001all right I'd like to call this work study and brief board business meeting to order it's Tuesday October 10th 2023 at 6 p.m. thank you for those who are in attendance and those who are watching either live stream or recorded we appreciate you being here I've called this meeting to order and we'll just get right to the presentation and discussion topics 2.01 FY 2023 annual financial report and school level reporting form thank you madam president governing board members everybody we're in our second week of fall break and um we just have one presentation tonight and that'll be given to us by our associate superintendent Miss Bonnie Betts and her crew so thanks it's all you uh good evening governing board members president wood Dr McCord so actually I'm not going to be giving this presentation
002this evening uh Miss Jackie mattinen and the new budget man manager Lauren torsa are going to give it but I don't see them so I don't know where they are right now was waiting they left they left so wait a minute I'm on my own that would not be good however I do reserve the right to add my color commentary as always uh wanted to remind everyone that we are talking about a year ago so this is not this is not budget this is our actual spend data from last year and um also it we are on Spring bre uh spring break we are on fall break um but we are obligated to present to you tonight because the uh annual financial report is due by the 15th of October so given that I'm very
003happy to hand this over to miss Jack e Matan our Director of Finance thank you Miss bets Madame President members of the governing board Dr McCord do we have anybody on the phone uh no one's on the phone yes yes Ronda page is on the phone right okay thank you um so as Miss Betts mentioned we are presenting the FY 2023 annual financial report um you'll note on this uh cover slide here it says revised we did find a couple of um errors and a typo so this will be posted first thing tomorrow and this is also uh it's important to note that this is unaudited um and before we move on I want to give a shout out to Lauren torsa this was her um third month here and tax ing the annual Financial
004reports there are three of them so um it was a it was a huge undertaking so I'm very thankful that you're here so today's report will include the annual financial report or AFR details we'll talk about Levi funds um ending cash balances unrestricted and M unrestricted capital and M revenues and spend there's a new tab on this AFR um that reviews fund balance Reserve we'll talk about classroom site fund other funds and average teacher salary uh the Food Service AFR and school level reporting and then uh we'll have the appendix this was a slide that was um adjusted so that it was aligned better with the flow of the of the presentation I don't have my notes uh FY 2023 Levy fund analysis so you can see here this is our cash balance uh we
005wanted to bring your attention to the unrestricted Capital um 49.6 million please note that this is our ending fund balance and is not necessarily our our budget balance carry forward into 24 so if I could add to this one um The Debt Service fund 700 note that $780,000 that was that we had at the end of June 30 just so you know that those monies are applied to setting the tax rate for the new school year so those monies are all eaten up um when we set the tax rate we consider those that car carry over um as part of the revenues to offset the tax [Music] rate so can I just clarify that that means that because we have this fund left over the tax rates will be a little bit lower for the
006taxpayer that's right okay thank you is it cash and this is Cash yes it's total cash the other thing is as Jackie mentioned the um this is not representing budget balance carry board except for in unrestricted Capital so the cash as you know in unrestricted capital is all available to be spent that's not true in m fund1 b is it not that is am I correct in asking this question or um when you have the cash you have you you should we should keep it until after we've done all of this before we spend it correct I that probably wasn't a very clear question so the any excess cash that we have available to us let's let's just use M as an example because we have excess cash available to us it does improve our
007credit rating because we have cash on hand that's correct can we spend it I guess that was part of my my question after the tax rate has been set correct so the um yeah the The Debt Service fund 700 as an example that money is as if it revenue and so if we just let's just assume we need $24 million so then we only have to Levy for 24 minus $780,000 so it does directly impact the tax rate here we have M excuse me and unrestricted Capital revenues by Source we've combined M and unrestricted Capital they're the biggest contributors to our um balances and this um aligns with the monthly reports that we see every month you'll notice here last year um the county contribution was 13 million um or prior year rather in 22
008and 23 it was about 150,000 um the offset to that of course is the state contribution of 148 in fy22 and 180 million in FY 23 in uh the 22 legislative session um they passed a Senate bill that that shifted some of this Equalization um the model and the form didn't change necessarily we still receive the same amount of funding but it does adjust uh where the money comes from uh this is M and unrestricted Capital expense comparison year-over-year so you can see operating went up slightly Capital went up a little bit um salaries increased considerably and benefits increased proportionately with salaries but also you'll see the $25 million increase and 20 million of that is our um Arizona State Retirement System prepay and unrestricted Capital expenditures by category so just some detail here um
009some technology Transportation um about 5.12 million to the schools um this slide also had a had a correction the dollar amount um included in radios and repeaters was hiding from you so I made sure that that was um available and uh the other category includes some other smaller categories such as Marques um stage curtains things like that so again M spend increased 45 47.5 million year-over-year due to compensation increases increases in cost due to inflation that we saw and then the prepayment to Arizona State Retirement unrestricted Capital increased about 4.7 million um due to budgeting to schools and departments and and adopted curriculum just just to clarify for our constituents when we talk about budgeting to schools and departments what kind of funds are we giving them and what are they spending that on just
010some examples so the last uh two years we have developed a a zerob based budgeting process for the schools um they put in a request and those requests are reviewed periodically um and whether or not they're approved then they're allocated Capital some of the things that they ask for are supplies um and they can use their school budget for that some of the items that they ask for are bonds so that goes to Albert and Miss vetts um for the Departments most of their uh Capital spend are is districtwide so you think about technology um they're buying laptops and software that's used districtwide okay all right thank you you're welcome so the fund balance Reserve erve this was a new tab this year uh this is new on the 23 AFR the data is pulled
011in from the accounting data that we Ed to load the AFR um but we did have some options on the categories um for those different funds so it was really um kind of a a fun exercise to go through um and if you remember in February of 2022 you approved the revision to policy DB which states that the M um budget shall include at least a $2.5 million carry forward um and subject to the final budget process should include a 4% carryover the 4% carryover uh was based upon the prior statutory maximum uh the state used to only allow us a 4% carry forward and in addition if you remember we at the same time that was when we um made a recommendation to allow schools to carry over their unspent M monies and so
012last year at the end of 22 I think there was about $100,000 that we allocated out to our schools uh going into 24 there will be close to I think a half a million dollars is that right Jackie so our schools are learning now how to use that and how to how and have trust that we're not going to take the money away from them if they don't spend it so you'll see that on the the on the audited financials you see a a line that says carryover awarded to schools as a fund balance reserve line in the in the Final Act for and I'm understanding that some schools are saving this so that um they can purchase some more expensive item that they might have not been able to do with one year's worth
013of funds but over two years or so they can get something that's bigger that they need that's right yeah okay can you remind me what do we have any parameters around the school uh saving their funds you want to that Jackie yes the policy states uh that anything over a $50,000 balance uh should go to the cabinet level leader for review and approval they should have a plan to spend uh to carry forward more than 50,000 so will it typically be just like a one-year carry forward is that kind of what we're anticipating or do you think people will be saving up for several years 50,000 for several years to try and buy something uh we do have one school that has quite a large balance but we've seen that most of them are spending
014um at least a majority of it uh they are saving some so um they're doing some really exciting things with it it could be year-over-year okay I think one of the reasons that we did make the recommendation to you is just before they would feel almost like they had to spend it because if they didn't spend it then they would lose it so I can't tell you in my own experience where there have been closets full of expired science equipment and all those kinds of things and yeah markers even dried up yeah dried up markers yeah there's so it is it it has proven to be more prudent to allow that but but always having a um a limit is smart as well where we are asking we we as a leadership team are asking
015okay what are you saving this for now and we're not going to take it away from you but what do you plan on buying in the future which kind of aligns with the zerob based budgeting process really just that thoughtful conversation right so moving on to classroom site fund we wanted to share the history of classroom site fund we have the amount per student in the top row um so you can see that it was around 400 and change for 19 20 and 21 and then went up to 733 in 22 and to 758 and 23 and um that increase obviously has had an impact on our revenues and ending fund balances and should note the $19.3 million at the end of 23 so recall that when we built the budget for 2024 we made
016the recommendation to utilize $5 million of that available balance to uh provide pay increases going into the 24 school year and do we what do we anticipate going forward that it will level off or decline we've actually done those calculations and if we um if if we were to go back to that $425 per student so you can see that we would generate about $17.3 million so we would have enough fund balance to get us through um a couple of years uh obviously this is in salary we'd be obligated to put those salaries into M if we don't have the classroom site fund monies okay in other words we've been careful yeah because it it likely won't keep increasing like this well and just like our M dollars though as well cuz we don't know
017all is a subject to legislation and state revenues so okay this is a graphical representation of this previous slide any questions on that do you have any idea what caused it to go up so much I think it was purely the economy just skyrocketed here in the state of Arizona it's all based on sales tax it's all based um plus a little bit of the permanent uh land fund as well piece of that goes into that was a that was a ballot initiative a few years ago wasn't it yeah actually that's going to expire in right so I I don't know that's the um that's the 123 isn't it prop 123 which is related to the state land trust but not classroom okay okay got it it gets complicated yes it does she was just
018asking that just to test us to see if we remember how do we do so now we're going to talk about other funds so first FA as federal and state grants we just uh shared a a summary of each for you um you'll see uh on page five of the AFR a lot of federal projects um start and end actually in a negative um with a negative balance that's due to the completion reports and the payments coming in after we run the AFR so that's pretty normal um in this particular grid you can see that we do have a positive ending balance and part of that is because it's U Medicaid is included in these Federal projects and then on the state um we don't typically see a negative balance with the state funding uh
019the increase there uh was due partially to Esser school safety and an increase in results BAS funding and then on to cash funds Community Education and nutrition services Revenue [Music] comparisons animation that's great awesome very good Jackie you go that's actually better than the colors not animated not there I just do it myself give you a marker so we wanted to highlight um fy19 revenues and FY 23 revenues um and show you the difference um the fy19 was pretty much our last um normal year if you will um so you can see the change in 2021 and 22 um due to co also on the AFR 521 those Child Care Grants from Dees were rolled into fund 520 so we pulled them out here so you could see the revenues in community school and then
020510 um Revenue in 23 was almost 14 million so the good news is that the revenues have come up and are more consistent with what we would consider in an average year um over time and still actually increasing a bit in Community Schools as well as in nutrition services so pretty good pretty good news MH and again other cash fund Revenue comparisons um highlighting 19 to 23 kind of back to that back to that normal level um actually very close to to what was normal um in all of them Civic Center auxiliary operations tax credit donation Student Activity most of these most of these revenues are collected at the school level and they stay [Music] there any questions on those so FY 2023 average teacher salary this uh was included on the AFR and this
021is taken directly from the revised number two budget for FY 2023 so you have seen this before okay mine yes okay um going right into the 2023 Food Service AFR we talked a little bit about Food Services already I really wanted to share that um so you can see the beginning cash balance so we did have on hand $10.4 million at the end of 22 largely due to the fact that we were on 100% free and redu um Universal free right all of our students were receiving free meals every day and that allowed us to build up some fund balance so we've responded to that I think that when we shared the bond and override Report with you in early September we shared some of the other fund work that we've done which included some
022serving lines at Greenfield Jr as well as uh mosquite Jr so we are using this fund balance to catch up on some Capital items that are within the nutrition services program but even with that and knowing that we kept Staffing so we didn't lay off anyone at all during 2023 in nutrition services even though the participation did um drop significantly um but by normal attrition nutrition services was still able to not draw down fund balance by more than a million dollar and that's a very good news we anticipated drawing down over 3 million just because of the work that the team has done to make sure that they're moving around Staffing Etc they were able to keep our costs low and appropriate against the amount of participation that we have so this is a really
023good um result for Gilbert Public Schools well then I I do appreciate that effort that we didn't we used attrition didn't lay people off when we had had to staff up when we had so many um students that we were serving breakfast and lunch yeah and I meant I meant to mention too that I did ask Natalie Tenny the director of nutrition services to to join us this evening so if you have any specific questions as we go through some of the few slides I'll think of one she will be here to um to help answer those so we can't let her off the hook so um this this slide is just showing the the trend that we've seen over the last four years and it's interesting to see that in 2019 the blue is
024the local the local Revenue and the Orange is the USDA reimbursement fast forward to 21 and 22 you can see the Orange is very large and there's very minimal blue uh indicating that our students were very much participating and now if you fast forward to 2023 and compare that to 2019 to me this is a a a reflection of the fact that over the last two years under Universal free lunch I think that the entire School Community has discovered that nutrition services is providing kind of a pretty good meal and a pretty good value and so the um the participation rates are are still staying uh a little bit higher than than they were back in 2019 and then the revenue and expenditures this kind of goes along to what I just shared you can
025see the revenue in 2022 the large Blue Line and compar to the light green uh you can see where the revenues greatly exceeded the cost but in 2023 you can see the revenues were slightly less than the total costs again we anticipated because we had a $10 million fund balance we could afford drawing down as much as3 or $4 million fortunately with the efforts of the team of Natalie and her directors and her supervisors they were able to move people around appropriately again nobody losing their job and just doing natural attrition to narrow that $3 to $4 million down to less than a million and then this is just the meals served again you can see that in 2023 meals served were very comparable to 2019 so back to normal operations at Gilbert public schools
026that is a lot of meals though over 2 million Mills we're the biggest uh restaurant in the town I guess you could say that's right that's right the biggest food business maybe all right moving on to the FY 2023 School level report this was new in 2020 so we uh have shared this information with you before today's report will include a school level AFR summary the school by school comparison and revenue to spend comparison for those schools so uh as in the past we want to caution um you when you review the this report um it is uh common to compare one school to another but it's important to note that not all not all schools are the same there's different programs the two schools that we will compare tonight are very different although they're
027very close in enrollment um they're special Ed um a lot of the costs are at the district level um so we just want to make sure that everybody's aware that the comparison of schools side by side um there's a lot of information that isn't necessarily obvious in these reports so we are going to compare again Gilbert Elementary and Carol Ray Ranch Elementary again they're very similar in size uh about 11 students off Carol ra a little bit bigger this is function 1000 spend only so you can see that the amount per pupil for both um salaries benefits um purchase Services it it is higher at Carol Ray Ranch even though they only have 11 students more they have a lot of special Leed programs there so the class sizes are smaller the other thing is
028keep in mind too that as a school district we allocate out resources based upon FTE so we say k Ranch you can have this many teachers based upon your your student enrollment and uh Gilbert L you can have this many teachers based upon your school enrollment however the costs of each of those individual teachers are not at all considered so you could have more higher paid more experienced teachers at a Gilbert Elementary then you might have at a k ranch or the opposite again that goes to uh Jack ja's cautionary comments that there's so many moving Parts Within These comparisons the numbers don't really tell the whole story another good example when I was reviewing this I thought wow $628 and $657 in capital for each school knowing that we have a zerob based budgeting
029process I didn't remember allocating $300,000 to these schools but um this includes the multi-purpose room AV refresh the AV refresh technology um those large purchases at the district level are all coded to each individual school so the report pulls in this the school unit numbers um so that's why the the capital purchase is so is so high and on both of those schools we probably haven't done a refresh before on those schools right on a lot of those items this is probably the first time since they were built that they've had a refresh in those items yeah that's right I I this report does include the bond spend to correct yeah so it's not just unrestricted capital and M it includes all funds across the school system well I don't know how old is go
030we Elementary 50 years old so was built in there you go yeah not fully rebuilt but added significantly right yeah they kept the Cottages they kept the Cottages yep y but still that's a long time to go with um equipment years and years so we've done very well it's time to give him an upgrade so this uh will compare again both of those schools um on all functions so including instruction Support Services um and there was an error on this Slide the four highlighted cells have been corrected um so you can see by function and again hire at Carol Ray with the um support services for students that's where you would find um some of your special ed support services and school by school Revenue to spend comparison um the um the State of Arizona
031uh allocates out the revenue in this report per pupil um so it is a a challenge I guess needless to say is that a good word to use okay um it is a challenge to um compare the revenue and spend when the revenue is already put there even though we don't allocate out that way um so you can see um under Gilbert Elementary the revenue to spend for group a and special ed um is in the negative for Carol rat it's in the positive overall districtwide um it is in the negative for the group a and special ed and then the districtwide report um again keep in mind that the districtwide portion of this report includes all utilities we do not um break that spend out to the schools it includes the district office Personnel
032supplies um operations expenses not charged the School site uh Central Food Service and all Transportation costs uh the special ed Transportation last year was by .6 million so that was all at the higher districtwide um report even though that is certainly a student expense so the percent of reported district-wide expenses um excluding federal funds is 31% of the total spend and of the total districtwide spend 34% of that is associated with transportation and operations so that leaves 3% for everything else okay so part of this report includes individual school reports so a separate one-page report for each school is included in the AFR um and they will be posted on our website any questions so I know it's uh difficult to compare school to school and even like you said even some of the reports
033are difficult just because the assigns it a certain way which is different than how we actually allocate it but can we use this to look at um like the same school year-over-year or to see maybe how our have our costs gone up significantly for some reason or another is it is there a way to use it to help help us see are we using the money the best we can we could we could use the year-over-year school IND individual school reports to see um how financially they compare year-over-year um if that is something um that you're interested in I I I think it would be more beneficial and probably more accurate to just pull it out of our general ledger and do it that way okay um because there's a there's so much behind this
034file uh that is generated from the state and they allocate it out in such a way um that we asked and they weren't um exactly sure how how the how the funds were um directed into certain cells so okay um okay so we are looking because we do look at year-over-year school by school and again kind of with that show based budget analysis for the capital and for different things like that we're we're constantly looking to see that if there's a huge anomaly some way mhm I mean you you're basically the you oversee as the district anything that goes to the schools it's not like something comes to the schools besides the one account that we have of um like their fundraising or their um tax tax credits tax credits yeah yeah that would be
035the only thing that doesn't come like through from the state through the district to the school correct okay the other the other thing is as an example and is why the data is a little bit um a little bit uh unclear and that we're so cautious about the conclusions that you might arrive at so let's use Burke Elementary as an example so prior to Neely moving over to Houston Burke had 400 350 something like that students so on a per dollar per student basis um and I haven't verified this but I would presume that on a dollar per student basis Burke Elementary's dollar per student spent in 2021 prior to Neely moving moving over to Houston would be higher than their 2023 spend because now they have 460 students so if you think about your
036administrative costs yes you think about your administrative costs that's fixed every school has an office a principal registar Etc custodians right so the more students you have the less per student you're going to have to spend and so that might be that might be a problem for some people not understanding that saying you just cut Burke by $50 per student so that's why it's it's a little bit um it's a little bit misleading if you take so even looking year-over-year so to your point it would be useful to see what happened at Burke in year 2021 versus year 2022 or year 222 versus year 2023 to see the dollar amount per student it's helpful though for all of us to know oh this is why and also the value of having a school of 450
037versus 350 in terms of being able to provide the ACC ademic uh environment in a more efficient way with more students than less but we know that it's not in the numbers right we all know that CU that happened but it's not in the numbers and so that's why numbers can lie or not tell the full story be misinterpreted misinterpreted for sure yeah so if someone from the public were to come and look at this report what would you want them to take away from as they browse through these different schools and what we're spending per student I mean obviously there's a lot of context that the report is not able to give but what correct what would you want them to take away from the report I think they'd almost have to have an
038explanation because it if you interpret it just based on what you look at here it doesn't seem to be fair but when you when you have an explanation you know specifically like the special ed students I think what I'd want them to take away is there's more to the story period and hopefully would ask help them ask questions and we'd be willing to answer any of those questions related to any of those types of things well and I think to to say that we're each student is unique so we're trying to meet their needs in a unique way which doesn't necessarily mean equal dollars it's addressing needs equally but not in a way that everybody gets the same everybody gets what they need so well and when we when I was in um Colorado we
039we absolutely allocated out dollars to our schools and we had a Community member come to one of our meetings and they said well you guys are lying on these budget sheets because I look at high school a and I compare it to high school be and you're just absolutely lying because every single teacher has the exact same salary and that can't possibly be true because we were allocating out based on average salary so even that is still not not clear but that's funny right so so my hope would be that if anyone is doing some comparisons my request would be please contact you know Jackie or or me or whomever and ask the question about could you explain why this is happening to me to make sure that they're asking for the context when they
040look at the numbers that would be great okay thank you are there any further questions Mrs Paige did you have any questions or comments no thank you anything further board members thank you very much we appreciate it yes we will vote on this later in the meeting and then oh wait we have to have a difficult question for Natalie and then we will sign right okay thank you Dar I just I can't think of one so she's off the hook next I'll get her when I do the taste testing next week all right we appreciate you giving us that presentation and again we'll visit that in our action items so we will adjourn the work study and move to our brief board business meeting I will call that meeting to order and ask Miss Wilson
041for a roll call Miss Lorie wood here Miss Sheila ug jetti here miss Jill humph here Miss Rhonda pagee here Mr Chad Thompson is not president Madam president you have a quorum thank you very much that will take us to our consent agenda items 5.01 approval of consent agenda items board members is there a motion so moved thank you Miss jetti it's been moved is there a second second thank you Miss humph it's been moved and seconded that we approve the consent agenda items all those in favor please vote by saying I I I hi any oppose with nay thank you that passes 4 that will take us to our action items 6.01 FY 2023 annual financial report and school level reporting form I don't think we need an explanation since we just went through
042that I will call for a motion board members is there motion I move that we approve the F fy2 FY 2023 annual financial report and school level reporting form as presented thank you Miss jetti it's been moved is there a second second thank you Miss h it's been moved and seconded I will ask for any discussion if there's any further discussion I juste appreciate all the work that was put into that and I know it's a lot so thank you Miss Paige anything to add not at this time thanks thank you and again just that we are this is required by October 15th to be submitted in this way so by law we take care of it in this way so appreciate that I will then call for the vote all those in favor of
043approving FY 2023 annual financial report and school level reporting form please vote by saying I I I I any oppose with nay that has passed 4 Z that will take us to the adjournment of our brief board business meeting board members is there a motion I move that we adjourn thank you Miss phrases there second second thank you Miss jetti it's been moved and seconded that we adjourn I will call for the vote all those in favor please vote by saying I I I I and any oppose with nay thank you we are adjourned