School Board Meeting - September 25, 2025 (Open Session)

001Okay. >> Good evening and welcome to the September 25th, 2025 meeting of the LBUSD Board of Education. The open session is called to order at 6:06 p.m. If you are a student who wishes to speak to an item, please write student at the top of your card so you can speak first and do not have to remain for the entire meeting. All public comments submitted via the online form were sent to all board members prior to the meeting. Thank you for coming to speak to us respectfully about items that you care deeply about. Now, pledge of allegiance. Ivy, will you lead us in the pledge? 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

002all. report on close session. The board voted on whether it would wave the attorney client privilege regarding a portion of a legal opinion provided by council council concerning whether conduct of a board member violated statute. Um there was a 35 vote. >> 3-2 vote. Yes, there was a 3-2 vote. Um and the privilege was waved. >> 32. >> Oh, okay. Um >> I voted against it. >> Okay. I voted for it. >> I think >> Okay. Okay. Mr. Clerk Hills, are there public comments? >> There are no >> Are there any student comments? >> No, I'm not seeing Oh, there are some buried here. Uh, there's no comments on matters not on the agenda that I see here. >> Yeah, there's one. Okay. Yes, Aaron Barman. >> Thank you. I'm here to advocate for staff.

003Back to school is bananas, but the best part of back to school is that it's a fresh start and a new beginning. I'm suggesting that the board, particularly new board majority, take this opportunity to start on a positive path. I believe you should all be positive role models for students and the be one of the best ways to start on a positive path is to commend and acknowledge the staff for all the amazing things happening at the campus sites. Take a cue from Dr. Glass at all the gatherings, school power meeting, PTA meeting. He has said LBUSD is a wellrespected district globally and nationally and he has consistently thanked staff. I've had the privilege and pleasure of getting to know so many staff members in my role as a volunteer hospitality staff appreciation at Elmoro

004staff appreciation chair at Thirstston and now I'm doing it at the high school. I'm deeply concerned you're going to drive away talented staff that'll be coveted by other districts. I am not suggesting that we just dole out compliments for the sake of being complimentary. I'm suggesting that we offer up commenation and acknowledgement where it's deserved and authentic. Um, so I would like to see a little bit more of that. Um, I would also like to another positive path is think about way that you communicate out to the public. Um, whether that's in email, writing, at a at a public meeting, whatever it is, content matters, but delivery really matters. Please think about physical posturing, tone, decibel levels matter. Please think about delivery and please start communicating in a more positive manner. We want a bolstered

005staff, a supported staff, not a demoralized one. Take a cue from the student board members. At the town at the town hall, Ivy gave a shout out to Mr. Todd. Um, and he was a student who's come back to teach. We want to keep and preserve that. Logan gave a shout out to the MUN program. Ivy shouted out um Mr. Witoff. My kids in your class really enjoys the class. I don't know what those machines do, but it looks like an incredible place. I'd love to shout out everybody here. It's so easy to send out a quick email to a a teacher say, I love what you said at back to school night to a coach. Hey, I really liked how you helped the team power through that challenging moment. Thank the night staff here.

006That's Eddie Roger Senior, Samuel, Aaron, and sometimes Rey. There are so many ways to thank the staff. One thing to keep Dr. Glass is the history and legacy of LBUSD being a very competitive district. I have firsthand experience um knowing this. I know someone who doesn't live here but regularly looks at job postings the is always very impressed with the uniquely high retention of staff. So I'm asking you to start on a positive path right there's so many opportunities to thank the incredible staff here at all like soup to nuts. It's amazing. So please, please, please, new year, new soup, new beginning, new you. Please start on a more positive path. Thank you. Thank you. We do have an incredible staff. Uh, if I may, um, I would like to just add to the comment

007you just made about our staff. I think there's some selective listening going on here because, um, I went to the back to school nights and I went to the, uh, openhouse meetings and I've spent a lot of time, uh, on the campuses talking to staff and working with staff. And, um, last time we were discussing the classified employees. Um, uh, I spent an afternoon with them. I mean, I, uh, and, and I'm not saying that because I feel defensive about what was just said. I just think that it's kind of out of balance to suggest that that any members of this board are not supportive of staff. Um, I just think it's inaccurate. And so, I thought I would uh, com make my comment on that public comment. >> Okay, we're moving on to reports

008now. um our bargaining units, CSEA, Vasa. >> Thank you, President Perry. We actually don't have any report for you tonight. >> Oh, darn. Thank you, though, >> Mr. Wav. >> Uh no comment from Laboua tonight. >> Thank you. Um >> Madam President, >> parliamentary port point of order from our last meeting. I didn't want to get into it at the last meeting because um it was a long meeting and it went late um because there were a lot of issues that got belabored excessively. But um I did want to go on record stating that at the end of the meeting the representative from LEUFA asserted that he had the floor and I just want to make it clear for purposes of the board now and in the future that only board members have privilege of

009the floor. And so a member of a union who's sitting at the dice at the invitation of the board does not have the ability to assert that he has the floor. And uh again, I didn't want to make an issue at the time, but because it's a matter of parliamentary procedure, I wanted to as clerk, I wanted to make it clear that um uh that doesn't comport with our procedure. >> Okay. Um Superintendent Dr. Glass, do you have a report? >> I do, Madam Chair. Thank you. Good evening, uh, President Perry, trustees, staff, and members of the community. Uh, in support of keeping our meeting focused, I'll keep my remarks brief as I know we have important issues to cover tonight. I'm completing my listening effort related to my first 100 days as superintendent and

010am presently drafting a report for you and the community on what I've heard and learned. In addition, I'll provide you with some ideas for a future strategic direction that is primarily informed by those connected to our schools and the larger community. You can expect that report at our October 9th board meeting. I'm excited for you to see it. Uh, also at our last meeting, we told you that we would be bringing you regular updates on progress related to the pool. So, I'll begin that tonight. The pool modernization project bid and award process is currently advancing as scheduled. The immediate focus is twofold. Ensuring biders complete the mandatory pre-qualification process by the October 15th deadline and securing final design approval. As of today, 47 applications have in from interested bidders for pre-qualification approval have been received.

011The architect is working to resubmit construction plans to DSA for back check next week with final approval anticipated by midocctober. Additionally, district staff is actively preparing the RFP packages package for various consulting services and experts uh expects to publish the RFP by the end of next week. So, we're proceeding right on schedule. Uh also, uh as a condition of my contract, uh the board is required to have a governance workshop with me to identify ways that we can work more effectively together as a governance team. We had that meeting last week using a number of scenarios and case studies to learn how to be more effective together as a board governance team. I do understand that there were issues with the electronic notice that went out about that meeting. Uh we are investigating that. Uh

012but the full video of our meeting is available on the website. Finally, I want to acknowledge the hard work and progress that you made as a board together on your meeting practice. Uh as I mentioned, we have had a governance retreat where we were able to explore uh several aspects of how we're working together. For the past several meetings, I've worked with President Perry to implement processes around managing public comment, recognizing one speaker at a time without interrupt interruption, using a rounds model in discussion so everyone gets a chance to speak before someone gets a second turn and keeping remarks and questions gerine to the item. We've also become quite proficient at handling submotions. Joke. For tonight, I won't add another thing uh for the board to consider and think about, rather to use this

013as an opportunity to practice and develop the good process you've worked on to date. Thank you, Madame President and trustees for the opportunity to serve this wonderful district and community. I'm excited for a meaningful and student centered meeting tonight. >> Thank you, Dr. Glass. Um, now let's go on to board member Oh, no. Let's go to Dr. Mayberry. >> Thank you, Board President Perry. Uh, just a very quick uh uh report this morning or or this morning, this evening. Um, we had our first family literacy night uh yesterday at Elmoral. Uh, so I wanted to give a thank you to the Elmoral staff and structural services staff that organized those. Um, and especially our our district and school librarians put those together. They organized all those. This is the first one at the Elm Marl.

014It's called Camp Readalot. Uh we had over 70 students there last night. A lot of uh preschoolers and TKers and kinders and parents there. And uh they really transformed the quad and field over there into like a literary illiterate literacy adventure. So stations and the high school students actually run most of the stations. Uh so it's a really fun evening for the community to come out and celebrate reading. Uh the next one at Top of the World is October 21st in a few weeks. Uh and then um and then there's going to be one for sixth graders on October 13th that the high school students will also run called Celebrate Reading Festival. So they can do that through their English classes. So but our those are all coordinated with our librarians who do just a

015really good job of of bringing that love of reading to the students. >> Thank you. That sounds really exciting. Now we'll move on to board member reports. >> Okay. Um should we start with Logan or Ivy? Do you want to start? >> Okay, thank you. Um so first thing we're going to we're going to kind of do a similar structure to last time where I'll I'll cover the uh LBHS events and then Ivy will I'll turn over to Ivy and she'll cover the um rest of the district. So for one of the major events that's happened at LBHS is the homecoming theme was announced on the 16th. It's going to be a Harry Potter homecoming. Uh it's on Saturday, October 4th. So for any students who may be watching this, buy your tickets and attend

016that. Uh the homecoming court was announced, so congratulations to all those people. And we had back to school night this last week. Brush and pallet released their first article, which can be found on lbhsnews.com. I suggest everyone go and check that out. Uh and there's a football game tomorrow with the neon theme. There's a variety of career talks from October 2nd to the 30th with eight individuals coming on different days to educate our students about different career pathways. That's something that I personally attended a lot last year and found incredibly valuable. And today, Dr. Glass held a student listening session during tutorial to hear students opinions and thoughts on life at LBHS, which I personally attended, and I also thought that the feedback that was given was incredibly useful. I unfortunately did not have the

017honor of attending that as I was making up a test. But um in terms of thirsten, ASB is having a mini student store this week selling Otter Pops for five star points as an incentive for showing smart behavior. Um the first full student store is second week of October, giving students a chance to redeem those points. Uh this week ASB is coordinating a variety of lunchtime activities focused on suicide prevention awareness, including a stress ball decorating tutorial. Uh looking ahead, PAL's Club is planning several lunchtime activities for the first week of October around our uh United in Kindness/bullying theme. Uh middle school sports are underway with boys volleyball and girls basketball kicking off their seasons. In terms of El Mororrow, uh they recently launched their after-school programs this week, uh with new additions including green

018team and PALS. Almost one half of students at Elmoro are participating in the space afterchool program. The Boo Blast t-shirt art contest this Friday with the winner announced on Halloween uh will be happening and the winner has their art displayed on a t-shirt for the next year. In terms of to uh top of the world student council is up and running in the new school year. So far the student council has conducted a window decorating competition for this fall. The windows around the principal's office are now very festive. Uh top of the world pals programs um is also going to get starting very soon. And other activities that students are looking forward to um are the new ASB classes that started this week and Top of the World's Bonanza, which takes place on Friday, October

01910th. >> Thank you, board member Morgan. >> Hi, thank you. Um when we have meetings close together, there's um still a lot going on, but not quite as deep to report. So um we had our uh transportation committee since our last board meeting um and it was a very productive meeting. Dr. Glass was president but then had to step out um which was unfortunate but I think we made really good progress. I think in the discussion we talked about the functionality of the app and the ability for families to track where the buses are so that you know when to when to get to the uh bus stop and the problems that parents seem to be having. And so in addressing that, I think some updates have been made this week and I think we're

020further looking into possibilities to bring forward to the board um possibly recommendations um going forward. We still have a lot of work to do on that because we still have um high school transportation we're addressing and um some other things. So I think there'll be more to report on that and bring out soon. We have um the first meeting of the arts committee has been formed and that's coming up and will be reported on at the next meeting. But I'm really excited about that. So, if you have people that are interest, if you have friends, associates, co-workers that are um in the arts, um please direct their um names to Dr. Glass as we're trying to form this committee and it was very laid out very specifically how we're going to be soliciting members for

021this committee. Um the board workshop I thought was terrific. I really appreciated the opening question which was um that we are trying to demonstrate caring and um community and he we started by everybody going around the room and discussing what we were personally do how we were doing personally what we're dealing with school starting etc and I thought that was a really nice approach to bring our conversations to a human level um so I appreciated that and I thought the board workshop was really great for those that haven't had the opportunity to look at the video yet Dr. Glass brought forward five different scenarios. Um and we also had um Scott Danforth, our attorney there and uh he received one as well. So we were able to work talk through the scenarios how we would

022handle it, discuss maybe what is accurate or not accurate and then um continue forward. We had five different discussions that were similar to some things current and some things and but not exact. And I thought it was really really helpful. Um it was a special meeting so um I know that has different requirements and I was sorry that Jim um was not able to be there um because we do try and include everyone when there's a special meeting but things come up and unfortunately he wasn't be able to be there but the video is great. You should watch it. Um and then I was also at the back to school night at the high school um as well as um along with Dr. Glass and it was a wonderful start. I thought Dr. Dr. Almond

023did a nice job um introducing the school to the parents that were in the room. The energy was very positive. Uh we did not stay and walk around to all the classrooms like we did at Thirstston and Elmoro and T, but I don't think that was the right venue. I think being in the in the theater was great and it was wonderful to see so many familiar faces as well as so many new faces. So that's the end of my report. Having survived nine days of COVID, uh the last board meeting that I attended was our last business meeting, uh it was difficult using the communication and maybe uh it was difficult with where my head was at, but I think one of my comments that came through was that I thought it was a

024horror show and I wanted to apologize to the staff. I thought the comments uh that were made by some of our board members were not called for and were outrageous and again I sincerely apologize. Thank you. >> Thank you. Glad you're back. >> I attended the uh middle school PTA, not as a board rep, but just as a parent, and um I just want to thank publicly all of the parents and the staff who were there. Um they're the parents at the middle school are doing a lot of work and I really appreciate all of the things that they're doing for our students. So, I just wanted to acknowledge that. Um I also want to uh thank you Jason for putting together a very smart agenda for the um special meeting last week, our board

025retreat. Um those case studies really kind of force some interesting discussion and I think it's uh an interesting thing for people who are thinking about uh the board this year and some of the issues we're facing. Um it's an interesting uh meeting to watch if not a little bit long. So thank you and thank you Scott for being there. It's a that was a big ask. So I appreciate you you joined us. That's it. >> Clerk Hills. >> Well, first of all, I want to continue uh commentary that uh I began a narrative I began a couple meetings back and that is acknowledging the uh accomplishments of our running back uh Charlie Christian. Um, I sent I got a clip of his um fourth quarter um uh touchdown run and uh sent it back to

026some people I know in in in the NFL and they were all very impressed. It was a real muscle move by Charlie and um I'm looking forward to watching him as the season goes on. Uh so um wanted to comment on that and commend him. Um I also have different perspective about our meeting. I thought the meeting was uh very long, very difficult. The uh meeting we had um on um I guess it was the 11th. Yeah. Yeah. It was when we did 9310. And um I just want to comment that um I was a little bit concerned about some of the commentary I read about it as if it was kind of a win-lose situation that uh there had been some revisions proposed and then those were rejected and then others were replaced it

027and you know this the narrative was kind of negative about it. I really felt like it was a win-win situation. Um it was a and you know the thing about it is we did have a great governance workshop Mr. superintendent uh on the what 18th um and I agree with um uh member Melchesky that you should watch the video. very interesting discussion about how the about the roles of the superintendent and the roles of the president that people might find interesting. But that was a governance shop is five or six hours. But the previous meeting on the 11th uh the sad but it's sad but true. Yeah, it was a really long meeting because we were trying to do governance in addition to the regular meeting and we did do a lot of governance and

028n 9310 turned out to be a huge long government uh governance discussion but there was a lot of sort of strange things said during that process and um I don't want to belabor it right now but um uh there's a lot of misunderstanding of basic legislative function. This is a legislative body. And for example, uh it was suggested that you know um a legislature could pass a law and make it permanent or that if the legislature passes a law that creates a non-exclusive procedure for addressing an issue that you that you that the legislature in the future has to follow a procedure that an earlier legislature established. And that's just not true. It's fundamental under American law that um if a legislative body could do that, create uh a mandate that that the same legislative

029body later would have to follow, that means that the present legislative body could take away powers from uh the future uh uh membership of that legislative body. So, I was a little bit um concerned about some of that narrative. um you can't pass a law saying that this law is permanent because um if you have the power to repeal it, you also have the power to remand it amend it. So I was a little bit concerned that some people were asserting that the sort of false legalisms. Is that mean I'm out of time? >> Yeah. Okay. Um so I will just wrap up by saying but the it was a happy ending because the 936 that we got out I just want to commend everybody. I want to commend everybody on the board and I

030want to commend you Mr. superintendent. Um that was and Scott as well. Um that was a win-win. Um there people started talking about concessions and all this kind of stuff. The fact is every pos every thing that that I wanted to accomplish that other members of the board wanted to accomplish and that you wanted to accomplish got included in the final version. And I read it when I read it the next day. I'm very proud of what we accomplished even though it wasn't um it's like they say um law is great. You just don't want to see you don't want to watch it getting made and it was it was pretty painful but we I think I'm very proud of what we accomplished. >> Thank you. Uh I attended meetings with Dr. Glass always a

031pleasure and our union presidents which was really helpful. the board retreat which I agree gave us a lot of thoughtful situations to look at. I spoke with students in our career programs at the community college. I had a great meeting with Dr. Mayberry and Dr. Treat and I met with the transportation committee like board member Morgan. I I think the group is really making good inroads towards uh better much better transportation for our students and decreasing worry for our parents. So thank you. Let's move to B. Second reading and approval of board bylaw 9223 filling vacancies. Dr. Glass. Thank you, Madam President. At um the first reading on September 11th, the board directed a legal review of board bylaw 9223 subsection 7 to bring the bylaw into alignment with state law and asked me to

032research a narrowly tailored option that would allow the board to excuse a member uh for illness of a family member in a way that comports with the statute. I have brought back to you two options. Option A is recommended that only revises board bylaw 9223 subsection 7 to track to state law by removing the locally added phrase illness of an im immediate family member. Uh also presented for your consideration uh is the narrow local interpretation of prevented by illness. Um so it adds a limited use subsection to section 7 uh that interprets prevented by illness to cover uh defined serious family health situations with safeguards including board resolution documentation required use attemptive lawful remote participation monthly review and an explicit statement that state vacancy rules timelines brown act limits and compensation provisions are still in

033control That uh second narrow local interpretation was uh crafted with the support of a a very talented and intrepid attorney who happens to be sitting to my left and can answer questions about it if you wish. >> Okay, board members, are there questions? And you're welcome to ask our attorney, too. Mr. Hills. >> Well, I I want to make sure I understand. Um the item on the agenda was a second reading on 9223 as we passed it in the last meeting and that was based on um uh what I thought was a very positive civics lesson for the student members as well as the rest of us. um that um uh the subject of a vacancy on a board on the school board is the subject of state law and we have to make sure

034that we're in compliance with state law. And the state law um uh which is um uh it starts out in the education code at 5090 through 5095. Says that vacancies on our board will be filled in accordance with um government code section 1770. And that applies to all legislative elected positions in the state um at the county level. >> Just a minute, Clerk Hills. We're asking for questions now. Oh, you're getting to >> actually is a question. Um so I just want to make sure I understand. Um your primary recommendation is that we basically stick with what we did at the last meeting. But in response to the question, um, you you have defined a possibility. Um, so I wanted to ask Mr. Ferguson. >> Uh, I'm sorry, Danforth. Um, why did I say Ferguson?

035Um, uh, I wanted to ask you, um, if we were to attempt to have a a local exception, I mean, fundamentally, this is not a local control issue. This is a state law issue. This isn't something that's been delegated to the school districts as a local control matter. Um, and so if we were to try to do something locally and have local control over vacancies, um, we would be doing something that would be given ourselves in essence a local privilege that none of the other school boards in the state um, have been authorized to do under the state statute that defines what vacancies are. Is that true or correct? uh not not quite that simple. So this the way that the statute is written is not clear that it applies directly to sickness of the

036board member because it's not specifically defined. It then reverts to the school district's permissive education code. Right? So the school district has general discretion to do things under the education code that are not expressly prohibited. Okay? um there hasn't been any case law or any statutes that define that particular provision of the government code related to prevented by sickness. And it's and it's the way that it's written is interesting because most of the code section specifically relates to things involving the board member, not that part. And so that's why if it's not specifically prohibited, the district does have usually discretion to make some sort of limited modification to it, assuming that it's not been prevented by case law or some other law. >> Mr. Dan, >> just to be clear what you're saying, just to

037be clear for me, not that you're not playing clear. Sure. um that because the state law doesn't expressly prohibit it. We have a statute right a bylaw right now that says um that you can miss three consecutive months of as a board member except when prevented by illness. And so what we're suggesting is since the state doesn't prohibit us from doing so, we can define that clause when prevented by illness to be more inclusive of particular situations for up to three months. Right? Because it's not prohibited by the state, >> right? It needs to be a reasonable sort of interpretation of that. >> Great. Thank you. >> I move to approve board policy 9223 as written. >> Um Mr. Danforth, do you know of other school districts that have expanded this to include family members?

038>> Um I I do not know of any specific school districts that have done that. And so could there be possible litigation if we did that and had somebody meet um not present for six months because of >> three months but clarifying it. >> We're clarifying the three new not six like we had. Okay. >> It's clarifying up to three months with this definition of illness. >> Okay. >> Could there be? Sure. There can be litigation for a lot of things. So >> Right. Okay. >> Yeah. >> Okay. Um, are there any question um any public comments? Mr. Hills, >> don't we need to Don't we need to move to approve to continue the conversation? >> We're moving to approve. >> Read >> what they added to the agenda. >> Second. >> We we can

039do that after. was your motion to approve >> into discussion after but we need a motion to approve. >> Okay. >> There's nothing on this. No public comments on that. No public comments. Okay. Clerk Hills, did you want to have Mr. Danforth read something? >> Uh, yeah. I think that um it would be good idea to uh have in the record what was contained in the memo on this. I I mean, in other words, Mr. Superintendent, the breakdown that you gave us was that what we did last week um was was uh in compliance. And if we were to adopt a locally uh formulated exception, that that would then require um us to address the legal uncertainties associated and the legal risks associated with that and the measures that might be required to sustain a

040local exception. uh uh in terms of monitoring the illness of a family member and going through that and um and in in doing that. Oh, no. I I'll leave it at that because I'll have comments later. >> Victoria is bringing it up for us now. With all due respect, in in in uh in adherence to time and just out of respect for time, since this was attached to the agenda, albeit um after the agenda was published, but it's supporting documentation, is it do we need to have um Scott read it word for word, or can we refer to it um for consultation if needed? >> I think I can cover the it at a high level. I don't need to read it all to you, but I can explain to you what it does. I

041think that's what Clerk Hills is asking. Yeah. So, uh, you see in the green language, that's the simple conforming only change that strikes the locally added provision or illness of an immediate family member. Uh, down below is uh option B. So, you would use both of these together. you would you would strike it uh as option A suggests and then you would add this sub subsection that's in italics and in blue under seven that defines prevented by illness and so you see the language that the district would be using to define prevented by illness for the purpose of this vacancy role and then scroll down please it goes on to apply so put some guard rails Um there there has to be a resolution based on a brief note from a licensed healthcare provider. Um

042confirm that the trustee has used attempted Brown Act compliant remote participation where feasible and the board needs to review it monthly. So it puts some limits around how that is used. Um and then also limits to say that we're not that state law still prevails um in spite of these changes. The rationale that's provided below there does get to the risk that some of you have touched on and as Mr. Danforth has mentioned the interpretation is reasonable but it's untested. Um so that's why uh we are defining it here and putting some limits around its use. I'll pause and let um Mr. Danforth provide any commentary from legal perspective. Was there some question that you wanted me to refer to or just >> You should say that you really like it. No, I'm kidding. >>

043Just just dazzle us. Just dazzle us. >> Um I I mean I think that the board policy as written um is obviously the safer bet. Having the locally defined term um is like was mentioned is un untested. So, you know, there's always the ability to later interpret something in a certain way if the board feels that it's worthwhile or reasonable, right? So, if there's a request made by a board member, this is the circumstance, perhaps a resolution can be passed that indicates we feel that this fits the bill of the policy and of the statute without actually having been put into the statute. So, you're suggesting that we we would say yes to Miss Morgan's motion and do it as is, but that if it ever arose that we needed to expand the definition of

044illness, we provided it for us and we could do that. So, we wouldn't necessarily have to vote on it today. >> Yeah, I think that's reasonable. >> Madam Chair, may be recognized. Howard, turn your mic off. Let's turn his mic. Okay. So, um I had moved. Um so, I appreciate looking into this because I know I had requested that and I um and my reasoning behind that was that I was certainly a defender on the other side of the podium where I came over the podium um defending the defending at the time. Um the reason why it was being questioned. Um but I did want to know did we find support of law and the and that would have been my question earlier. Um but the fact that we didn't um and the fact that

045to the narrow scope has a lot of layers in it that I would be concerned that we might risk violating a HIPPA act. I know that there's certain things that can be redacted and things like that, but it it seems um that to me seems micromanaging of someone else's family situation in my opinion. Um but I am, you know, as someone who really validates law and policy, I am concerned and somewhat alarmed that this was um included and approved um in the past by some current sitting board members and that that the legal implications of it weren't questioned. So, I appreciate taking the time to look into it. I appreciate looking into the legal possibilities um and how we can support our board members should a situation come up. God forbid it ever does. Hopefully

046it never does. Um but I appreciate having this in our pocket if we ever need to um refer to it and then can readress it at that time. So thank you >> Mr. Hills. >> Are comments in order? >> Yes. >> Yeah. Yeah. I would just like to express my appreciation for everybody that's given this some thought including the student members who were expressing you know last time concern about you know compassionate concern for a more a member whose family is and by the way well I I um anyway um I I just like would thank everybody for their thoughtfulness about this. I just want to for the record state a couple of things. One is that um uh you know when you look at the statute um it says um it basically talks in

047terms of uh of the member um not discharging duties for three consecutive months except when prevented by sickness. And um I I tend to think that the sickness does refer to the member, but I I concede that I think you could read it the other way, which makes it intriguing. But um you know, if you go through all the if you basically what's happened here is the legislature has said in the education code that the governance code will the government code provision on vacancies will govern the schools. And so, um, when you tinker with this, you're tinking tinkering with a statute that applies statewide to, uh, you know, all these other entities. So, we we have to be careful about it. Um, but I think everybody's trying to be careful about it. Just by analogy,

048I would point out that um under the standing rules of the Senate and the state senate and the state assembly, um in order for an absence um to not have consequences, negative consequences, it has to be there has to be leave for the absence given. And um that's interesting because it goes to the question of whether the um uh the leadership of the Senate or the Assembly determines that it's sufficient reason for an absence. And if you don't get an absence excused and sufficient and you don't show up, they count your vote as in the in assembly, they count your vote as a no vote. So, if you think you're going to go on vacation and let all your buddies vote something through that you want, um if enough people do that, they could actually

049end up having enough negative votes to defeat something that the member wanted. So, that's why they try to build those incentives in. Um last thing I want to say is this. Why is this important? Why are we spending time on it? And a lot of people may say, "Oh god, that guy Howard Hills just rattles prattles on, you know, and talks too much, you know, but this actually is extremely important because of this. There have been two occasions in the past when it would appear that vacancies occurred on the Laguna Beach School District board um that were never declared. Um we can go back and argue about that. I don't want to go back and argue about that. Um uh and u but I will say this, why is it important? If there's an actual

050vacancy created under law because there isn't excused absences or whatever the the criteria isn't met, what that means is that the voters acquire the day that a a vacancy is created, whether it's declared or not or recognized, the voters in that political community have a right to elect a new member. And so if you have a the idea that oh it's a vacancy and oh yeah maybe he went a little bit on three months but you know rules are meant to be broken so let's not worry about let's not make a big deal about it. What's happening is you're taking away from the voters the right under law to elect a new representative so that they don't have a lack of representation on their bo boards. So this is fundamental to democracy and government by

051consent of the governed. So, I think it's really good that we've devoted the time and I really appreciate the work that you um Scott did and you, Mr. Superintendent, did um to respond to um member um Morgan's request and it was also something that the student members expressed an interest in. So, I'm really glad we got to it. And last thing I said to them was, you know, maybe we should go have a student project of lobbying the right committees of the legislature about addressing it uh statewide. But, uh that's a little bit ambitious perhaps. But the point is I think this was worth the time that you put into it and I'm glad you did. >> Thank you. Any more discussion? >> No. Um I I wanted to clarify though that if somebody has

052an illness in their family, they can miss two months and there's not going to be a problem, right? So at least they can they can do that. >> Given the new the interpretation. We would employ that interpretation even if it's not in the bylaws. >> Okay. Okay. Thank you. >> It's up to three. If there's three three months of vacancy, that's when the vacancy would open. So, >> right. But I was saying two to be safe. >> Yeah. >> Okay. Are we back to the motion? So, all in favor? All in fa All in favor of adopting a option A. >> I >> Well, I'm going to get the students first. >> Yeah. Uh we're we're both going to vote yes on the matter. >> Thank you. Okay. All All in favor? >> I motion

053passes. 5 plus two students. Okay, now skipped a page. Okay, now we are going to have a presentation of the specialized independent review of the district's financial practices. Dr. Glass. >> Thank you, Madam Chair. Um in the course of the last year, uh questions arose among board members around the use of signature authority or the appropriateness of uh signature authority of um previous district leaders. And if those were applied in a consistent and um financially sound manner, uh you ordered a forensic audit of the signature authority of the district. That audit has been completed. Um, and the auditor who conducted it, uh, is here to present it to you tonight. >> Thank you. >> You all can hear me. >> Presentation >> almost. All right. Thank you. >> It's all good. >> Okay. So, you're

054you're Brandon Waldron? >> Yes, ma'am. I'm Brandon Waldin, senior manager of ID Bailey's fraud and forensic department. >> Okay. Thank you. Welcome. >> Thank you. >> And then uh do I click this? Thank you very much. Appreciate it. >> So, as I just mentioned, my name is Brandon Waldron. I'm the uh senior manager with Ibel's fraud and forensics department. Just give you guys a little bit of background. Uh I've worked with school districts for about 13 14 years. Uh during the course of that time, half that time was me as a senior manager doing audits and the other half has been me specifically specializing in school district fraud and forensic cases. I do a lot of school districts all around the world, different states. So definitely school districts is my passion, making sure that no

055one's stealing money from the students. So please keep that in mind as we walk through. So I want to start by talking about the scope of the engagement because sometimes when questions arise, it's helpful for me to reference back to this like this was my scope. This was what I was looking at. Yes, there is some wiggle room for me to kind of think outside the box and request outside things. But obviously I am bound by the contract that was set before me. So the contract that was set before me was as follows. examine, document, or solicit records to verify compliance with the district's purchasing policy and confirm the signatures on agreements for the period of December 1st of 2024 through March 30th of 2025. I was made aware that the particular individual in question,

056I'll say the magic name, Mr. Valaria, was uh asked to be um excused around December 30th, December 31st of 2024. So uh per my recommendation I had done one month prior to that to see how often the signatures were present and then the three months after that to see of course if those signatures had ceased. In addition, I was then asked after Mr. Glass had joined uh the district, he had requested me to examine the copies of all the canceled checks to verify if the superintendent signature was signed on those canceled checks. So those were the parameters that I was asked to look into. >> Something the superintendent asked for his contract to be bought out. He was not dismissed. >> Oh, well thank you for correcting me. Thank you. So the information that was

057reviewed was the district policies regarding the contracts and purchasing which I got directly from the district website. The Orange County Department of Education dispersement services manual. The uh financial system deactivation of Mr. Valaria which was I went to the person in charge of IT to request when was his access from the system deactivated. the district user access by user ID to see who has the ability to create purchase orders, who has the ability to uh run check runs, things of that sort. Uh board meeting minutes and agendas, the of course available cancel checks and the service contracts that were during the scope period that I mentioned. These are the results. So we were provided 79 documents when I asked for the contracts. When I asked for that, I was provided not only contracts but amendments

058and copies of canceled checks. Um, I believe this was due to the turnover. People were just grabbing things and passing things to me for me to examine. Uh, so we looked at those. As far as the contracts were concerned, after sorting through the documents, we noticed that everything was in line with the purchasing policies that the district had uh outlined and approved. In addition, we noted that there was only one contract that was actually signed by Mr. Valyria. It was during the time that he was um actively in his position. So, it made sense that we saw that signature. All the other signatures were authorized signers on the contracts. One thing that we did was if it was over $5,000, we deliberately made sure that the board was aware of that contract and that the

059board did indeed sign off on it. So, again, all that was was good. The only thing that I will say that is a little bit outside of my scope, but just something to keep in mind for the board members is that if it is less than $5,000, the only way for me to verify that it would have been provided to me was if I would have looked at purchase orders, and that would have been outside of the scope. So, obviously, if it's above $5,000, it's very easy for me to just confirm, okay, you know, two-sided, right? the contracts that were given to me. Are they on the board agendas as being approved? And the opposite way getting the board agendas. Is there any contracts here that I see that were approved that I don't have

060access to? So, I did do it both ways. But if it is less than $5,000, then the only way for me to verify fully that I had all the contracts provided would have been to look at purchase orders, which would have been outside of my scope. Moving on to the cancelled checks, I was provided a list of all the checks that were run during the scope period of time that was provided to me. 1,153 checks were uh compiled, which was a total of about $ 8.9 million. I asked for all the copies of the cancel checks so I could verify what signatures were on it. And in doing so, I was only provided 975 checks. I did receive reasons for 34 of those checks. why they were not provided to me. I found all those

061reasons to be valid, but there was 140 checks that were not provided to me. Um, last that I had discussed with Mr. Glass, this is not a district um personnel issue. This is more the fact that the county did not provide it to the district and therefore they did not provide it to me. And looking over the checks, Lauria's name was on every single one of them. And I asked the district questions in regards to that. They said that the signature was pre-programmed and so every time that it was hit, you know, the button was pushed to run the checks, they were automatically printed with that name. It took three months for them to find this pre-programmed out and to remove his name. But the one thing that I did do specifically was I said,

062"Okay, so his name's on all of them. So that's the reason I'm not going to push for the extra 146 checks because I know they're going to be on there anyway." But the one thing that I did do was I specifically wanted to know when was Mr. Valaria's access to physically run the checks himself. When was that removed? And in doing so, I was provided with the evidence that showed me that it was removed two days after his departure, which you just told me was volunteer departure. So, thank you. Um, so after that period of time, uh, he had no act no way of running the checks himself. So that's something that made me feel quite comfortable with some of the checks. I did look at the cancel checks, not only from a standpoint of

063the signatures, but also we summarized all the vendors for the checks that we had and kind of see if there was anything that stood out to us that we may want to do just a little bit more investigation on. At the time I saw there was two checks to Mr. Valaria. Um, obviously I had no idea what those were for. I asked for the support documentation with the district gave me and I found both those checks to be reasonable and why they were written to him. One was his severance check and the other one was for his reimbursement for travel. So uh that is the end of my presentation. Uh I obviously welcome questions. >> Board member questions. Mr. Hills. >> Uh a few questions. Um, how many checks under $5,000 or how many dispersements

064under $5,000 uh did you not look at because you didn't have the purchase orders? >> Well, you you're talking about contracts or you're talking about checks because obviously just because there's a check there, there could be an invoice and not a contract. >> Yeah. You said there were transactions under $5,000 that you didn't have purchase orders for, so you didn't pursue those. Um, how do you know how many those uh or how many of those transactions would be the >> Well, so maybe there was a miscommunication in what I said. So, I'll I'll explain it a little bit better for you, please. >> What I was saying in regards to that was contracts, only contracts, not transactions. Those are two separate things. So, if you have a purchase order, that in a way is a

065contract. But I just saw the contracts that were more written service contracts. Those were the ones that I specifically reviewed. >> Yeah. And >> and of those, there could have been service contracts that were less than $5,000. And I outside of me requesting it from the district and them giving it to me, there's no way for me to verify that I was given >> Yeah. >> all of the contracts. >> Yeah. Okay. So we don't know how many those were. Um you mentioned that um when you mentioned the period when there were like automatic signatures being done correct pursuant to some type of computer program. >> If I recall correctly it was Mr. Valaria, Mr. Bean and Mr. Dixon on the checks. So that period um that that was occurring um you said that um

066it that ended when he departed. Do you mean when he departed on December 31st or do you mean when he departed on April 1st >> as far as the signatures on the canceled checks or his ability to run the checks? I think that's where the confusion is. I was talking about he was no longer around to run checks to hit the button to print checks and process checks after two days after he had left in December. >> Right. >> So >> December 31st. Correct. Now his signature was still on the cancel checks until April. >> Then that stopped. >> So that but those those signatures were going on the checks through some type of automatic. >> Correct. It was automatic. Yes. >> Okay. And during that period from December 31st or from a from um

067January 1st to April 1st, he was not an employee of the district. >> That is correct. >> Um as an auditor or in your experience, does that seem like an odd situation to you? >> Uh yes and no. Here's what I'll say is is it's not odd to have signatures pre-programmed to print on the checks, especially when the good news is is that I do know that the physical checks are printed by the county. So, that is something normal that I would see. Um, but with that said, you know, not catching that the signatures were still printing a couple months later, that is that varies by district by district. In your experience, is it odd to have a situation where somebody um is no longer an employee, but um they're um they remain with signature

068authority and in this case actually their signatures being used for expenditures. >> Again, what I'll say is is that it's not odd that it is automatically pre-programmed. It is odd that it maybe took a little longer to find out that they were still being printed. >> Yeah. Last question for now anyway. Um you mentioned that um uh that you attributed some aspects of this uh disarray to um the turnover. Uh what exactly were you referring to when you said to the turnover that was taking place? Well, there's in in my line of work in accounting, one of the things we definitely talk about is tone at the top. So, what I'll say is is that at the specific time that I was requested to do this particular engagement, uh Jeff Dixon was being the assistant

069business superintendent and at the same time he was also the acting superintendent. I'm sure he was extremely busy. And then during my course of my examination, I was notified that he had departed and was no longer at your district. So when I'm talking turnover, I'm saying that until Mr. Glass had come on board, um there was no assistant superintendent of business. There was no acting superintendent. So I'm sure that was part of the reason why when I asked for all the contracts, I got contracts, cancel checks, and other information. >> Yeah. Well, thank you very much. I may have some other questions, but thank you. >> Let's move down. Do you have any >> Dr. Masheski? >> Do you know what our internal controls are concerning checks in this district? >> Yes, I do. In

070fact, uh when you received my report, which should be forthcoming here very shortly. I deliberately line out all the internal controls that I noted in the process. And isn't one of the internal controls that the vice uh superintendent for finance basically has to approve the checks before they're they're written. >> That is correct. Yes. >> So there was ongoing uh oversight. My other question is how much does it cost the district for you to to do this report for us? >> Give me one minute. I'm trying to remember the uh contract that we agreed upon. No, I was just No, I'm just trying to remember because I looked at I literally just did part of the billing today. So, that's why I was trying to think about what did I build today. Um, one minute

071because if I recall correctly, this was a we did do a not to exceed on the contract and if I recall it was 25 or 20,000 that I do not remember, but if I recall correctly, we did have money that was still left over. or we didn't bring it all the way to full to the full amount. >> Very reasonable. Thank you. >> Board member Morgan, do you have any questions? >> I do. I have a couple. Um I wanted to mostly I want to clarify a couple things. First of all, thank you so much for um your service in this issue. Um I know there was um recommendations from various community members that indicated that this is um something that any business would do if there upon a departure of different people amongst your

072organization depending on what their access is and what their um responsibilities are. So, I appreciate you um being here and taking the time and I appreciate um my peer um member Kelly agreeing that your fees are reasonable. Um I wanted to clarify that you indicated that the signatures were preprinted on checks for a total of three months, but that and that every check that's run has the oversight of the business office prior to it being issued or prior to being sent. So, it's actually both, meaning that there's the So, there's the oversight of the district. So, the way that it was explained to me and the way that I saw it also through the manual of your county is is that the district will get the payments that they want to release. They will get

073the necessary approvals to feel comfortable with that list. They will send that list over to the county. And that's what I mean by the magic button saying, "Run these." Then it goes over to your county. the county processes the checks and those signatures are automatically printed on the checks. So, it works twofold, meaning that there's the oversight of we approve that these transactions, these contracts are occurring and in addition that this payment needs to be made. >> Thank you for clarifying that. Um, I I would have to go back and look at the minutes, but I'm pretty sure that the question of signatory authorization and bringing it to the attention of our of um of our uh employees as far as concern um started in February. I think that was the first time that it

074came up. So I think I am a little concerned with the fact that there was oversight of checks that were printed um for a course of two months um or a month and a half that were seen with that signature. So the 146 checks that were not provided, can you explain again why those were not provided because I don't know if I totally understood what those checks are and why you didn't get them. >> I will have to refer a little bit more to Mr. glass on that, but the district specific when I talked to district personnel specifically about that. They said that the checks were not provided to them and sent to me. So, obviously, I'm only I only can work with what I have. Now, when that happened, I asked the question, you

075know, should we be concerned about this? The first thing is is that in my report which again you'll receive very shortly um probably within next week most likely um there is a list of these 146 checks specifically. So you'll see the vendor names and the amounts of the checks that I did not see. So it's not like oh there's these random 146 checks. I don't know what the payments went to. I do know the specific checks. I do know the vendors that uh they belong to and I know the amount that was issued. Plus, and again going back to my my presentation, my scope was to verify the signatures on the checks. And so when I was told by the district, including Mr. Glass, that all three of the signatures were on all of the

076checks and I had looked at 975 of those checks and confirmed that all of them had that, I felt very comfortable not needing to request the additional 140 after that. >> Okay. But but but for the reason why I wasn't provided for them, that would be more of a Mr. Glass question than for me. >> Okay. So, I think um so you looked specifically at the checks, but I do recall and we'd have to go back and look at the minutes, but I do recall the question of looking at the signatures on contracts to ensure that the district was not committed to or and obliged to contracts that were not um brought to the attention of the board or were extraneous to the day-to-day operations. And I don't know, I'm not hearing that you looked

077at contracts, that you looked at checks. Is that And that's And I'm just clarifying. Um >> I'm sorry if that wasn't made clear in my presentation. Yes, I did look at all of the contract signatures. Um in the report, you specifically see a workpaper that deliberately says in it all of the contracts that I looked at, including all the signatures on those contracts, which of course you could verify yourself. Um and then in addition to that um when I had said at the bottom only noted one contract signed by uh Valaria that was that was that was me noticing that of all the contracts that we looked at all the signatures that we had noted we only noted one that belonged to him signing the district up for services and that was during the period

078of time that he was working here. So we just let it go. >> Okay. I appreciate you clarifying that and I apologize if I'm asking a redundant question. >> No. I'd rather just be I'd rather just be clear. So, thank you for for helping me clear it. >> Yeah. No, that's terrific. Um the in your in your uh report, will it be identifying procedural concerns or procedural suggestions so that we are um doing that we're exercising best practices? I know we have a new CBO coming on. I know that Dr. glasses done, everything he can to keep, you know, all the wheels moving um until he comes on. And so I'm just I'm asking if there are these recommendations which actually might kind of help our incoming CBO hit the ground running of what he

079needs to look at to to improve upon our best practices. >> Of course, and yes, I did provide specific recommendations within my report on how to uh improve the internal controls. um that will be in the section where I specifically name all the internal controls uh for the district. And then after that, if I recall correctly, I provided four recommendations. And I promise you, one of those recommendations is is that it's good to remove the individual's name after they've departed from the district. >> What's the typical recommendation of how long it should go with a name before it should be removed? >> That is a very political question. Uh what I will just say is is that uh I would say that within two weeks that would be something that should be reasonable enough time

080to to get that removed. >> But in your professional experience that's a good recommendation for best practices. >> I it I would say that but sometimes there is some red tape that has to happen. So sometimes it ends up being longer than that anyway. For example, sometimes the school district uh have the board that specific, you know, board specifically has to vote removing the person's authority. That could take some time. Um sometimes uh it has to do with uh you know the the board member has been announced that he's leaving but at the same time he has not officially left yet. So there's a lot of different reasons why it may be longer than that. But once the decision has been made, yes, they are, you know, yes, they have left and yes, this individual

081uh should have their signature authority removed. I would say two weeks is reasonable. >> I just like to >> thank you >> point out that um the county is responsible for taking the signature off. We could have we could have told them the next day and I would bet it would still cost three months for them to remove it. Well, again, that's and and and so that's why I said more of it's a political thing in regards to obviously the the county's got to do what the county's got to do just as much as the district's got to do what the district's got to do. >> So, I I just need clarification on that. So, what I'm understanding is that >> um >> Oh, I'm sorry. >> Um I wanted to ask the student board

082member if you had any comments or questions. >> Uh no, thank you. >> Okay. Okay. Go ahead. Um, so I didn't quite understand this until you said that right now. So what you're telling me is that the superintendent's name remained on the checks, but it wasn't the responsibility of the district to do more than notify the county that the name had to be removed from the checks. But we are not personally responsible for the program that removes the name from the checks. If that would that be more of a legal the when you say responsible that's where we get touchy and that's where I would lovely defer to him when anything legal goes even though I work in fraud and forensics I love lawyers that keep me out of jail especially with the words such

083as responsibility what I will say is this is that it's not uncommon for the districts to be the ones that say yes county please remove the name from the account and for them to have to follow up multiple times in order for it to occur. So when you say the word responsibility, that's where things kind of get a little little touchy. >> Clerk Hills. >> Yes, you may comment. >> Yeah, I just had a couple a couple things. >> Oh, um, one is >> just a sec. >> What's that? >> Just a sec. Um, we were there public comments? >> What's that? >> Are there public comments first? >> Uh, yeah. >> Okay, we need to do that first. Okay, we have um we have uh Steve Mintosh and Gary Kasich >> means Steve >>

084pass. Okay, gotcha. Thanks >> once again. As always, thank you for your service and everything you do. I know everybody's busy with a lot of things. Um, for those who rem uh may remember, uh, I lobbyed the board, prior board for about two years to put public comment after presentations. It it took this board to get it done. Frankly, in this case, I almost wish it would have been the old way because what I want to do is make a distinction. Findings of a review, findings of an audit have nothing to do, no connection with your decision to do the audit or the review. And at the time you made that decision, I supported it or the board supported it. You didn't know the answers that are being presented today. So it's very easy for

085you or the audience to sit back and say, "Gee, there wasn't anything there. We wasted our money." That's not the case at all. When you made the decision to review, if you would have had all this information, you wouldn't have you wouldn't have conducted the review. That's very easy to armchair a quarterback and look back. So, I hope you take that into account that it was a wise decision that was made. It was unfortunate that you had to make it. I wish the recom It was a excellent presentation. Appreciate it. Um, I wish the recommendations would have been in it. I'm anxious to see them. I hope you can share the full report because if those actions would have been taken, if authorities would have been removed immediately, I don't agree with the two days.

086I agree with immediately. um if those actions would have been taken, you wouldn't had those concerns and none of this would have been an issue. So once again, I think you all made the right steps. I'm delighted that uh frankly with the findings, I'm glad there was nothing there. I was more concerned about contracts than I was about checks. Checks have multiple controls. Contracts not so much. And I was concerned that there wasn't a binding signature on one of those contracts that could have exposed the district to litigation. So glad those were reviewed. Thanks again for all your work. >> Thank you. anymore, >> Mr. Macintosh. >> No, >> he's passing. Oh, >> you have to. >> No, he doesn't have to. >> Then that would be that would be >> um So, now board

087discussion. Now you can discuss. >> So, um couple things I just wanted to clarify for the record because a lot of things have been said. Um, one is I would like to say that in terms of anything I said, um, and I believe this is probably true of others as well, but I can only speak for myself. Um, to me, you brought up the fact that this involved a Jason Valoria. Um, I, uh, I don't think of this as being about the the former superintendent. I think this about this as being about the transition that took place. That's why I asked you about what you meant by when things were getting turned over. This is about how um the district um conducted itself um in the transition. I've been involved in uh several transitions. Um

088and my in my experience when the new guy walks in the door um all the old signature cars are out on the desk and all the new ones are for him or her to sign are out there too. And um you take care of that first thing. Um but um so that didn't happen in this case and it's kind of interesting. um that there were these that when when there was no longer an employee was gone um and the employees that stayed continued to um have a situation where a non-emp employees signature was going on these documents as to the efficacy of this um I've also been responsible for a lot of corporate audits and I audits and I think Mr. Kasich is right that um uh audits have a role but don't get into

089things that need to be gotten into. In this case, once we found out that a former employee was still on signature cards for a period of time and we didn't know what that meant. We didn't know that it meant there was a machine doing it. We didn't all we know all we knew is that there was a non-emp employee who was on signature car had signature authority at that point what we presented to the staff was very simple. If you can certify that that authority was never exercised then we'll accept your certification and you'll be responsible for your certification. But if you can't then we have a fiduciary duty. We can't do anything other. We had no choice but to have it audited. Otherwise, we'd be in a situation where we would have taken responsibility

090to use a word that you don't um like to use for whatever happened. And now we find out something really fascinating which I never had my I never was sitting there focused on the idea of you know who's sitting at the table signing something but I I never would have focused on the idea of there being in essence an autopin you know process going on. So, I really appreciate your report and how you presented it. I wanted to clarify a couple things. Um, one of the board members said that what happened here, again, I don't view this as being about the former superintendent. Uh, in my view, his name would have never even come up in this discussion. This was about what happened after he left. Um although there were certain continuing um uh uh

091relationships and whatnot. But the point is that um this is uh about um how we handled it and our responsibility and the the fact is it isn't the case that he requested to have his contract bought out. I mean, that might be one way of saying it, but I think the proper way to say it for the record is that the board um terminated his employment without cause. Now, that triggered a situation where his contract, I guess you could say, got bought out. That's not a term that I would use for it, but let me just ask >> I I think we're getting off the topic. >> Okay. The la last question. >> I think you need to stay. Last question is what was the um amount of the severance check? >> I do not

092have that memorized. Um it will be in the report. >> Okay. Thanks. >> Any discussion? >> Discussion. Any discussion? Member Morgan. So um it was close to 400 Howard just for your uh reference 400k. Uh can you provide without having the report in front of you? So generalities are probably acceptable depending. Can you offer a couple any of the suggestions that will show up in the report? >> Well, it's usually rude for me to whip out my phone in the middle of a presentation, but I do have the the actual report um on me on my phone. If you give me two minutes, I can literally read verbatim what it says. I usually just don't like to do that. I find it rude, but it's your call. I >> think we'll get that information and

093be able to use it. I don't think we need to wait for that right now. Okay. That's my opinion. >> Just trying to appease the the >> Sure. No problem. I No problem. I appreciate you considering it. Thank you. >> You're welcome. >> Any more discussion? >> Oh, I'm sorry. >> Go ahead. Yeah, I guess the only it's sort of a half discussion half question is in 2021 our um rating went from a two which is good uh financial um controls >> yes >> to a three very strong financial controls. Is there anything from this audit that would lead you to believe that the rating of a three w did not legitimately represent the financial controls we had? I mean, one of the issues for me, I was not in favor of doing this audit

094because understanding financial controls, while I knew that the signatory card may not have changed, I understood that we had very strong financial controls based on the previous audit. So in my mind, it would have been impossible for the superintendent not for people not to notice because of financial controls that the superintendent was writing himself checks. So I did not see based on what our financial controls were from previous audits and reports that we had a problem around financial controls. So, I guess I'm asking it doesn't sound from anything you're saying like there was any kind of significant finding that would undermine that um evaluation of the district's financial controls. >> Well, here's what I'll say to that. Um there so there of course was two issues I was looking at the contracts and the checks.

095When it comes to the checks, I do feel comfortable with the controls that are in place. I do give some recommendations to strengthen them, of course. Um, but with that said, there was nothing in the internal controls at that point that made me concerned about the check piece, the contracts. I understood the concern. Uh, meaning that, you know, if the gentleman is is not with the district anymore, but he has signature authority, then theoretically he could have signed a check or not check a contract. Um, but with that said, the thing that made me feel most comfortable because obviously just as much as you guys are requesting it of me, I got to come in and go, okay, what are the risks here? What are things I need to look at? And so, in doing

096so, I was asking the questions, hey, could someone of the district um Mr. Glass wasn't there yet and Mr. Dixon, I think, wasn't I think he had just departed. I had asked the question specifically um can someone in your humble opinion sign a contract and have a check go through without that contract being looked at by someone by the district and >> correct correct but but that's why I said at the very beginning of my presentation I was asked for a specific scope and so that is the specific scope that I did and so during that course I mean as far as what I what I was hearing from the district as far as internal controls were concerned. I felt comfortable that again the contracts that I had seen were indeed the full completed contracts

097which is why I did not recommend to Mr. Glass that we look at the purchase orders >> with contracts they have to come before the board >> for approval. >> Agree. If they're less if they're over 5,000 if they're less than 5,000 then they do not. That's what I was told and what I had read in the policy. So that's why again when I mentioned before about the 5,000 I felt the reason there because I'm sure you can understand as someone who does fraud and forensics and does school districts if I come up and give a recommendation or I come up and say oh you know I didn't felt the need to to look into this and then of course someone looks into it and there's a contract that was signed and there's a problem

098obviously I have a lot to answer for right so in addition to me looking at the contracts I do have to look at the internal controls and asked myself is it likely that something would have happened not only I mean obviously one or two is different than a systemic problem. I did not feel that there was a systemic problem with the contracts or with the internal controls over the checks which I think is the question you guys are asking. >> Thank you very much Mr. Waldin. I I also felt like it was our fiduciary duty to do this to just make sure I wanted it to be clean coming in for a new CFO for Dr. Roy Chowdery. I didn't want him to have any big s that we owed it to make sure it

099was a clean a clean district he was coming into. >> Of course, which is why again when people see my name my my title of fraud and forensics. I make it very clear this is not a fraud investigation is a forensic audit and forensic the word forensic means to find the truth to look at the data to confirm suspicions if there is any to answer questions if there is any. So that's why again that's why I was called in. I only singled out Mr. Valaria's name because he was the only one that actually departed from the district. That's why I singled out his name. >> Okay. Thank you. Um, >> is it going to be a really quick comment? >> Okay, really quick. >> But I think it's important. I would just like to clarify

100that until uh my colleague um member Hesky just articulated it. The thought had never crossed my mind that anybody was writing themselves checks. Uh I never thought this was about anything like that. I I thought this was about us earning and keeping our three rating. Um because when we knew there was an exposure not to somebody doing something wrong but to not being able to account and and document what's gone on that we absolutely had to do this and so the idea that this was I want to make it clear because um this certainly wasn't about thinking that anybody was writing themselves checks or anything I think that's important because we have an obligation not to cast any aspersions that that was even an accusation. Um, and so I just wanted to clarify that for

101the record. >> Well, and just so we're clear, I'm not saying that the board did say that. I'm saying as part of my job, my due diligence, I'm checking to make sure that that isn't happening. >> No, you didn't say it, but thank you. >> Yeah. >> Thank you very much. >> You're welcome. >> Now, presentation of health benefits cost review. Dr. Glass. >> Thank you, Madam Chair. In late July of this year, I became aware of a healthc care spending issue related to the setting of rates for different employee tiers, the agreements the district had made for health care expenditures in its bargaining agreements and a resulting overage in district contributions to the health care plan. Because at that time the board was considering approval of bargaining contracts in late July. I was faced

102with the challenge and I was faced with the challenge of setting employee health care rates for open enrollment that at that same time with albeit a um limited and incomplete understanding of the overspending issue. I alerted the board of the possibility of a continuing overspending issue related to health care plans. At the July meeting, the board directed a limited audit on healthc care spending on that issue. I engaged the services of Mr. Michael Bishop and Mr. Chris Oliffson to experienced and seasoned school CBOS, retired CBOS who now work in this area of auditing and evaluation. uh to conduct that limited audit with Laguna Beach Unified School District, evaluating our healthc care spending, looking back several years, identifying was is there indeed a challenge or problem related to spending, what were the causes of that problem,

103uh and what potential remedies are available for us going forward. Those two auditors are here with us tonight to present their uh preliminary findings. Uh and uh I will invite them up, Mr. Bishop and Mr. Olivesson. Yeah, please come up. Uh, Madam Chair, you should have a document with um Michael Bishop's name on it that covers the points that he will raise. >> Thank you, Dr. Glass. Uh, thank you, board members. Um, as the superintendent mentioned, um, there was a concern that came to light, uh, probably started in with the need to increase the district's budget related to health and welfare benefits. Um, that was uh, covered first interim of 2425. That would have been the December time frame. And uh the issue really became more of a concern when rate setting was completed in

104the month of July. Uh employee contributions determined in the month of July. And the alarming part were the dollar amounts. Uh the dollar increases year-over-year from 2425 to 2526. Uh so our review primarily was looking at budgetary activity uh and we will cite the period of time covered starting in 2223 uh so the preceding three fiscal years um and rate setting for the current fiscal year 2526. Uh the memo summary uh describes um the purpose of the review, what our objectives were, the particular task in terms of the work that would be needed to arrive at the conclusions and recommendations that are included in this summary. Uh and then of particular interest would be the key questions answered. Uh, a little bit about myself and Chris. Uh, we are, as the superintendent mentioned, uh, together

105we probably have a good 75 years of experience in the business. Um, of of that probably a good 45 or 50 years or more at the chief business official level. um in a variety of school districts in uh Orange, San Bernardino, Riverside, Los Angeles counties. Uh so we've dealt with these kinds of issues before. Um and they aren't always pleasant issues uh uh to deal with. uh health and welfare benefits arguably other than the educational work that we do in public education uh matters related to health and welfare benefits tend to be the most emotional that we deal with for obvious reasons. Um so we don't take uh this mission uh without a lot of respect and consideration. So our report uh will go through things that uh create challenges in your particular district. Um

106what the causation and some recommendations to think about uh going forward. It's a opportune time. Got a new superintendent. you have a new CBO in a couple of weeks. Uh so it's an opportune time to take a fresh look at how the district does its business. So our focus was to answer these six key questions on the top of page two. Um I won't read it to you. You can see it in front of you. Uh it's important to know the environment in which this work is being done. Uh and I'll just explain not read but explain what's included in that environment. We've got budget s setting for the entire district budget development concluding up to the district adopting a budget in June. Um, we've got a complicating factor uh because your plan year has

107an October one beginning, September 30 ending. So your plan year sits in two fiscal years. That will add some complexity. U as with most districts uh you uh to the extent employees uh contribute to the cost and that's the case in this district. Uh the summer months tend to be dark, no payments during periods of time when school is not in session. So for the months of of of August and September or July and August, those two months, uh no contributions are made. So your employees are charged on what we call a 10thly basis. So, we'll take whatever their responsibility is, uh, we'll divide it by 10, multiply time 12, divide it by 10. That's that's the dollar amount, uh, that they're that they're responsible for. Um, renewal renewal rates, as I indicated at the

108very beginning, come in July. That that marketing period is probably May of each year through uh through June. Uh, you have an insurance committee. So the insurance committee is involved in um understanding that marketing, understanding plan design, understanding rates. Um eligible members, you have essentially four membership groups. You've got certificated employees, you have classified employees, you have unrepresented management, uh and then you have part- timerrs that are eligible for benefits as well. Um the more complicating factor um uh I get to in a second. You've got in your collective bargaining agreement, you have a very specific set of language that discusses what the district's responsibility is as it relates to uh covering a portion of employee total cost of their health plan. And that's identified at the very top of page three. District annual contribution

109for your PO program and the district annual contribution for your three HMO programs. Um so you have plans four plans three HMO one PO and you have four tier groups. Okay. So in essence, you've got 16 combinations, four plans, four tier groups, right? Uh which now we're getting a little complex. We're getting a little complex here. Okay. Uh but in your contract, it's in your collective bargaining agreement, which is a contract by the way. Um, it specifically says, and this I will read, eligible unit members shall be responsible for any cost incurred over the individual district contribution. Um, and I added the uh itallic emphasis. So what that means is whatever the annual cost is, whatever the annual cost is, the district is responsible for the collectively bargained contribution and whatever the excess cost is,

110the employees have to bear that cost that was negotiated. Um and that should be the prevailing operating philosophy. Um this table here is intended to basically describe and show uh what that simple example shows which is annual plan premium minus the district contribution equals the employee responsibility and that employee responsibility uh divided by 10 would be 10th. Okay. And what we show is plan plan tiers what the total annual premium this is an example for the current year what the district contribution is and that contribution is has has been static for um at least the last three three prior years plus this at a minimum for our years of review. And then the eligible member responsibility um would be the employees responsibility to cover uh the cost of the benefits that they select. Um and

111then thely cost is in the far right column. >> I'm sorry to interrupt, but I'm not entirely clear about the employee tenth contribution. And I just want to make sure we're all on the same page about that. Can you restate what that column said? >> Uh it it becomes a mathematical uh uh calculation district uh total district premium min and this is for a planier. Okay. minus the contribution by the district for that plan tier equals the employee responsibility >> their monthly contribution >> from so their pay deduction okay thank you sorry about that >> exactly so that describes how the contribution by our interpretation of your collective bargaining agreement would be calculated Okay. Uh we've got open enrollment happens in the month of August and then your health plan year starts in October. We

112identify as it relates to all of that activity. We needed to give you kind of the flow of the activity to give you what are the complicating factors. Misalignment of the fiscal year and the plan year adds complexity. Okay, renewal rates aren't known until after you adopt your budget. So, the business staff and the work that they do in developing the district's annual budget and a budget by nature is a set of estimates using um what are a set of assumptions. So the budget builders will have to make assumptions about what they think the healthcare costs for the year will be. Okay. um multiple plans and tears uh add to complexity and mind you probably up through 1718 I believe it is the district's cap was a dollar amount now it is a set of

113moving parts and I say moving because premiums increase every year. Um, employee plan choices and tier choices could change every year based on uh based on things that happen in life. births, marriages, uh kids aging off of plans, unfortunately, death are all things living changes that occur to your employee groups that require decisions to be made around am I one party, am I two party, am I three party or more? Okay. And your tiers are specific not and and what I just said is more typical of school districts. uh you are single employee plus spouse employee plus child or children and family. Okay. Um so it's complicating in that changes could occur related to uh choices by employees in terms of the plan that they uh uh sign up for each year. and as well

114as employees coming on, employees coming off, uh new employees, and employees leaving for whatever reason, terminations, retirements, uh moving on, uh in their career for other reasons. So, you've got moving at least three different moving parts related to your plan. Premiums, choices employees make, and new employees. The only thing that's static is your district contribution currently as in your collective bargaining agreement. Everything else is a moving part. Okay. Um all going to making management of this management is rate setting. Well back up budget development rate setting. um managing the logistics of the choices employees make, managing the uh employee changes that happen throughout the year. And that's just related to the cost of your health plan and then ensuring that the cost of that health plan stays within the budget that was estimated at the

115beginning of the year. Okay. Um, so let's get to well the last thing I would should probably say all of that requires frequent review analysis certainly as it relates to the cost items uh the expenditure that occurs every month and then comparing that activity uh to what is budgeted for your healthcare. So, let's go back to the questions that needed to be answered. How do annual contributions compare to contractual limits over the past 3 to 5 years? Well, again, we looked at four 22 years that have completed completed and the year that's underway 2526. Uh and what we found was going back to that table identifying what the employee we call it employee responsibility. What the employee contribution responsibility is in each year the contri employee contribution determined was less than the employee contribution that

116should have been determined. I can't answer why. I can answer what but in this case I can't answer why. Um but that is what the condition was and that lack of compliance is what contributed to budgetary concern or the need to make budgetary changes. When budgetary changes were made, they were made because cost was exceeding budget. We could we could go back to look at was the employee contribution set up correctly and in the four years reviewed uh the answer to that question was no. In 97% of the cases the contribution was set too low. In a few cases the contribution was said higher than it otherwise should be. So they were going both ways. Uh but the majority of the cases, the overwhelming majority of the cases, the employee was not charged what we

117would say they should have been charged based on that calculation. Total premium minus district contribution equals excess. Contract says the employee is responsible for the excess. My my adding to that regardless of the dollar amount, but the contract is very clear. So what caused the overage? The overages is really caused by uh to the extent years uh 2425 a little bit in 23 24. Um not an overall problem uh that appeared in 2223. But the causation would be not fairly calculating not not appropriately calculating the employee contribution rate because as we look at it total premiums is a dollar amount. The employee contri now district contribution is portion of it. Employee contribution is the remaining portion. the sum of those two should equal 100% of the premium in many cases. And it really wasn't consistent.

118Some I I won't even cite a dollar amount, but uh uh in many cases um as I said, 97% or so, uh small amounts, in some cases large amounts. Okay, large amounts $400 or $500 a month. Okay, you add that up over uh a group of employees, then you're going to get to a point where you're not producing enough revenue to cover the premium. Then you go back to increase the budget, which in essence means the district is picking up that additional cost. Um, you didn't bargain for that. You bargain for your employees to pick that up. right or wrong that was negotiated in the collective bargaining agreement. Okay. Um were budget adjustments properly documented and approved? Um uh we could we could find one one change as cited 2425. It was identified at first

119interim. Uh it was included in first interim. Uh the first interim budget is first interim document is approved by the board. Um uh we could say that was board approved. Um there was outside of our scope. Uh there was a TOU for an additional contribution on the part of the district in 2020 in 20 2122 that increased the district's contribution by $350,000. That that was a negotiated which ultimately came to the board for approval. Um so in those cases yes in other cases we could not find whether there was official communication at the board level of what was occurring that particular year are internal controls sufficient to prevent future variances. Um the process of managing this activity uh by and large worked um as it would otherwise be intended. Uh what where failure if failure

120occurred would have been at rate setting and not having sufficient conversations that I could determine about rates about the setting of a rate and determining that that rate was the appropriate rate between the parties involved the business office and the HR business department and the HR department. I will say related to internal controls, we talk about the ability to separate duties and not have one person do multiplicity of duties. You're small. Okay? And I'll go back to what I said before. You have a complex uh management of your cap to manage. You've got in essence 16 variables and that's just on health. You have additional variables for vision and dental as well. Okay. And then life falls falls within there too. So um probably more complex than perhaps the district's ability to manage. Um and

121the key communication regarding rate setting um uh may not have been as complete and transparent as it should have been and understood by all parties that we are charging the rate that we're contractually uh committed to charge our employees or we're not for whatever reason. and then communicate that through the organization. Uh certainly up to up to the board uh so so decisions can be made. We collectively bargained X if we're not going to follow that X. What are we going to do? Why are we going to do it? And it's okay to do it. Uh that piece uh didn't occur. should have occurred but didn't occur. Uh is there evidence of material breaches or improprieties? Our our our review was limited to just hair health care costs um in any area of healthcare costs.

122No, as it relates to payments, we we didn't see um anything uh that raised our eyebrow. The issue would be rate setting. Now, if you want to call that an impropriety or material breach, that that might be a legal definition. I'm not a lawyer. I won't give that legal definition. I'll rely on council to give that legal definition. Uh but uh uh for the areas we looked, we didn't see anything. Our only concern would be uh the rate setting um re recommendations and starting on the bottom of five uh and these are all should consider some of the things we recommend are subject to negotiations. So it's not in uh the purview of the district to do unilaterally. It would have to be done along with his bargaining partners. Okay. Uh but I would certainly

123think you should consider looking at plan year and coordinating that plan year with your fiscal year. That would take uh rates rate setting earlier in the spring. That would take uh open enrollment instead of at the beginning of the year at the end of the prior year with the exception of new employees that come on after that period of time. Uh it would assist with development of budgets. Um all of that with the caveat if your carriers would allow you to make those changes because you're contracted with carriers, right? Um some are very particular about plan years and although it may be best for you, it may you may not be able to to do that. But looking into it, I think would certainly warrant would be warranted. Uh as it relates to rate rate

124setting, as you're currently staffed and organized, um rate setting is in the business office. Uh there is some coordination with uh your assistant soup of HR. Uh but there could be more and better coordination, communication, and agreement signing off that the rates we set are correct and comply with your collective bargaining agreement. Okay. I don't believe that step exists. That's something that certainly should be included in the process whether you change the plan year or not should be included in that process. And then the periodic review of health and welfare costs throughout the year. Um it's typically done twice a year at first interim and second interim. Um, but it's something that should be reviewed uh on a more regular basis than that. That way, if budget adjustments are necessary, you don't necessarily have to

125wait until December or wait until March to affect uh those budget change discussions. Um back to the complexity uh for the amount of people in your business office and in your HR office, this is very complex to manage for people that have a lot of things they juggle on a daily basis. And I will say uh certainly with uh my years of experience uh they cannot devote the time necessary to watch this on a monthly basis. uh that so the the comment there is you need to look at the environment the operating environment the staff to manage that operating environment and honestly ask yourself do we have enough people okay um and then at the plan structure should it be that complex not for me to say Um but should it be that complex that

126definitely given what we're discussing should be on the table uh from management and uh your bargaining partners uh and the insurance committee um and with um consultation with your uh healthc care consultant uh looking at the complexity of the plan designs. Um, they may work, but is it the most effective for uh the staffing and operating environment that those plans have to be managed within? Um, that concludes the recommendations and I'm sure you have many questions or andor many comments. Okay. Um I know when insurance rates increase. >> Yes. >> And that keeps happening. Is is there a chance to negotiate those rates down? And do you have evidence that we have worked on negotiating them down? Uh it is virtually impossible to get carriers to change their expected cost increase based on the plan

127design that they've given you an underwritten cost for uh to have them concede on price. You're going to have to concede on plan. So, typically what happens if the cost is greater than you're willing to pay as a district, um you're going to have to uh give some on what the plan covers and the cost of using the plan. So, >> so you might have a higher deductible or >> certainly certainly okay certainly deductibles, co- insurance, um, uh, co-pays, those tend to be the variables. >> Um, have you attempted to lower your costs? Yes, you have. Uh, you've even made a recent change uh in in uh plan. uh you joined a joint powers agency, health and welfare joint powers agency. So there are changes you've made. Um where it is difficult to change costs

128is with one of the popular carriers in the state which is Kaiser. Uh they know they're popular. They I won't say they have a corner on the market, but they've got good market share >> and there is no reason for them to change their prices >> because they can say goodbye to us. >> Yes, they can. >> Okay. >> Yes, they can. >> And and one more. So, it sounds like our plan is pretty complicated. And so would you would you say that we would need to hire another staff member to really coordinate all this and keep track of it monthly? Uh that would certainly help. Um speaking of my personal experience, every district I've worked in, uh there was someone with the responsibility every day of health and welfare benefits. their responsibility uh with

129oversight and support of course uh if we look in the district there's not one person who has in the business office uh sometime when I can get to it in HR uh sometime but not devoted um would it help yes what should it be that's something that you guys should look Thank you. Other board questions. >> I have a quick question. I'm trying to understand this from the perspective of an employee rather than from the board. >> So if you know we we have a budget where we estimate what the health care costs are going to be in July that the board approves and we don't really that's that's a floating number for all the reasons you stated >> and that would be an aggregate number. >> Exactly. And then the um staff uh proceeds

130over the next couple months to choose health care plans. >> Yes. >> And they're choosing those health care plans with an expectation of paying a certain amount of money per month. What it sounds like you're saying to me, and I just want to really make sure I'm clear, that if the aggregate exceeds the caps for any of those 16 categories, >> yes, >> you immediately have to pass on the cost. So, we would discover that on November 1st or on October or whatever. >> Actually, you would discover that when rates are received. >> Okay. When you go to set rates, you can do that simple mathematical equation. What is the new premium? What is our static district contribution? That delta, that difference is the employee responsibility, >> right? So what that would mean and those

131rates come out in the fall. >> Rates No, rates come out in rates are given to employees in July. Open enrollment is in August, >> right? But we don't know who's chosen what correct until like September then. >> Correct. >> So what I'm understanding is we have a budgeted number. You determine based on the choosing of the various plans by individual employees that perhaps our caps have been exceeded in various categor all some a few whatever. And then that would result in uh according to our contract uh transfer of that cost exceeding the the CBA to the employee. Would the employee know that their rates were going to go their their contribution was going to go up? You you know what I'm saying? So like are they choosing the plan expecting to pay a certain

132amount per month? >> Certainly. Certainly >> based on the rates. And if we're over the caps and we have to pass that on to the employees, does that change in any way what they would be expecting to pay? >> Does that make sense? >> I understand your question. Uh but let me back up and and maybe focus on that timeline of when employees know and what do they know? They know in August. They know what they paid for the prior year because they had been paying it all year. They know that uh as employee groups are very interested is when we get new rates, what's the effect on me? What's going to be my contribution? Or or if you're already contributing, what's going to be my increased contribution? So they know that when they start

133open enrollment, they know that in August when open enrollment starts. If you're on the health insurance committee, you know that before probably, but for every other employee, they will know when they get their open enrollment packet. The open enrollment packet says what the contribution dollar amount is. So, they're making choices effective October 1 based on information they know in August. The problem here is the number they were given in August might have been good for them, but it was not in compliance with the contract. As I said, 90 around 97% of the cases the amount was lower than it should have been. lower than it should have been. Okay. Um the focus here >> I beg you pardon. >> They chose a plan in tier maybe. >> Exactly. With a rate associated with it >>

134which would then become higher >> possibly. >> Yes. Another way to look at it is if they had known the rate was going to be what it was, would different choices have been made related to plan design? >> Okay. So, it kind of goes both ways. Okay. And um let's let's break down the elements. As I indicated, there's the district budget and then there is the rate set for employees. your district budget stress related to health and welfare benefits. The overspending as we call it was caused by the rates to the employees being too low. When you agree on premiums, you agree on premiums you can afford to pay. And how do you determine you can afford to pay it? the district contribution plus whatever the employee contribution is going to be should be sufficient

135to cover the overall cost. So if we accepted rates, we know what the district contribution is. We should simply be able to understand what the costs to individual employees are. that has to be sufficient to cover all of the costs to pay the expected annual premium costs. Now there are variables as I uh as I mentioned before variables of employees changing plans variables or changing tiers within plans employees exiting off the plan through retirement through separation employees adding. So, your business office developing the district budget, I'm less concerned about that because all of your budgets are estimates. Okay? As it relates to rate setting, that can't be an estimate. That has to be spot on. One, to comply with the contract. two to cover the contracted cost for the premiums you guys have contracted with

136the carriers to pay. >> Okay. And again, that in and of itself is complex, >> right? >> Very complicated system of trying to establish rates in August that >> might not equal what the final cost is for each of the categories. Okay. So, that's helpful. Thank you. The only the other question I have for now is um so you didn't look at any prior years to these four in terms of doing a forensic audit or whatever the right word is. The earlier one was a forensic. >> We had said we'd covered three to five years, >> right? >> Three to five years. >> So you previous to this this has been an ongoing a longer term problem >> as it relates to rate setting. Uh we we have information that we we secured uh the

137end of last week from uh your health healthcare broker, healthc care consultant. Uh I could take a look at that to see if in setting the rates the rates followed form of the form that was used for the four years we reviewed. I could do that. >> Okay. Um, when I read this and it says that you looked at four years and this is a time period in which you see the rate setting as being a problem, >> right? >> You didn't look at any previous years to see whether or not there were we were exceeding caps in any of those previous years. You didn't look >> what I said was no. But what I said was we got the information from your consultant on Saturday. >> I see. >> Have not had an opportunity

138to look at it. It can be looked at and I can supplement. >> I think I might have misunderstood a previous conversation about this. Thank you. >> Board member Kelly, >> um, can you tell me should any of this have come up in our annual audits for seven years? I've sat on this board and there's never been an audit issue concerning the amount of money in the line item that has to do with benefits. We did clean audits for seven years. The >> scope of work of your financial auditors are not going to extend to whether you comply with the collective bargaining agreement, >> but we can in the future have that as something for them to be looking at. >> Uh yeah, you can ask that to be part of your review. They will

139they will increase your cost because that's not within the state audit guide, >> right? But it would be a nice control. uh could be that or you could simply rely on the consultant you already have. Uh that could be scope of work that uh the Bowwin group could advise you on. Use the consultants you have. >> Board member Morgan. >> Hi, thank you so much for this um review. I have a few questions. A couple things I want to clarify the timing um because you talked about the um staff receiving or you know benefactors receiving rates in August, right? And then they enroll and during open enrollment and then their first um payment I guess is October, right? When it goes into place. So on on page two, you talk about the budget setting and

140it says since the plan year does not start till October 1st and renewal rates are not known and agreed on until after budgets are developed, staff must estimate the expected cost of health and well for benefits of each year. But then renewal rates goes on to say the district will generally receive renewal rates for the program between May and June with final rates agreed to generally in June of each year. If they get the renewal rates in with in an October one renewal, the renewal rates typically are going to be within a 90day period of time. You're not going to get the rates six month six months in advance. They begin work probably in May, but uh the consultant doesn't bring those renewal rates until June before the insurance committee members go off for the

141summer. So rates are known in June, budget is already put together uh in June. >> Okay. And then so with regard to the rates and the contribution, how are those determined um for each of the different tiers um within the plan are those >> you're on page three. >> Page three >> at the very top. >> Uhhuh. >> That tells you what your district contribution rates are. >> Right. But how are they the so how so the determination of how we establish these rates of what the contribution is going to be is just just basically math offset by simple math >> simple simple math. Okay. So madam um the rates that are in the table at the top of page three that's out of the bargaining agreement right >> that's in the collective bargain >>

142right so it's bargained I think is the is an >> it's collectively bargain with your employees >> so is that and that's all done in within the insurance committee with or no I mean that's done with the um bargaining negotiations >> negotiations >> but then the insurance committee I was going to ask you all um what um So then what in the insurance committee itself what decisions do they make if the if the rates are provided and we have an agreement on how much the district is going to contribute what is determined what's discussed inside the insurance committee >> I'm not in the insurance committee but I've I've been involved with insurance committees that much of the discussion is plan designs going into um directing your consultant to go to market to get prices come

143back and then um I presume I won't speak for the insurance committee but I presume they're looking at the prices and if these are prices that the that they are willing to accept or recommend be accepted and then if accepted uh bear the financial responsibility of that acceptance. >> So if the insurance committee >> um Miss Zuziak sits on the um insurance committee and so she might have some information about specifically what things does the insurance committee at Laguna Beach uh consider? Um as uh Michael was saying he's sat on insurance committees. I've sat on insurance committees. Neither of us has sat on an insurance committee here but that is correct. Yeah. No, >> I appreciate that. Thank you. Okay, >> please respond. >> Okay, want to make sure. Um, so we each have four

144members that we get to assign to the in district's insurance committee. We meet three to four times for the year and we meet with our insurance um broker which used to be Burnham and Ward which I guess now has changed and we start looking at the usage at the beginning of the year for the prior year and if we want to make any changes or if we want to go to bid. We went to bid two years ago, I think, and moved into the SIBA program, which was good for us because it put us in a bigger pool and it brought our rates down. We stayed with Kaiser um independently instead of going into the pool for Kaiser. Um they come back like this gentleman said in about May and give us an idea of

145what the insurance companies are looking at. So Kaiser Kaiser there is no negotiating with Kaiser. They come in and just say the rate increase is going to be 10%. Let's say Blue Shield could be looking at might be 6% for the PO, 5% for the HMO, little cheaper for the TRIO depending on what you choose. Again, we have never discussed or talked about the district cap because when those numbers come in, it's on the employee. So, we don't know until August 1st what our renewal is actually going to be until we go to open enrollment. There's it doesn't even come in negotiations because it is what it is. It is insurance went up 10%, 7%. And it shows in our enrollment rates and the people then the employees choose what best suits them and their

146family based on the number of their contribution. There's never in negotiation a discussion about well we're over the cap by $500,000. There is no Um, yeah, excuse me, Mr. Hills. Um, >> we don't talk big numbers like that. We don't talk that, oh, insurance for the whole district is going to cost $2 million. And this is the district's part of it. This is the we just get the renewal rate and that's what we're told to pay. And the only what we do in our insurance committee is look at different plans to help try and bring costs down for everybody. We look at what the needs of are of the employees like what are they looking for? What do they need for their families? What is the most competitive that we can do to keep everyone

147um in decent plans? But like he stated, insurance is out of control and it's every time we start at the beginning of the year, it's like, okay, how bad are we going to get hit this year? >> Thank you. Um, if I could redirect some questions to you then. So I I think I'm struggling a little bit with the idea that it's ne that because I think you said that it's negotiated. How much that how much the district is going to contribute is negotiated. >> Is that right? the the the amount on I believe on that page at the very top those are the contribution amount that is the district's responsibility >> so >> and it's been that at least since 2223 >> so how are those so the contributions then are determined by the

148difference of the plan versus what the employee selects I mean is it that >> that as you see the math in the table these are the permutations these are all the available options if to select blue blue shield po employee only. That's for these rates. That's going to be your contribution. That should be your 10thly. That's going to be your cost. This will be your 10thly contribution. If you take HMO access, that will be your cost and yourly contribution so on and so forth down the line. So, what I'm saying is this is what I prepared from your data. Mhm. >> If this was the approach used then um I think the employees would have more transparency about what their cost is. There will mean more transparency about all of the what I would consider

149excess cost or gap uh however you want to refer to the amount unfunded uh known earlier. So then as an employee I can make a a more representative decision on uh whether I want plan A, plan one or plan 16. Um as an insurance committee if they had this kind of information sooner then would it change acceptance of the rates? Would it require them to do more marketing? Um, I can't answer that question. Maybe uh the insurance committee member might want to address that. But it get the more information employees have, the better decisions they can make for what their financial responsibility would be for whatever plan is selected. >> I appreciate that. Thank you. We looked at the if we look at the open enrollment booklet, it identifies what the employee contribution is. Okay?

150It does not compare that contribution to what the total premium is. It doesn't it doesn't have it in as particular detail as this example might be. And as a consequence, no one knows whether the rate that is listed is the rate that covers the entire cost of the plan. And that is what we have to understand here. Are we covering the cost of the entire plan? And if the employee rate is less than it should be, then you're not covering the entire cost of the plan. >> Right? If that's the case, who bears the responsibility? In this case, the district bears the responsibility. >> So, thank you. Um, so you had said 97% weren't covered covering enough and 3% were covering too much. Do we have different tiers for different levels of employees where some

151are covered have more of it covered than others or what is the differences in that just amount just the plan that they chose or >> No, it it's nothing about choice. What what we did is each year is to take the actual renewal rates, apply the district contribution, >> determine what the uh excess amount is, apply the district contribution, uh excuse me, the district provided employee contribution for that year. And was that employee contribution enough to cover the gap? And in most overwhelming majority of the cases, the answer to that question is no. >> So how are those contributions then? And where is the determination of who contributes how much each employee based on their plan? How what is how is that factored that contribution? >> I'm I'm not understanding the question. >> Well, you

152said that we were contributing less. The employees were contributing less to than the plan. >> Yes. So how is that if the if if the plan ca if the budget came forward or if the premiums came forward and the budget has been determined at what point is that known because I I think you had mentioned in 2122 we entered into anou for $350,000 if that wouldn't that first budget issue have been um identified to adjust for the shortfall I mean wouldn't we have recognized if it were called out that we are a shortfall which this 350 did that it would trigger something to correct >> question to kind of address that question. You got multiple parts in that question. Sure. I I'll deal with the last question should have been >> why why is there

153a shortfall explain to us why the shortfall existed that we needed to make a budgetary adjustment. It could have been rate or it could have been in developing the budget they were off. It could have been either or it could have been a combination of the two >> and that would have been something asked when thatou was entered into. >> It should have been >> should have been asked before theou was approved. >> Yes. >> Okay. >> Yes. Now uh to answer the other question um understand that rate setting and budget development are two different activities. Budget development is what does the total plan cost? What is our estimation of the total plan cost? And for the most part, the business office develops the budget based on the prior year and what they think the

154overall rate increase is going to be. Okay, that's separate and apart from rate setting. Rate setting is applying your total cost to the responsible parties. The district's responsibility is fixed is very clear. On page three, we identify what the district's contribution is. That hasn't changed. So that's fixed. The employee pays the difference. >> Simply the employee pays the difference. >> And you're referring to the 5.5 million that's listed in the contract. Is that correct? >> No, I'm speaking of the contribution limit here. >> Well, what the bud? >> Okay. This is the district's contribution per employee per employee. Okay? Based on whatever plan tier they select. Okay? And when we do the simple math as it's done on this table in an overwhelming number of cases under the the rate that was set by the

155district was less than the rate that shows up in this column, >> right? That creates a shortfall, >> right? >> That shortfall then might affect the budget. >> So the budget doesn't affect this. >> This not fairly priced to each employee would affect your overall budget. >> Okay. Um are we at any is there any and I I then I'll yield my questions and maybe circle back after the uh community offers any comments. Right. And we we have some people that still need to ask questions. >> Is there any litigation concerns with being of under of that that you can and that you can >> or that you've seen in a situation like this like that were not compliant or >> Well, I I will say I'm not going to give you a legal answer,

156right? because I don't have a a law license. But what I will say is if it was the reverse, if you were paying less than you should have been, instead of charging your employees less than they should have, if you were contributing less than you were contracted to require, the unions would probably if you didn't resolve it based on their demand for you to resolve that, >> uh they probably would have filed an unfair labor charge. >> Okay. Okay. >> Thank you, >> council. You agree with that? >> Okay. >> Yes. Yes. Yes. Yes. >> Clerk Hills, do you have any questions? >> And we have >> you haven't had a chance. >> Last question that was asked on the your answer is a very good answer. Um there's a lot to unpack here. Um

157but I guess one question is this. Starting in like 2020, 2021, 2022, but definitely by 2022 coming into the last few years. Um everybody knew this was going on, right? I mean, um or should have known this was going on. I really think that as a matter that they did know that it was going on, but it was at a low enough level that they thought it could be sort of managed and then it got to a bigger level and all of a sudden um there was a change of um leadership and all of a sudden we have this big disclosure about it. Um, and uh, I'm just wondering in your experience, what's the likelihood that the insurers, the unions, the administration um, did not know that this was going on. You say it's a

158very complex thing, but it doesn't seem that complex to me. um you know as you said um you agree on your premiums that you can afford to pay and um you know what they are um so I'm just I'm really at a loss to understand how this has gone well I don't think it has gone undetected um I think there's been an awareness let's put it this way would you agree that in 2022 and 2022 there were people that knew that we were exceeding caps. >> It should have been known. >> Yeah. So, um you know, I I'm not going to go on. There's there's a lot of questions I can ask. Everybody's asked a lot of questions. I'm not going to belabor this because um Mr. Superintendent, this is a discussion item on the

159agenda right now. So, it's not an action item. >> Yeah, it's just a discussion item, but at this point, we're just asking questions. >> Yeah, I understand that. But I just was confirming it was a discussion item. >> I wanted to make sure because if it were anything other than a discussion item, I would take a very different approach. But um I think it's really important that um you know you have caps in the contract and you have parties to the contract and you have people responsible for um implementing the contract. And um and so what I'm hearing or what some of the things I heard was that we're underst staffed and we um and as Mr. Kelly pointed out the audits weren't picking this up and um this was developing over a period of

160time. Let me ask you this on insurance committees. What's the normal composition of an insurance committee? I don't know that there would be a normal uh composition amount. You're going to have representation from management. You're going to have representation from uh the collective uh bargaining units in this case Laboufa and CSEA. uh you might have unrepresented employee uh representation because they are subject to uh the health plan as well but the composition of your your particular insurance committee is identified in the collective bargaining agreement. >> Yeah. >> Um that is typical of the insurance committees that I've experienced in the districts I was the CBO in. Um, in one or two cases, we had unrepresented management uh to represent the interests of the employees that did not have a union. >> Would you would you

161ever have a board a board member sit on the insurance committee? >> Uh, I would never know. >> Yeah, I understand. Um, >> not that I'm anti-board. Um, it's it's it's a staff level uh and it's staff work. >> Yeah. Uh the board gets an input at the governance level to evaluate information that is brought before it uh asking the relevant questions to uh to get the questions answered that you want answered and then make a decision of yes or no. Um uh that's just my view of of board staff relationships. >> Yeah. um what what bearing or impact on this whole situation would be out there in terms of um you know insurance the insurers commission's volatility. In other words, um is is uh in terms of the insurers's contribution to this problem, uh

162their awareness of it, um their understanding of it. Um and when there's changes that are that where you have one of the explanations we got is that the staff may have been wanting to provide incentives for some employees to move from one insurer to another insurer. And so every time you move or you change the number of people that are participating in a policy, does that generate a lot of commissions for the insurance companies or for the agents or the brokers or anything? I'm just trying to figure out what what forces might be at play here. >> Um the particular issue you had in your district, your carriers would have no idea of. Also, I wanted to ask um in your experience, would a district like this, as you said, that probably understaffed for really

163avoiding this problem, um would do you think a district like this would be well advised to bring in outside consultants and look at the question of whether we're getting good value for the money we're paying for our insurance. Um uh I don't know if that's ever been done here or if it's u is if it's not been done. Would you see a need because like right now we've got the staff that's used to working with these insurance companies and we've got the unions and everybody's kind of rolling along. Um uh maybe you need a new fresh look at the whole question of uh are we getting a good deal? Uh could could we actually get more coverage and spend less if we managed it differently? Um, I would think, um, maybe that might be appropriate

164to try to do that kind of a analysis because I've heard about that being done at other school districts. >> One question I denoted in in in your discussion there, you have a healthcare consultant, >> right? >> They're called the Ballroom Group. >> Yeah. >> Okay. So, uh, part of your concern would be part of their expertise to answer, >> right? >> Yes. >> Yeah. And they may need some help. Um, just like the staff may need some help. Um and um last thing I just want to say um is that we have a board bylaw on 9310 that expressly states and when your when our close session when we met you was over and we were out of close session. I commented to you um that uh um it states that the board cannot

165take actions that are inconsistent with the collective bargaining agreement and the caps are in the collective bargaining agreement. So if we went over the caps then we violated our bylaw and we breached the bargaining agreement. And um so I think those are things that we have to make sure we all understand. Um and uh uh the unions have testified or the unions have stated on the record that they didn't know about this until very recently. And so >> kills I think this is getting into discussion not a question. I think you're getting into discussion not a question. We haven't gone to discussion yet. >> Okay. Thanks. >> Thank you. I actually was going to ask a question, but I I will refrain. >> Okay. Um I think everybody's asked questions except you wanted to ask

166one more. >> I'm sorry. I uh uh if I misunderstand details. I haven't I haven't looked at this level of health care cost before. So, one thing I heard you say was that the the district contribution per employee has not changed in a number of years. >> No, the district contribution. That's correct. >> Right. So, um I'm wondering why if healthc care is is going up so much, the district would not be as part of collective bargaining or whatever negotiating. I don't know if that's part of collective bargaining or if that's a financial decision why we made a decision not to increase the district contribution in relationship, you know, relative to what the employees were being asked to do. That's part one. But the second part of that um has to do with the total

167amount of the overage. If you took that total amount of the overage which I think was 400,000 is that for this year >> uh it was it was estimated to be 800 and some thousand. >> Okay. So if you divided if if you looked at the fact that the district contribu contribution hadn't gone up I'm wondering first why wouldn't the district contribution go up what is the reason for that in terms of negotiating rates and all of that and two if we made a decision as a board to cover the difference are we in effect whether rightly or wrongly in terms of the contract are we in effect making a sort of implicit agreement that we're upping the district contribution per employee. >> I understand that it's not part of the contract, but doesn't isn't

168that in effect what it does? >> First of all, uh we have to be mindful not to negotiate uh openly and you've got your negotiating party parties here. You have union representation, you have management here. um we can comment about um but we shouldn't necessarily try to solve >> because the solution is one that should be negotiated with your labor partners. >> I I no I understand that but it sounds like we made a decision in a prior year to cover the difference. So I'm just wondering if that decision was just upping the district contribution for that year whether right you know even if it wasn't in accordance with the contract. I I to answer that question, I'd have to look at the particulars, >> okay, >> of that particular year. That was a year

169outside of the scope of the years we looked at. >> Okay. >> Yeah. And I apologize. I wasn't trying to make a suggestion about what we should do. Just trying to understand the reason why it might not have gone up, but also our decision to cover the difference in a previous year. Thank you. Uh >> madam chair, may I ask one more question and then we can go to um >> so theou that we entered into in 2021 >> that was discovered in your um research and your investigation of the of this issue and how it came about. So we didn't see so and that would have been a board approval in 2021 but you did not you did not find any other agreement in subsequent years that approved or added anou to subsequent years

170to increase the amount that the district would contribute. Thisou was not an ongoing contribution agreement. It was a single opportunity. >> It was a single yearou >> for 350,000 in 2021. So we're 850 this year. We were 4850. We were 550 last year and that's 2324. So, or no 2425. So, we don't know. Do we know how much was paid by the district in um 23 if this was 25 26 so then 24 25 23 24 we don't have a number on that one. And on 2223 we don't know but in 20 2122 we paid 350. >> You agreed to cover the increased cost of 350. Yes. >> Okay. And that was approved. So there's So there's still So we still really don't know. The only TAS that relate to benefits was the 2223 [Music]

171through 2425 three-year contract which had a salary increase for each of those three years with the explicit language the employee uh the district cap would remain the same. >> So okay. And so we don't know what those um overages were in 23 242. That's basically >> correct. Okay. Um >> which one? >> Thank you. >> Okay. Are there any public comments, Mr. Hills? >> Clerk Hills. >> Thank you. Thank you very much. >> Good evening. Um, so I take you now to December 16th, assistant superintendent uh Dixon's uh uh transcript from the reading of the first interimm budget. His his presentation, he talked a little bit about the dental insurance uh having a refund of 155,000 a year. Uh going to anticipate for the last next couple years. This is at the threeh hour mark

172by the way, three and a half hours. It does go on to say that um benefits were also adjusted based on actual enrollments that occurred and as you know our benefit plan begins October 1st every year so it doesn't align with the fiscal year. And then his mic cuts out he says I guess my time is up so I can talk through it because you'll see all this in the report. The benefits now align with the actual enrollments where the employees chose their plans whether or not they added families or took plans blah blah blah. That's all that was stated about the benefits. So the actual uh first interimm budget says expenditures for employee benefits are projected at two and a half million reflecting an upward change of 497,000 primarily because of a higher cost

173for the employer port employer portion of health benefits and goes on to say it's healthc care is rising. These key factors and uh will be topics in future negotiations and collective bargaining units as the district strives to manage costs while maintaining competitive benefits. Well, obviously the bargaining unit would have known about this because it it's stated in the endm budget that increasing health care costs should be included in negotiations. Sure doesn't seem that was the case after the last negotiations, but now we hear it's 850,000 the district's covering. So, you know, it was just going on for several years. You got red flags going on. Why? Why aren't people Why didn't the management the raise red flags here? Who knew? And when they did they know this is a over a million dollars of taxpayer

174money. They should be going to the kids. You know, there's at least a dereliction of duty here. You know, in the real world, just about everybody involved with this would be fired. I mean, really, this is atrocious. Uh yeah, you you can talk about, you know, the the timing and all that, but this has been going on for a while. People have known about it. So, you either knew about it and you didn't do anything about it, which is a derelction of duty, or you didn't know about it and that's just plain sloppy work. So, uh this is truly indicative of the last administration and the kind of behind the curve oper behind the curtain operations that they did. Thankfully, now we have a new superintendent and a new CBO that are going not going

175to allow this type of non-transparency to happen. Thank you. >> Thank you for that uh that presentation. Um I don't think this is quite as complicated. me board member Mel Kesky, you were asking some spot-on questions and I think if you continue to drill down that when when was the rate and did we make a decision as to whether to fund the increase or pass it along to the employee, it it kind of boils down to that. Um some of the things Steve said the math clearly was missed. I appreciate uh Dr. Glass bringing this to the board's attention and taking the action to get us to this point. I I'm hoping that some of this historical disputes, we're kind of done with those and and sort of the next board meeting, we start talking

176a little bit more about some things for the kids as opposed to cleaning up some of the prior stuff. So, needed to say that out loud. Uh, everybody in the world does this. Any any business that provides health benefits does this. I've talked to some CPAs, some that do small work. I come from a large corporation. We do this every year. It's math and a lot of it boils down to the brokers telling you who's going to select what and they have it down to a science and then everybody budgets conservatively to say I want to be sure that I have enough money in the fund to cover so that I don't have to pass it along to the employee and I don't have to go to my board and say I have a budget

177variance and that's what's happened here. You had a budget variance. So it it really and and the fact that it crosses fiscal years, finance guys cross fiscal years all the time. That that's not a complicating factor. I wouldn't put much weight in that. I would put some weight on your brokers on the brokers to say if if they told you that there was going to be a selection that was different than what it said, you need to hold them accountable for that because that's part of their job. Um board member Kelly, you asked a good question about would an audit catch this? You don't audit contract execution to contract. It's just not part of a fiscal audit. But your audit did catch it and it popped out in this thing called a variance. You were

178over budget. So your audits did catch it. It did it exactly what it's supposed to do. And there was this big blob that said we're over budget by this much because we we didn't budget enough to cover um or either didn't budget enough or didn't have the staff pay enough. Um so yeah, decide what I mean. Don't spend too much more time on this, right? Employees have gotten a benefit for a few years. Decide what you're going to do about that. You're clearly not going to make the same mistake going forward. So, you're going to get it right. But let's uh, you know, decide how you got to this point. Decide what you're going to do about it and move forward. Let's get on to some more important things. Thank you. >> Thank you. Any

179more? >> No. No more public comments, right? >> Okay. Thank you. Okay. board discussion. >> So, thank you for um >> member >> bringing this forward and I would like to thank you especially for the use of the word transparent throughout your conversation because I think there's been a lot of concern that there's not transparency today when what we're discovering is that there was not a lot of transparency previously and I agree with u Mr. Kasich, we need to move forward um and continue to move forward because to your point respectfully, we are doing a lot of things for the students with transportation and the arts and things like that. So, we are trying to balance both in moving things forward for the students um which we've been very successful at so far, but also

180working um diligently to understand how some of these things occurred. So I do appreciate that when um the the years that we aren't able to identify the fact that we were overbudget by 350,000 um and I this is a discussion but it's kind of a layered in a question is there um I'm concerned with 23 24 and 2425 and so to continue to look into those years do we need to expand on this um investigation just to make sure we understand what our financial amount that we're talking about and at and and obviously once for negotiation it would probably be helpful to understand that. Is that relevant? Is it not relevant? Um >> you certainly could look at those years but those books have already closed. those fiscal years are passed. And so any overages

181that the district would have absorbed would have been paid for um and it would have shown as a that much less that would have either appeared in the in the district's general fund reserve, what was added to it um or a deficit. And I don't think the district ran any deficits in those years. So those are past fiscal years and those amounts. Uh while Mr. Bishop and Mr. Olivesson um can't tell you what they are today. They have been accounted for in the past budget years that are now complete. >> Sure. And I don't think it's a matter of whether we had a budget deficit because we're a very fortunate um community that we have a very robust budget. And I think even this issue we identified that it wasn't going to impact um our

182budget our budget in the sense of what we can in the sense of are we in a deficit but what it does do is it takes funding away from other areas that were that should be used elsewhere. And so I think my question or my comment would be um to express concern and and to explore how we can understand fully what the impacts of this were um because the theou was discovered out within that five-year plan. So it's clearly it seems to me that there's a pattern here that has occurred that we need to obviously correct which I trust is going to be happening and there's ne negotiations that are going to happen which I trust will be happening. Um but I think I'm cons I'm I'm would like to know um what our total

183overage is in in in the entire process from when we started discovering that we were without um that we were um had a budget deficit in this area just so we can understand what kind of numbers are we talking about um that really wasn't used for our students. >> I will commit to finding those numbers for you. >> I appreciate that. Thank you. Member Kelly agenda says enough there's been enough set on this. >> Okay, I got to give everybody a chance though. >> You're too good. >> Member member Hills, clerk hills. >> Yeah. Um, so could we have order? uh have some work. >> Yes. Um can we listen now to Clerk Hills? >> Yeah. I'm a little bit surprised that member Kelly, who likes to sort of be a cheerleader when um everything's

184going good, doesn't want to extend the discussion of a problem. And I I would also say that um uh you know, we hear a lot of talk about putting the students first and supporting the staff. Well, this is supporting the staff. This is the work of the board supporting the staff. and somebody has not supported the staff. The staff has been put in a bad position. Uh board member Melchesky didn't want the superintendent to even bring this out to the public. Uh when when the uh back in July when Well, yeah, it is true. Um back in July when the superintendent announced that we'd been presented with this problem, she questioned why we were making it public before we had all the facts. >> I'm sorry. I'm speaking right now. This isn't a debate. This

185is not a debate. This is not a debate. I'm making a comment right now. And um so, you know, this is about supporting the staff and we've got a lot of work to do supporting the staff and I'm not quite sure I understand um why somebody who was on the board is asking why didn't the board um change the premiums. But more fundamentally, uh, this can't be swept under the rug because the fact is that when you spend over your caps, when the caps are in the collective bargaining agreement and you've got a bylaw that you have an oath to uphold and the bylaw says that you can't do something inconsistent with the collective bargaining agreement and then you say, "Oh, but you know, it's all going to come out in the wash because the

186general fund is enough to cover it." The fact of the matter is those expenditures that went over the caps were unauthorized spending of public money. And so um you know um this this is a serious problem that needs to be addressed and it's going to be addressed. But um you know this was not for the kids. The students were not put for first. You know we hear a lot of talk about let's put the students first. Well, this entire process of allowing this to happen was not putting the students first. This was putting um this was putting the adults first and it was putting politics first and it was putting um pretty shoddy, sloppy administration of public affairs first. And so it's time for us to now put the students first and put the staff

187first and support the staff because the staff are the ones that been are put in a very difficult position, not anybody in this room. It's the staff that is going to have to eat this if we can't come up with a negotiated approach to resolve it. And that's what that's what was said back in um July. And I would say it again. And finally, I want to say this. Um, President Perry was out of town um and I was serving as acting president when this was brought to the attention of the superintendent and um he um as a courtesy uh called me to let me know this was happening and um let me know what he was deciding to do and I told him I would support him in his decision to go ahead and

188fund um uh this fully because we didn't want it to hurt the staff. And um that was an agreement that we had. But what I said at that time was we can't let we can't take this out on the back of the staff. They cannot be the ones that um take the brunt of this. But we need to understand that if we approve the collective bargaining agreement and go forward and we talked to council about this, we were doing an understanding that we weren't approving the ex going over the caps. We were we had to do the agreement so we could get into the negotiations and get back to the caps and restore authorized spending. And in that context, I just want to say that Mr. Superintendent, I just have the greatest admiration for your

189courage in this matter and your integrity and your honesty in this matter. There's some times you and I don't agree on things uh occasionally, but um the fact of the matter is you've really handled this brilliantly and courageously and I'm really proud to be part of your governance team and I want to thank you very much and your colleague. You guys did a great job and I really appreciate you um uh coming in and and um and uh helping us find our way forward. >> Thank you. Board member Malchesy, do you want to say anything? >> I don't feel the need to respond to that. >> Okay. Um Glass, >> thank you board and uh thank you uh Mr. Bishop and Mr. Oliffson for your work on this. We have a little more to do

190sounds like to find the total amount um of the uh overages across the years, but I appreciate your work. Uh I just wanted to summarize my understanding of the issue and let you know how I plan on going about addressing this going forward. Um and Mr. Bishop, I'd appreciate it if there's anything that I say that you would like to comment on or correct or um have a um guidance on, I would appreciate that. The cause of the issue at its core is that the district did not set health care rates for employees at the level needed in the collective bargaining agreement. It is that simple and that has occurred for a number of years. Why that happened is not known. I will theorize it was for the same reason that I didn't set them

191at the rate required in the collective bargaining agreement because it would have caused um 200 to 500% increases in the in the monthly rates of employees. Um and that would have been shocking uh for any employee to see those kinds of rates. I just did some back of the napkin math um compared to what Mr. Bishop and Mr. Olson put together what the 10thly contribution should be versus what they are. I'll just read a few of those. Should be 19320, is 41, should be 45660, is 121, should be 30360, is 46, should be 57790, is 45. If we had imposed those kinds of increases as a surprise on employees, it would have been really detrimental to our morale at the beginning of the school year and just the wrong thing to do. So, I I

192don't know why the decisions were made in the past, but I expect it was for the same reason that I continued to make the same error to protect the employees. The effect of that over the years has been increased cost to the district side. And to your point, Member Morgan, we need to find out exactly what that is yearon year. We've got a couple of those years, so we're not far off from determining what that is, but we can determine what the total overage was. Now, solutions. We have to renegotiate the collective bargain agreement so the district and the employees fairly share the cost of the plan. This is a district and employee funded healthcare plan. there's some sharing that goes on between this and that happens through good faith bargaining with our partners in

193labor and so we have to do that and reset these rates in a way that addresses this issue and simplifies and clarifies so we don't have the complexity contributing to it. We have to then once that work is done set the rates going forward every year in a way that's in accordance with the contract. It's that simple. I know that was hard to do. It was hard to do. It it was something I didn't do uh this past August, but it is the that is the cure for this. Set the rates in a way that's in accordance with the bargaining contract. And then finally, monitor the costs on an ongoing basis to ensure the plans are costing according to budget. That can be done monthly and in real time. So I I think those are

194the steps as I see them. I'd invite Mr. Bishop's commentary on any of that that you would amend or change, but that is how I see the challenge going forward and how I attend approach it. >> That's an excellent summary. There's nothing I could improve on that >> because this is an information item and it's insurance. And I appreciate um member Malesky's comment about how looking so deeply into insurance is not um a day-to-day activity nor is it mine. Um so in just trying to understand all this is the solutions that are needed something that the the operation side of it is something that that you will look at and evaluate from what I understand you just said but the the issue of the amounts and the totals is that also part of that and

195I know this is a question is that part of that or is that something that that like the annual negotiation ations. The articles are brought up. They're brought to the board's um attention of what's being discussed and then asked what what they would like to negotiate and then is that acceptable? Is that the same process for something like this? Because being our first year, I want to make sure I'm understanding what to expect going forward. >> Yeah, you will have a role on the board. I will have a role um and our administration will will have a role and the unions will have a role. It will really take all of us working together to work through this. We have an in-ear budget issue that we have to solve. I have some one-time dollars that

196can help offset that. When we get our new CBO on um he can evaluate that as well and find other pockets of money. We're going to work really hard and bring a recommendation to you so that our employees don't feel the shock of this in the first year. Um but that will be something that we'll negotiate. We'll sit down with with our union partners and negotiate that and then bring to you a solution that we think works. and we'll have to do the hard work of um them considering the interest of their members and finding something fair to them. Me considering the positions of my board and the taxpayers in the community and bring and bringing a solution that's fair to them and trying to bring an answer to you that we think is fair

197in the current year. And then simultaneously through the course of bargaining we have to work to identify what are we going to now do going forward. So what does the rate system look like where this doesn't occur again and can we simplify the tiers? Can we simplify the rates? Can we restructure the way the bargaining contract is set up uh so that it is more clear? But I think the complexity is one part of this and Mr. Bishop talked about that. But the fundamental problem is you have to set the rates in accordance with the contract. And so that if we had done that that would have prevented the problem. We still would have had this these massive increases. like I don't think any of our employees would have liked to seen a 400% increase

198in rates one year. So I don't know that we could have avoided that. But we can avoid the problem going forward by monitoring it closely, setting the rates um fairly with the employees and the and the district um and then following the contract. >> Thank you. Thank you both. I just had one um I and this is I if I understand the the going forward the year the impact that it would have on staff is is alarming and so that we don't want to shock our we want to take care of them. I understand that. In all actuality though, these are increases that um that people out that's employees outside of our district, but employees across the the country are facing on a regular basis. Is that correct? I mean, this is insurance costs. There's

199they're somewhat set depending on what you take in and out. And so, at the end of the day, while we want to take care of our staff, these this is the reality of what the American people are dealing with. Is that correct? Well, I would not say that. Um, our rates increased uh for the employees 5 to 7% this year. That's a little light uh for what insurance rates typically go up. But to do what was in the bargaining contract, I would have had to increase them 400 500%. That is nobody is facing that kind of increase. So, we've got a we've got a local problem. There are always health care increases that we have to account for and budget for. And Mr. Bishop talked about that. uh that that you you consider them in

200the budgeting process, you consider them in the rate setting process and then the employees consider them when they choose which plan. Uh but but nobody should face these kinds of >> No, I agree. I agree. Okay. No, I was because I had looked up what's the typical percentage increases and it's about 7% so a year um which I think is what we've seen uh consistently for a couple of years now. Correct. Yeah. Okay. Thank you. >> And it is part of the bargaining process too. Yeah. Okay. Can we move on now? Correct. Um action item superintendent approval of the contract for assistant Oh, thank you. for assistant superintendent business services. Dr. Glass. The board is presented with the contract for Dr. Minaj Roshaderie for approval. >> There is no greater argument for the need for

201a permanent CBO than the last three hours that we've experienced together. Would you please approve this contract board? >> Um, are there any board questions? >> Did I see a start date of October 13th? >> That's right. >> Yeah. >> Thank you. >> Any other board questions? Uh, clerks, >> this is questions about the contract. I have a but it's not comments about it's just questions. >> Okay, I'll take a pass on questions. >> Okay, any other questions? >> I move to approve the contract. >> Um, >> thank you. Uh, any public comment, clerk hills, about the contract? >> No comment. >> Okay, now we can go on to discussion. Okay, clerk hills, you ready? >> Just want to state for the record um that uh I'm glad that this worked out uh that we

202found that you found a person that you wanted to work with and I think that's really a good outcome. Um I do want to go on record um on a couple things. One is um I understand that there was part of the process was um that there would be there was like a public meeting um I guess leadership associates sort of managed the um recruitment and search process and everything and that as part of it they had like a public session where they invited stakeholders in and all that. Uh did that could you tell us about that? I didn't participate in it, but I know that that did occur. There was um out outreach and a a focus group type conversation around the qualities that were uh sought in a new CBO. >> Yeah. Do

203you know did the district have anybody sit in on that? >> Um some of the uh people at it were district employees. >> Yeah. So like senior staff assistants who were >> I think it was members of the um business services team were largely involved. Again, I did not participate in that part of it. >> Yeah. Okay. Um, well, I think for reasons of discretion in the late hour, I'm going to stop there, but I do want to talk to you some more about the our relationship with leadership associates o over the last six months or so, but now's not the time for it. So, we can do that another time. >> Okay. >> Thank you. Any more discussion? >> Okay. Um, let's call for the vote then. Student board members. >> Um, unfortunately, we

204can't both be voting on it, but we'd both love to be voting yes. But, um, I'll be voting yes on this. >> Okay. Thank you. Um, all in favor? >> Opposed? Okay. passes unanimously. Consent calendar. Approval of consent calendar items C through H. Does any board member have questions on any item within the consent calendar that does not require that item to be pulled to be voted on separately? >> I have a question. Can I vote on minutes since I didn't make it to the close session because of technical, but I did make it to the real board meeting. Yes, you can. >> Thank you. >> Okay, >> D, I have one question on the items that are related to CTE. I just want to ensure that those are things that you've looked at and

205are um >> Yes. >> happy with. Great. Thank you. >> Those are those are totally normal. Um does any board member wish to pull any items within the consent calendar for discussion and to be voted on separately? No. Okay. Clerk Hills, are there any speaker cards for those wishing to comment on the consent calendar? >> Okay. May I have a motion to approve consent calendar items C through H? >> So moved. >> Second. >> Any discussion? >> Called for the vote. Student board member. >> Would you like to vote? >> We'll be voting yes. >> Thank you. Um all in favor >> I opposed. Okay, thank you. Um now I think we me um the next regular meeting is October 9th, 2025. May I have a motion to adjurnn? >> Second. >> Any discussion? Okay.

206Uh vote student board member. >> Yes. >> All in favor? >> I >> thank you very much. Meeting adjourned at 9:14.