 180 million on the projections based on the template alone with the 14,280. Um Okay, now the expenses for 25-26. So this is covering all six six thousands from our salaries including our on behalf which we'll have a little more discussion on the next slide. Um or explanation on that. Uh contracted services 6200s uh and then the utilities 6300 supplies 64s other operating and then 64 I didn't want to say just insurance cuz health insurance is a totally different one. This

170is our property casualty insurance. And then our debt and then our capital outlay. So looking where we ended at 2025 uh we ended at a total of 197 million and we're projecting to end this fiscal year and this is including projections all the way to the end of the fiscal year of our non-negotiables or utilities, this property insurance, that this is including those projections and we're projecting to end at about 194 million. So, uh lower amount of 3.1 million based on where we ended last year. That number can still change. These are just projections. Um so, this is what the the team has been working on in the expense half. Um so, yes. Let me see so far. Um so, yes, that 3.1 million would be the savings we'd be looking at on the expenses.

171Um this year's spending, you know, once we saw that this year's numbers were headed in the direction they were headed, which was back in like September, October, we already we began that those cost-saving measures with the departments, with the budget, uh the campus budgets and all departments. Um so, we we just I know we just in like rolled out the freeze on spending, but we were monitoring all those expenses going all the way back to September, October um with with not going overboard with a lot of the excess spending. So, um that's why I think we have that pretty good savings there of the 3.1 million. Okay, on the next slide, salary analysis for 2025-2026. So, this is just projecting um this is projecting all the way out to year end. So, our teacher contracts

172go all the way um through August. They continue to get paid. Those dollar amounts are included in here. Um this salary amount does not include TRS on behalf. You'll see the little box in the bottom that explains what TRS on behalf is. Uh for anyone that's not familiar with it, it's basically an in and an out. The state gives us the revenue on our template, but it also just goes right back out. So, that is an in and an out in our financials. So, this is specifically just payroll right here. Um So, right now our adjusted budget uh is currently showing 158 million, but what we were projected to end is 161 million at the end of the fiscal year, and that is including all contracts, all stipends, all everything that needs to be paid

173out for this fiscal year. Um back when Region 1 started working with this, they did review this preliminary salary budget and verified that uh the numbers were were actually not not far off from where we should have been. And then this current analysis right here is based on what the team has done currently, the budget team. Um so, that that right here on the projected amounts, the 161 million actually includes, like I said, all contracts earned and to be paid out. Um we're only off 2.5 million from the actual adjusted budget to our year-end projection. Um it might be important to note that the December stipend that was paid out did total 2.4 million. So, had that one not been paid out, we would have been very close on the budget to the actual year-end

174projection on that one. Okay. >> adjusted budget, just so you can confirm, that's not the adopted budget that the board re- uh that's not the adopted budget that the board approved? Or when you see an adjusted budget, could you define That that would be what we're going to what the system is going to show after the amendment that we bring in April. Right. So, that would show once you the >> Once you all go back through and and realign and fix it what you're doing right now. >> we fix the budget based on the budget amendment that we bring to you guys at the next meeting. Yes, it is on the back up of the next uh for the agenda meeting, the regular meeting. Okay. Okay, and the budget adjustment, so this is part of

175that April amendment that we're talking about. So, we do need to reduce the revenues about $10 million to bring us back to where the that conservative to bring us back to where the that conservative number is at the 1428 um you know, the current budget is showing 180 million, but we need to bring it back to that actual um 108 million 180 million um decreasing it 10 million. So, in order to decrease that, we have to to balance, we need to decrease as well on the expense side. So, this is where it might get a little tricky because we may not have uh $10 million to reduce on the on the expenses on the other expenses. Um as you can see, for each object where we we where we have cushion to increase or decrease,

176it doesn't total $10 million. So, we will have to get creative on that piece, or we may have to just for budget purposes actually adopt or not adopt, but actually present work on the amendment to actually get us to where our actuals and our conservative budget looks like for the for the ending of the fiscal year. So, the net amount of the adjustment needs to be about 13 million in order to balance us. But, will that happen? That's where it's going to take some work be be uh for our team. So, once again, I just want to state that once the April amendment comes comes to you guys at the next meeting and we make that change, then the system will show the more true the truer picture of where we are. Mhm. Okay, so

177preliminary revenues for 26-27. Now, we're getting into 26-27 here. And this um is just incorporated from the Moak Casey template, the latest version. This is taking straight their data, what what they're projecting based on the numbers that have been up updated by PIMS into the system with the state. So, this is strictly from their template with the exception of the line that says other revenues. That is those are our numbers for um interest for all the different other little local revenues with the exception of tax collections. So, that's the only line that we added, but we wanted to show where Mock Casey has us right now uh for projecting for 26 27 on the enrollment. That's the fall snapshot enrollment, and it's giving us a refined ADA of the 13989. That can always change. Um

178that's why this is just an estimate based on on the template that they're providing giving us a state aid of 137 million projecting us tax collections. We're pretty close with the tax collections almost every year, so we felt comfortable going with that number, and then of course estimating our local revenues with the additional 14 million. That's interest and all our little buckets of money that we get. Um totaling 177 million. So, yes, it is lower because that ADA is lower as well. And you're going to see on the next slide the optional ADA amounts that the team has been working on. This is what um the budgeting put together based on these If you remember last workshop, I stated 14,000 is what we can look at for next budget year. However, I did state last

179year last month that um that may not be the number we go with because if we're still trending downwards, if registration's not looking good, we may need to go lower. So, Mock Casey is that that middle column, the 26 27, the 13989. 14,000 is what I said last workshop that we would be looking to budget at, but then I went even lower on that 138 if we wanted to be even more conservative based on where we're trending. >> Mr. Rodriguez, question uh the Sassy program that we have that adds to the ADA, right? Do we already have Is that already included in here or no? Um that That's a separate bucket. >> What is the ADA? It is >> overall ADA projections, we already do take that into effect. Okay, that's what I wanted >>

180So basically in the end we add two numbers. We add the ADA and then we add the Flex Off or what you're you're saying Sassy, put them together and then we work towards that number. And it's already reflected in this one number. >> these projections would reflect that in. Okay. Okay. On my superintendent's report that I'll give you on Monday, Mhm. I'm going to have a slide that shows the actual ADA through the first six weeks, which is 14,438. So this is an increment higher than what's here. What's the projection? >> And how was How was pre-registration coming along? We were 60% as of last Friday morning. We We already have about four elementaries that are almost hitting the 100% register mark. And I just want to say because parents who are not zoned to

181their school, I know I got a call her saying, "Hey, you don't You haven't registered your daughter." Yes, I did since March, but they weren't showing her at her school because she was zoned to another school, right? So do they have accurate numbers based on that rezoning? Yes, PINES before opening registration rolled forward those students that were going to be rezoned to their new uh schools. So based on our current schools, right? So based on the address that the parent submits, it'll automatically send you to the school that it's zoned. >> Right. Yes. One of the One of the things too I was going to bring up now that we're talking about enrollment and all that. I got a question for slides by weight, but right here now is that we don't have an enrollment

182I mean I want to stress that, right? Cuz people are out there "Well, why are people leaving?" I said, "They're not. We We still have an enrollment of 15,000." What was our total enrollment? Almost 16,000. >> 16,000 students. You know, when I first got on the board When I first got on to the board, we had about 15,000 and and uh going down uh when I first got on on 5 years ago, we're at almost 16,000 totally enrolled. Our ADA is only off by like 200. So, it's not the 14.5. I think you're off by 200 and change. That's 200 students, that's about 1.6 million. Okay? So, I don't want to cause a concern and put Cuz I've heard it from people, they're like, "Well, they're saying it's an enrollment issue." And I said, "No,

183it's not. We don't have an enrollment issue. We have 16,000 students. It's not It's an ADA issue, but very minimal." Cuz we're only off by 200 compared to other districts that are off by 1,000 or more that are missing off their ADA. That's a huge impact. So, I don't want to show weakness for error. You know what I mean? Because then people start to have second thoughts and okay, well, maybe something's going on and whatnot. Nothing's going on as far as people not wanting to come to the uh Weslaco ISD. And that's why you're seeing that you're almost at 60-something percent. That's why you're seeing that elementary Some of them already reached capacity. So, there's a high demand because we're very very uh proficient as making successful successful students, right? And I think as a

184board, we need to take on that mission as well, too. And be ambassadors. And be ambassadors of our school district. Right. Not go out there and start saying, "Well, we have an enrollment issue." When we really don't. 16,000 When I got on the board, 15,000 students, right? We're not going down like everyone else, we're going up. Okay? There's more rooftops coming to our neighborhood as well, too. Our ADA is well, too. So, our budget problems that we see here, it's not because people are living uh are leaving, we're having trouble where to put them. I know about 900 more coming up next year. 900 more rooftops. Exactly. And and the feedback of that because of what WISD has to offer Right. and what we present monthly with the accomplishments with fine arts and athletics and

185and the FFA and everything. I mean I don't see why anybody would want to not have their kids come here because of those opportunities that are there and the success we're having. >> Exactly. Not just locally but at the state level. Yeah. So that's pretty impressive stuff. So I just want to clarify like your job is well too when you and your executive and the executive staff get together make these presentations that we're clear that this problem is an internal issue. It's not an issue with our kids coming in. It's just you know and I think everybody knows it right. We don't have to go back and beat that dead horse but we're not having an enrollment issue and we're not have we just have a slight ADA issue but that's something that other districts

186have done. Dr. Rivera they've gone and and completely done like an analysis and identify those kids that are chronic that are hurting that that ADA and they've made phone calls and they've gone and met with parents and what are we doing or what are we doing wrong or how how do we help you get your student in? For the virtual I think you have like 60 something people maybe that that applied whatever the case may be some other districts are already sending people out and door knocking and talking to the parents like what do we need to do to get them back in? Do we maybe they don't maybe they're getting bullied at the school? Well you know what? Well we'll move them to another. You know don't don't keep them home and and they're

187not working with them so what I'm trying to say is we don't have a massive problem with students coming in. It's very minimal and I and I want to applaud the campuses and those teachers and those principals because they're showing up for them you know at the end of the day and also administration with the curriculum they are all delivering. Do we do we have a number on pre-K students coming in? Uh yes sir we do. Yes give me one second. You just send the a recruitment ambassador to to the daycares the Do you know what I'm talking about? It starts Start off from the get go I mean that's all. Yeah so currently right now we are 400 a little bit over 400 pre-K threes and pre-K fours new new to the district. New.

188Awesome. Mine's wonderful. I had to submit like a whole bunch of stuff. Is there any Is there any We're forcing them to like a W-2 and all this stuff? Like is Is there any way to make that easier or or is that required? We have honestly every year we try to refine that process because we feel the same thing and we go through the process but we just don't make people but like we practice it and we go through it. Each year we refine it and we're trying to get down to even make it less but yes but also make sure we do have the data that we need the information. Is that like for the whole Teams thing the tier one to tier five and the the the Does it go with all because

189of all that? Not all of that with the census block no but there is some things that do take into place that we have to have data for. >> I was just surprised I had to submit my W-2. Like why do I got to send that to the district? It shouldn't be income eligibility. Yes. And and since you have so many people coming in and wanting to join right the organization kind of like they said I know some districts what they're doing is just to to to get them they'll do like an automatic they do an app and they click right away for automatic enrollment and then they get the documentation later. Like in other words to secure them. To secure them just to lock them in like hey welcome to WISD it's a quick

190click and then later on you work on the on the documentation. Yeah I think that is a great idea. Yeah cuz my wife was on me go get it or he's not going to get some to where we live all that stuff. Yeah we're almost at 600 new in all grade levels. Awesome. Let's continue with uh Dr. Vera's uh final slide I guess. So that is Oh the final slide? Yeah that is correct on the on the you know ADA that that's not really the problem. I know we discussed numbers today and it's looking good but that's why with the budget we want to stay conservative. Right. way when we stay conservative we come out on top, even better. >> But moving forward, that gets adjusted every month moving Of course. Next year, yeah, next

191year that that is going to >> and then we're able to adjust it to the Exactly. Yes. Next year, I think the the data will be uploaded live, right? Faster. Yeah. It'll be uploaded live and we can make these adjustments more um timely. Okay, and then the last slide. So, this is just a preliminary action plan and we understand, you know, there's there's urgency, right? Like, hey, we we adopted, you know, we're looking at deficit budgets, um but the first, you know, step is of course to to start with these accurate projections of revenues and expenditures and that's what we want to do with our April amendment. We want to bring the budget to where we think we should be conservatively. And again, if we end up end up on top, even better. But that's

192the first step is just starting out with the accurate projections. Let's get this year where we need to be in the system and so where everybody can can can tell And get a clearer picture. And get the better picture, yes. And then, of course, just continuing with the staff attrition. I know um I think we again, I have a salary analysis already prepared for next workshop that will hit these numbers with the current staff that are not returning and the dollar amount that we're looking at saving. Um if Could could we get that earlier prior to the budget workshop? >> Um if you want right now, preliminary, we're looking at about 133 or Dr. Janney or or what at about 2.5 million in savings right now. With the retirements and attrition? Yes, it's right now

1932.5. It's right now 2.5, yeah. That's part of my salary projection that that we have for for next year. >> been projected all the way through >> And and that's just right now. There's more coming. So, as we're getting that information from HR, the budget team is getting it, taking it off the contracts for next year. Okay. What what are we staffed for? How many students? Uh staffed for how many students? Do we know that? Like how many teachers do we have for the amount of students? >> Yeah, that's what I was going to say. What's the ratio I guess? You did it. Yeah, because if we're losing all those people then our class size is going up, right? >> No, our class sizes are still being monitored at 22 to 1. Right. You don't

194have them. >> Elementary, at least in elementary. And I know average middle school was 25 to 1 at the middle school level. My question was more towards do we have more teachers than we need? No. >> Okay. Oh, really? Not on based on your other presentation. >> I know in in just our and and we can obviously update in a board update, but just in our study about a month and a half ago, we were at the elementary because of the loss of enrollment, we were about 11 teachers over. Right. And then 11 teachers over? And then kind of going deeper into that analysis, Mr. Rodriguez administration, you know, Region One puts out that deal. Right. Yes. How many administrators should we have for the amount of kids we have and so forth and so

195on. I think it would be very helpful for the board to see that. Yes, they provide us a budget tools that we can that >> Didn't we just get a TASB uh study done on all that and how or maybe it was a forensic, I don't remember, where they told us like TASB TASB did it and I think we were okay with what TASB does it every year. I mean the discussion for leaders going to be not I I don't think you you You have to look at salaries. Right. I mean that's what it's going to come down to the analysis I guess once you all figure out your budget is looking at salaries and then looking at that's why I said non-campus level personnel and departmental personnel because your ratios are almost near what's

196required. But that's why once you figure out what what we're dealing with this year, the total number that Mr. Castillo's right, you should give us a breakdown based on this is where we saw the major increases across different fields and departments. That will be more for for next workshop and I understand the urgency. You guys are like that's what's the plan. >> Yeah, cuz we got contracts coming up. looking >> at all of that. Like it's it's it's there and we can if we get information even sooner then we can what's up with that provide the report update. All right. Um and the next item of course is what we have been in discussion with for the last you know month or so on the reimbursement of the bond proceeds. Um currently looking at a

197number of projects that meet the criteria. Uh what this does is of course it helps us increase the fund balance by reimbursing for all of those other projects that that have already been paid out through the local fund. Um so right now it's it's looking like around the number of projects is looking at about 19 million, but again that's something that we'll share with you on the next one on the next um workshop. >> On on the breakdown right there for the bond proceeds when you cuz right there was like you said 19 million a portion of the 13 or the majority is going to go back to reimburse those or whatever percentage it is. But can you also provide the the surplus that we currently have in bond compared to original >> 6.5 million

198I think is what we're looking at on compared to original budgeted versus expended expended in the bond. Only because like I said the act farm and the act farm the interest was supposedly going to the interest payment the money that were coming in were initially going to pay for the act farm. The 19 doesn't even include the 13 million. Right. And and so I think right now on savings we're looking at about 6.5 million in uh return Uh yes and savings. Savings in projects that we've done up to this point right that we've that we've gotten back. >> Yes, about 6.5 million. Okay. Those are projects that we've done primarily the projects that we have in proposition A. Okay. And then we can just get a breakdown like that. Proposition A original budgeted and then

199the final. So yes, on there it's close to 20 million that we have for bond proceeds as far and we've already gone through our bond council where he's reviewed put the stamp on it and so forth and that does not include the 13.6 million in interest. Right. Right. And the financial advisor of course is on the hook for arbitrage rules and all that with with IRS, so they're keeping an eye on that as well. So, they're keeping us in check on on that uh with that. Um and then, of course, continuing with the campus department budget savings, again, that's going to be a deeper dive next workshop um on where, you know, we we can with of course, we never look at uh you know, affecting our students in any way. They're still going through

200um with without a hiccup on that. All travel, all competition, all their needs are definitely still being met, and we want to continue that next year. And then, on the next one on the self-funded insurance plan, well, that's um also depends on what happens with our April board meeting. Uh we on my salary analysis, we already have like incorporated right now based on what we discussed last insurance workshop of potentially going up on the district contribution, the 3.1 million. So, that is already included in the salary analysis, but depending on what is decided, that may or may not be the case. So, um I can't really say how that's going to help. Which one, sir? I'm sorry, would you say again? I got Oh, the 3.1 million? I got lost. By by increasing the district

201contribution from seven How much is it? >> you're talking about the insurance. something to 879 So, the last workshop into the next fiscal year. So, increasing it from the 700 and Say it again. 732 to 879 is an additional 3.1 million that we would the district would be contributing for the health insurance. But, that depends also on what is decided with the insurance um portion of the the meeting next week. And then, of course, we just continue to be one of the lowest um tax rates in the region in region one. I want to say there might just be one other district that's lower than us, but that's that's where we're we're looking at. And again, we understand the urgency and um any questions that you have, of course, we're going to address as we

202can and through any board updates >> There's no plan to increase taxes. There's no plan. right? No plan to increase taxes. Okay. The final Oh, that's it. Yeah. The Oh yeah, sorry. The timeline for your workshop. Yes, the timeline. So then um So the next uh workshop we're looking at having on um May 11th. By then we will have certified property uh estimates. The Hidalgo County um appraisal district is supposed to get us our estimates by April 15th. So by the workshop the next workshop we'll have those estimates to base our our uh preliminary uh property values on. Um and then of course we'll have more updates on the enrollment, staffing, and then the expenses. The the bigger Could we move up the fiscal year 25-26 status projected? Will you be Will you be giving

203projections on 5/11? I can, yeah. I I The only reason I'm asking is cuz like the trustees need to see like the clear picture, right? As far as uh available funds, revenue, uh minus and then like expenses. When you're doing separate sheets like that for some that aren't familiar with the budgets, like they've stated they're going to have difficulty identifying that, but if you're able just to put, you know, it's just addition addition and subtraction. Like this is where we're at as far as funding available. This is kind of what we're expecting here as far as the overage, complete salary costs and whatnot, insurance, uh construction payouts that are still already designated by Like like you break it down like that, then so that way then we start talking, okay, what do we need to

204start planning for for next year? You know? And because we start doing it in June, that's like really late. June's too late. >> at the By the next workshop we'll already have the updated numbers based on the the April amendment that we >> I mean I I I just think it for as pressing as it is, yeah, it needs to be done in May. Yes, correct. 25-26 update. I got that. Okay. And on the certified tax values, how are we doing that? Cuz I don't think they're certified till July. No, these are uh estimates. That's why I put estimates there. Okay. So these are just the estimates and of course they've been pretty close. So that's this is one of the drawbacks of being a July 1 district is we have to base our budget

205on estimates. But our our our tax I guess long day collections. There you go. Tax collection rate is pretty high. Yes, it's pretty high. We're still we're probably like in the 94 >> 94 94% >> 94 95% >> that's not going to be an issue. Okay, cool. So yes. When does that come up? So yeah, I will have a 2025-2026 status at the next meeting. After the amendment has been posted. >> Oh, I thought the the certified The next workshop. I'm sorry. >> goodbye. All right, thank you. Okay. Thank you for all the information. Any other final comments? I sent a bunch of questions. We did we did get Yes. All right. And I I do already have most of the answers for you. We We answered them. We answered them. So we'll we'll send

206them out. All right, thank you. Okay. All right, let's continue on. Uh thank you for the presentation. And number five, Long Range Governance. So >> Can we adjourn to set up the boardroom? Yeah. We'll get which We'll We'll adjourn after the the Long Range Governance. So right now we can take a a quick five minute break and then come back real quick. And they're shooting in the conference >> Yes. Yes. Okay. >> While we set up. Dr. Sinton We'll >> Mhm. Mhm.