10-7-2025 Appoquinimink School Board Meeting

001Good evening everyone and welcome to the uh Tuesday October 7, 2025 aquaponic school board meeting. The board went into executive session at 5:30 on motion of Miss Dit, second by Dr. Graham to discuss certain legal and personnel issues. We are now back out of executive session and this is our regular meeting. We'll begin this meeting like we do all our meetings with the pledge of allegiance. >> I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. up on the agenda. Um, thank you. On the agenda tonight, we have no special recognitions, which is kind of sad. Uh, no one has signed up for public comment. We'll have a number of reports, board comments. There

002is no old business, new business, a personnel report, and then our establishment of meeting dates. Dr. Burroughs, are there any adjustments to the printed agenda? >> So, just a few small things under established meeting dates. Um, on letter A, the board of education will have a finance training workshop. Should be training, not a finance workshop. And then on the note of um item C under established meeting dates, it's because of veterans day um not election day. >> Okay. So with that we will move on uh to reports. The superintendent report Dr. Burroughs. >> All right. Thank you. >> Thank you very much. Um so this this month is National Principal Month. Uh October actually um the 2nd was National Custodian Day. The 6th which was Monday is National Coach Day. And then on October 16th

003is boss's day or supervisor's day. We currently have um 32 full-time teaching openings. Most of those are in our special programs. We have 11 full-time paraprofessional openings. Again, most of those are in our special programs as well. We did have our September 30th count. We will have a presentation on that a little later. Um I'm uh give a little preview. We are up 61 students. Um we're we're very thankful for those 61 students where most the state is seeing a regression in their student counts. Um and we are actually up almost 11 units over last year's unit count. So units a staff member um mainly a teacher. Any questions? >> Any questions from the board for Dr. Burroughs? >> No. >> Okay. Uh, next on the agenda, we have rep revised policy uh 11:06 board

004meetings. Dr. Burroughs All right. So, this is uh under board policy 1000 series. This is policy 11 or 1,16. Uh we're going to update this policy. Next slide. We're updating this policy due to Delaware House Bill 64. Um, basically we need to have a method for public to remotely attend and provide public comment at schoolboard meeting meetings. And um, a method for the public to remotely attend and provide public comment at schoolboard meetings must be provided. That's on there twice. Um, so this we're updating our policy so we make sure that we hit this house or hit the intentions of this house bill. Uh, so we're updating that tonight. Um and then we'll review it in 5 years unless there's a change in legislation. So um you have the full policy in your packet. I'm

005just going to go through items that we're changing. So um up there is a red line and what we're changing to is district citizens may sign up to address the board during regular and special schoolboard meetings at an allocated time on the agenda. Students must sign up in advance by contacting the office of superintendent before 400 p.m. on the day of the meeting or in person with the secretary to the superintendent at least 15 minutes prior to the start of the meeting. Requests made prior to 4 p.m. on the day of the meeting may request a virtual option for public comment. Just the rationale on that on that time is that that those requests go to Casey. most um well on all board meeting nights she has left the office and is over here preparing

006for the board meeting. So she might not see the email and not be able to send out the Zoom link to the people that like to participate. They're more than welcome to come and sign up 15 minutes uh prior to to be here in person. Um but we need that window to make sure that we could send out the Zoom link and they get the Zoom link in advance. This is also just a slight change. Um, the board will allocate up to 30 minutes in total for public comment. The board may elect to extend the period of time during the individual meetings as they see fit. If more than one person wish to speak on the same topic, the second and subsequent uh subsequent speakers are limited to provide new information only. Members of the

007public are also encouraged to share their views with the board members via email. Each board member district email address shall be provided on the district website. No person may address the board at a meeting for longer than three minutes unless the time limit is waved by consensus of the board members present. Members of the public are urged to address concerns at the local school level and with district office staff prior to addressing the board. No person shall initiate charges or complaints against individual district employees at the board meeting. Such charges or complaints shall be presented to the superintendent or the board in writing signed by the complaint. Any defamatory or abusive remarks shall be called out of order and the speaker's privilege of addressing the board may be terminated. Persons addressing the board may be

008asked questions for further clarification, but the board will not reply to a person or delegation nor engage in a dialogue at the board meeting. A written response may may be made to the speaker prior to the next board meeting. Any questions or comments on that policy? Remember, this is just the report. We will also have a first reading and a second reading before approval. >> Steve, can you go back to that last slide? Let me see that last slide. Persons addressing the board may be asked questions for further clarification, but the board will not reply. >> So that's us obviously asking the question, >> correct? >> So we didn't reply after we asked them to clarify their answer. >> I'm just I'm just making reading the language. I mean, you can always reply. Again, it

009gets into practice, right? Like what's the practice that we're going to have? >> We can reply in writing to them as a follow-up. >> Uh what's the what's the next um next month's next reading? >> Yes, next month's next reading. If you have any comments or changes or things you'd like to see, feel free to reach out to me and I'll be more than glad to update the policy. >> Yeah, I think the point is that >> I understand the point. I'm just I'm just not convinced that it reads with the appropriate intent. So, let me just sit with it. >> All right. Okay. >> All right. >> Any other questions? >> Numberation. [Music] So, other words, if we're going to change it to limiting it to 30 minutes, so I contact speaker is used

010to respond back to your speaker number one, you're speaker number two, you're speaker number three. Is there is there a chronological order? So somebody doesn't stand up and say, "Yeah, I want to be the king speak for my three minutes and don't get taken down by somebody else and let it register." Is there is there a numbering system that goes into place? >> We currently do not have a numbering system. Usually we just put them in order as we receive them, but we don't give a number. >> Thank you. >> Any other questions? Yes, >> just one on >> um earlier point. >> So if we have a second speaker come in and let's say there's a hot topic that a lot of people want to speak on and they are literally touching the same

011points as the speaker prior. Our president would then tell them you're being redundant and ask them to to refrain from repeating points brought up by a prior concern of a prior speaker. He could do that or the president could do that >> and that's that that's what that that what that's policy is saying. >> Correct. >> And partly that's out of respect for a lot if we're if we're you know there's limited time and so if we're going to hear five people all say the same thing that might cut into the time of others who want to say something different. And so if you're just being repetitive of something somebody just said okay we heard it. let somebody who wants to make a different point speak. That's what that is kind of getting at. >>

012I was only saying that I I know when people come in here sometimes they are passionate and if that president is going to ask somebody not to talk after they spent their day planning on coming and speaking. I mean and we do use our discretion allowing people to speak even sometimes if it is not part of polic. >> Oh sure. I mean, no, ordinarily, I think you heir on the side of letting people speak, >> you know, now we we are going to hold them to three minutes or, you know, if they're mid-sentence at 3 minutes, we'll let them finish the sentence, but um but yeah, I mean, obviously, we want to hear from people. And I think it says in the policy, and I know we've said, we probably say every meeting, you don't

013have to wait till a board meeting to to speak to us. You know, our email addresses are out there. We get emails from folks, our phone numbers are out there, I get phone calls from folks. Um, and you know, when you have those conversations, you have more than three minutes. I mean, I've spent half an hour and 45 minutes on the phone with some parents. And I mean, it's generally, I think, time well spent. >> So, okay. Anybody else have any questions? I'm sorry. >> I do. So, um, when I first, um, put or wanted to run for the board, I came to the meeting and was supposed to do that 15 minute thing, >> but I missed it cuz they used to call public comment delegations, but we've since changed that. >> Um, I

014also get phone calls about like how how do I make a public comment, like who do I talk to? because most people don't really, you know, or some people don't come to the board meetings unless like they something happens and and they want to do a public comment. I'm wondering would it be easier if we put like a Google doc on the website for people to just go in and Casey can get that information. I just find it interesting that we have to email Casey to get a public comment request and I feel like it should be easier for our parents who or whomever to complete their address, complete their name and what they want to talk about and then she gets that. But I just think that that one piece of this policy to

015email Casey is just a little like almost kind of inconvenient. Like I would love to just go to the website and do the Google Drive or the Google Docs and let her get it. >> I mean they could email directly too. Like I mean that's on the website with her email address and just shoot an email that and the form sent to them and they fill out the form and it comes back. So, it's not like they don't have to necessarily directly call Casey. They can email go through the email process and also get the form filled out. >> Okay. I just know like I've seen other districts and there is a Google doc and they can just kind of go in there and they'll go to the right person and then we'll add them.

016But >> thank you for the suggestion. >> Yeah. All right, are we moving on? Are we done with anyone? Anyone else have any questions for Dr. Burrows on the board? All right, hearing none. Next on the agenda, we have budget observations and recommendations from Chuck Longfellow and Scott Kessle is I think Chuck was going to be coming in from uh >> Yeah, before we uh jump into that, we'll do a couple introductions. Myself, I'm Scott Kessle. a former business manager at Brandy Wine School District and Cesar Rodney School District and we have Chuck Longfellow on the line. Just uh Chuck, you want to introduce yourself? >> Chuck Longfellow, former CFO Appin School District from 2008 to 2018 um CFO of um other districts and uh Department of Education and uh consultant. Thank you. >> So,

017we're going to go ahead and jump into the report. Uh we were asked to do a financial review and we did a report and this is a presentation that we developed from that report. Uh you can go next slide Steve. Okay. So, uh, there was a financial position report submitted to the Delaware Department of Education back in May. And, uh, on that report, there was a projected discretionary carryover balance reported of $7.9 million. The actual carryover was 3.8 million or $3.1 million with unencumbered. So, that report was overstated by $4.1 million. And uh the the makeup of that was the salary was underestimated by 2.1 million. Non-s salary was underestimated by 2.5 million and revenue was underestimated by.5 million. And if you net those out that comes up to the 4.1 million adding that to

018the 3.8 gets you to the 7.9. So So the actual carryover was 3.8 not 7.9 >> and and the required carryover was 4.2. >> Correct. So we fell short of what as a result of those miscalculations we fell short of what was required. >> Correct. So so we so that was what we saw when we came in. Uh we took some immediate actions right off the bat. We we uh started closing purchase orders that had discretionary funds in them wherever we could. uh we had a tighter control over the purchases using discretionary funds and we did some recoding of discretionary salary to non uh and and non- salary expenses to non-discretionary funds wherever we we uh possibly could and the result of those efforts was that we we were able to avoid the need for

019the Delaware Department of Education to appoint a financial recovery team to come into the district. So some of our ongoing uh efforts, this is part of it. We we uh determined what happened to create the discretionary balance that that was lower than what was projected and we created some observations and recommendations to improve the process and to ensure that it doesn't happen again. So what follows here is uh six major observations that we had and 24 recommendations that we think that can be used as a playbook by the district to uh improve the financial operations going forward. So this was the first observation. We noticed that the uh budget format was not conducive to transparency or clarity around discretionary state and local funds. So when we talk about discretionary state and local funds, those are

020the ones that are are uh uh tied to the referendum dollars and that is what we're talking about with that that financial position report that was that was overstated. So if we go to next slide. So this is a sample that I have to kind of show you what what happened. So this is a sample of one of the more extreme instances of the discretionary and non-discretionary funds being mixed within an operating operating unit and what can happen. So this is a detailed operating unit and program code report that was from the end of March 2025. That was the last month that was reported to the board uh before the current situation was discovered. The highlighted line you see there in yellow, the general line, that is uh the uh discretionary portion of this operating

021unit, and it is reporting a negative $1.4 million. Uh the rest of the appropriations uh um lines on here are non-discretionary funds, both state and federal. You'll see the one there is oneonone unique alternatives. Those are state funds of $775 thou,000. And then there's two federal funds, IDA part B and the IDA pre preschool is about $2 million. And you'll you'll notice that those are pretty high positive balances. So the thing with the with uh state and federal non-discretionary appropriations, they tend to end the fiscal year with a pretty high balance because those funds continue to be spent throughout the next fiscal year. However, that's different than the discretionary funds. Those end at the end of the year. So you notice the 1.4 4 negative 1.4 which if you net that out if you look

022at the bottom you're going to you're going to think $1.7 million we're good to go when act when in actuality minus 1.4 and million in the discretionary funds. So that's one sample. There's >> and the reason you're just so I'm clear the reason that you're distinguishing between discretionary and non-discretionary is because the $4.2 2 million carryover has to be on the discretionary fund. >> Correct. >> So, it's not enough that we might have had 7.9 million. It had to or we didn't have 4.2 million. It had to be discretionary. >> And if we included non-discretionary funds in that total, that would not have been correct. >> Correct. >> All right. So, uh you can go to the next slide, Steve. So, so the the discretionary and non-discretionary budgets were mixed together. So, it was kind

023of a task to go back in there and disagregate that so that I could kind of figure out what was going on. So if you look uh once we disagregated the discretionary budgets from the non-discretionary budgets you can see the top portion see the bud the the amount of the budget was $73.3 million and you can see that there was $75.5 million spent. So the budgeted amount within the budget was overspent by two uh $2.2 million. And if you look at that the bottom section of that of that chart. Um so if the so the report what was supposed to be 7.9 million was what we what we were going to report what we were trying to get to. So if you wanted to be at 7.9 million the budget would have had to been

024set at $70.6 million. The budget was set at $73.3 million. So it was o it was overbudgeted by $2.7 million. So that's kind of a doubling effect. you're over over spent and over budgeted. So that those amounts added up to 4.8 million and you can see when you back those out you can get down to the 3.1 million which was the was the actual amount. >> Any questions on that? It's a little Okay. So we have some recommendations uh based on this observation and the first is distinguish we we want to distinguish between discretionary and non-discretionary funds in the expenditure budget as much as possible avoiding placing discretionary state and local funds in the same operating unit with the non-discretionary state local and federal funds. We want to create a chart of accounts document that

025maps the expenditure budget elements, operating units, and program codes and appropriations. We're going to explore school district budget uh budgeting software to reduce reliance on spreadsheets and to automate memorialize forecasting and allocation processes. And if the district is going to continue to use spreadsheets and in the short term, we we will be doing that. We want to leave the breadcrumbs behind so that you can see how we actually got to those numbers. So anybody that follows through can see that. >> Well, and as I understand it, again, these recommendations when you're distinguishing between spreadsheets and other processes, I guess my understanding is that what Eric was doing was he was taking numbers from our software system and then just transferring them to a spreadsheet. >> Correct. And so it it's been difficult for you to

026go back and figure out on the spreadsheets where he was pulling the numbers from in our software. >> Correct. >> And when those numbers are being pulled to a spreadsheet, they're literally manually being typed into a spreadsheet. They're not extracted from a program to a spreadsheet. >> That that can be the case. Yeah. And and sometimes you they do copy and paste. >> That could be human error. >> Could be. Yep. So if there's not any other questions, Chuck is uh Mr. Longfellow is going to uh do observation number two. >> All right. Thank you. Next slide, please. >> Observation two. The financial advisory committee, superintendent and board relied on the work of a single individual resulting in a single point of failure. Uh one major dimension of the problem here is role clarity and

027expectations. When you think about the job of a school board member or a financial advisory committee member, these are volunteers, busy people, uh sometimes limited access to deep information. Superintendent has 30 to 50 or more program areas to worry about. And CFOs are also super busy people. So, you need multiple eyes on reports. You need multiple eyes monitoring things. Shouldn't just be on one person, but you do need to specify who does what and when. make sure that um as we go forward we establish procedures uh with multiple levels of uh preparer, reviewer and approver of reports where it's appropriate. Specify role responsibilities from school bookkeeper up through the board. Um and ask for backup documents and explanations. You know, don't don't shy away from from asking questions and even questioning people in public. And

028even if they can't answer the question on the spot, they should be able to get you uh get you these answers. Next slide, please. Our recommendations here, reinstate the monthly cash flow, salary, tracker, and operating unit program code reports. Provide them to the advisory committee, superintendent, and the board consistent consistently each month. Um again, uh multiple levels of review are essential. Grain your staff and stakeholders on reading financial reports. Um the important things to look for Delaware code and strategic approaches to budgeting. One um peeler thing about Delaware school finance is all the strings that are attached to the different pots of money. It seems like uh in Delaware that's more of a thing than in many other states. So that could give us this false sense of security that well these strings protect us

029from doing things that are non-compliant or going over these appropriations and so forth. But this the thing we need to watch out for is our discretionary state and local funds and our and our tuition funds. So the we need training on this here and to reinstate keeping notes or minutes of the financial advisory committee meetings. Next slide please. Third observation is a lack of proper planning for expenditures, clarity around the cost of programs and transparency around how programs and staff are funded. Uh this centers around the budget as a planning tool, a proactive planning tool. Um it's not it's not good to just use a budget as a reporting tool or a reporting and monitoring tool. It really needs to be a plan. Don't wing it. Don't let contracts for goods and services roll from

030year to year without a review. U programs need periodic analysis of your return on investment related to academic or operational outcomes. Uh a couple of the examples of of what we um observed as we were going through things is that the summer school program had been supported by COVID funds temporarily. When those funds ran out, there was no designated budget home for those expenses. Another example is uh recent labor contracts which provided for initiatives such as SAM model single approach to mastery where dual certified teachers will um will teach in classrooms uh and receive stipens and uh for this um because they're covering essentially uh two jobs or money for paras to serve as teachers or substitutes. Not that these aren't valuable services at all. They absolutely are. But some of these costs appear to

031be um have been significantly underestimated causing financial stress on the organization. And in our report we do have a um another example or two there. We um we also noted um during our analysis that school and district office administrators and staff are allowed to initiate and sign contracts and contract extensions. This made it difficult when we tried to throttle back spending in June and July because these contracts were signed in April and May for the following year. So, one of the um u some some of the um clauses that the state recommends or requires are the funding out clause. If you run out of funding, you can um you can cut the contract purchase order requirement before placing orders over a certain amount, federal debarment clause and um the um insurance requirements. So um we

032have several recommendations here tied to this observation. Next slide, please. We need to implement a collaborative approach to budgeting. We and it needs to be a plan. every project uh program and initiative needs to be costed out properly and prioritized. We can't just say we'll find the money. That's not the answer. Reinstate budget development meetings between fiscal staff, principles, and district office leaders. These usually happen in the uh third and fourth quarter of the year. Um they used to happen and they they should begin to happen again. We need to rebuild our reserve and we need to explicitly budget for it. It can't be that the reserve is what's left over at the end. If we have a target, we need to make sure that we set that aside first and then evaluate initiatives and

033programs on a regular basis for effectiveness for impact, instructional um impact and operational impact and cost effectiveness. Next slide, please. >> Okay, the next slide is observation number four. >> Chuck, there's a couple. There you go. >> Did you get the co the those last two recommendations there? >> Oh, I didn't. Okay. I'm sorry. I'm sorry. That Thanks for that. Um, are the other uh recommendations establish a position or function within finance workg groupoup? Not that we can afford to add positions, but we do need this function to improve procurement practices and contract reviews. We need a contracting person. Um, we're we're too big not to have somebody with that function nowadays. and establish a board policy that explicitly requires the superintendent signature on all contracts or uh delegated um in a in a carefully

034thoughtout manner that does not circumvent the finance office review. Thanks, Scott. Steve, next slide. Observation four, the referendum did not result in a surplus after covering the existing deficit. Let's go to the next slide where we have um our graphic on the referendum cycle. So, normally a referendum is held to relieve a current operating deficit and to set the district up for some years of surplus until staff raises inflation and especially with aquinamic growth will overtake the surplus and a deficit reappears. It's the way that school funding is set up in Delaware. Not all states are like this, but Delaware is. We found that um so going in going into the 2024 referendum, there was a deficit and so going into 2025 before taxes were um were collected from that referendum, we still had a

035deficit, which is natural. We should have not had a deficit coming into fiscal year 2026, but we did. Um the deficit situation still existed at the end of fiscal year 2025 despite the passage of the referendum. So um the referendum when it was set should have um included enough to overcome the deficit and put us into surplus. We should have gone from yellow to green, but we essentially went from yellow to yellow on this graph here. And for numbers on that, the deficit going into fiscal year 2024 um or the deficit at the end of fiscal year 2024 was 3.5 million. That referendum should have cleared that and then some, but at the end of fiscal year 2025, there was still a deficit of 1.5 million. >> Next, please. >> Chuck. Chuck, before we get

036off this slide, >> is that because of the misallocation of some of the spending from discretionary to accounts that it shouldn't be charged against and I'm thinking in particular summer school. In other words, if the estimates that were used in that referendum cons contained the same misallocation of funds, it would have shown a surplus, but in fact, that's why we got into trouble at the end of of last fiscal year, right? >> Well, I don't know that summer school I don't >> that's an example. I don't think that summer school itself was something that was in the referendum, but um it could be one of really um one or more of really three things. Um it could be that the referendum was not aggressive enough and should have been more or it could have been

037that we didn't reduce things from the referendum if you know I don't know if we went out for referendum and we we didn't pass one or something and we didn't re didn't reduce things. It could have been that when uh the referendum money came in, we thought that it would cover more things than it did because of um mistakes in estimation or projections. Um it could be any of that kind of stuff. Uh we don't know for sure. The fact is the amount that came in for the referendum did not cover the any incre the increases in expenditures in fiscal year 2025. >> Right. But I guess my point is part of the reason that we didn't cover is because we shifted some of the expenses and summer school is the obvious example but I'm

038sure there are others. they were being mis applied or to to the wrong category. And when we shifted them back to operating expenses, then what would have been a surplus went away. Uh because the budget at the time of the referendum could contain the same error that the budget at the end of last year had in terms of certain expenses being allocated to the wrong buckets. >> It could be things like that. Um I don't know if summer school's one of those, but if I go back to my observation three example, the one with the um well two of two examples there. One was the SAM stipens, >> right? >> That we we have indications that those were underestimated and that those were supposed to um be covered by the referendum. We also have indications

039that um the paras servings as subs that were in the um in the contract were not covered fully by the um by the referendum. And and there was also a um a um salary increase salary increase for fiscal year 2025 that does not appear to have been covered. So, um I don't know because we haven't seen the we've seen lists of things that were supposed to be covered in the referendum but not detailed costs of things that were supposed to be covered in the referendum. >> Okay, thanks Steve. Next slide. So the recommendations here um the district has already committed to 2 and a half million in discretionary spending cuts, state and local spending cuts. We need to make sure that these are actualized. Um continue to implement the unit allocation tracking and reconciliation process

040to make sure that we're using state funds to the the greatest extent possible. Uh here's another um another plug for training. They're training the senior staff at the district on Delaware education funding so they can maximize the state and federal funding usage and preserve local funds. Um you always want to use other people's money first and and preserve your local funds. And then I know that um employee groups have been working with Dr. burrows and asking questions, but make sure that your employee groups, your unions do have the information they need to understand the current situation. Um, we are not broke, but at the same time, we are in austerity mode, and that message needs to be stated and restated loud and clear. >> Next slide, please. Oh, next slide. And, um, going to turn

041it back over to Scott. >> So, I'm going to do the observation number five. uh we noticed that the budgets uh were adjusted in FSF which is the state's financial system and and it was also adjusted on the monthly reports after the final budget was approved and and without board approval. So a good policy would be to we'll get into the recommendations on that but I'll give you a sample of that first if you go next slide. So I it's probably hard to see here but u the top portion of the slide it's an excerpt of the board approved budget which was approved in February and the bottom portion is an excerpt from the uh from the March monthly report that was presented to the board in May. Uh that was the last month report

042uh was done before the current situation was brought to light. So you may notice in the very fir in the first line there it has a curriculum and instruction. it was budgeted at 2.9 million. However, the monthly uh budget report reflects a budget of 4.6 million. So, that was never really presented to the board to show that change. And this is going to be part of our training for for folks to kind of look for things like this. So, if that if that number jumped that much, probably what was added was the federal funds. It may had gotten somebody would say, "Hey, what's the effect of that?" And then you would have had a conversation probably about well you know there's federal funds in there and those federal fund balances are a lot higher at

043the end of the year so you got to really watch out for the discretionary funds because that could that could cloud the picture which is what I think happened. Uh you can see there's another example there you see the special education budget was about 795 and then all of a sudden it jumped up to uh 3.5 million. So those those didn't go through the board to be approved. So, uh, we have a recommendation here on the next slide. Uh, school district should require all changes to the original board approved budget to be reviewed by the fin financial committee and approved by the superintendent and the board. And we should amend the board policy 5102 to more explicitly require board approval of a preliminary budget, a final budget, an amendment to budgets as needed. Because during

044the course of the year, there will be there will be things that come in. you said that you you will want to adjust the original budget and also keeps everybody clued in to what's going on. Um, so go ahead. >> How would not requiring changes to be approved by a board actually any policy like >> wouldn't that already be >> I think it's just not explicit in there that you have to it there is something >> legislate stupidity basically. >> I mean I don't think it's real clear at the curb policy and the policy needs to be clear that that you should do all three of those things. So, I'm going to turn it back over to uh uh Chuck to do observation number six and take us out. >> Thanks, Scott. Observation six, um

045tuitions, the district's tuition fund balance was in effect negative going into fiscal year 2026 due to a $1.5 million bill payable to Christina school district for fiscal year 2025 services. This one, this one might be catching um folks off guard because it's not really what um sounded the alarm with uh district finances. The district uh it came to your attention because of discrepancies in state and local discretionary fund balances. Um another structural problem lurking here was the tuition tax fund balance. Um, APO carried $960,000 in tuition tax cash balance into fiscal year 26 while carrying a $1.5 million payable essentially um um netting out to a half million uh deficit coming into this uh fiscal year. Um unlike discretionary funds, uh you do get like um an equalization fund from the state to help you

046through. It's state money that you get preloaded in July that carries you um through part of September. There is no um there is no special equalization fund that covers the tuition tax balance. So, um the um because that because it doesn't because you don't have that, you need tuition money in the bank at the beginning of the fiscal year in order to get through October when your um when your large tax receipts usually come in. So um recurring tuition taxf funded salary itself is in the five 580 to 600 sometimes up to 800,000 um dollars per payday depending on if you have a summer school bill or stipens due. Uh the tuition fund was out of money by the end of July 2025 and had to rely on a transfer from operating reserves. This fund

047has been in deficit status since before the beginning of the fiscal year and will remain that way until our large tax receipts come in. The next uh slide please with recommendations. So >> Chuck, before we move on though, I mean my my understanding is that when we set the tuition tax rate, which is the taxes used for special education and other special programs like that uh to support the children with those needs. Um when we set the tuition tax rate for this tax year, we we set that rate to cover the shortfall so that going forward this is not going to be an issue. Am I wrong about that? >> It's the way it should be done. >> That's not the way. >> But that's but that's what we did this year, right? >> Partially.

048We did set it to cover the Christina bills and all of the known um items that we know about. Part of this goes back to the budgeting process. You set the tax rate in June, July. Um needs pop up in September, October when uh you're starting your new school year. What we need to do is during our budget process in quarter 3, quarter 4 before we set the tax rate, if we are adding new classrooms that are potentially tuition tax funded, if we are adding staff that are tuition tax funded, then we need to we need to budget for those things and be explicit about it. Um, what has been happening is that you'll have a carryover and then we'll have needs that become more apparent in um the new the new school year. you'll

049add that you'll add those um resources and it will wear down your um carryover. So, we just have to get more proactive about and forecast get better at forecasting what those next year needs are going to be, build something into the budget to cover those because it's just not it hasn't been there. So, um, so for, um, what should happen is that we should build up a $4.5 million carryover, not a negative half million dollar carryover. We need a $4.5 million carryover. And you um, you could do that in one year, but you probably should not do that in one year because it would it would um, it would involve a um, you know, a tax increase that's probably bigger than you would want to do. >> I know. Yeah, I agree with that. Why

050four and a half million? >> Four and a half million is because you want to be able to cover um payroll through October and and some payroll items that are non-payroll items uh through October. So, if you think about um5 to $600,000 per payroll, $550,000 to $600,000 per payroll, and there's typically seven or eight payrolls um until mid-occtober when your big tax receipts come in. Um and then you need some money also to cover some non-payroll items. Four and a half million should be sufficient. you do receive some tax revenue in July and August and September. So, it doesn't really need to be 7 or 800,000 times eight, but um you do need that kind of um a carryover. >> And the state based on last year, I know the number goes up because our

051payroll goes up, but last year we were always we're in theory required to have $4.2 million on hand at all times, which is two payrolls. So, it sounds like what you're saying is that the payrolls associated with tuition tax, special ed aren't included in that $4.2 million figure. >> They are not. They are not. So, um with these recommendations though, if you implement these recommendations, then you as a body will become more aware of the balance there because it's not there is no um I'll read through these and um you know, hopefully my point will be made. Um, so we talked about a carryover being built up um, so that we can cover our expenses through October, right? Um, the districts have gotten used to not buying certain things until October and November when the

052taxes come in. It shouldn't be that way. If you have needs and they're budgeted needs in July, August, and September, you should be able to buy those things. U, tuition expenses should be budgeted deliberately. I said that. Um, the district should bill other districts per the Newcastle County PreKU as permissible. The district has been missing out on $50,000 per year in revenue by not doing that. And so we'll we'll make sure that the district knows how to do that going forward. Next slide, please. And the district should report tuition fund balances to the to the FAC superintendent and board throughout the year. You get a financial position report on discretionary state and local operating funds, but there is no such thing that the state requires that um is a tuition tax. But it is it

053is something that we depend on in order to um serve our students with special education needs that it is it is significant for us and we need to do something like that ourselves. >> Yu tuition should be treated just like the u the discretionary funds. I mean that and that's going to be part of the training too that we we would want to track that just like we do the discretionary funds. >> Scott, did you have that kind of uh reserve fund at all times for tuition tax when you were heading up your finances in your school district? >> Yeah. And I I I would do an estimate at the end of the year. And we did dis we discovered a ch, you know, a portion of this, you know, after the tax rate was

054set and then we're like, okay, we're going to have to kind of increase this over time, which is how I would approach it. But yeah, when I was in other district, I would I would do an estimate. I would say, you know, multiply out the payrolls through through when when do my when does when does my big tax load come? It comes in October. So, how many payrolls is that times the number of payrolls? Boom. That's my number. So I know I know what I care >> and we know that because we had a presentation on it a couple meetings ago. We we know the tuition tax expenditures have exploded in the last 10 or 12 years. And so you know 12 years ago the number would have been substantially smaller and probably we could

055have gotten away with not having a reserve because but now that it's such a big number we're going to need a reserve. >> Yeah. I I remember I remember when I was here it was we carried over at first I think it was a million and a half and then it got to almost three million at one point and so you know the challenge was you have money there you have needs you don't want to say no to the needs but you also need to make sure you can make payroll so if you do look back you'll see that we used to have a well you'll see we used to have a carryover that covered this but I think now that we've had this um crisis situation that we need to be more explicit about

056it. >> Yeah. So, what what he say is like when you end June 30th, there should be 4.5 million sitting in tuition funds because I Chuck, that's how you came up with that number, right? The number of payrolls looking back over last year, how much was spent? Yeah. Okay. >> Right. Right. Right. Yeah. So, um, to wrap to wrap this up, um, as as Scott said before, these recommendations when you take them all together, they could act as a a playbook for the new CFO, um, and and the district. Um, you know, if there's if if if there's what I would call a moral to the story, it's really twofold. That we need to monitor state and local discretionary fund and tuition cash tax cash flow and projections closely. And the other is to treat

057the budget as a planning tool primarily not just a reporting and monitoring tool. We need to be deliberate about budgeting as well. Um do we have any additional questions or or comments about the um presentation? So I just an observation and a question. So, it seems like through this whole um report uh resources, it seems I'm getting the opinion that we're we're short on resources, whether it be tools or even staff to help some of the financial issues that we have in 22 schools and a large budget. Do I get do I is that is that what I'm getting that you think that whether it be software or someone to track you know what a um almost like a purchaser or whatever word you use >> would that be your opinion or >> Chuck I

058think I would say that's it's a little bit of that but that there there's a lot of process here that could be that you know that's that that isn't costing anything. It's really there's some process stuff, but as far as budgeting and keeping track of expenses. That's I think that's the real issue. Chuck, what do you think? >> Um I agree, but I mean everybody needs more staff to get everything done that they need to do. I know that. Um but one of the a couple of the big things are um I think that the district's now grown too big to really rely on spreadsheets for everything. So I know that Miss Stewart is looking at software for budgeting. is also looking at zerobased budgeting techniques which I think is awesome um because then that's

059a proactive look and it's a priority based look at your budget um as far as the um you know procurement and everything you got to get that done and I know that there are some districts that um have a more centralized view of federal funds management so I don't really know um which way the the district wants to go on this um if there's capacity within the staff now um to um to take on some of these things. I do um I do want to note it's in the um it's in the report that I think it was about six to eight months ago maybe well maybe it was around January 2025 that um the district did bring in a um an analyst into the finance department but um that person hadn't had the lead

060time um or necessarily the access to reports to um to get up to speed by the time this had all um come to light in May. Thank Thank you. >> So, I have a follow-up question, but it may be more for um Dr. Burroughs and and Miss Stewart. Um I mean, we've got a list of recommendations here with respect to each of your points and thank you for those. Um, Matt, can we get a report either at we've got a financial workshop at the end of the month or our next board meeting, whichever is more practicable for you. But I want to make sure that we implement these recommendations that they're not just made and then kind of not followed through. So, what I'd like either at the end of this month or in November

061and then maybe an update again in December is just run through the recommendations and explain to us that yes, this has been implemented. this is how this is what we're doing to make sure that all these recommendations are followed through on. >> Yes, we can take um both reports and make sure that uh we list out the recommendations and how we're enacting each of those recommendations. >> Does anybody else from the board have any questions for >> associated with those recommendations? Also, I'm assuming it's software. I'm assuming you're going to change policy procedure on how we do things. what costs are involved in it. >> Okay, I can make sure I update on that as best as possible >> just in implementing the software. >> Um, is it is it reasonable to expect that some

062of these um just in my packet I went through and circled some that um I think to Miss Mr. Abrams point that is no cost but seems relatively a easy lift. So, is it reasonable to expect that when we go into the workshop later this month that some will already have been launched? Is that a reasonable expectation? >> Absolutely. I mean, many of these we've already started to put in the practice. Um, we started those in some of them in July and have >> transitioned them in. So, yeah, absolutely. >> Okay. We look forward to your update. >> Does anybody else have any questions for Chuck or Scott? Anybody else on the board? All right. Well, gentlemen, thank you very much. I hope you'll continue to be involved. >> Thank you. >> All right. Next

063on the agenda, we have the unit count report. Dr. Small Good evening. >> Evening. >> I thought it was a great idea that Scott had, so I feel like I'm going to steal that for my presentations also. So, the unit count presentation. First slide, Steve. Next slide, Steve. All right. So the process um the unicount presentation is pretty much about the counting of students because the state of Delaware requires official verification of each school's student enrollment as of September 30th of each year. Essentially the units allocated are based on student enrollment including grade level enrollment, special education classification enrollment and enrollment in secondary vocational courses. So essentially the the algorithm is standard units plus special education units plus vocational education units gives you what we call division one units. Next slide. So when you do

064that using that algorithm, the AOquinic school district, our district comes up with 1,46.83 division units, which if you look as compared to last year's units of 135.86, we're up by 10.97 units or as Dr. Burroughs mentioned earlier, almost 11 units increase. Next slide. Here's a year-by-year breakdown of the units. So, I'll give everybody an opportunity to take a look at that. Next slide. And this slide is just a thank you to the team of individuals who worked diligently to make sure that our unit count was accurate or as accurate as possible and effective for making sure that we had the proper number of division one units. Questions? >> I just have Can we go back to the previous slide? There we go. So, as I look at this slide showing the last five years, somehow

065we actually went down 48 students on September 30th last year, but our unit count went up by 2.8%. This year, we gained 61 students and our unit count only went up 1%. Am I correct? That's primarily due to special education. >> Correct. >> Okay. Anybody else on the board have any questions for Dr. Small? >> All right. Well, thank you very much. That was clearly my question. So, perfect. >> I'm there for you. >> Thank you. >> And and thanks to the whole team that uh put this together. >> I mean, that's a good point. So, uh thank you, Richard, for doing that. Just a special thanks to all of our uh secretaries in the buildings and our people here at district office. Um we had a little extra twist to this. We had a

066as I've mentioned several times we mentioned that uh we had a new system this year ed insights which made a little there was a few hiccups in the system and uh took a lot of training and the teachers I should also mention because they had to learn to take tenants and all that like in a new system. So, it was a real team effort and I our district I felt through the leadership of Brandon Moss and his department and everyone in the buildings and all jumped in and gave a team effort and uh we were able to get our unit count right and uh which was if you would asked in August I think it was a real stressor for many of us that that was going to be an issue. So, just thank you

067to the team on this. >> Okay. Thank you. Uh, next on >> Sorry, before we move away from that, um, >> we had the growth in the special education realm. Remind me of the numbers at the top of your superintendence report related to vacancies. >> There was 32 full-time teaching positions and 11 full-time pair positions. >> Didn't you have a special education breakout? Did I hear you correctly earlier? >> I most of those are in our special education. That's why you Yeah. Okay. Thank you. >> Okay. Uh, next on the agenda, we have the construction update. Mr. Hopkins. >> All right. Still at Reading. >> As you can see at Reading, the building's completely down at this point. This in the back here is all complete. the last of the building went out. This is

068an underwater storm storm water management system where the water comes off the roof and into here. We don't have one of these ponds across the whole area. So, that kind of gave us this field back to have an athletic field on this side here of a maintenance area here. This parking lot area is is is starting to get prepped for the parking lot so we can expand our parking lot into this area. looking to be with the field hopefully late November and then we'll start getting our first seating down and starting to prep it up to try to get up for spring sports. Good Steve. It's kind of a view from the back. You can see kind of gives you perspective where the old school was compared to the new and how good the back

069actually does look. There is no real back to this building. The side just looking at it, you know, from all points of view, it's a pretty good looking building. HD just more of the area. This is that storm techch area I was telling you about here. This is where the athletic fields are going to come in here. They're getting a grade now. And we'll start with some paving and curbing and wrapping up the backside. Stone's going down for the parking lot that comes in and helps feed for the sports area here of the gym. That was part of the demolition. I thought I deleted it, but I didn't. This is Crystal Run. So, Crystal Run, this is the elementary school here. We're we're going to start the site work relatively soon. This is waiting a

070Turner's trailer. This portion here will be where it comes the the middle school will pick up from the side of here and it just kind of work its way around with the high school to this side. Hopefully in the future will be an ECC here. Sports fields are lend this area here. Sports field here. Fieldhouse, some sports fields here, but you'll start to see a whole lot more dirt pictures. But this is giving you an idea of where the construction is headed. HD. That's what the overall hope is at the end of this. We're coming into the middle school, elementary, middle, high, future ECC, and the sports and athletic complex in the back. This is Beast and Road coming down the side, the existing road that they're now. >> I just want to mention that

071we have not been approved for ECC. >> We have No, that's I said hopefully >> future. Y >> that hopefully in the future. >> But that's that's that that's the hope and space for it if we're fortunate enough to get it. That's about all we have for construction update at this point. Any questions? >> When do you So, you're doing the fields behind Reading and do you anticipate by the end of next spring that all that work will be done and then we'll have the trailers and everything off that site and it'll be finally done. >> Yeah, the trailers are all gone now. You know, we're kind of housed in the in the back in the boiler room, you know, for wedding and turner uh staff. Yeah, we're'll be looking for spring sports, you know,

072come come next spring. That's that's that's the goal >> we're trying to get there. And then we'll we won't have any more personnel there, I guess, after the spring. >> Not not real. I mean, well, we have a maintenance area now that we're trying to work in in into it because we took the maintenance area out of the inside of the building. We have a maintenance building in the back that we got to start up. We haven't started that yet. So, they'll be kind of working into that spot. >> Okay. It's a great looking school, by the way. >> It truly is a good-looking school and we are in time and on budget. >> Any questions from the board for Mr. Hopkins? Yeah, just with the Crystal Run project um said it hasn't been fully

073approved yet by the state, right? Um I agree with everything you're doing as well going full steam. As you said, every month we're losing even more money, 5% more. Um I just I think it's just badening that a project has been approved. The necessity has been is legitimate and we still yet haven't been approved. That's not on you. That's just a comment for me. I appreciate everything you're doing with the uncertainty there is on there. Um, and uh, thank you for the update and look forward for positive news soon. Do >> thank you. >> All right. Next on the agenda, we have board comments. We will start with Mr. Abrams. >> Hi, good evening everybody. I just want to thank everybody who's working behind the scenes on committees helping to make our district better um,

074by your participation. So, I want to thank you for that. Also just wanted to update that last week we had a financial advisory committee meeting. Uh M store led the meeting. Um I thought it was uh a very good meeting. There was a wide variety of topics that were discussed. Talk from membership to voting to just everything in general coming out of where we've been the last few months. Um moving forward and talking about putting more members on, bringing different people in. The only thing I'd like to ask is that somehow in the next month or so we start reviewing the board policy. I know it's only one um for us in what direction we'd like to send the financial advisory committee working on our behalf. Thank you. >> I just want to add that's

075something that we have Alisa and and myself are reviewing the financial policies and we do have a plan to bring those forward. >> Okay. Thank you, Miss Dit. >> I don't have >> Okay, Mr. Higgins. Thank you. Um so over the month I uh I attended a DSBA uh meeting. It was a Delaware state board of uh board meeting. Um few policies that the the state had f uh passed that um like to share. There's financial literacy uh added to our curriculum. I know that we have already instated that right Matt through the social studies. Um additional rights for uh the safety of bus drivers and bus riders. Um, one that I didn't agree with that uh the state is now going to take have the last say in what books we have in our

076libraries. I think that that's better local, but that's me. Um, I did also uh and thank you uh Nor for allowing me to go to the financial committee meeting. Um, I was still and I still continue to be very impressed with uh Miss Stewart. um she came in under tough circumstances and she has just proven to be laser focused and uh and um for zerobased budgeting I I'm 100% behind. Uh in saying that, I also appreciate all the administrative staff and our principles and our and our school leaders for helping and empathizing with the situation we're in and doing all they can uh to be part of the answer. Um they didn't create any problem. Um but they are asking to be bear some burden. I think that should be uh publicly noted that that

077that they are doing their best to help out in uh in what we're doing and what Miss Stewart is is doing in fantastic job doing. Um also uh I'm working personally um appreciate the school district for hearing me out on one of my concerns which was um and is uh classroom attendance. Um it's a nationwide problem stemming from partially coming out of CO and the kids that were through COVID the practices that they have the habits and bad habits they formed from that. Um there are state and district policies that uh are already in place um about minimum attendance and uh I believe that it's long time coming that some of these policies uh had some teeth and I'm not alone in that. So, um I just hope that uh coming for going forward we'll

078see a little tough love with some of these uh attendance issues and get the kids in the classrooms where the teachers can teach them. And then once we have kids actually in the classrooms learning, um maybe we can assess how well they're learning while they're in the classroom instead of not in the classroom. Um, also, um, bagels for board members is norm normally the Wednesday after the board meeting with a scheduling conflict. It's actually going to be next Tuesday morning. Um, so that'll be 8:30 a.m. at uh, Manhattan Bagels next Tuesday, not tomorrow. Um, it's all I got. >> All right. Thank you, Mr. Higgins. Dr. Graham, >> thank you. Um, so I just wanted to quickly just connect the dot from my last comment as it related to the growth in the district around

079special education in conjunction with the vacancies that Dr. Burroughs just highlighted for us. And so I think it's a perfect example of exactly, you know, what we're experiencing, right? So we have rapid growth and then we don't have um the the staff to backfill and to meet those needs. And so I just wanted to quickly connect that dot for anybody that is listening because obviously that's a vulnerable population within our school district and that we need to be as many priorities as we have that is certainly um an area in which we all need to continue to be laser focused for our children and kind of meeting their needs um specifically within that population. So again I just wanted to connect that dot. So we have that growth uh that uh um Dr. Burrows was

080just mentioning in addition to the vacancies and so it's a perfect storm if you will and so I just wanted to call attention to that as Mr. Higgins and I were just sitting here conversing um about it and there was something else I wanted to comment on and I just forgot. Come back to me Mr. President. There was another comment that I had but I forgot. >> Not a problem. >> Thank you. Um, I just wanted to speak tonight uh about something I'd like to see the district focus on this coming year. I mean, it's been roughly 10 years since we first uh adopted our high school course catalog, which has all the career pathways and there's a lot of good classes that they teach at our high schools. That catalog is the envy not

081only of other school districts in this state but also school districts in the Mid-Atlantic and further. Um and since we've adopted that catalog I mean we've also I think um dealt successfully with a lot of issues and made a lot of other improvements. I mean we have an immersion program now that gets fabulous reviews. We spent a couple years dealing with a very chronic late bus problem that I think you know we do not hear about late buses the way we used to. I think that problem has been addressed. We spent time looking at school start times and we adjusted the uh start times at the various schools and in high school. I think you'll see uh improvement long term in our test scores. That's what the research tells us. This year we started our

082cell phone policy which by all accounts has been very wellreceived and is making a difference. We unfortunately had to adopt a parent and guest code of conduct but it's in place now. Um we have work-based learning I think with over 400 partners meant >> 400 partners um who offer our high school students uh you know practical real experience out in the real world. We also went through COVID. Um I will say the only good thing I think that ever came out of COVID was the fact it forced us to put our meetings out on YouTube. And so um you know we're now accessible and available to people in a way we never were before. Nothing else about CO was good though. Let me be clear about that. Um, but what I'd like to see now,

083and the reason I'm kind of reviewing all this stuff is that I mean, we are here for education, and what I'd like to see done this year is kind of a a more careful review and examination of our educational processes and programs. And for example, what more can or should we be doing in the elementary grades, first, second, third grade to make sure as many kids as possible are not only learning to read, but learning to read proficiently. Um, you know, if you don't learn to read when you're in first or second grade, you're going to suffer the rest of your school career. So, you know, I' I'd like us to just take a closer look at that and see what more we can be doing. Um, what are we doing to catch up? I

084mean, there's still nationally the statistics show there's a lag from COVID. What are we doing to close that gap to uh make up for that lag? Um, I'd like us to look at our high school, look at our catalog. Um, what more can we be doing at our uh high school level? Some of the complaints I I hear, not necessarily at high school, but lower schools, I hear parents telling me, and students, you won't want to hear this, but parents tell me that their kids aren't getting enough homework. And is that really the case or is that just misperception? Um, at the high school level, one of the things that I see a lot of, and it always breaks my heart in a way, is that especially for seniors, they they've amassed enough credits to

085graduate. And so, they come in late because they don't need to take a class the first period, and they leave early because they don't need to take a class uh the second period. And I just view that as such a wasted opportunity. Um, you know, back in the days of dinosaurs and and um, you know, when we did uh, assignments on stone tablets, not computer tablets, um, we had seven classes a day. And so during your high school career, you could take 28 classes. today because of block scheduling you take four classes first semester four classes second semester you can take 32 classes and what that means is and you know in addition to English and math and science and social studies and history and a foreign language or computer science I mean you still

086have capacity to take more classes and a friend of mine is one of his favorite sayings is youth is wasted on the young uh because you just don't realize ize what you're missing. It's so easy to want to sleep in. It's still easy to want to sleep in. Um, but I guarantee that when you look back in your 20s, your 30s, your 40s, you're going to sit there and realize, you know, I don't know something. I could have taken a class in photography. I could have taken a class in art. Or my wife might say, "Shark, you could have taken a class in cooking." But there are a lot of classes you can take outside your comfort zone. Take them because your high school career only comes around once and you know I guarantee you

087that you're going to later regret not having had not having taken advantage of that opportunity. And so one of the questions that I'd like this study to look at is do we need to do more in terms of what's required for graduation? Uh in addition to your core classes, should we require people to take some of these other classes that are available um as part of graduating? I it just it just really just disheartens me to hear of so many seniors deciding to come in late and leave early. What can we do to alleviate that problem? Because you're there, we're there to teach kids, right? And I think maybe there's more we uh can be doing. Just don't let that time go to waste. Um you know, what more can we be doing about writing

088skills? You know, people often say to me, "Oh, Richard, you're such a good writer. Can you write something for me?" Maybe that's true. I don't know. Maybe they're just being nice because they want me to do it. But if I am a good writer, it's only because I do it every day and I've been doing it every day for 30 years. Uh even longer. Are we are we having our kids both at elementary school, middle school, and high school, are they doing enough writing? Um, I remember when I was in high school, if you told me I had to write a 500word paper, that was a lot. 500 words. I mean, I'd be sitting there counting them. Today, I can dash off a thousand words in in an hour and then edit it because I've

089done it so much. And and writing is so important. I don't think people appreciate that. So, what more can we be doing? Um, so Dr. Bros, I will leave that to you in terms of how you want to put together a group. Is it going to be administrators? Is it going to be focus groups? But I'd like to get some sort of preliminary report maybe by March if that's doable, presentation to the board about things we can be doing uh to make our coursework more rigorous, to improve reading, to improve writing. Um Tim talked about attendance. What can we be doing to increase attendance? Um you know whether you want to do that with a group, a task force of administrators, whether you want to do that with a committee that includes parents and teachers.

090I'll leave all that to you. I would though like us to include some sort of survey for all our families. And so I know that our survey return rates aren't always the best, although that's true in so many things when it comes to surveys, but I'd like to reach out to parents and families and see what thoughts they may have. How can we make school better for kids? And I'd also like to see maybe after that initial if you come back to us in March, I'd like to have a town hall where we go over those preliminary recommendations and give parents a chance and and other community members and students uh to address some of those recommendations and see what they think. I mean, you know, we pride ourselves on being a fairly well- reggarded

091school district. Uh but I think the best organizations are the organizations that are constantly challenging themselves and constantly evaluating and re-evaluating themselves. And you know, we've got through a lot these last 10 or so years, but I really think we ought to spend some time just focusing on what we can do from an education perspective and uh you know implement going going forward. So that is my request and my board comment for this evening. So >> I would like to uh piggyback off of um Mr. Forson. Um we do have a something we can do which is um attend the HBCU night and college fair Thursday October 16th. Um between 5:30 and 6:30 there will be an H.B.CU CU night and then from 6:30 to 8:00 there will be 70 plus colleges and universities um

092at the Apoconic uh no excuse me at the AOCIC high school. So make sure we attend um and it is from grades 8 through 12th grade. So just wanted to remind folks to um attend that as uh as a way to help our students metriculate. Thank you, >> Dr. Graham. You also have >> that was actually going to be my exact comment was a reminder for that, but so thank you for that, Mr. Dit. Um, but then lastly, the third comment I just wanted to make was just as a follow-up to last month's board meeting. Um, any of you that were here in the room with us or online, I think we all could um perhaps categorize the meeting as spirited. Um and there was lots of um engaged conversation um during the meeting and

093thereafter and then subsequently like in our emails and things of that sort as the community continues to outreach us. Um I just wanted to um in that regard just wanted to like provide emphasis on the financial report uh the budget observations and recommendations that we heard earlier as we continue to be uh committed to the changes as you may have heard earlier that um Dr. Rose will bring forward um action on the recommendations and the observations that have been presented. So, I just we didn't spend as much time this evening. We didn't have as many or any public comments tonight, but I didn't want that to be misleading and that it is not on our radar. So, I just wanted to provide the community kind of connect those dots, if you will, that it continues

094to be number one um probably one a one and one a on our list as we continue to work through um um the financial recommendations that have been brought forward. I think we heard Mr. Abrams make comment about the financial advisory committee um and changes that we're going to make there. And so, um as Mr. Dr. Higgins said we have lots of trust in Miss Stewart and her leadership as she kind of brings us through this. And so I just wanted to comment on that in addition to uh the reiteration of Miss Dit regarding the college fair on October 16th. And that concludes my remarks for tonight, Mr. President. >> Thank you, Dr. Graham. All right. Uh the board having made its comments and there being no old business, we move on to new business.

095And the first item that we have before us is our September 9, 2025 board of education meeting minutes for approval. The chair will entertain a motion. >> Mr. President, I move to approve um the se September 9th, 2025 board of education meeting minutes as presented. >> Second. >> Motion by Dr. Graham, second by Mr. Abrams to approve the September 9, 2025 board of education meeting minutes as presented. Any questions, comments, or discussion on the motion? Hearing none, all in favor signify by saying I. I. >> I. >> Any opposed? Motion carries. Next on the agenda, we have the monthly financial report for August 2025. Miss Stewart. >> All right. Good evening, President Richard, Vice President Dr. Toshiba, Superintendent Dr. Barrows, and members of the board. Tonight administration is requesting monthly the approval of the monthly

096financial report for August 2025. Um just to give you some background about this report. So as you know I do meet with the finance advisory committee and at the FAC committee. Um the ma the meeting that we had last week was pretty much my first time kind of overseeing and running the committee. I would say that um there was a lot of great conversation, a lot of input that was put in from the committee which I'm really excited about and I look forward as we move forward to get in a better financial place than where we are now. So part of what you essentially will be approving tonight is when I bring the monthly financial report that includes a report on our revenues as well as our expenditures and even backup documentation that we use

097to bring forth the revenues and expenditures. When it comes to the revenues, it gives them an overview of what our property tax receipts have been received to date. Um, and then it gives us a breakdown of what revenues as far as our local discretionary revenues and non-discretionary revenues that we have received. This also includes what I am used to saying restricted funds, but essentially it is grant funding receipts that we have received. To date, we have not received any receipts on that. um we are looking to possibly receive that in November but that's just how that kind of rolls with restricted funds as well as debt service and our minor cap and major cap. So that's the revenue side. For the expense side um there is a report that we pull from the data service

098center that has like our operating unit program summary report. It gives you a breakdown of what has been expended at the school level. So each school 21 schools as well as our department level at the district office. And so that is presented to the committee as well for review. So all of that um before you all make a motion on the approval. Um I do want to note something that I believe is very important. It was eyeopening for me but I believe it's important to communicate that as you see I'm bringing forth to you August of 2025. We are currently in October of 2025. That's a month lag. So even though whatever we have in the report, it's still in a sense 30 days behind of what really is current, I do want to affirm

099and assure you that I work closely with the superintendent as far as our cash flow. Um because even though we have a budget, we do have to manage cash flow. That's the timing of the receipts. So for example, let me explain that to you. We could have a budget of, let's say, a million dollar, but if I only receive tax receipts of 300,000, I only have 300,000 to work with. So, I don't have a million dollars to work with, only 300,000. And so, I think that's important for you as a board to understand and know that that's a key. And we do have internal controls in place. Right now, I communicate with the superintendent weekly to give him updates um if there's anything present with our cash flow so that he is aware. my team,

100I update them often. Um, and then when we have our cabinet meetings, I update that as well. So, just want to kind of give you those highlights. And so, now I am requesting approval of the monthly financial report for August 2025. Any questions that you may have? >> Mr. President, I'll make a motion to approve the monthly financial report for August 2025 as presented with the approval of financial advisory committee. >> Second. >> Motion by Mr. favor and second by Dr. Graham to approve the monthly financial report for August 2025 as presented. Any questions, comments, or discussion on the motion? I think I heard you say, but I just want to confirm. The financial advisory committee has also reviewed the report. >> Yes. And they have approved that as well. >> Okay. Thank you. Any

101further questions, comments, or discussion on the motion? I >> I was not here for the August meeting. >> Okay. Uh Mr. Higgins. So I have two wonder to what you just pointed out. So in the financial advisory committee they're approving that they reviewed it, right? A difference of approving >> anything else. So they're just approving that they actually saw it, right? That's what they approved. >> Correct. >> So that was just one thing. So the second you had mentioned uh cash flow with all that's going on in the state and even the federal government um locally uh with our our with appeals and such. Are are we okay uh cash flow-wise? Not anything under our control but >> right >> you know outside controls are we are we good and do you have as you

102said um internal backups in case there becomes an issue of cash flow. >> So I am working internally to keep a close eye on that. I am a little concerned about our cash flow given everything that's going on with our cash receipts. Um but what I have in place now is that I'm monitoring just about every expense that's going through the district. I have my team eyeing that as well and they're doing a phenomenal job. I have to give a shout out to my finance team. They are phenomenal. They have been a huge support to me and starting here with Apple Equipment School District and I just want to make sure that that is clear. They are my eyes and my ears. Um we are monitoring that to make sure that we have the cash

103flow to put in what is present. So what is push being pushed now and what I'm communicating now is that we only need to purchase what we actually need not what we can kind of get by what we need. So for example if people are used to buying and I'm just using as example 10 packs of pens well no you just need one um given with our cash flow and that is across the board. Now, I am I do ask that they reach out to me. We have a conversation. Um I'm also retrieving understanding as things happen cuz I understand things happen, you know, especially when it comes down to our facilities and operations. There's something that's going to happen that's out of our control. We're going to have to do it. But even in

104that, I am monitoring monitoring our daily validity. If you have not heard about that, it's the DGL060. That's a report that has a list of all of our appropriations for our local funding as well as our restricted grant funding. And so I'm looking at that and to date as what it shows is that the appropriation that we received from our state for payroll, we've already zeroed that out and used that up. So now we're only looking at our one appropriation which is 98,000. And so I'm monitoring that closely. Roughly we received some information about where we should stand. It's at about I'm going to say about 8 million possibly. that can get us through just about possibly the end of November. Um maybe a little bit in December. So we're trying to track that as

105closely as possible before we take any necessary measures like in a sense going to get a loan from the state. So we are trying to look at that closely so we don't have to do that. But you know we're just not >> if I could interject just a little bit here. >> Follow up real quick. Um, so to your point, our revenue, we usually get our large cash receipts usually come in in October. Um, if you look at the budget, uh, in just a minute, we're going to approve the revenue budget. We were, you know, in a normal year, we would have thought we got 77 million in. Uh, we actually got 13 million in. The reason for for that is the the current litigation that's happening, uh, with all the districts in Newcastle County.

106um this with the state and Newcastle County county executive and CFO. Um so that is impacting our cash flow at this point. Um and it's it's impacting every district in Newcastle County as far as that goes. Um Miss Stewart um mentioned a loan. The loan was put in place. I don't want to >> The loan has nothing to do with our current financial situation. The loan is due to when the legislation allowed us to differentiate the tax rate and backed up when taxes were going to be collected. It looks like they're even going to be later now than what was projected. Um they realized that all districts in Newcastle County were eventually going to have a cash flow problem because we weren't getting in our our local revenue through um cash receipts. So they put

107in legislation that we have an opportunity to take a loan um from the state. So just to kind of give some context >> bridges the gap of revenue to what we we actually owe to what we have >> it has nothing so I just want to be clear it has nothing to do with our current financial situation >> and that's and that's a I would imagine an interest free loan because because of the specific situation that the county is in not not our school >> right so just to put some dates on that and an ordinary tax year we set the tax rates at the beginning of July the county sends county who collects the tax money for us. Um, thank you. Um, they send out the bills the end of July. People get their

108bills the beginning of August or your mortgage company gets the bill uh the beginning of August, taxes are due by September 30th. So, here we are and it's October 7th and what happened with the reassessment um issues. Um when the state said to the school districts in Newcastle County, you can split your rates and increase the commercial rate and reduce your residential rate. Well, we had to get that information to the county by I think it was August 26th or 27th, something like that. The idea was the county was then going to turn around and send out bills sometime in early September. Well, here we are, October 7th. They still haven't sent the bills out. And the payment date was extended from September 30 to November 30. So to to Dr. Burrow's point of a

109moment ago, um, in any normal year, if there are normal years anymore, um, we would have gotten the bulk of our tax money by now because the deadline was September 30th. Well, now people are still waiting to they haven't even gotten their new tax bill yet. So, they really don't know what to pay and they won't know until the county sends out the new tax bills. The county has not sent those tax bills out yet. Um some uh apartment owner associations has sued the state and county claiming that the split in rates is illegal or unconstitutional and they brought some other claims. The court is going to have a uh a one-day uh hearing on October 20th and has promised to rule by October 30. Um, I hesitate to be a prognosticator these days, but

110whatever happens October 30, then presumably new bills are going to go out the beginning of November and the county will have them ready to go out November 1st. But that means people will get their bills the first week in November. They're due November 30th. I suspect a lot of payments are going to be late simply because of logistics. You know, Thanksgiving week is in there. So again, when the state was tinkering with the calendar, they said to the school districts, "Yeah, we understand you're getting your money two or 3 months later than you normally would." So they have provided a mechanism where the school districts, to the extent they need the cash, can get an interest free loan from the state while we wait for the tax revenues to come in. So that's what all

111this is about in terms of tax bills and reassessment. Um, as folks may recall, Newcastle County hasn't done a reassessment in 40 years. Uh, based on this experience, it may not want to do another reassessment for another 40 years, but uh, right now the law is they're going to do it in it'll be done every 5 years. And once we start doing it on a regular basis, presumably it'll get easier. So that's what that's all about. Okay. So with that, we do have a motion on the floor to approve the monthly financial report as presented. And Tim, just to your other point, I mean, my understanding is when the financial advisory committee approves the report, it's gone through the report and agrees that it is accurate. It's not the case that they're just saying we

112looked at it. >> Well, no, no. My my point was being at the meeting there was question on well, what are we approving, right? Like obviously if they're approving everything is accurate to the best of their knowledge, that's one level. Um, and then approving line by line is another. So I'm just saying that I think from for me for practice they they review they are reviewing it. That's that's what they are sending us that they looked at it and they saw there could be there could be things that >> they looked at it and saw but they didn't have any questions as far as they >> right. There weren't any outstanding questions. Right. Right. >> All the questions were resolved >> as pertain to the budget not general questions. >> Correct. Okay. So with that

113further clarification then any further questions comments or discussion on the motion? All in favor of the motion to approve the monthly financial report as presented and as uh approved by the financial advisory committee, please say I. I. >> I. >> Any opposed? >> I abstain. >> Okay. Four eyes and Miss Dit abstains. Thank you. Next on the agenda, we have the internal accounts report for August 2025. For approval, Miss Stewart. >> All right. So, this is um administration is requesting approval of the internal accounts report for August of 2025. stated that FSE has reviewed and approved this. So essentially what we have and what we do now in internal accounts um we provide a reconciliation report of all schools and we use a system called school funds online and that's where all the school funds

114are managed their receipts as well as their dispersements. Um, with this internal school accounts report, um, what I updated the FAC on, just so that you are aware, we do have an internal accounts procedure that we did update and make some changes to. Some of those to note is that if there are transfers between budget lines within that school's account, they have to get that approved by myself and the superintendent. Any grant related um, funding sources should not go to school funds. it should be coming to the finance office because it's a grant and there's restrictions to that. If there is a new vendor that is needed that the schools can no longer enter in new vendors that has to be approved by finance and there's a purchase authorization form that in a sense if

115they need to use their pecard they get the request and the approval upfront first from the principal um and then it goes to me to have the final approval that is okay before that purchase is made. So just so that you are aware there are some changes that we did make to the internal accounts to provide more internal controls and so this is the opportunity where FAC was able to review that if they had any questions we were able to answer. If we were not able to answer um I definitely let them know that the next goound when we come to the meeting I will be able to provide that answer. Um so I am asking for a motion to approve the internal council report for August 2025. >> Mr. Mr. President, to make a

116motion to approve the internal accounts report for August 2025 as submitted with the approval of financial advisory committee. >> Second. >> Motion by Mr. Abrams, second by Mr. Higgins to approve the internal accounts report for August 2025 as presented and as recommended or approved by the financial advisory committee. Any questions, comments, or discussion on the motion? >> I had one one comment just in general. Um and again maybe not spec specifically this but I I did notice and we you spoke about in the financial advisory committee that um payroll as far as this year to last year is right on target given the fact that that our we were given our our teachers got well-deserved raises. I think um it needs to be noted and accommodating um the whole staff uh your staff and actually

117our teachers as well and our educators for coming together and knowing there was an issue and you know kind of all bearing a little of the burden and uh I appreciate as community member and as a board member and I just wanted to say that >> all right with that comment any further questions comments or discussion on the motion hearing none all in favor signify by saying I I >> any opposed saying any obstain Mr. Wit abstains. Okay, motion passes. Next on the agenda, we have the bond anticipation notice for approval. Dr. Longfellow, I think you are up. >> Thank you. Thank you. So, um, before we talk about the bond anticipation note for now, I just wanted to note that in September 2025, last month, we paid off bond 196, which was for the

118local share of the um that year's program of the new Aquinamic High School, the Alfred G. Waters Middle School, Reading Middle School auditorium, renovated athletic fields, constructing a new ECC, which I think was Towns End ECC and some renovations on the district office. Um, that's good that we did that. I think the rate then was uh 4.02 11 million or so was our state was I'm sorry, was our local share of that. Um what we're asking for you tonight to approve is a bond anticipation note um with the state that's going to cover the local share, the 27% local share of our um fiscal year 2026 capital improvement program which is in the bond bill. Um that is the local share of a new middle school and high school at Summit Campus. And uh the

119other thing that's changed since I did this last um some years ago was um that now the state treasurer's office also asked when you approve the bond anticipation note that you also approve the future conversion of that note to um bonds at a rate to be set by the state at the time of the state bond sale. So, I'm going to um read off a um potential motion um that we are recommending that you um adopt and approve. So, we're looking for a motion to approve a bond anticipation note with the state for 5,57,741 at 4.09% 09% peranom for the fiscal year 26 capital improvements program which includes the local share of a new middle school and high school at Summit campus and subsequent conversion to 20-year bonds at a rate to be set by

120the state at the time of the state bond sale. >> Mr. President, can we accept that as a motion or do we have to remake the motion? >> You can make a motion to approve to you can adapt what adopt what he just said. >> Mr. President, I make a motion to adopt Dr. Longfellow's motion for the bond anticipation note. >> Second motion by Mr. Abrams, second by Mr. Higgins to adopt the motion as presented by Dr. Longfellow. Any questions, comments, or discussion on the motion. I have a question. I just want to be clear about this. When we say that the $5,57,741 is the local share, that's only the local share to date. I mean, we're still going to there's still going to be more money required from us >> towards >> That's only

121that's only the part of the phase that is being funded fifth school year, right? >> Um there was probably some already funded last year. If not, there's definitely going to be some funded in future years because um new middle school and a new high school definitely don't just cost, you know, $20 million, >> right? So, I just I I mean I just wanted folks to to to be clear that this 5 million 5.5 million and change is really just our local share for the work that's being done this fiscal year. >> It's being funded this year. Yes. >> Yeah. and that uh there'll be uh additional funds uh that we have to approve uh in the future. So with that clarification or understanding, are there any other questions, comments or discussion on the motion? Hearing

122none, all in favor signify by saying I I >> I. >> Any opposed? Motion carries. >> Thank you, Dr. Longfellow. You're still up because next on the agenda is the amended preliminary revenue budget for approval. Thank you. I will bring that up in fair screen. Uh let's see. >> He's got one more there. Okay. Okay. So, here we have um this is one part of the amended preliminary budget. We did present a preliminary budget um a couple months ago just to establish some board approved spending authority to operate the district. And what we said we would do is continue to work on the budget. Um the budget does have two compon two major components to it. Our revenue side and our expenditure side. This part here is the revenue side. It's admittedly the easier part.

123Um we intend to bring you the expenditure side of the budget next month. So um this is the cover page. Here is the um here's a page that has the projected property tax receipts and um a brief two-year history of our tax rates. This was um this was done a couple this was done a couple weeks ago because we had to get it done in time to notice for the um the financial advisory committee and the the board. So you'll notice in here October has what at the time we projected would be the normal like normal year and but as you said there's no such thing as a normal year anymore but the normal in a normal year we would take and um smooth out what we um what we're going to get over the

124year by month depending on um you know depending on the percentage we receive each month um over the year. We we did a 2-year 2-year look and out of the uh 96.4 million that we should receive in receipts all year, normally in October, we would receive 77.4. That was not the case. Um we received or we're we got um we asked the county what do we think we're going to receive this this month? And they let us know that we should expect 13.2 rather than the 77.4. for um I met with I met with um with Stuart um once we found that information out and we did project is that going to get us through the month and we did uh we did find that it should get us through the month as far as

125discretionary cash goes as long as we stay in what I call austerity mode as as she described it. it is just getting what you need, not everything uh just getting the the basic necessities, not not you know um the full spectrum of needs that we have. So this budget here, I'll ask you I'll ask you to approve it with this number in here to memorialize what we should have gotten. However, if you were to say no, I don't want to do that. I want you to go back and change this to what we think it might be. Um two things for that. It doesn't it doesn't really hurt our feelings. we can go do that and bring it back next month. But the other thing is we really don't have the crystal ball to know

126what we're going to receive in November and December given all of the suits that are going on and the um you know the directions that came from um from the county to um for the mortgage companies to not pay their their escros and so forth. So you could leave it like this and then you you could know that by the time we do the final budget we you know we have um we could repro it um it you know whichever you want to do but again the October projected receipts were 77.4 million but the actual is going to be more like 13.2 with about um seven and a half of that being current expense which is what we rely on for making our um discretionary payroll. The other thing is senior transfer 1.803 million is

127um typically received in October. We're going to receive 1.8 or so million which will bring in another million for current expense. So this right here is probably the most uh dramatic slide of this whole thing. Usually the um revenue budget is pretty easy but it's not this year. Nothing's easy this year. Um, next page we have >> Chuck, before we move on, can I just ask one question? >> So, the the amounts you're showing for July, August, and September, are those the actual amounts we received? >> Those are I know that July and August are actuals. I don't remember without having to without digging through a slide whether September is the actual or not. Miss Stewart might know. Um, I'm not sure. Um but um I know that at least July and August are actuals.

128September could also you know what I think September I think September is also actual. >> Okay. >> You think >> and then even if we approve this with the caveat that you suggested which is we know that this is based on I'm going to say a traditional and I'm using air quotes a traditional year. Um could could you or Scott or Lisa just provide us an an update uh based on what we learned during October at our November meetings? >> Yes, absolutely. Um, I think that's that's something that she might do um in conjunction with the uh monthly report because as she said, I I you you could tell that she's a little uneasy about giving you month old data, month and a half old data that I think that she probably wants to um

129get you up to date. So, this is probably something she would do. I can't see her face, so I don't know if she's shaking her head or not, but I'm sure she is. >> It's It's very pokerfaced. >> Yeah, she's very stoic. >> Laser focused. >> Awesome. Awesome. Um, okay, next page. Um, one thing we're doing that's a that's an improvement from previous years and uh some of this comes from um Miss Stewart's suggestions and from the financial advisory committee's um uh recommendations is that we are separating out and it's and it's something that you saw in our um presentation tonight. We're separating out discretionary state and local operating revenue and then the next slide is going to be non-discretionary. So when this is done, you should know the bottom of this what is the

130pure discretionary state and local um funds that we anticipate receiving this year. What was the actual we received last year and what was the prior year budgeted? Then the other thing we've done is we put notes along the side so you know where it came from and what some of our assumptions were. And this is uh this is something we're doing to um improve the process. The um one note um that I'd like to make and and this is in the spirit of cash flow. You heard about cash flow. Um we have received our preliminary um charter bills and usually around this time of year we're supposed to pay 35% of our charter bills. It's about $1.6 $6 million this year. We cannot do that because if we do, it threatens our ability to make

131our payroll because of the um short amount that we've received um from um property taxes this year. That $13 million, we got to make sure that it gets us through October, November. If for some reason we're forced to pay that, it puts us in a very bad spot. So, um I'm not sure what DOE's stance is going to be on that. I think every district is in a similar um situation with that. But at the same time, I also feel for the charter schools because they need cash flow to operate. >> But we we can get an interest free loan from the state. Correct. >> I don't know the details on that, but that would be um that would be a practical application of getting that interest free loan from the state is to cover

132the charter bills. So, um, that's something that I would I would consider that for I would avoid a loan if possible, but for something like that, >> I agree. we should avoid a loan >> to the greatest extent possible, but you know, if the charter schools are in the same boat essentially that we are and they don't have the ability to get a loan from the state and I can't say I've looked at the legislation um and and we do and it's interest free, then it's something caused by the change in the in the property tax due dates, right? >> Yes, I agree 100%. >> Okay. Well, hopefully we won't have to worry hopefully we won't have to deal with that issue, but we'll see. >> Yep. Ne uh next one is non-discretionary state and

133local general operating revenue. These are all of the things that we don't um we don't have um full discretion over the most of these buckets that come to us from the state and of course all of the buckets from the federal government have string strings attached. So since they have strings attached, we don't have the flexibility to use them for our um generally our local share of of salaries, which is the biggest expense that we have um in our district. So here we just have a list of all of those non-discretionary funds and even at the bottom some local um non-discretionary funds and again with notes on how we um came up with that, some breadcrumbs as Scott likes to call it. federal program funds and tuition program funds are here on this sheet. And

134so, um, our tuition tax should bring in 25.8 million this year, but we do transfer some out to other districts for, um, special programs such as Delaware School for the Deaf, Brennan School, um, other programs, and then also there are some are some transfers that go to, uh, charter schools. the net transfers from other districts. Um I put zero in there for now, but we do expect that we will be billing. So that could be another 50 60,000 coming in. Um it wasn't budgeted, but um initially we put in zero um pending our analysis on that. And then finally, I think this is the last page, our debt service and capital funds. We took this out also. Um there's there's no reason to mix this in with the other funds. debt service tax revenue and

135interest income. We do receive interest on our debt service and construction funds that help us fund our um paying our bonds. And then our minor capital and major capital. And there under major capital, you do see the local 23%. Um I thought it was 27%. I hope that's not a typo. Um but it's the 55 5.507741 507741 million for the bond anticipation note and a disclosure there that we will apply for a bond anticipation note but we've already uh disclosed that so wanted to see >> it's 23 Chuck >> 23 okay I I misspoke then when I when I said 27 in the bond anticipation note um presentation I misspoke it should have been 23 so um any questions um this has been um reviewed by the um financial advisor committee and um we recommend

136the that the board approve this amended preliminary revenue budget for fiscal year 2026. >> Right. And and Chuck, again, I I mean, I think you've told us, but I want to make clear looking at the last page, the debt service and capital funds. Again, this is just showing us revenue. It's not showing us how this revenue is going to be spent. So, that'll be what you show us next month. Is that correct? Correct. You're going to see next month and in in this particular slide, the debt service um the debt service expenditure is going to be exactly what we know we're going to spend on our bonds plus an estimate of the interest we're going to pay on the bond anticipation note. It all depends on when um when they uh sell their bonds and

137what the rate's going to be on that. Um, and then minor capital, we budget that all of that's going to be spent because it is it's other people's money and you try to use other people's money before you use the money of your own tax base. And then major capital funding, that's all going to get budgeted out because it's all going to get um spent on our projects. >> Right. >> Okay. Um, so we have the um fiscal year 2026 amended preliminary budget for revenue. The chair will entertain a motion. >> Mr. President, I'll make a motion to approve the amended preliminary revenue budget for approval as presented. >> Second. >> Motion by Mr. Abram, second by Mr. Higgins to approve the fiscal year 2026 amended preliminary budget as presented. Any questions, comments, or discussion

138on the motion? >> Thank you. Um, if I can, I just want to add clarification. I know Dr. Chuck was stating in the amended preliminary budget that September number that you see, the 8.4 million, that is a projected number. The actual receipt for that was about 7,69,000. So, I just wanted to clear that up for you. >> Thank you. Thank you. No problem. >> Okay, great. Appreciate it. So with that clarification, any further questions, comments or discussion on the motion hearing? None. All in favor signify by saying I. I. Any opposed? Motion carries. >> Thank you, Dr. Long Fellow. Thanks for all your uh help during these last couple months. >> Thank you. >> Next on the agenda, we have a transportation update for approval. Miss Macintosh. Everybody likes a podium. >> All right. Good

139evening everyone. Um I'm Amanda Connley, director of safety, security, and operations for the school district. And I have with me this evening Miss uh Stacy Macintosh, our supervisor of school transportation. We are here tonight to provide an update on transportation now that we're into the school year as well as a recommendation uh to the board. >> Okay. Good evening everybody. >> Good evening. >> All right. So, currently uh we have six contracts that have been returned to us by Advanced Student Transportation. Uh they do not have any drivers in the pipeline. Uh so that means they were the the routes were running not on time, kids not getting into school. So we had to retain those contracts. How did we get here? So just a little bit of history. So prior to 22, uh we

140were fully contracted. We did not own any buses. Some of us remember those days. Mr. Longfellow does, too. Um so the board finally after COVID the board um approved eight buses for us to start with. We ended that first school year in 22 with 31 total contracts. Uh a a more of an increase than we even expected. Uh this was obviously in response to the rapid growth and the driver shortage. The contractors just could not keep up. So since 22 uh we've grown to 54 contracts. That's what we've started this school year with. On year four, we're up to 54. Uh we own 65 buses in total. 11 buses are spares and trips. Uh we have 54 full-time employees. Uh well, drivers and three part-time drivers. And my staff, including myself, is eight employees total.

141This is just I can't I can't see that without my glasses in front of me. Okay. All right. So, this is just a little bit of the history. You can see where we are and where the contractors have been. And you can see the numbers through the through the years. Advanced student has been dropping continuously. The other uh the other contractors pretty held, you know, they've been holding pretty steady, but as you can see, our numbers, we have grown from year to year to year. >> Okay. And are you using the term buses and contracts as synonyms? I mean, so if we have a contract, that's a bus. >> That is that is correct. So there's there's always a lot of confusion around that because up to three routes can be assigned to a bus.

142So sometimes when someone hears, oh, we have a bus out there, they might think they're only doing one route when ultimately they could be doing up to three. So the bus is the unit, but the contract is what holds the routes. So I think you said there what six >> contracts being returned to us now. >> That is correct. >> Is that 18 routes or? >> So two of them were triples. So they held three and the remaining four held two routes each. They were doubles. >> Right. But we're going to need a bus for each of those six. >> We are we are if we're Yeah. Yeah. Our fleet. So the the fleet that is not 23 and higher. It's getting very hard to maintain with the cost. So it's it's just it's feasible.

143It's in our best interest to get new units. >> You have the human like you have the resources to fill this >> like Okay. >> So we do. So when um we look at our contracts and and Stacy looks at what we're doing with transportation, the first step that we take is to reach out to the Department of Education. So, in this case, the Department of Education um will cover the cost for the new bus or for the new buses that we are requesting. We as a district are responsible for any of the add-ons. Um so, when we talk about add-ons with the buses, there's not a specific uh menu that we put on all buses. It depends on the model of the bus that we're provided. So, we look at things like safety seats

144for students with special um transportation needs. um larger fuel tanks so that our drivers aren't um having to stop multiple times a day or every day. They can stretch out that. Um so Stacy and her team look at the specific model that um the state is going to provide us with. They cover the full cost of the bus and then we're responsible for covering the add-ons um that we would put on the bus. So, in the ask that we have tonight, you know, knowing the um austerity measures we are putting in place right now with the district, we've we've worked with Miss Stewart uh to make sure that she's confident in the the ask that we have u before you this evening, which is um looking at the cost of the bus being covered by

145DOE, knowing that we would fund any of those add-ons with those units. And then the employee costs are reimbursed by the Department of Education as well. Um there's a $1.56 per hour that we cover on top of the state salary reimbursement to keep our department um competitive with our neighboring school districts. We're we're not um close to some of those school districts, but we're we're right there with two of the uh Newcastle County school districts. So, the Department of Education covers 25.50 um per hour for the depart or for the bus driver um employee cost as well as picks up those other um benefits that are part of their compensation package. And then um locally we fund uh $1.56 per hours covered by our transportation budget. >> What's the turnaround time on six buses? >>

146Well, fortunately um there are a couple of companies that have what they call floor models. So, we're looking at 3 weeks. >> Oh, okay. >> Yes. If approved. >> Yes. >> So, uh when we approved these contracts in the summer, um it was apparent to me at least that that the industry of independent busing was shrinking. Um we had said that in the summer. >> Yes. >> Uh coming to fruition. Advanc has just dropped six contracts. Right. uh following that trend, they may drop all 14 by next year. Uh because they started at 38 two two or three years ago. Now they're at 14. So they may or may not not have a contract. In saying that, um you're getting six buses. We have 65. Where where are we putting them? What the Fairview campus

147is where they are now. How sustainable is that? And how many more buses can fit there um physically? >> Well, it in my opinion, we're already over capacity, but I don't know what the capacity would be there, right? We we're we're working with the campus and the schools. Um it is not sustainable. Um it's very challenging, especially if if you've been out there for athletic events and band competitions and things of that nature. Uh we are out of room. We're doing the best that we can um with what we have. >> Yeah. Because it it just seems that unfortunately and to no no one in the district's fault. I I look at the way the state handles busing and they are putting busing companies out of out of business. That is my opinion that you

148this you cannot as an independent contractor in my opinion compete with the state. Um so sooner than later you are going to be a full-blown bus company. Um, and I think we need to think as a board and as a district going forward, not just these six, which unfortunately are necessity, but going forward, maybe 14 next year, maybe 20, maybe seven. So, I think as a board, we need to be forward thinking. And, you know, to your point, you're already at capacity where you're at. Not that we have money to throw around. I but um I'm, you know, I'm not want to bust at my house. So sooner or later you're going to run out of room and I'd rather fix that problem before it it becomes a bigger problem. That's just my >> Oh,

149I I appreciate that. I love proactive and and yes, like I said, challenging day-to-day operations. Uh but we're doing the best that we can >> until a home is filmed. >> So we're paying with our extra $1.56 over $26 an hour to the school bus drivers. I mean, what are the private bus companies paying? You know, >> unfortunately, yeah. So, if you if you want to just talk about advanced student, they're about 1970 an hour. So, they're not even meeting what the state is reimbursing, but they use that um I guess as they go up into, you know, the pay scale. >> And is that 2550 figure include benefits or not include benefits? >> I'm not too sure. No, I don't believe. No, it does not because the OEC's is is given to us at

150a later date. They they supplement 90% of our OEC's. Now, it is worked into the actual contract for the contractors, but not us. The state makes that transfer at another time. >> Right. I mean, Tim, to your point, if you actually run the numbers, the state is paying more money for us, the school district, to run the buses if they would just have they they should have solved this problem 8, nine, 10 years ago. If they were if they would have given more money and would give more money to the private bus companies, we wouldn't be in the bus district. And you know, folks will remember that I always thought it was a bad idea for us to get into the bus business, but it got to the point where we didn't have a choice.

151Um, so getting free buses. >> Well, that's right. My point is the state actually spends more money because they give us free buses. They pay the bulk of our drivers salaries. So from our perspective, it's probably a little bit less. But if the state had simply done more to work with the private bus companies, they would have spent less. We would have spent approximately the same and overall the total cost would be less. I mean, that's all I'll say what water >> and our cost would have been just flat >> is what it is. But I also remember and folks >> who were here will remember I asked a lot of questions about what happens when we start to get more buses because I don't want to have to buy more land. We got plenty

152of parking at our campuses in my view and we'll have to make it work. I don't think it makes sense to try to acquire land for a separate bus depot. That's my opinion and I'm you can always try to persuade me otherwise. >> I certainly won't >> when there I don't think we need to acquire land. I think we have a plan on where we can put the buses. It's just we just need to actualize it. >> Yeah. I'm not even sure we're there now. I was just asking the question because I just know that that's, you know, physics or whatever it is. >> We're getting close to that point now. And to Dr. Burr's point, we do have land already. Um, and Stacy and her team are doing a phenomenal job right now working

153with the resources that we have, and we're coming up with short-term plans um to to solve this as we slowly add to our fleet over the next year or so, but then also um some long-term plans over the next 3 to 5 years of where we need to be. um because we do know that as our fleet's going to continue to grow, we we do need um to make sure we're thinking that way. >> And even though I may be a kromagin on this topic, I mean, people shouldn't take that to mean that I don't appreciate all the really good work that our transportation folks are doing. They are doing a phenomenal job. And again, if you were here back in those dark days of 2018, 2019, 2020, when we would get a monthly presentation

154about the vast number of buses that would run late on any one given day, I mean, we just got back into a corner and we had to do what we had to do. Um, and so, I mean, again, you guys are continuing to do really good work. And Tim, I think your point is exactly right. at some point. I don't see it as a long-term business model where a bus company is giving us back roots or contracts on a year-to-year basis. It's only a matter of time. If it's not next year with 14, it'll be seven next year and then the final seven the year after that. I I just don't see how you sustain your business giving back contracts every year. But if you can only afford to pay your drivers 20 bucks an

155hour and the state's paying 25, I don't know how you could can compete with that. You can't get the drivers. And that's what really has been uh I'll say driving, no pun intended, this problem. But anyway, I mean, we have a recommendation in front of us. And so unless anybody asks further questions, >> I I have a point of clarity. I think I just heard a little bit of a mixed message. So, do we or do we not have a plan for storage of the buses? >> Six. The additional six. >> Yeah. >> For the additional six, yes, they will fit on fairy pants. >> Oh, okay. Yes. All right. Thank you. >> And one final question. Um, with these six or what is a number where you would need more support staff besides drivers

156like mechanics or assistant mechanics or other employees that I don't even know about that you may now are at a stress point where you need additional employees? >> Well, well, office staff, we're fine right now. When we open new buildings, maybe we can revisit that. Mechanics, we could save a lot of money if we could do our own maintenance. Right now, we we take it out. We we actually pay drivers to drive the buses to the shop to >> But saving money would be an investment on a a a shop. >> It would absolutely and and that would Yes. But we we need the home then we can get the mechanics and then Yes. And ultimately it will be saving money. So, we outsourced the I mean, the six would be under warranty, so I'm

157not worried about that. But other than once they're out of warranty, >> right? >> Repairs obviously are larger cost. >> Correct. And tires. You would not imagine how quickly we go through a set of tires, which is about $4,000. >> I mean, it's not a discussion because it's a necessity. I mean, we're just, you know, I'm just trying to look so we don't have that automat a problem immediate again as far as right >> forward thinking. >> Mr. Abrams. So just a question if in your recommendation tonight as we add to the foren fleet and it continues to be Mr. Forston's fleet from Miss Wall. So you wanted me to remind you for fleet do you need any more buses in this? Do you need us to say you can go up to 10? Do

158you need to go more than what you're asking for? So two weeks from now there's a problem and you need more than just say you need what you need. Do you need us to give you >> push? I I believe I believe the six would be fine. we have enough spare units that we can certainly uh get by with just as we're doing right now. >> Okay. >> Um but I appreciate that >> to to your point uh maybe somebody if not you follow legislation when buses may not be free. Um because if there's going to be a time where the state says we're ending this program and I free we we pay 10% right it's not 100% free but we do have a cost right to the >> just the add-on value just the

159add-on. So 130,000 roughly is what DOE pays and we're paying about 1,300. >> Right. So maybe somehow maybe a Google alert on the state ending free bus program because that's a lot of cash that they're they're giving us for Yeah. So thought >> Mr. President, I'll make a motion to approve the recommendation as presented this evening. >> I'll second. >> Motion by Mr. Abrams, second by Mr. Higgins to approve the addition of six buses to our bus fleet. Any questions, comments, or discussion on the motion? Hearing none, all in favor signify by saying I. I. >> Any opposed? Motion carries. >> Next on the agenda, we have overnight field trips for approval. >> Mr. President, I make a motion to approve trip ID 11031, trip ID 11032, trips for preliminary approval with trip ID being

16010864, followed by trip ID 10945 for approval. >> Second. >> Motion by Dr. Graham, second by Mr. Abrams to approve trip ID 111031, trip ID 111032 and preliminary approval for trip ID and trip ID 10945. Any questions, comments or discussion on the motion? Hearing none, all in favor signify by saying I. I. Any opposed? Motion carries. Next on the agenda, we have change orders for approval. Mr. Hopkins, >> I have submitted change orders for approval. Uh, a couple of those to note. Uh, there's one there for $29,000 for an added manhole. We had to get around some existing conditions. We had to move around that to get that to work. Uh, we added um didn't add, we finalized a design on some sidewalks going to the outdoor classroom. That was in 32,000. There's several on

161there just closing out the jobs and there's some premium time, things like that. We're at the end of the job where we're starting to close these items out. So with that, I'm seeking approval of the uh change orders as submitted and as recommended by myself. >> Mr. President, I move to approve the change orders as presented. >> Second motion by Dr. Graham, second by Mr. Higgins to approve the change orders as presented by Mr. Hopkins and as recommended by Mr. Hopkins. Any questions, comments, or discussion on the motion? You know my question. Are we still on time and on budget? >> We are. >> Okay. Any other questions? Hearing none. All in favor signify by saying I. I. >> Any opposed? Motion carries. Next on the agenda, we have revised policy 3108, holiday leaves and

162absences, first reading. Dr. Small, >> thank you and good evening again. >> Good evening. >> So, we have the policies policy revision for holidays, leaves, and absences. Next slide, Steve. So um this is the first reading. We went through the report in September. First reading is tonight and the second reading will be November 18th, 2025. Um the policy is from the 3000 series and it's policy number 3108. Next slide. This first piece of information here is to ensure that we add governance a governance reference to make the list comprehensive for the governance that governs employee leads. Next slide. This is a new description that was placed in the policy to create clarity around who earns acred leave. basically making sure that we have a clear understanding that leave is acred under the provisions of the

163negotiated agreement and state and federal laws. Next slide. Um two provisions here. The doctor's note for for the human resource department will be needed at four days that are consecutive days of um absence and there are five personal days that can now be used as a part of an individual's sick leave within the district. Next slide. Um this um information is just to make sure that the provision is comprehensive. that's already a practice that we use in the district with um employees that come to us with zero to one year of experience. So, as an example, an assistant principal that is just walking out of the teacher ranks and moving into the administrative ranks, um we try to make sure that they have the days of vacation in the same way that an individual that

164has one to 10 years but um a fewer number of days. Next slide. And this last slide is to make sure that the language flow and the specificity is within the um policy for consistency sake. We started with vacation as a part of this as opposed to annual leave and we looked to end with vacation instead of annual leave. And we also made sure that we had the new fiscal year as opposed to the new calendar year. um leave carried over would not exceed 42 days. Next slide. Questions? >> Questions for Dr. Small. This is the first reading and he will be back at our November meeting. >> Uh yeah, just a quick question. Dr. Small, um remind me of assuming approval. When does when would it go live? So you're going to come back

165next month in November. Yes. for final for final reading assuming approval right and then say we approve it that night when does it go when is it effective >> so it's effect of the actual date of the approval but to get it into the board policy online >> um I would suspect that maybe Wednesday or Thursday of that same week >> okay that's what I was asking like I know it's approved that night but like when like when will the team kind of see it >> the hope is that it would be ready to go. So, it's it's in draft form and it's ready to go. Now, essentially, I have to take the red font and turn it into black font. Um, once I'm able to do that and get it to Miss Pro Hudson,

166we can get it up on the website for a policy >> to be finalized, if you will. >> Okay, sounds good. Thank you. >> You're welcome. >> Any other questions from the board? All right. Uh there's nothing to vote on because this is just the first reading. So, thank you very much, but don't leave because you're up again with our personnel report. >> I was going to do a 360 and say good evening again. >> Good evening. >> Um the personnel report for the October board meeting has been presented for your approval. Tonight, we are asking for your approval as presented. >> Mr. President, I move to approve the personnel report as presented. >> Second. Uh motion by Dr. Graham, second by Mr. Abrams to approve the personnel report as presented. Any questions, comments, or

167discussion on the motion? Hearing none, all in favor signify by saying I. I. >> I. >> Any opposed? Motion carries. Thank you. >> Thank you. >> All right. The last item on the agenda is just to review the establishment of our meeting dates. The board of education will have a finance workshop at 6 p.m. on Tuesday, October 28th here in this room. The financial advisory committee will meet at 6 PM on Tuesday, November 4th. Um, in this room, which is different for them, right? It says it'll be in this room. They've been meeting here, the sec our normal second Tuesday meeting. And that meeting will start at 7:00 and will also be in this room. So uh with that uh this meeting is adjourned. Thank you all for attending.