Gilbert Public Schools Board Meeting 02/07/2023

001I would like to welcome you tonight to our work study and brief board business meeting Tuesday February 7th thank you for those who are in attendance and are watching online or we'll watch the recording we will begin I've called this meeting to order and we'll jump right into the presentation and discussion topics we'll start with 2.01 Master Capital planning committee update Dr McCord thank you madam president governing board members again welcome to everyone tonight um 2.01 are Master Capital planning committee update as many of you know and some of you may not know we've had a master Capital planning committee for a little while now and we thought it would be a good idea to have a little update considering the fact that we have a couple new board members here so again trying to

002help get everybody up to speed and I'll turn it over Bonnie Betts is heading up that committee and working with orcot Winslow and so I'll introduce your guest okay great yeah uh thank you good evening Dr McCord um president wood board members um this we thought it was timely we have some data that we can share with you and wanted to make sure that you all were aware that we are going through this process but to begin I definitely wanted to share our Master Capital planning Partners so next to me is Tara Grenier she's with Orcutt Winslow along with Sarah nanbala who's been a key principal in the project as well as Scott sawinski and a myriad of other individuals that have been playing a role in addition when they responded to our request for

003proposal they partnered with another company amaresco and it's their software solution that will be used to actually collect all the data surrounding our Master Capital plan so today's report we want to talk about the mCP partners and the superintendent committee some details on that we are sharing some facility belief statements about the leadership team went over and approved I had our last leadership meeting we'll get into the facility assessments and pilot results which is related to the three pilot schools that we opted to do and we did that back in October finally just to walk into some qualitative metrics that's part of this master Capital plan that Tara will share with you and then getting through the details of educational programming versus technical specifications and then giving you an example of a technology chapter associated

004with those educational program specifications and then I'd be remiss if I didn't make sure that I introduced Albert dutchover so hopefully he's you're supposed to sit right behind me anyway he is a very key component to this master Capital planning process he he did have in his possession a master Capital plan that was developed in the 2010 time frame which represented a massive spreadsheet and it just had all of our facilities listed and all of the the larger components associated with each facility so you'll hear me use the component word many times so that would be roofs would be a component central plant HVAC equipment all those would be specific components bathroom Renovations carpeting even flooring interior and exterior paint so we so that's the tool that Albert and I have been using over the

005last four and a half years to determine our priorities associated with the bond spend so as we are getting further into that we were judging all of our next projects based upon the life cycle of each individual component instead of a facility assessment so we both felt that that was a hole in the data and so that was when we came to you last summer and requested an approval for our partnership with Orcutt Winslow and amaresco to begin this master Capital planning process so kept Mass Capital planning why and of course we need to manage our Capital assets I wanted to make sure that you all were aware of our footprint here in the town of Gilbert and a little bit in Chandler and a little bit in Mesa but our footprint we have 39

006schools 26 elementaries we have five Comprehensive High Schools we have a 712 Academy which is GCA along with global Academy and then on top of that we have six large district office complex facilities so over um over what did you tell me Albert for thank you 4.8 million square feet of property and assets that that are part of Gilbert public schools in addition if you would like to I shared the aquifer with three of you Jill and Lori were already received your your copies but in this document you will see our Capital asset grouping and our total booked value of all of our Capital assets is just under 500 million dollars so that's a sizable amount and that's just the book value so it's not the market value it's not the replacement value but it

007would give you an idea of the amount of the quantification of the value that we are responsible for here in Gilbert Public Schools so that's the why of the master Capital planning process so Asset Management best practices most of this I've stolen from from Orcutt and from from amaresco so our goals are to understand Capital renewal needs and establish consistent data management practices so I shared with you this massive spreadsheet that Albert and I have been using well it's really difficult to get back in there and just record well what did we do and how much do we spend and which component did we update and then keep that going because you know well this is what it was in the history do we add a column do we add a year in which we

008replaced it we were supposed to replace it in this year do we put another year in there so that's when we actually replaced it so it was very difficult so it's important that we have an ability to collect consistent data and be able to look at it and report on it in the future established facility and component standards I shared some of that with you our educational program specifications are very important in that area and then finally develop a data defensible so our goal is to make sure that the data is valid and the quantification of the needs is valid and then that we can prioritize not just about facility condition and Graham Maxwell who is our mresco partner who who will introduce himself later to you and he is online he will share some

009of those actions and prioritization schemes that we we would use so it's not just the facility component what its condition is whether it's poor fair or good it's also what is the what is the um the vulnerability of that particular component if it doesn't get addressed so as an example if we have an HVAC unit that goes down in three or four of our classrooms at one of our elementary schools it would shut down the educational program at that school because especially in the um early fall because of the we wouldn't be able to keep it cool and it'd be uncomfortable for our for our students so that's just an example so and those are kind of some of the some of the conversations that he will have with you later I have one question

010we still have state standards and statutes about the sizes of our classrooms and the number of people that are allowed in those classrooms and specifications as far as square footage and things like that correct correct um and I believe there's a portion in the presentation that we'll talk about the qualitative measures okay that we're using as a benchmark for some of the questions that amaresco is seeking as they go through their analysis of the properties okay thank you and in addition Orcutt did use a lot of the state facilities board standards in developing our educational programs to start with so that's our starting point so um so the RFP process of course I've already shared that with you the master Capital plan is a superintendent the master Capital planning committee is a superintendent's committee so

011we we set it up initially to meet quarterly we may have a need to meet more often depending upon the data and some of the decisions that we need the the body to to make as we get into the process of establishing our educational program standards Etc it was also very important that this master Capital planning committee represent all stakeholders so not just all the various Geographic areas in Gilbert Public Schools but also the the the types of stakeholders whether it's a parent a Community member we've invited students from the superintendent student Senate we've invited teachers and administrators and district office personnel and we do have a contingent of about five professionals at the district level that are there to offer technical support to the committee as we're navigating all of this data so um

012we expect to that that they they will actually make the recommendations for the facility and Equipment standards we would present that to them for them to approve uh we would um we want them to help determine the prioritization so is security the highest priority would we prioritize HVAC over exterior paint those types of questions would also be requested of our Master Capital planning committee also establish and review the actual product so annually or biannually probably is what we'll end up doing we will be presenting a formal document and and that will be approved and created annually with staff of course with support from the master Capital planning committee so before I go any further are there any questions about any of that okay great so um over the last month or so we have met

013in in the superintendent's cabinet regarding what would be our facility belief statements here in Gilbert public schools and um and how should we communicate those out as part of our Master Capital planning process so we've drafted these five statements the intent is for them to be presented and discussed at the master Capital planning committee that's scheduled for Monday night the 13th of February and they will go through all these to determine if they wanted to add any if we've covered everything or if there are some some things that they don't think we need you know those kinds of things so I'm not going to State these for you but um but if you have any questions about those let me know and we we can send that to the master Capital planning committee for a

014further discussion so anything else on that okay great so the facility process and GPS pilot results at this point in time I'm going to hand this over to our friend that's in New Hampshire and he has agreed to um to participate remotely for us so Graham are you there and can you say hello hello everyone so I'm Graham Maxwell I'm the senior director of operations at ameresco and I'm leading the facility condition assessment for the master capital planning project I should probably check in can everyone hear me yes good okay so next slide then Bonnie if I kind of go through some of the concepts here you bet okay okay there you go Graham thank you so everything we do rolls up to an ASTM uniform Act 2 classification system and I say that because

015Bonnie just spoke about components and I just want to kind of break that out a little bit so ASTM uniform Act 2 is adopted by the GSA the federal government it's just a way of talking about buildings and the things within buildings and within uniform out we refer to buildings and sites as assets and an asset contains those kind of key attributes like building size number of floors what year of construction it is maybe even the address and within the building we talk about elements so elements are those major components most common to a building that include your roofs your windows your foundations but also there's mechanical systems like Chillers and last but not least we talk about actions actions are the things you do so when a chiller fails what do you do about

016it can you repair it can do you replace it based on life cycle Etc and we show this hierarchy because everything we're kind of about to talk to looks like this speaks like this within the database the work that we're going to talk about next slide please Bonnie one of one of the other key Concepts is the facility condition index so again this is an industry standard this is a unit of measurement of risk um for you for any school within your portfolio any building within a school or your portfolio as a whole it considers all of those actions those renewal costs and it divides them by the current placement value not to be confused with the book value the current placement value would be the cost to replace that facility in in kind this

017year so when you take the renewal cost and divide it by the CRV the current replacement value you get a percentage ultimately which which can be kind of categorized as good zero to five percent fair five to ten poor 10 to 30 and critical just a little I'll just point out critical when a building gets to cryptical that's when reactive things start happening the roof might leak the chiller might fail on a more frequent basis and that is when the property is kind of migrating away from you in terms of putting good money after bad money next slide please Bonnie so those will be kind of more common themes as we kind of look at polio as a whole for now what we've done is a pilot where we took three of your schools all

018the way to the Finish Line in terms of the facility condition assessment process those three schools were camper very high oak tree and South Valley Junior I believe if I'm just just checking my notes Here camper Valley was built in 2009 oak tree 1999 and staff ballet Junior in 2004. so as Bonnie transitions to the next slide here you're gonna see a chart on the screen nice one yeah so the other thing we're looking at here it displays the life cycle forecast of all of those uniform categories I mentioned earlier like Interiors mechanical electrical shell it all rolls up to the colors on this chart now in the first year which is 2022 we'll be rolling the database in 23 in due course but in that First Column you're seeing a deferred maintenance backlog of

019just under 10 million dollars for these three Pilots schools just just again for context there's 18 buildings within these three schools and it's not just the it's not just the the schools themselves right so um so so that 9.5 million dollars and if addressed in full would not carry over to the next year however each year with the backlog is not fully addressed this value will accumulate adding to the unfunded liability of the portfolio meaning if you address three to four million dollars of those needs in Year One the remaining 5 million would carry over to 2023 and 2020 40 on so this life cycle view tells you when systems are coming to the end of their life the cost to renew them but um they also presents an opportunity to kind of get strategic

020around how much funding do I need year over year and how much funding do I need on average over a 10 15 20 year period I believe Bonnie's coached me on this I believe you guys talk in five and ten year chunks so I don't need to go beyond that but we'll give you this long-term view so you can see what's coming so Graham just to ask a question because you've coached me on this so generally speaking you do present out to 2051 so out 30 years right so why why do you go out that far if we're really interested in the next five to ten years I believe 90 to 95 of the building components or elements will come to the end of life within the third year period meaning over the next five

021years to 10 years I could be wrong by plus or minus a year when we look at the condition of the elements within a building but cumulatively over a 25 to 30 year time frame the that that unfunded liability cost of doing nothing over 30 years is 90 plus percent accurate that that's the idea of that so you've got certainty over 30 a 30-year period of how much you should be funding on an annual basis on average but in that five-year tactical window that you guys look at um we could be wrong by a year something might come to you may actually need to be replaced one year early or one year later but over time you get more accurate and then the other follow-up question Graham the values so first how are the values

022calculated so these are these are our schools our three schools represented here but how did you come up with those replacement values what was the algorithm or the data that you used to determine that yeah great question funny so we start with RS means as a basis um we don't think Harris means is 100 accurate because it looks at National Regional averages but it tells us what the cost per square foot should be of a school within Arizona for example you can further refine RS means with the multipliers and geographical factors to kind of refine where Gilbert sits within Arizona um so that's our starting basis and then within a template which is what asapana has with three billion square feet of buildings so over time if if Iris means tells me or ashrae even

023tells me that a boiler lasts 22 years but we've seen practical life of boilers around 30 years we we lean towards what we consider practical versus theoretical life because maintenance matters I.E if you're a proactive in your maintenance practices and doing preventative maintenance you can extend the life cycle of any asset so custom and renewal time frames are interlinked and influencing what you see in this chat and then just my question before we have the board ask some questions tell me the whether you are escalating the cost of these components year over year to to try to guess what the future cost of a replacement would be yeah we we steer away uh predicting the future so everything that we show is in current year dollars and we have a process every this time right

024about now where we roll the database into we'll be rolling database into 2023 where we show you our research we show you what construction indexes look like in terms of inflationary values and we roll the database into the current year but every year after that we keep encouraging dollars what one last point I'll give you Bonnie is everything you're looking at is hard cost only we also don't predict the soft costs associated with construction so you're talking about um architectural fees that sort of thing permax architectural fees and those those extras okay board members do you have any questions just at this point I know we're going to keep going but I've got a question about this chart that we're looking at does each year assume any carryover from the year prior or is this

025chart showing us we have in 2022 we have a backlog of 9.5 million if we were to settle that in 2023 there would be a completely new cost Capital needs cost of looks like a little over 4 million is that am I understanding this correctly that is correct okay thank you that's only for three schools though correct okay that's correct I have a I have a question I have a question just and maybe it would be your answer Bonnie or Albert um when you talked about like um the air conditioning units and things like that do we prioritize that obviously um you know like roofs and um the things that that we can't have school for as opposed to flooring and desks and things like that how do we how do we prioritize that so

026we we have been doing that but this master Capital plan will allow us to put that information into the software solution that will inform our priorities as well in each of these so you can see that all these These are going to include exterior and interior paint you could make a case that that that's a lower priority than replacing HVAC or something like that so this is all of the needs considering all these components that you see are all these groupings that you see at the bottom for each color so just want to make sure that's clear too I I had one question just about um hard versus soft soft costs so a hard cost I presume would be the components plus the labor to replace them and the soft costs would be other things

027like the fees or other things that come up yeah it would include the labor to install okay yeah thanks for the strength I understand thank you did you have a question go ahead um I'm just trying to understand how we came to these numbers did somebody go out and inspect these three schools from ceiling to floor end to end so Graham can you answer that yeah yeah so ultimately yeah we sent a couple of assessors out they did visual non-intrusive non-destructive assessments so they walked the buildings I think Albert escorted them arrival's team let's go with them they um we captured a lot of photographs we captured a lot of information and then we did some costing back in the office um to reflect what the true cost would be for construction and so we

028with that determination we feel like we got everything like there wouldn't be anything else that would come up in these numbers so um that's kind of why we want to make this presentation because this is just the assessment so we have some areas of the school district in which we are not to a standard and so this is just a condition assessment but but when we when we determine what those standards are going to be my favorite example is the Press boxes so we had a situation at Highland High in which one of our coaches I think was up in the Press Box and stepped through the roof of the Press Box and then he grabbed onto a handle that also almost failed because it so is anyway it's so those are some of the

029examples um because the press back is is very small now they would their assessors would go out and determine what it would be to replace that particular Press Box the question is is that smaller Press Box than what's actually being created or recommended do we want to just replace like for like or do we want to consider an up grade to meet the standards that that we would be talking to the master Capital planning committee about so it's a multiple process and Tara will go into more of those types of details thank you so I just had one other question kind of along those lines too so going out to each of these schools you looked at the condition of of the things that you mentioned here as well as then took into account the

030um spreadsheet that we had that showed when the original thing was you know built or input or all of that you included all of that information as well Graham yes that's correct and you know I could go into a lot more detail around what the process looks like but ultimately it starts with the blank slate but with construction new the templates within buildings of these types then we did a series of interviews with Bonnie and Albert to kind of ask questions about hey have there been any major additions or just to be clear mostly Albert Albert is the one who knows all the information yeah but but you know adding the color to the database that all happened off-site and you know it if a school was 35 years old and you replaced the boilers

03110 years ago it doesn't assume a 35 year old boiler anymore it assumes a 10 year old boiler and maybe Boyle is the wrong term in Arizona I should have said Chiller but I live in near Boston so it's cold here but um but then we go and do the assessments so the assessments are kind of like that next layer of validation and verification we we do as much as we can with institutional knowledge to digitize it but then we walk every square foot of that face to kind of further validate so whether that's name plates whether that's whatever information might have been available from drawings to to update those records so that when we think of a score we think of what was the last action I have one more question sorry um when

032we're looking at this uh is this just buildings are we looking at the buildings and are is Furnishings separate from this master Capital plan um go ahead Graham yeah so so the let's define that a minute so so in terms of Interiors we we look at all the kind of things like partitions fitting all finishes for finishes ceiling finishes but generally in generally we lost you Graham how about now Bonnie oh good we got you again thank you yeah sorry there's a three second delay so I keep hearing myself but I what I always say to that is pick up your building turn it upside down shake it the things that fall out that are below 2500 to 5 000 based on your capitalization threshold those aren't in it everything else is in it so

033you get your ceiling finishes your floor finishes your fittings but furniture for example might not be a capex consideration versus an Opex consideration it just depends on where your capitalization thresholds are so things like Auditorium seating would be included but maybe desks in the classrooms are not included that's probably important okay okay thank you Mr Thompson yeah I want to go back to this chart again and I'm sorry if I am just slow on the uptake here but so this chart is basically in 2022 we're not assuming that the building is new we're assuming the building is basically this is a snapshot of where it where it was in 2022 and you're saying that the life cycle of these these three schools these three campuses is 30 years what what happens in 2051 are you

034is that a complete tear down and rebuilding and in this case because the buildings aren't brand new does that happen much sooner than 2051 or is this assuming is this taking the snapshot and saying we have 30 years from now just to address that this is the cost of doing nothing on the screen right when things are going to to come you guys are investing in your facilities you you are doing Capital planning you are doing Capital renewals so this is that snapshot that says hey you need 9.5 million dollars to address all of your needs this year four million next year 500 in the following year right but um you what what I said earlier that 30-year point is a kind of a cost of doing nothing view of what what would my average

035annual funding be to kind of maintain a certain level of building standard to maintain the quality of teaching and learning that you could get 50 60 100 years out of these schools with the appropriate amount of capital renewal it's it's all about how do you how do you keep these buildings fresh and how do you continue to adapt them to their educational suitability standards of today does that answer your question yeah yeah I think so I think um just to follow up as an example so in the 2022 um stacked bar it includes the roof at South Valley so the roof at South Valley and I don't know this to be true but my presumption would be that the roof was categorized by the team as very poor meaning it needs to be replaced quickly

036well we're replacing it right now so this particular information does not include the upgrades that that are already that have been done probably probably even well since October for sure and so I just want to make sure that that's that's a caveat the other thing and Graham I don't know this for sure but we have as you said we have made Capital investments into our buildings but I don't think the data that we had to substantiate that fact was clear enough that you could consider that what you did consider though is that if we replaced a piece of um of HVAC equipment two years ago you would identify that equipment arguably as good right and so therefore there would be no reason to include it as a need to replace am I right on that

037yeah that that's roughly right so so the way to think about it is if you build a building in the year 2000 is 23 years old today and on average ashrae tells you that an air handling unit is 20 to 25 years okay so in theory it's showing up in the first five years of this chart that each year that air handling unit however if you've done a lot of preventive maintenance if you've done the right level of capital renewal along the way we've seen practical life of our handling units stretch up to 35 years meaning if it's in good shape it doesn't need to show up in your five-year View right so we're trying to we're trying to move away from theoretical life cycle manufactures warranty type life cycles to practical life remaining and

038that's and and that you only get extensions to Life by doing the right things along the way so it's reflective of good maintenance management practices and good Capital planning but um where that's not in place everything shifts left what I mean by that is the left column goes up and everything shifts towards it but when you get a scatter like this it means that you're doing some good stuff along the way and and I should say that we we've done a lot of school districts and a lot of um Across America and so we've seen every type of profile but what I typically what I'm interested to see is when we kind of bring this up to the 4.8 million square foot view which is your entire portfolio what does it look like and that's

039where we're going to right Bonnie yes sir yep I'm a little nervous about that if this is just dark three skull well I would say a couple of things so there's both there's two things to that oak tree has not seen any renovation on our listing at least since I've been here so they're the next school up for this summer so their assessment probably indicated a great deal of need South Valley we knew about the roof but Campo isn't arguably probably in pretty good shape being that it was built in 2009 so it's hard it's hard to know what's going to be yeah it's our new school right all of our schools are many of our schools are much older than that we have though been doing remodels especially the last four or five years

040so it'll be interesting I just think again it will be important to have a realistic prioritization so that we can even start to I guess that's the most important thing to me and why I've been asking for something like this for a long time is that how do we prioritize funds are always Limited at some level so how do we prioritize exactly where they go to and what makes the most sense today so anyways I've got one more question there you go ahead go ahead and stop okay thank you um I agree that these numbers they look I mean these are some some big numbers right but I also I think if I'm understanding this right this is just the cost of doing business in the school district this is the cost of if if

041any if any entity was building a building they would have the same the same costs moving forward at you know probably similar intervals um I guess the my question is if we take care of all of these items on each of these bars does it change the look of the chart moving forward so for example and again I'll go back to 2022 if we spent the nine and a half million and took care of everything in 2022 would 2023 look different and if we took care of everything in 2023 would 2024 look different than it does on this chart because you said this is this chart represents if we did nothing what if we did everything what would how different would this chart look the way I would approach that one Bonnie is if you

042added everything up and divided it by 30 what is the average [Music] it looks like it's around about 4 million maybe maybe four and a half and and the reason I say that is that's what it would look like over a longer term view over a 10-year bond cycle for example I think you guys do five but um it would look like 45 million a year at these schools sorry 45 million over 10 years of this course but the way you're looking at it here is yeah you've got big gears you've got small years right look at 2028 there's nothing in that color but it doesn't mean you should have built your capital reserve if you so so what most what what a lot of good asset management looks like is averaging this out how

043do I average this out because it's it's not just about spending the money someone's got a project manage that like some you you that's disruptive to your schools right so can you even do that much work within the time frame so if you can average it out I think that's the answer to your question so it's having the foresight to be able to do that thank you Miss Humphries well my question was um we are inspecting these buildings but what about structural issues when would those um become noticeable or how would we account for those I mean I'm thinking of those two schools in Glendale that they had to shut down school and send the kids to other schools in their District because all of a sudden there were structural issues that were a challenge

044and a safety issue so Graham your assessment would catch that right I didn't actually catch the question sorry I'll I'll speak again go ahead so what about structural issues so things that we may not be able to see as foundational or something like foundational or um just I remember maybe about eight years ago they had already started school in Glendale and they actually had to close the schools and find an alternate place for the children because the schools were found to be structurally unsound so I just wondering how we prevent that issue here in Gilbert as schools age I I think that's a really good question and I don't want to kind of fumble together and answer to it because it's a very you know it's pertinent but what I would say is again foundations

045have life cycles and there are periodic points along that life cycle where you should maybe do more intrusive testing and assessments where I would recommend a specialist comes in and does what they do to kind of read Baseline how much light you have left in that foundation and also trigger events would be something I'd want to kind of react to so I don't know if you get earthquakes in Arizona we do sometimes yes I had structural issues in my house because of an earthquake yeah yeah yeah it's a trigger events but also periodic preventative type studies would be what I'd recommend there we're not catching that we're not doing an intrusive or a destructive test right now and the foundation is visual but it's a great question and something that should be considered all right

046thank you I appreciate that Bonnie just I I just on the question before that about if I did everything would it change the Outlook and all of this and I'd love to just say one more thing on that at least I have a client in Colorado and they didn't do any Capital renewal for seven or eight years and because they were tightening their belts elsewhere well what happened was when we did a five-year kind of backlook analysis on their operating costs we found they were operating their buildings at twelve dollars per square foot the um one of the industry standards for o m they they say that most buildings should cost around 5.50 to six dollars per square foot to operate and maintain I.E these guys were paying twice the operating cost per square foot

047to maintain and keep their buildings running so they made a decision not to spend capital but they spent it anyway they just spent it reactively of unplanned funds versus proactively our planned funds so that's just another kind of tidbit I'd love to kind of give you that the cost of doing nothing ultimately will catch up some way somehow and it's better to be proactive and planned strategic like you guys are doing here versus reactive and kind of behind that April thank you Mrs page has another question just real quick just so I can get this in like wrap around in my head and maybe this is something Alfred's going to go over what is the process of when something does break out of school and is it labeled critical like these these uh these levels

048that we had what happens to that and do these numbers include routine maintenance that we do these numbers do not include the routine maintenance but Albert you want to come up and and give her an idea of what happens and I think maybe the the Ashland Ranch failure of the that one or Neely yeah thank you Alfred you're welcome um okay could you repeat the question again I'm sorry I know what you said we have a catastructure I'm just trying to get this all like connected in my head so if something does go happen at a school what if an air conditioner goes out a bathroom light completely like whatever do they fill out a work order send it to you what is the process is it labeled then immediate urgent or can wait a

049week how do those work orders and what's the process of that yeah so it's a little bit of both so um on a routine basis yes the school would would notice an issue and they would submit a work order work request and we would assign those emergency we'd assigned a routine I mean we don't by no means wait for a work order if it is an emergency we we deploy right away so that being said that that's our routine basis um secondly our Mo or our first I should say is as we do preventative maintenance and we have preventative maintenance program so we could hopefully identify a lot of these prior to them happening uh happening or predict the catastrophic issue or at least work on it now rather than later like working on an

050AC unit right now would be totally ideal compared to running into an issue in the middle of the summer again that has happened we've had a couple incidences in in recent uh history that we've run into but I feel like we were able to deploy quickly enough to hopefully minimize School disruption as much as possible but we definitely keep an eye on both ways and multiple ways not only from a school level as well as preventative maintenance and then again just routine just kind of walking through and making our own assessments in-house so thank you board members do we have any further questions at this time what are we going to do with this information well we have more we're going to have more still process I don't need more of this presentation but do

051you want to answer that right now right so I I just wanted to share that these were the three pilot schools and um amaresco's teams have been here since the start of the school year this is the start of the second semester going through and assessing all of the buildings so they're doing that assessment right now and I'm not sure how far along they are can you share with that that with me Albert I can um we're down to I believe we're finishing off the district and GCA this week and I think we're going to do a one-week break and then we're going to come back and finish off three out of the five remaining high schools and then all facilities will be assessed and are they assessing the district office facilities as well Albert

052currently they're doing that right now okay So based upon that all the data will be collected and this graphical representation will reflect Gilbert public schools in total and at that point in time with the other additions which Tara will share with you that will create that Master Capital planning document that just expresses what the status of our facilities are here in Gilmore Public Schools what that average need might be that Graham talked to and then some strategies on how that could be funded so that would be that's the plan with the master Capital plan thank you so are we ready to move forward I'm Graham thank you very much so if you could stay on just in case there are some uh ending other questions at the end that would be great thank you so

053at this point I am going to hand off if I can get this to work there we go oh that's why because I made it bigger sorry so I'm going to hand this over now to Tara grineer here you go Tara thank you thank you all right um so part of um what we are also assessing is the qualitative metrics so Jill you had you know asked the question about State Standards State Facility standards there's also um the Arizona administrative code within both of these documents Liv's standards so um in particular like we're referencing here as an example under the Arizona Administrative Code you know it talks about classroom lighting it talks about what the foot candles should be to satisfy an educational learning environment and that you know there's a certain percentage of that

054like I think here it's 30 foot candles of light is provided by LED lighting so that's a standard that's at a state level State facilities board has very very common requirements as well you talked about square footage it talks about mill work it talks about you know lineal footage of um technology things like that you know writable services so there's there's a whole list of things that the state um that has and so we use those qualitative metrics as at least the Baseline for what we'll roll into as our suitability standards that we're also developing in conjunction with the school district so do you want to flip to the next page so out of those qualitative metrics what we've been trying to do is is look at those as the Baseline and and write a

055series of yes no questions and so out of these yes no questions we're sharing that with ameresco and then they're building that information into their assessment so as they're going out and looking at you know the facilities across the campus are at across the district they're looking at all of these standards as well so they might be looking at the square footage they're looking at here's an example again of you know is a classroom outfitted with LED lighting yes or no if it's yes you know is it sufficient is it meeting the minimum standard of foot candles and there's a there's a way that you can you know measure foot candles in a classroom again it's a yes or no and so there's prompts that as you go through that series It ultimately will provide

056you the data that we're we're interested in gathering and so then that will be output data that can be shared you know again as an output for for these different modules so it'll you know determine there's a report that could be run line that says x amount of your classrooms are deficient you know they don't meet you know minimum foot candles you know if that's one example um and if it doesn't you know again then it goes to a prioritization here's what we would have to do we'd have to go in you know you might have some incandescent lighting we'd have to change those out so again it's it all is interrelated data that we're collecting we're looking at these qualitative metrics setting up what we were what we call our suitability standards or educational

057standards and we'll talk about that in a minute quick question so did you include these in their pilot assessment of those three schools we didn't have them ready for the pilot right so these kinds of things we might still have more than the that would be included because it would be more money suggested if we don't have the lighting or if we don't have the that would be part of it they've been using them since January though right right yeah right so the next right so the next 36 campuses will have this we'll have this okay so we had a we had a whole series that addressed pretty much all of the state standards at a minimum and then we've been working with um with Bonnie and Albert also to understand you know some of

058those high-level District standards so having some engagement um you know with some of the different departments and again starting to develop what do the standards look like Beyond just a state minimum so what are and those are what we call like our suitability standards which we'll get into here okay this kind of touches back to the main Expo since we were talking about the the standards so we do have an assigned technician who is our evening PM technician who follows the protocol based on the sfb or state standards so when we go through quarterly we do quarterly inspections of every school so he that's his job to consistently go through and he carries a light meter and he goes through classrooms and he goes so to make sure we're I hate to put it this

059way but at bare minimum we're following the bare minimum standards and we log those we take those and we report those to the sfv as well we create work orders based on those inspections so if we do see a deficiency we may we again deploy to make those Corrections right away so we at least meet that standard but again we're talking high standards that we have as a district which the majority of our facilities if not all our facilities exceed these base standards but we do follow we do not drop below those so we're constantly looking towards those and like I said we have a technician that that is his sole purpose is to go through and do quarterly inspections from one end of the district to the other and make reports as needed so

060so we have no schools that are out of compliance with State and District standard yes and so as well I'm going to speak lightly to that so as anything we know as of now no we do not um have any any deficiencies to fall below that so except for maybe that Press Box and like I said these are bears State minimum standards so they're very kind of love yeah well I I have a question just and I I don't know if you'll have the answer but because of the age of our schools most of them have the taxpayers are already funded the full cost of building that school we're just on the cost of renovating and keeping them up are there any schools that have not fully been paid for like maybe camp overdie that

061we've paid off those bonds I don't think so okay yeah because I mean we haven't gotten a bill on anything okay so I think we're good well I'm just saying that that the cost of construction that's that's a big cost and the fact that these are already paid for and so we can just continue maintaining them the taxpayer has a real investment that we want to honor and make sure that their investment is honored by keeping these schools up and thus saving the taxpayer money there may be a little bit of Debt Service still left over but very minimal for during the 2009 Campo Verde build because we've been on a on a a schedule of just seven to nine years of amortizing our bond so my guess is all those all those schools have

062been fully paid for by this time okay but thank you all right so um kind of moving on there's uh there's two um different elements that um that we've also been working with as a team and with the district and so there's the educational specifications which we also call um the educational suitability standards as well and so these are basically a written and graphic means of communication between the district and design professionals so I always kind of look at it as um it's almost kind of like you know my Bible or something like I'm going to follow this to the T these are all the standards that I need to to um to make sure that we're accounting for when we're designing like for for instance like a brand new school so if you're going

063to go in and build a brand new school and even if you're going to do renovation this particular document it'll talk about all of the key components that need to be like in a new school like you need to have your you know this is what administration needs to look like this is what the classrooms seem to look like these are what specialty classrooms look like your media center your cafeteria space your your Fields your site so it talks about all those elements that make up or the components that make up a new school you can also use it utilize it as I mentioned for program spaces if you're doing renovations you know as you move you know move forward in your teaching and learning you may not have some of these programs at certain

064schools so as you go back and potentially add them to schools you know there would be a standard that would be created so then you start to have that Equity lens you know if you're having it from one school to the next school to next school so it really is it's a way to address all of the different components that go into the school in terms of space so and then everything that goes into like the square footage adjacencies and and it can touch on High level Concepts like you know we want to have natural daylighting we want to have a certain level of of lighting levels we want to have certain technology in there but it doesn't get into the specifics and so the Civics are really found and captured within the technical specification

065the technical specifications you have to think and think about are all of kind of the elements so it talks about like if you're going to have a flush valve you know on a toilet it'll I describe like is it a manual is it censored is it it'll give you more of the finite detail of all of the the different elements that make up you know that go into the building and so those are those are usually non-proprietary specifications because as a public entity you know typically they don't you know you have to have non-proprietary specifications if the school district has some standards that are proprietary meaning like for example if there's a technology or a PA system PA system's a good one and you know you want all of the different PA systems to all

066talk to each other they all want to interact the same they all want to be maintained by the same vendor the district has an option to bring that forward to a school board and to have that approved as a standard and therefore you do you know if you approve that it doesn't necessarily have to be non-proprietary you can write that into your specification the reason why most of the districts you know prefer to have non-proprietary standard is because then it gives you a little bit of um you know kind of buying power you know you can as long as they're similar or like items you don't want to ever go with something that's not a similar type item to your standard so so basically um you know we're writing these technical design standards which the

067district already had in some level we're just making them a little bit more well-rounded really trying to capture a lot of like different components that really weren't there before and again it's a tool that is you move forward in your design processes with your architectural vendors or or you know not even architectural vendors I mean they can be a direct source like an HVAC vendor or a technology vendor something at least the standards are documented and again it sets out the priorities for the district so another specific example um prior to to my arrival Albert had decided to go to carpet squares so that would be an example of a technical specification but we don't really care who makes the carpet squares we just want to go with carpet squares but not with rolled carpet

068that's another simple example of non-proprietary where it's just a what we've adopted as a standard so so we're um right now we're we're Gathering all of this information we've been working with the school district um we've been gathering information with Albert we've been working with Bonnie and you know coming up with um with all of the different types of specifications and working with some different departments and so you know this was an example of you know kind of the technology example um that we're writing into the educational specification that the classrooms will have um an interactive method of communication so in this case um you know you have the interactive screen in the middle it'll be flanked by writable services so you know that's that's a high level standard that's in the educational specification when

069you when you talk about your teaching and Learning Classroom per se that may be a little bit different um you know in another space but you know for a typical classroom that's kind of been the sooner that's been set up and that's part of our a that's part of our av refresh effort that we started that John's team started um gosh just a little over a year ago now so and then I I just wanted to share this is one of the you've already seen these slides that John shared when we did the bond and override report but it's just fun to see the students interacting with those interactive boards so based upon that we are through with the presentation and ready for any other additional questions that you might have what is the timeline

070for um having all this information and then giving us a complete picture of what the costs would be similar to the Chart the 30-year chart I want to be ready for shocking yeah um well right now um as uh as Bonnie mentioned um we we were still in development of gathering all this information at least from the educational specification and the technical design guideline that information um we're we're continuing to close the gap um so we're hoping to have all of that information gathered and disseminated and out to amarusco to to start doing all of their field surveys and so we're hoping to have all of our data and everything complete here you know I think it's by the end of April I think is what we had marked we're trying to get gather all

071of that information so that we can bring this back to the school district I believe we had said originally like in June I think it was so okay and then then Graham when when do you think the assessments will be done and then how much time does your team need to actually scrub the data and put it in the right format so that it can be reported on yeah it's it's a similar timeline like probably in the April time frame is what I'm thinking because like Albert said if we're kind of going through mid to late February there's there's normally a one-to-one ratio between time on site and time off-site on the on the qaqc process and costing let's see Jetty I have a question that that about the state facilities board you were saying

072that you have to report things like the um lighting and all of that to the state facilities board is that right yes okay then originally the state facilities board was created in order to bring school districts even several years ago I think it was Bishop versus the State of Arizona but we know how successful that has been um how how much are they giving us I mean do they give us anything right now yeah it's it's going to be case to case I think the last time we we did a project through the state facilities board I mean a couple examples would be we did Highland High we did a weatherization to So speaking back to miss betz's painting of a building through the through a true evaluation it may not just necessarily be Aesthetics

073it may be true moisture penetration and some other issues that come along with that um so we did we did that with the school facilities board as well as Roofing but it has to be defined purely in the past as a failure so for example Gilbert Junior High at the time um it qualified for I believe two buildings to have the roof redone the other building the other roofs they they had to remain the same we were able to refresh two roofs those that deteriorated and so when we went through and did it again just here this past year we we did it ourselves with through bond funds and and did the entire site so everything matched like for like so as of right now we haven't received anything since um 2019 I believe that

074was that was the last the weatherization project was the last thing so basically we just have to report to them but we aren't getting ready yeah it's more of compliance so than when we do and we do have a catastrophic failure we've done our due diligence to maintain our facilities and we haven't let it um basically we we haven't let it get out of hand to where we've created the failure yourself going back to the maintenance piece so we we're trying to stay aboard with that this page just one question do we have anything like this for our transportation um so in what way I guess just for standard you mean and yeah this is so interesting I just wondering do we have our buses and transportation on a similar plan oh I see um

075yeah the other equipment so I actually can request Mr Toby when we hired him oh gosh two and a half years ago turns out that he was a a fleet expert and so he has been upgrading the fleet and making decisions on the fleet of do we need the big 80 passenger buses do we need 50 passenger do we need more 30 passenger and he has been purchasing buses based upon available resources to meet those needs but I will go ahead and have him give you an update on where the fleet is we regularly eliminate Vehicles we auction them off before we auction them off we actually pull off transmission or any single workable component that could be used as a spare in the event one of our newer buses fails but he would be

076better able to answer those questions I know we're not talking about that tonight I was just curious yeah I think that would be a great great future work study so I'll have that conversation with him thank you for that anything further no I I appreciate the in-depth work the this that this is I know that we've always had something where we monitored and known you know when the school was constructed when we placed like an HVAC system but I think getting in depth and making sure that we're doing everything that we need to and understanding what the costs are I think that's a um it's well past time for us to do that I really appreciate the efforts on this I had question was what is the importance or value or why you know to

077have school-wide standards or district-wide standards why do you see that as a benefit or and a value Tara Tara or Albert Albert too well I think Tara's the one that asked us initially we we asked the same question you did and so I'm just saying that was the hardest question probably for us to answer in terms of what are your standards what do you want all your schools look like what is the what is the Baseline for everything that you guys want in a school that's that's a hard thing to answer yeah it is and so and why does it you if you look at some of the answers to that question you'll see that they're not specific in terms of of of like everybody will have this type of desk you know they're more

078of a philosophical in terms of they're going to be safe and secure they're going to have proper facilities and a lot of different categories and so then we go back and as we are ordering equipment or things to put in those spaces well we're going to look at okay what is the industry standard on some of these things what is the cost of these things I mean sometimes we can't outfit them at that specific rate just because of where the market is and you know as we go back and we didn't mention it you know when you look at if if that timeline would have went further back to 2008 and then came up and you talked about what kind of repairs we were able to do in our classrooms and in our schools it'd

079be minimal we wouldn't have the money and then all of a sudden the daa started getting replenished and we have bonds that we were able to utilize thanks to our public and so we're able to do a lot of different things related to that so I think what they look for and you correct me everybody else does it's really easy but I I think that is just like philosophically what do we want to do as a school district and what are some of our areas that we think are very important as we move forward because this I think will help out the school district long after everybody around this table is gone and that's what's most important to me to be real honest with you because then future boards won't be sitting here going well

080we ever done anything like this what do we do and like you said you've been asking for this for a long time and luckily we're able to get to this point to be able to have a document in our hand that'll help guide us through so and I guess I would just add to that is that the reason why standards are created yes there's the high level you know philosophical you know underlying Life Safety you know that we want all of our schools to be safe but when we start looking at it too it always kind of comes back to me from an equitable standpoint you know right now there's a lot of competition you know and and schools have to be competitive with you know all the different options that parents have now but

081you know looking at it from a standpoint of you know are your classrooms equally sized are you offering the same types of programs you know at schools um you know and there's there's specialty schools and programs that are going to be at different schools but really starting to look at it from an equitable standpoint you know as parents you it's typical you know you'll go into one school and oh this one looks like this and it looks great well why does my school over here look not so great you know so when you start developing those standards it starts to help kind of ease that Equitable lens As you move forward and so um whether it's an early planning if you're going to build a new school what is that new school going to look

082like what are all the different components and stuff to it versus like a renovation you can have a renovation project look like a brand new school you know if you're following kind of some of the same standards the other reason why you create standards is you know you don't want to have inferior products so if you want to look at it from a technical design standpoint your maintenance you know they don't want to have to they have to maintain all of these facilities you know and when you have all these different standards they're trying to keep up on all these different parts and all these different you know place cases of Manufacturers and all that sort of stuff so if there's some sort of standardization that helps from an overall operating cost as well so

083when when you were just when you were just talking and you said equitable what I was understanding was having these standards makes us competitive is that what you're is that what you're mean competitive with the charters and with the private schools and things like that well I'm just saying from kind of school to school as as a parent and I you know you look at when these schools Renovations happen you know if you go in and it looks like hey all of these things are happening in my school why aren't they happening in these other schools that's what I'm saying Equitable in terms of your own School District not you know yes you're always competing with you know other options and every you know Charters go up and everybody's like oh they're brand new and

084they're shiny and they're this compared to post I mean that happens in every school district but at the same time we're just saying is as if we have these standards that are created you know you're setting yourselves up for Success because you're going to have you're creating you know facilities that are are great learning you know environments for students you know you're setting up what you want each of these campuses to look like and so when we go back and we have the high level conversation not every school is going to look identical and and districts don't some districts love that and some districts don't so it's really kind of like how do you want to look at it from from campus to campus within the school district thank you did you have something to

085add oh I was I was just going to Echo what Tara said it is truly Equitable and I guess from my end I'm looking from the lens of a maintenance and upkeep so when we've done everything we've done we we put it all out there and we're waiting for the next five or whatever years that we need to to maintain these buildings I look at it as a point of just to the point we're not hunting different parts we're not juggling multiple um components or or technologies that helps me as well is again to train staff to Plug and Play staff to be able to handle um being understaffed at times I could put guys in situations where it's you know if I use an analogy as far as a guy working on a car

086well I only work on Porsches well I only work on Fords and he's thumbing through while the school's down and it's just related to an AC unit okay well then I got to get somebody else out there well that's not Equitable to me because now I'm wasting not only one technician at the time of the students being uncomfortable I'm wasting the time of another technician to go there where we could be utilizing them at another facility so standardizing it really helps out um helps me from that standpoint as well as not only provides I feel like buying power at times when we are buying carpet squares where it's not this school's rolled carpet this school is x-carpet or exploring we're able to buy in bulk and and have flexibility on how we pivot and make

087moves uh down the line with our facilities so thank you on that Equitable comment that you keep making I love that um when your report comes back is there anywhere that you guys add any type of suggestions to make us more competitive what we could add into our schools um on on this particular one it won't necessarily be that reporting it's reporting what you have um and so but I think um you know with the create the creation of educational specifications and the creation of technical design guidelines and then how well those are followed over the course of of the lifetime of these schools I think that that's that's going to help set up some parameters for Success you know so um and I think you know having the engagement conversation with the facilities group

088to understand what are they looking for you know as as a group as a district what are you looking for that the the district's going to look like over the next 5 10 15 20 years and that's that's the whole premise of creating a long-range you know strategic plan um or facilities master plan so and I think all the work that we've done over the last so I don't know four to five years with John Castellano in technology Services Albert and even Trace we've been really focusing on what what would be the standard for our classroom instructional wall which was that AV approval from a little over a year ago so that's going to be standard and we went with BenQ so now from technology Services standpoint they know the BenQ boards they know how

089to work the software they know how to repair it and that just facilitates the process district-wide that's just a simple example I I would say just I mean looking at this boardroom which was recently done redone what two years ago um those chairs that we had previously were probably 30 years old at least two of us couldn't sit in them because they made our back hurt um just upgrading things so that everyone has workable um space to learn in I think that's just really important that we don't have a school that looks like um we haven't spent a lot of money there at another school where maybe donations have been more generous and they've been able to do more I think it's really important that every child feels that we value them and they have

090a school that they can be proud of and curb appeal I think is also you know something we've really worked on in the last few years updating our um Marquis fixing the entrance to Highland High School so it looks more professional Institute of somebody drawing a I when I went there before I always felt like somebody just took a piece of paper and said we want this and it didn't look very aesthetically pleasing so I do think I'm not sure if that's in the the philosophical statements but aesthetically pleasing to the community and having that curb appeal is also very important on your Ed specs yes and I was going to add since I'm up here blabbing my last Kumbaya comment um I I think it is you know Gathering some of the stuff we've

091done and we've looked at it I think it also just brings the district together and unifies it just to the point of the east side is better than the West Side the South Side everybody we've created the standards so everybody's equally touched and everybody's equally benefiting from it so that we can basically fill these schools from east to west north to south with our students and everybody feels just to your point like they're in a school that they can appreciate and that they're appreciated at so it's my last two cents anything further board members well thank you great Graham thank you very much sir we can let you off the hook now thank you again thank you Graham thank you Tara thank you Albert thank you Bonnie and a lot of teams that have gone

092to this it's done and we look forward to the next meetings and the um the feedback that you'll get from the master Capital planning committee because I think the more feedback that we can get as far as just getting this out and letting people know and then getting understanding what are they looking for at their schools and do they understand what the you know what the costs are what the ramifications are all these things that will just be helpful I think so thanks thank you Tara thank you Albert have a good evening thank you do we want to take a break a few minute break do you want to sure is is now good or would you rather later I'm I'm totally fine I just let's do it after this one okay I just want

093to make sure everyone was prepared for a little while yeah unless you have to take it no I'm totally good okay maybe after this one I think no no no thank you thank you I just usually get up yes yes and one or something okay so that takes us to 2.02 FY 2023 revised budget number one Dr McCord thank you madam president this is our first budget revision and our presentation to you for this evening this item will appear on the action items at the end of this meeting so again I'm I'm going to hand over the presentation to Jackie matinin and I will just be the color commentator for this particular part of it good evening as um mentioned this is our first budget revision for FY 2023 good evening all right oh sorry

094excuse me I'm slow on the uptake here so we'll start with an introduction and talk about some data that drives the budget revision student counts uh we'll talk about the FY 2023 revised mno budget and the unrestricted capital budget we'll talk a little bit about other funds average teacher salary and final finally final tax rates so here we have an ADM comparison from FY 2022 to FY 2023 revise number one so you can see the columns there the FY 2022 final recalculation comes to us in about July so you can see the uh in person Arizona online and part full-time and part-time FY 2022 revise number four which we presented uh last week I believe and then the FY 2023 adopted when we adopt the budget we use an estimated amount and we subtract about

095400 students assuming a student loss now the FY 2023 revised number one the 31 587 those are actual numbers so the uh we're on to the m o budget capacity for FY 2023 so we're going to compare again FY 2022 the weighted student count again at the top Revenue control limit which is driven by the weighted student count and our base level support so again FY 2022 revise number four the total budget limit was to 268.42 million FY 23 adopted again using projected numbers for the most part was 296.5 and this revision that we're sharing tonight is 301.7 million so the increase from the 23 adopted to what we're presenting tonight is 5.2 million I just go ahead you'll just remind us where did that 30 million come between 2022 to 2023 just generally so

096you can look in the revenue control limit the 229.7 up to 231 that's just under 2 million dollars that's directly the result of the um of the fact that we we projected a 400 student loss and only lost 250 students so that a roughly two million dollars is accounted for there there is about looks like on the budget balance carry forward so I'm just going to show you here looks about uh three and a half million dollars there there are two components to the budget balance carry forward not only as we finish the year do we have a an unencumbrance of purchase orders and stuff like that that we didn't need so that results in a higher budget balance carry forward but in addition in 2022 during that recalculation process we gained another nearly eight

097hundred thousand dollars of budget capacity that rolls to the budget balance carry forward so that's another component of the budget balance carry forward and then those were the two main contributors also you also uh approved that revised number four which gave us the additional 35 million dollars uh sorry wish it was 35 million thirty five thousand dollars in mno override which also contributes to that budget balance carry forward again so those were the two main components the revenue control limit increase of almost 2 million plus the roughly three million dollars in budget balance carry forward so that's the abducted versus the revised okay tell me remind me how did we go how did we gain 30 million from the revised number four to the FY 2023 adopted and we did describe this a little bit

098better on the next presentation but um but the 193.4 million dollars represents the revenue control limit with 20 million dollars moved to understand capital okay so because of the way statute reads you can see that our budget balance carry forward was still 42 million dollars right in 2022 we weren't we're not allowed statutorily to transfer from mno into understanding Capital we have to re-class the revenue coming in so we had to take the 20 million dollars from the revenue control limit put it into unrestricted Capital thereby reducing so that that change is really um you know what do you have there 30 million dollars minus 20 it's really about a 10 million dollar change thank you yeah I was just trying to remember what that was yeah I know it's very confusing sorry do this

099and you do it but it you get all these numbers and then after a while you forget what exactly happened and why we made that I remember a lot of what happened I'm just trying to remember exactly yes yes and when they start looking at the numbers so we spent a fair amount of time ourselves what's the story there again we'll move on to unrestricted capital so again FY 2022 revised number four shared last week fy2023 adopted again estimating because we adopted in July and then the revised number one the daa district additional assistance is 16.54 million textbook allocation is nine hundred thousand the budget balance carry forward is 28.66 which includes that 20 million dollars and interest earned is about a hundred and ten thousand dollars so that brings us to 46.2 million dollars

100for this revision which is about a two hundred and sixty thousand dollar increase from the adopted any questions on that one so I wanted to share to you would intuitively expect that if we had another 150 students we should be seeing an increase in the district additional assistance but this is just a reminder that the district additional assistance is calculated on prior year student counts so I just wanted to make sure that's clear to you and then I also wanted to point out the hundred and ten thousand dollars in interest earnings directly related to the decision we made to move the 20 million dollars out of Maintenance and operations into District additional assistance two reasons maintenance and operations the money just sitting sitting there does earn interest but we're not allowed to spend it it

101just stays into our cash Reserves at the county in unrestricted Capital there is a component of the formula that allows us to capture the interest and increase our budget budget capacity with that interest earned and you can see in FY 22 we earned about 16 000 in in interest on Capital so we're up considerably um because of that transfer okay well and we also thought since that was one-time money it seemed like because at some level it makes sense to put it usually our Capital our unrestricted capital is more of a one-time spend either curriculum or building the different building remodel different things that are more one time spent so it felt like it was a first of all we'd make we'd capture the interest that we can actually spend and then also felt like

102it would give us an idea of how to spend it best since it's a one-time spend right so some other funds that we thought were notable we have the 2022 revised number four compared to the adopted and then finally the FY 2023 revise number one so classroom site fund is 42.79 million instructional Improvement is iif that is 2.37 million state and federal grants is up to 59.47 we included some other cash funds tax credit auxiliary operations and donations and that is 18.65 million nutrition services we're at 23.31 Community Education and their grants 11.9 and 6.7 respectively these are many of these are cash funds we took the beginning fund balance and added their current balance and added anticipated anticipated Revenue through the end of the year and whatever Revenue we had so this is a

103pretty a pretty accurate snapshot we feel of these of these cash funds and the reason for that change primarily this response to the annual financial report which you guys approved back in October so all that information shows our spend and so then that's what that budget that new budget balance carry forward is calculated on which resulted in all in all these increases in the budget capacity for revised number one yes are these ones that we apply for every year or they standing grants many of them are entitlement grants so we have Title One idea some are application grants but most are entitlement grants where did the almost six million dollar increase in nutrition services come from um the Deering covid the um we had Universal free breakfast and lunch so regardless of your socioeconomic status

104everyone in 21 and 22 were able to access breakfast and lunch for free the reimbursement from the federal government is much higher than our normal fee of around three dollars and So based upon that even though our costs to make those meals increase the reimbursement was that much higher giving us an opportunity to increase our fund balance so which was greatly desired because now in 23 we're off that Universal free breakfast and lunch we are presently in this in the process of right sizing our nutrition services program as natural attrition is occurring we're not filling positions because our participation our number of meals at breakfast and lunch has gone down substantially so that's the main reason just due to the uh the decision to have the universal free lunch and and all of the reimbursements

105from the federal government we may have also seen a swing there as that 17.09 for the adopted was an estimated amount so we may have been pretty conservative there yeah that's foreign so the average teacher salary this grid is required now on the front page of our budget we also have it on our website and it's on the AFR the average teacher salary we recalculate this every October for the first revision of each budget so this is reflective of the staff that's currently or that was currently employed in October of 2022 and that average now is 67 676 compared to the prior year of 57 to 28. the increase is ten thousand four forty eight on average and that percentage is 18.25 on the adopted um it was 66 869. is there an average length

106of service for the I mean estimated for the person the teacher that's making this amount of money so um remember the details that went into this calculation so we we did with the change in statute with classroom site fund we were we were not constrained to the 40 percent of the revenues going to pay for performance and because of the competitive environment for teachers at that point in time we made a recommendation to move about close to fifteen hundred dollars out of the pay for performance and put it into ongoing salaries so that occurred so from year to year though it wasn't a true increase but that's in there yeah because because they received that money beforehand right but it didn't count towards their base that's correct and then if you remember the Advent of

107the budget going into 2023 was very favorable for all school districts in Arizona and that that we were able to give the three percent pay increase that was one time in 2022 we added another three percent increase and that was on top of that fifteen hundred dollars or so and then on top of that we added another forty five hundred dollars per teacher to provide that beginning salary being fifty two thousand dollars a year for our teachers okay so all that collected resulted in that 18 uh percent increase but that's not based on the average um tenure of a teacher correct it's not it's not I know it's not considered in the calculation I just was wondering and the it's the really the the teacher experience index that captures that and we'll share that with

108you when we do the preliminary budget okay all right thank you Bonnie um that I know that you include you know the pay for performance and all that near 67 000 what about um insurance is that in that it is not nor is Arizona Arizona State Retirement or any of our payroll um benefits those are not in there either so so technically this could be higher if you if you at if you put in the the benefit of the insurance in particular in terms of our total cost per ftes well in in terms of the teacher salary too yeah this page but thank you um where does this put us comparatively with other school districts in our state with this average teacher salary we have not done that analysis yet but it's on our list

109of things to do please keep in mind that we have to check a lot we the only data that we can get is by actually going out and looking at all the surrounding school districts and seeing how they're reporting we've been we've done this every year we will we will be sharing it again but there's lots of caveats because everybody has different definitions for teachers and they they put in different amounts for the average teacher salary so we always pull these notes too to make sure we're appropriately representing it this is our last slide um so so we did make a recommended uh an estimate of our tax rate when we um when we adopted the budget the first time in June the legislature completed very favorably and that resulted in a different tax rate

110because our portion of our state aid or a portion of the formula that comes from the property tax was impacted by the the state legislature and so as we were putting in the the second adapted budget in July that was right at the same time that we were preparing the tax levy for the 23 school year so this is just reflecting that we estimated that our savings would be roughly 24 cents it resulted in just under 22 cents on the total tax rate to include the primary and the secondary it is based on everything including the override that's correct yep the override yet everything that we have our tax rates still went down that's correct yep that's really good probably if you if you could show us how that compares maybe if you're doing comparisons

111to other school districts you know and if you bring that back to us at some point as well you bet okay that's all that we have on that okay so remember this is this is revised budget one because due to our student counts basically is the main reason that we can revise it and capture more budget capacity along with the annual financial report which reflected our spend from last year okay so I'm just reminding myself and everybody so we we will pass a budget usually June or July and then after the Anna financial report comes out December and the 100th day count is that the main number that we're looking at the 100th today for students for in the current year in the current year then we will come back and typically we have a

112revised budget about this time everybody's budget number one right and then we'll continue to look at student counts and continue to revise budget up or down depending on our student counts is that correct and our student accounts even though we're past the 100th day with all of the corrections from our all of our attendance and registrars at the schools they're constantly making changes and updates to make sure that we're reporting accurately so it does change from now until actually the middle of July when they do the Statewide recalculation okay so I just wanted to kind of thank you let us know that timeline and see if there's anything else we should mention about that do you have anything else you thought the final budget revision is due the middle of May so okay we will

113definitely bring at least one more back to you okay and this is what we will vote on tonight in the action item 6.01 the only other thing is that statute does require us to revise by December 15th if we have overstated our budget capacity by that time so fortunately with uh presuming a 400 student loss we've been pretty conservative and so we we have not had to revise our budget down for the last four years okay so that's good to know that's good to know I'm glad that we didn't lose as many students as we thought we would but I'm always sad that we've lost students if we can keep maybe we can talk about that later on another time no there is that's on that decline in birth rates that has been ongoing so

114that's part of the reason and our aging demographics like me I had five children in Gilbert public schools and now I have zero children Gilbert Public Schools so those are a couple of the reasons it's not necessarily that we're not doing everything we can there's demographics of play okay anything further I just I think there's a lot of factors in that and I'd love to maybe have a work study session regarding that at some point that's something that'd be okay okay well thank you I think we're good for the revised budget number one for 2023 and that will let's take a five minute recess is that okay yeah and then we'll cover how many budgets can we break in our head we need a five minute break just keep coming looks like we go one

115more sugar okay [Music] all right are we ready thank you everyone all right we will now go to 2.03 FY 2024 preliminary budget bets are you ready yes sir this is our preliminary uh shot at the budget for right now as many of you know the legislature is in session and they're doing what legislatures do and that is haggling over how much money they're going to spend so we'll the question is is when will that be solidified for next year and I don't think that there's a solid answer for that yet so we'll just keep an eye but right now this is kind of taking some things into account and a little educated guessing to a degree based on history and so here we go okay so Jackie and I are swapping roles now I'll

116be presenting and she will be color commenting this this is our preliminary budget um it's a very very much a an estimate based on what we know today so we're going to share with you the adapter budget timeline which we generally do share with you at this point in time we'll talk about the student counts and show you the yearly comparison that we've seen actually since 2019 and then we'll share the m l and unshaken capital budgets those are the only two budgets that we're going to talk about because those are the ones that are fully impacted by the actions of the legislature and the governor of Arizona so these are some of the details non-discretionary budgetary increases discretionary strategies and opportunities to balance the mno budget focusing on that and then risks and opportunities

117and when it comes to the unrestricted capital budget as Lori had shared earlier Mrs wood had shared earlier we have largely considered that a a zero-based budgeting um a fund because the monies are largely one time in nature and so um we we will not be having a need to provide a strategy for balancing that budget it's just whatever's available is available and we just control how we are allocating out the monies based upon the zero-based budgeting process okay so um this is the budget development timeline we have shared with us shared this with you already I think it was at the retreat that we shared this we're going to focus on underneath the arrow now the budget year fiscal year 2024 so in December we did begin the process as a leadership team looking

118at what are all of our additional requests that's where the art teacher request came from was through that process in January I think Dr McCord shared with all of you that he attended the opening session of the legislature which was in January wanted to point out that the GPS 100th day is on January 17th again just a note about the 100th day it changes from now through the middle of July so even though it's a hundredth day and the 100th day is achieved it continues to change um you can see that we are sharing with you the fiscal year 2024 preliminary budget in March we will be finalizing the 2023 ADM average daily membership which is the basis for our projection going into the new year we hope to have enough information maybe to provide

119tentative approval of salary and benefit increases though our plan to date we do have information regarding the medical benefit recommendation that's going to be shared with the employee benefit trust committee tomorrow and so that recommendation then we'll go to the trust board next week and then we'll come to you for a recommendation and approval with a recommendation with possible approval the last meeting in February and then you can see throughout March through May through June maybe July we will constantly be updating this board on what's happening at the legislature some changes and making recommendations to you about salary increases or any other budgetary increases that might be put forward for your consideration Misfits legally when do we have to adopt a budget we have to propose Let's see we have to adopt by the 15th

120of July right and so um and so we have to propose at least 10 days of advertising prior to that we have historically not had board meetings in July so we have proposed and adopted in June thank you okay so fiscal year 2019 to fiscal year 2024 student counts we thought it would be kind of interesting to share with all of you the history of our student counts here in Gilbert I'm going to quickly go to the next slide Jackie prepared a graphical representation of this which I think is easier to to read but you can see in going into the 2019 school year there were some some assumptions made even then that we would lose 400 students we did not lose the 400 students into in 2019 either but I think we lost like

121350 at that point in time then we moved into 2020 so remember the fall of 19 was when we went out to the voter requesting an increase to our m o override as well as 100 million dollar Bond ask during that fall we actually increased in student counts for the first time in I don't know 10 years or something it was about we projected going into 20 or 400 student loss we actually saw an increase of of 165 students so we had a net gain budget capacity associated with over 600 new students which was pretty cool then of course covet hit and so in 2021 you can see the impact of that reduction and then in 22 jumped back up again and now you can see the the small decline going into 2023 and then

122again we're still projecting that 400 student loss going into 2024. so we haven't seen any reason to increase or decrease that really even in 2020 when we saw the increase oh man have we just turned and we're going to start growing again we were still very conservative not knowing what the what what really will happen so and here we are any questions on any of that okay great so these budgetary considerations are are assuming that the aggregate expenditure limit is waived so we have to decide are we going to do it with it waived or not waived and so we opted to do it as if it's going to be waived based on the information we have today so we're going to start with the mno budget capacity projection so in this particular year because

123of the governor's the governor's proposed budget for 2024 she is proposing a budget with an amount to the base level amount that is greater than the statutory requirement so at this point we thought well let's show the budget capacity assuming trying to do it with both ways so the statutory budget would assume either an increase to the base level amount of of um the lesser of inflation or two percent so because of inflation going up we presume the two percent and then the governor's budget uh is making a recommendation of a 3.04 percent on the base level amount so we're considering both so you can see the base the bla is the base level amount which is that number multiplied by the student counts and the Tei that gives us our Revenue control limit here

124in Gilbert Public Schools okay so these are always our budget capacity assumptions so the student counts are based upon December data so again we always base our future year um ADM numbers on the current Year's numbers subtracting 400 from that so we're starting in this particular projection it assumes that we started from the 100th day data as of December and we have seen by looking at our data that most of our student loss is at the elementary level so we have opted to be a little bit more conservative and assumed 300 at the elementary and 100 at the high school because the weight of high school students is slightly higher than the weight of elementaries so we have done this the last two years I think it changes a little bit the the distribution between

125Elementary and and high school but generally we have done that the last two years [Music] um the aoi full-time and part-time are set equal to what that number was in December and then the total add-on weighted counts as part of the formula remember all of our special education categories receive additional weights so we just make the assumption that those weights are going to stay exactly the same and so we just put that into the formula as well so you see the base level amount increase depending upon whether we're using the governor's budget or the statutory budget and then our teacher experience index it's the one thing that's notable Jill you had asked about the average salary having an association with a number of years of service it does of course but we have seen many

126retirements over the last three years that have continued to bring down our teacher experience index which is that measure of how many years of experience our teachers have in Gilbert public schools in comparison to the average in the state of Arizona so that that loss due to that that Tei is over a million dollars in the calculation and then the trcl which is the transportation Revenue control limit is also set equal to 2022 we have completed the 100th day report in transportation and that is true right now we know that to be true that our Revenue our transportation Revenue control limit will be the same next year as it was in the current year okay so the preliminary maintenance and operations data you can see these are all the elements the unweighted ADM with the

127Arizona online you can see the total weighted count again that does include the add-on weights associated with our special needs gifted the opportunity wait for free and reduced lunch students Etc and then you can see the teacher experience index so you can see in 2022 it was 1.019 in 23 1.016 and now it's declined to 1.011 I have a quick question money and if you just refresh my memory I should know the answer to this question but um at one point they weren't giving us the full amount for the online kids they are now correct no we're still still we're still cutting we're still cut so the um Arizona online students are funded at 95 and that's the full time and the part-time are funded at 85 percent full amount for them even though they're

128full-time correct that's correct so these are the preliminary mno budget capacity numbers associated with those assumptions and one thing that's really important here is note that we have excluded the budget balance carry forward due to decisions that we've made and in some cases um just the extraordinary circumstances with our federal dollars our budget balance carry forward was normally in the past between four and six million and the last two years since 2021 it has been as you can see oh well yeah you'll be able to see it on the next one we'll address on the next one but it has been 42 million and this year it was 33 million and next year we would project it would be 12 million it was important to us that we not muddy The Waters by including the

129budget balance carry forward in these in these uh comparisons if we did that we looked at 2023 versus 2024 where we have 33 million of budget balance carried forward in 23 and then our estimating 12 million in 2024 that's an automatic 20 million dollar reduction so um it's just not true and so it was important to see the impact of the ongoing money in comparing what's really happening with our Revenue control limit and those other School Finance formula data points so you can see that with the statutory projection our budget increase year over year would be the 1.34 million so you can see under this statutory projection here 1.34 million dollars more and then if the governor's budget is approved it would be just under 4 million dollars more in budget capacity note that we

130asterisked the revised number one the budget increase decrease year over year that 42.21 that goes to your question Mrs wood and remember that that 42.2 million dollars was associated with the 20 million dollar you can see the RCL to unrestricted Capital here in revise number four so it's um it's sort of not really true I guess it was just a decision that we made so I wanted to make sure that we're asterisking that truly the Delta was more like 20 million dollars okay any questions before I go any further okay so here's the annual budget limit and the budget balance carry forward it kind of gives you an example of how things had been in the past so that 4.26 that were that we're focusing on for the new year the fiscal 2024 is what

131our Target is our our um our policy DB budget carryover Target trying to get close to that four percent but you can see that at the end of 21 our budget balance carryover can contributed 12 percent of our total budget capacity in 2022 it contributed almost 16 percent of our budget capacity and in 2023 contributed 11 of our budget capacity but again remember in 2023 that 20 million dollars is an unrestricted Capital so I just want to make sure that that's clear okay any questions on that well so we did the 20 million moved to unrestricted capital and then we have encumbered money to go to prepayment that's true and that is resulting in that expected 12 million dollars going into 2024 yes that's correct the the prepayment for the asrs correct okay which also

132we can earn interest on that's correct which we can't earn interest that we can spend if it's in the m o that's correct okay again it's that same category it's a it's a the budget balance carry forward is one-time money's in nature and so we'd be able to use it potentially as a one-time spend to potentially help offset uh increases or budget capacity decreases in the future Why did the budget limit increase in fiscal year 2024 if we're expecting a projected drop in students of about 400. because of the is that the three percent yeah yes thank you yep okay so non-discretionary budgetary increases some of these um you have already seen and some you have not uh at this point in time we will be making a recommendation to the committee to the employee

133benefit trust committee to a to make a recommendation to you all of a two percent premium increase this two percent premium increase would include the add-on of an out-of-state Network which is about 0.6 of that two percent again this is um it's going to be an increase to the m o budget of about a half a million dollars and the recommendation from our actuary was up to 3.2 percent we have a very healthy balance however in the employee benefit dress we will go through this when we share this with you but but it in speaking with the benefits team both Mr McIntosh and Adrian dutchover it seemed a reasonable uh recommendation at two percent the hourly increase for minimum wage we still don't know what that number is going to be this is January of

1342024 so we don't know what it's going to be yet we'll get that information another month or so and we will adjust that figure of uh accordingly a general on the minimum wage increase do we have also included just the minimum wage increase or enough funds that we can deal with the compression issue these are all non-discretionary so any any additional dollars that we would put on hourly wages would be part of our okay so it's not just a minimum wage workers because that's statutorily required we don't have any control of that okay thank you and then General inflationary increases we have seen at one point last year our fuel our diesel fuel had risen to about four dollars and 80 cents a gallon which was very much increasing our transportation expense so we uh

135we normally in the past have put in about nine hundred thousand dollars we did increase that by a half a million dollars due to the environment that we're in right now special education increases we have predominantly increased that by a million dollars each year we'll take a look at the actual increase to make sure that we're not overstating that and then the art teachers which you approved last week the 12 art teachers is 940 000 and then increased Arizona State Retirement in the current year there was obviously a momentary decrease in the Arizona State Retirement contribution and now that they're increasing it back up for the 2024 school year we already have that information of that what is the other 1.4 percent increase medical insurance premium going for I know there's probably a myriad of

136things but so the um the consultant we we have a benefits consultant and they have actuaries that take a look at our last 18 months of claims experience and based upon that and their actuary analysis they determine what they believe we would need to increase the premiums to stay steady so if we if we wanted to keep our fund balance exactly what it is their projection would be 3.2 percent so but knowing our environment and even our reserving policy indicates that we should be there is no maximum anymore in our reserving policy but the the recommendation is to to be right around 12 or 13 million and we're about at 19 or 20 million so we have some room and this was a really good time to add the out-of-state Network wrap around because um

137because we do have that available cushion because we don't know how much that's going to increase our claims that was just the administrative cost so this is someone travels out of state and they need to go to a hospital for some reason maybe a car accident and so that's come they can go to an index yeah there's two components to that but we'll we'll get in there there's the emergency component where it's a non-network provider but we are adding a network out of state so that we can get additional credits from the providers and it's also a benefit for our families that have a student that goes out of state to college Miss Spencer I have a quick question sorry um what is the special education increases what does that include so it's just every

138year when we when we prepare the annual financial report we see our special education total costs increase predominantly they're driven by salary they're our hardest to hire people hardest to hire teachers and so they're offered hard to hire stipends and we work very hard at recruiting them in addition often we are not able to find the providers and so then we go out to a contracted provider and then we're paying a little bit more for those providers at that point in time too she hit it we uh word we are a destination for people with students with special needs in the East Valley as well and so if you call the Department of Ed and you ask them for a recommendation for a school district who does special ed well they'll tell you Gilbert schools

139Realtors will do the same thing and so um the the amount of money we get from the state for special ed students does not equal the amount we spend and so that as that number goes up so does our cost so our special education overall spend is in the neighborhood of 50 million dollars and we receive about seven to eight million dollars annually from the federal government so then the rest has to be borne by our weighted student formula which isn't enough so our total increased need projected there are some assumptions in here but these are all the areas of the budget that we don't have any real control over um and then here budgetary increases under consideration we just wanted to make sure that you all understood the value of a one percent pay

140increase across the board three million dollars and then adding one day to a teacher's contract that was one of the items that was presented in ibbt we generally have completed ibbt and we just indicate whenever there's an item that they're requesting that has a budgetary impact that it will have to happen in the prioritization of budgetary dollars but it's a request that's out there so we will we will update this to you know some of the other strategies could be maybe we don't do a percent increase maybe we do a straight dollar amount um maybe we do um a dollar and so so my I had a meeting with my peers this morning many are considering somewhere between a two or a three percent pay increase and they're adding um a dollar at least three

141of the school districts that were on the call this morning indicated that they were recommending a dollar per hour increase for their hourly staff members so instead of a percentage increase yeah so so keep in mind that a dollar an hour is roughly about twenty one hundred dollars if you consider twenty two thousand eighty eight hours in a work year for those that are full-time working year-round so um give you an idea um this line item adding one day to teachers contracts so is that we're just are they starting a day earlier or is that is that to allow teachers more paid time to come in and prep their classroom or go through any trainings that the district requires them to go through or what what I guess help me understand what that would be

142so we wouldn't add school days right so this would be usually at the front end or the back end of a contract and usually it's for Teacher prep of some sort okay they were they were all so um complaining about the length of time to do the mandatory professional developments that we require so that has continued to increase with cyber security and all these other kinds of things so they were just saying well it'd be nice if we had some paid time to cover that 20 hours or so that we're sitting in front of the computer waiting so that was another one of the rationales for that so can I assume that it for every day that we add to a teacher's contract it costs us 780 thousand dollars that's exactly what we want you

143to assume in that particular case that's a calculated value it's not an assumption yeah and how did we land on and sorry if I oh you're good how did we land on one day it was just directly related primarily to that that conversation about about the fact that before it was only four or five hours and now we have to find time we often have to go home and do it over the weekends and all that kind of stuff so it was predominantly due to the continual adding of these required professional development courses that are compulsory like the suicide prevention training yeah the blood-borne pathogens the um sexual harassment sexual harassment bullying yeah those are statutory statutory requirements yeah um the ibut committee which is kind of like the negotiating committee correct yeah when was

144the do you know when the last time we added many days to the con teachers contracts was I do not know Jean ocean not not in the time I not in my recent memory from 28 years being here I think it's been very similar to this um the time that I've been here we haven't added a day we moved a day from the beginning of October to the first before school but we haven't added a day to our teachers correct the length has been the same we've shifted when they start but that's generally been it other districts you'll see other districts who will boast their salaries are x amount of dollars and they may be larger than our district or surrounding districts well you have to dig a little bit deeper into that because their

145number of days on their contract is also larger so it's not like they're they're it's not Apple for apple and so and this is this is just a proposal oh this is these are just budgetary increases under consideration we're not even making a recommendation to you at this point in time so these are just things that are being talked about and how I hate I'm sorry for focusing on this one line item but um this is what what committee is going is is considering this this is so it's the interspace bargaining team it's made up of teachers support staff administrators uh some from the Gilbert Education Association um some that are not so it's a great mixture of all of our employees and each year they they start the process in their primary responsibilities run

146through the memorandum of understanding and look at those things and then born out of that they may come with some thoughts and suggestions we may come with some thoughts suggestions and then uh we kind of it's it's it's a great process that lets a lot of discussion happen and then great suggestions come out of that sometimes we they're incorporated into a budget sometimes they're not and there might be some things that will be brought up that were like there's just no way we can do that and then there's things that we're like well yeah that's something great to think about so and then we they end up in the mou or in some other form uh to you guys have we have we gotten any feedback from teachers on what they think about adding a

147day to the contract not no not specifically we've never sent out a survey that I can that I remember I mean even within the ibbt oh within that group I think they're very favorable for it yeah okay so remember too that this is not what it costs for a day in Gilbert Public Schools it's a day for just the teachers that are classroom teachers I want to make sure it's clear that this is classroom teachers so they're not any of our academic coaches or those those are those that are tied to a classroom every day so our we're not talking about adding a day for a classified staff it's specific to teachers looking for some more time the other thing is to your to your question too this is the type of question that says

148okay well do we add a day or do we add a pay increase because we're you know we're talking about choices here and so under those circumstances it would be wise to go out and see would you rather have a two percent increase or would you rather have a one percent increase on another day of pay you know those are the kinds of questions that have to be asked and answered thank you I just had a quick question on and thank you Mr Thompson for all your questions honestly we're learning here so they're great questions um on the pay increase you talked about a dollar an hour versus about one percent up there does that significantly change the 3 million we haven't calculated it yet so I need to that's that's why as we go

149through this process we're going to offer a bunch of different options we actually deliberate over these options all the time in cabinet and we talk about them all the time so before I would present anything it would be do we presented or doing that do we not want to do that go that that direction um from a philosophical standpoint I would love to see that dollar that you talked about that the other District around us are doing like where that sits budget wise I'd be interested in that what's interesting is we we both have meetings with our counterparts and we walk out of them with some information and then we wait to see if it's actually accurate because a lot of times what we're told sometimes is not actually what comes up and that's okay

150because a lot of last minute changes governing boards get involved with well wait a minute maybe we should go this direction instead of that direction so I think it's a good ballpark there are already some districts on the west side that are throwing out large numbers of what they're going to put their base salaries at which I don't know what their finances are but I don't know how they could sustain something like that but that when when we bring something to you we want to if you see it in a stipend form that means that's money that we could um put out for the year if you see it in a percentage form on a base of a salary that means something that we could at least sustain for the next two to three years

151and that's important to us because as we predict a 400 student loss on a yearly basis we're a declining School District technically and so being able to give increases in a declining uh atmosphere means that Bonnie and her team have been handling our money extremely well and being as fiscally as responsible as possible so we're lucky to be able to do stuff like that to be real honest with you because we wouldn't we didn't take care of our money we wouldn't be able to do that well I think that also reflects a priority of making sure that we have we take care of employees that we have the best employees possible teachers staff otherwise because that is what really makes our district what it is so I think that's a priority that we've really helped

152you and set I wholeheartedly agree with that I think it's uh as we you know when Mr McIntosh and his folks go to meetings and come back sometimes he's his face is extremely red or you know he's calm as can be and that is because we have to compete and there's nothing harder to have a conversation with a potential employee who looks at you across the table and says well I can go down the road and make three thousand dollars more a year and money isn't everything and we all know that the culture really adds to what uh longevity of an employee but but when someone's brand new and they're 21 22 years old and they're starting a brand new job that dollar sign is extremely important to them so when I think as we

153deliberate in in the leadership team every Monday morning we're talking about well is it more important to put more money into their pockets or is it more important to do something that might improve their environment so when you talk about adding a day would that be accepted and improve their environment versus would they rather have more money in their pocket not have to work an extra day you know those are the kinds of conversations that we have all the time and like when you add a day like that and let's say you hit some harder Economic Times and you're looking ways to save money it's really difficult to take those things away that you've already given and so um we we have to be mindful of that too Okay so auditory savings as we project

154a 400 student loss we also project the associated teachers with 400 students so we we include the credit back for 20 FTE reflective of those 400 students and that's done through attrition right as because we have seen over a hundred retirees 100 teacher ftes retiring annually over the last three years I think yeah and I think what you need to know also is if you think back to length of service we did we had a lot of growth in the late 90s and and a lot of those folks are hitting that retirement age and they're taking it and they're ready to roll and so you'll see that in districts that have certain growth spurts during certain time of their existence and that's what kind of what we're hitting right now these opportunities to balance the

155amino budget so um definitely did consider that unrestricted Capital Revenue back to mno we still have the ability to bring that back if we needed to do that for for making these decisions um mno budget balance carry forward again I put that in there as a TBD though based upon the monthly financials we're projecting somewhere in the neighborhood of 12 million increase classroom site fund contributions to eligible employees we have more flexibility there with classroom site fund and there is a significant balance there we're waiting to hear what the new projection is going to be for classroom site fund so just a simple example of what could happen and I'm I've asked Jackie and her team to look into this but if we're going to add 12 FTE art teachers as an example since they're

156adding so we're adding to the program that supplemental can those 12 teachers actually be funded on a classroom site fund 100 which would offload the cost to maintenance operations giving us more flexibility that's just one simple example of the kind of conversations we're having in in the finance office to figure out how we could eke out a one or a two percent pay increase to make sure that we're maintaining a level of competitiveness here in the East Valley and still meet the ongoing requirements of a sustainable budget so and then again the same idea so classroom site fund we are always looking at what is that ongoing Revenue you could make a case and Sean has charged me with this more than once Mr McIntosh you can make a case that every year it's one

157time money yep I can make a case for that for sure I could um but we do have an expectation of a certain level of ongoing Revenue in the indirect Fund in the Civic Fund in jted in e-rate you know in Medicaid so right now staff is analyzing all those what is our one-time versus ongoing in those balances so that that could give us some flexibility as well and then just a reminder that classroom site fund it is expanded in terms of what we can use that money for in terms of the type of employees but it still cannot be used for hourly employees and for any uh any administrators or um support exempt staff that's like in my office or otm or technology services or operations capital budget capacity projections uh the governor's budget

158you can see that the 2024 statutory projection is flat Governor's budget includes a 3.0 for 3.04 percent increase to that District additional assistant amount per student so we've done both of those calculations as well we are being conservative and the interest earned assuming a hundred thousand dollars instead of 110 in 2024 but you can see depending upon whether it's the statutory um two percent or I mean statutory nothing for the um or the 3.04 percent recommended by the governor you can see too that the district additional assistance in revise number one is 17.5 million this is where it's gone down uh to your question Mr Thompson because the student counts in 2023 are less than the student counts in 2024 same dollar amount per student the expected revenue for next year will be less so

159risks and opportunities um AEL is not waived this is a big risk though I think Dr McCord's got some good news related to that you know he'll be sharing that well uh partial good news that the house today passed a waiver for the AEL and now I think it'll go to the Senate tomorrow and we'll see what happens there that's great we can always have a greater loss of students in the current year than realize that we didn't object to lose enough so we could have 410 or 420 students lost and then greater loss of students in the current year could be realized as well over the last two years we've actually seen the first two years that I was here the 100th day count continued to grow after the 100th day the last two

160years last year and the current year the 100th day count seems to be declining but after the 100th day which is an interesting thing I don't know why that's happening legislature could decrease the funding level classroom site fund Revenue decreases you know making it difficult to make other decisions with classroom site fund and then opportunities we could get more students in Gilbert Public Schools as we did in the current year at least more than we projected the loss the legislature approves greater funding and classroom site fund revenues increase so that's all that Jackie and I have on this topic [Music] so I don't have any questions but Jackie I want to say your color commentary was miserable yeah and we see this come across our desk and we we're expecting big things out of here

161okay we all got excited when she was people in the back were clapping they're like oh my God well there's nothing further yeah no more insults to go we're good so I'm sorry you had to put put up with that this is the first soap miss betz when will we see your next are we basically every month going to kind of get an update on the FY 2024 budget where we're at once a month or as as we get new information we will present the new information too okay so as soon as we get the information about the minimum wage or about classroom site fund um we will bring that back to you okay that would be great thank you yes thank you both of you thank you all of you Ashley's back I know

162she had a big handbook yes thank you guys okay that takes us to 2.04 the aggregate expenditure limit and government public schools Dr McCoy thank you madam president governing board members um for those of you that are here almost a year ago to the day I presented this and um this hasn't really changed much uh just the dollar amounts and it's it's just a few slides um talking about the aggregate expenditure limit and how that would impact Gilbert Public Schools this is something that I had a conversation with with all of our superintendent councils last week letting them know that this is a possibility of what will happen um or what could happen if the legislature does not give a waiver to our school district let me just start off with the aggregate expenditure limit

163started in 1980 Arizona voters passed a measure let me go back to that 1980 Arizona voters passed a measure that limits how much K-12 schools can spend in a school year which was done when the state implemented its school funding formula this limit is known as the aggregate expenditure limit which is the total amount that K-12 districts are spending as a whole each year this limit fluctuates based on the previous year student enrollment charter schools are not included in this because they did not exist in 1980 and most School funds are counted in the limit with the exception of funds such as Esser federal grants and budget overrides and so that's just the history of what AEL is all about and why we're looking at it today uh how much over the limit will Arizona

164be this year I've seen 1.3 1.4 billion dollars what impact is that on Gilbert Public Schools that's 48 million dollars last year was 39.9 or 440 million Dr McCart can I just ask or or make a comment yes this isn't that there's not the funds or the funds are available the funds are there in the cuffers we haven't overspent we haven't there's not a matter of we need to raise taxes to collect These funds the funds are there this is a basically because of the the formula the formula from the aggregate expenditure limit on in the Constitution that's that's what causes this to trigger not a funding situation that is exactly correct so there when the legislature we get more money for a lot of different reasons of course we budget for that we increase

165salaries we increase all kinds of different things because we're very thankful that we've received that money but that makes us hit that limit um now I wouldn't say quicker it just the calculations come out it's really easy to calculate in terms of here's the money that we've been provided by the state here's where the aggregate expenditure limit will lie and we knew that 48 million probably back in September of where that would be and you just don't know you have to wait for the legislature back um in the fall or in the summer there was a promise to hold a special session and that did not happen and so now you'll hear a lot about AEL and of course politically things have changed a little bit down there at the state and so there's a

166lot of different conversations going on about what the wants and needs of public schools are on both sides of the aisle and here public education is getting kind of caught in the middle of that and so this money is available we would be able to spend it but if we fall off what I would call the AEL Cliff then we won't be able to so that's how much dollars and cents um is impacted what does the legislature have to address or when do they they have to figure this out by March 1st 2023 what happens if they don't pass it by March 2023 school districts will be forced to reduce their current budgets and that would have to be done by April 1st and we would have to put into the state how we plan

167to reduce down 48 million dollars out of our already approved budget so our typical budget is 300 300 and some odd million dollars and 48 million is huge um and and I'll say this out loud um quantifying that in terms of people right um Bonnie calculated out that's approximately half is 48 million is approximately half of our certified staff now when I told this to groups last week I said do not run out and say Shane's cutting half of our staff if this happens and I'll say that again it's just something for them to be able to visualize of half of the certified staff is equal to 48 million dollars and so that that's a that's a big visualization yes sir well and as we just heard that's what we spend on uh special education

168exactly so that's the entire special education it's a lot of money a lot of people and so um how would we handle this that's always the question that was the number one question I got last week when I presented it to the councils um if we had to do that we'd have to end any kind of spending supplies payroll uh Etc we could reduce the school year statutorily we'd meet our required hours at the elementary by the end elementary junior high by the end of March uh 9 through 12 we'd hit that number by the end of April we could exhaust budget balance carry for carry forward that still would not be enough to to mitigate this 48 million dollars and so my message to those folks and anybody else that's listening is if we

169get to that point we will be huddling up not just my staff but I will also bring those councils in to have conversations with them as well as the governing board because this isn't um oh this isn't one person's decision this would dramatically impact our school district in a lot of different ways and we would need a lot of thoughts and ideas on how to mitigate that you'll hear other districts say they will be able to do certain things moving forward and utilize their budget balance carry forward to get through the year and next year you would still have to reduce 48 million dollars from your budget moving forward and so I I don't I would never recommend just totally using your budget balance carry forward because things happen and as you could tell from

170the preliminary budget there's a lot of assumptions and a lot of risks involved and so we would have to be careful with that we'd have to put a lot of thought into that um next year like I said we'd have to right size to a permanent 48 million dollar reduction uh what would that do that'd be a reduction in administrative certified and support staff for next year increases of class sizes unrestricted capital budget moved to mno if need be and just other potentially discretionary decreases and so my main concern would be to protect the classroom and and all those that are in it the students first and so you protect that and then if you had to trim down your budget by that much you would you would just start on the outskirts and work

171all the way in and try to stay as far away from those campuses and those kids as possible but we also know all of those things that are not in the classroom are there to support what goes on in the classroom and so it's extremely difficult but it's like stripping down a car to its bare minimum and and trying to move forward so it's a big deal and it's something that I hope I don't have to have a conversation with anybody about and like I said earlier we got some good news that the house pushed it forward so let's hope that the Senate does and we can concentrate on on important things like our students that's it any thoughts or questions well I I do want to give a shout out to representative cook that

172brought this to the house committee and made sure that it was taken to the house floor where they've just passed it yeah and I'm not sure where the Senate version is hopefully tomorrow hopefully in a day or two um I hope they will pass it as well but um you know it's he he gave a wonderful speech I was able to watch the video um explaining the value of our public schools and what a big impact they have on the communities around them that in almost every town such as Gilbert the public school system is the largest employer in the town so it doesn't just impact our family and students it's going to be an economic impact on the entire state so I I appreciate him doing that and look forward to hopefully hearing good

173news this week yeah so I've got some thoughts and some questions first my thoughts and speaking with some of our legislators um I'm confident that it will that it will pass okay and but I would I would mention that many of our legislators are going to be are extremely committed to some education reform measures that's what I've read yeah and so I just I just wanted to put that out there which I think I think could be could be good could be bad we'll have to wait and see my questions are what is the I mean what component is the formula missing that were 1.3 1.4 billion dollars as a state I don't know the exact number do you know what it's I think well it so it went into effect when our state formula

174went into effect and I think I think that hits it right on the head I I really think that um uh the way of thinking in in public education back in 1980 versus 2023 is totally different I mean you we went through a Litany of things just on the master planning committee on what a classroom looks like these days and so I don't believe the formula has been tweaked to the ability and to reflect the needs of what public education needs today and I think that's the bigger issue in my opinion not not anything other than my opinion in 28 years in education that we're avoiding as as a state conquering that and I think if that one day gets conquered we won't be having these types of conversations in the future and and I

175think it has to be done in a way that is one economical uh two Fair and uh three always focusing on making sure our kids are the most educated in the United States and so once we do that I think these other conversations will go away do you know why this is happening now I mean we we know the formula we know what the limit is so I'll tell you we've run up against this before okay in the past the most recent was last year before that I think it was like 2007-2008 it is and and back then it wasn't a conversation it was just kind of a pass-through of okay well yeah we're just gonna we're gonna approve this waiver and move on now I think it's become political whether anybody wants to agree

176with that or not um spending time talking to people that are in politics and related to education this is a great bargaining tool for people who want things done you just said it a few minutes ago I think it'll pass but the butt's always going to be there if this didn't exist that but probably wouldn't be there either so yeah so and I and I get that and I don't I don't disagree that this is being leveraged for for some political gain but if the schools around the state know what the limit is how do they spend one and a half billion dollars beyond the limit I mean I I get that it's different now than it was in 1980 but regardless if there's a limit there's a limit and so how do we go

177so far and and I say we and oh no I know what you mean I'm not let me help you GPS of course not no I get it and and I think that's what people need to realize we have approved budgets by governing boards and that's based on budgets given to us by the state the other question is is why does the state give us that money if they know we based on this we wouldn't be able to spend it like we like Miss Woods said earlier we have this money this money should be ours but because that limit exists and it's in the Constitution technically we can't touch it and so that either needs to be changed or waived and it needs to be changed if it needs to be changed has done constitutionally

178which you know legislature has to send it to a vote and it has to be done there so that's where a 1980s thought comes into play and it doesn't fit into that's why specifically Dr McCord there have been a few changes appear it's one was the when the legislature it's actually it's because the legislature has been has given us more money which has been generous and we're so grateful for the um one of it was when we they put the text they changed the text the 301 the 301 the classroom site fund when voters originally approved it it was not included in the aggregate expenditure limit but it ran out and the legislature fortunately approved it but not through the it just became now now it's now it's included in the limit so that's a

179big six fun checking money plus that now that a couple years ago wasn't added in as part of what we would spend toward the limit and now it's the same money or even a little more but now the way that it's um the way that they had to go about it through the legislature again being being generous to us and making that a permanent thing rather than how it was sun setting now it is part of our aggregate expenditure limit so now we bump up against it because of that funding which is there which we've been spending for the past several years but it wasn't included so that's one of the things and then I think just the increases in the 20 by 2020 and these other increases that that have been provided so that

180we could give more funding to our teachers specifically and all of our staff which the legislature and the governor and approved and and gave us which was again we're grateful for I think that has also bumped us up over the last couple years is that correct and and covid-19 hit yeah so in 21 the students that's what it was because it spilled those are the things we're bumping up against it if you don't mind um I was in high school in 1980 and there was no there was one classroom of special ed that had just started in my high school there were no computers no each there was like one or two telephones for the entire school um their education has changed and what we do for students has changed drastically since 1980. so the

181way this was written into the con for the voters to prove and put in the Constitution was that they would taken them out and then they would increase it so much for inflation and so forth so it doesn't take into account all these changes of Technology telephones special ed all kinds of different things that were not available I mean even even banned wasn't that big in 1980 I think the whole budget was 350 for all the band students to go on their trips so everything has changed very greatly I guess if if our approved budget is 300 million dollars then that's what I feel I should be held to right if I I won't spend more than that but if I if I think I should there's statutes in place that can put me in

182jail and that's why I love Bonnie so much to keep me out of jail but but that's that's our point is is that money's there and that's what we budgeted for and every District in in the state has assumed that and then now when we get to February we're playing this game of you know here I am I'm talking to councils I'm talking to you I'm talking to whoever's listening now and people freak out about this and that's that's if that's a political game I don't want to play that I just want to be able to spend the money I'm given and then if I'm not doing that right hold us accountable for that okay yeah and I would say that we have the most transparency of any um what do they call it Lea

183education group school boards and school districts are held to the highest standard for transparency on budget on curriculum on who we hire and how we check their backgrounds there are private schools that are now receiving those taxpayer funds that are not held at that same level of accountability and Charter Schools also are not held to as high a standard although they they do have a standard so when the legislature frequently when I go down there I get frustrated because I feel like they don't understand how their own public school system works and the level of transparency that we have and so when they talk about they want education reform understandable I want transparency and I think every education uh entity that receives taxpayer dollars should have a level of transparency and and we have the

184most transparency so I would like to have that discussion with our legislators that if you're interested in transparency um I'm more than happy to be as transparent as possible but we need to look at some other areas that are also receiving taxpayer dollars without that transparency so my last question is and this may be Miss betz could answer this I don't know why you try to slip away just stay here so my last question is I understand that we it wouldn't be wise to use our entire budget balance carry forward to mitigate the the losses if if the limit wasn't waived but could we um I I mean we're allowed to we're allowed to okay that's all thank you okay we just don't have to make the cuts next year I mean even if we

185could do it the cuts would actually I mean they'd go into effect next year but they'd be realized this year with notifications and all that good stuff so the year wouldn't end I guess what I'm saying is even if we made it through to the end of the school year on whatever we can do when we Face the budget for next year and the next school year in 20 20 23 24 we would still have to make some major Cuts because I just can't I mean I I've already looked at it and 48 million dollars yeah we could just take every single fund balance that we have and pay that back right but I don't know how to cut 48 million dollars knowing that even if we took if we were not required to provide

186transportation except for special needs so we could cut maybe eight million dollars out of transportation and just keep a skeleton crew to transport special needs students I I don't know and even nutrition services which really doesn't impact us but their budget is 19 million so 19 and eight I mean that's 27 I don't have any idea where you've got I just don't don't know when it was a year ago and I remember Bonnie calling me and I'm getting ready to go into an eye appointment oh yeah I did that to him and and this is when I think is she I think this is when it actually set in that this is a lot of money when it was 39.9 she wasn't yelling at me but she was screaming numbers at me and I was

187like oh my God but it it does when you start trying to quantify it and match it up to certain things it um it I mean I don't need to tell you you guys know that's a lot of money and when you're in the business of people it impacts people and big and small Shane just one question is there any any discussion about looking into doing something differently constitutionally about the AEL yeah there's there's always a lot of discussion um it just depends on what they'll be able to get through and and I don't know I I really hope I I I really hope both sides are able to come together and have a conversation and put aside on both sides this isn't just one group or the other everybody needs to step back and

188and rethink about what are we doing for our state and what are we doing for our kids and I would love that to happen yesterday the Arizona Chamber of Commerce came out very strongly along with a whole lot of people who are coming in for the Super Bowl yeah that want me want to relocate in Arizona about this I watch too much news just you know well we got the waste management we got the Super Bowl it was really good it was a very good yeah you know but if they changed it constitutionally that would take care of the problem I would take care of a lot of it I think um I believe Jennifer Pollock representative Pollock has filed the bill to do that I don't know whether it's made it to committee foreign

189[Music] so we wanted to just discuss that but we are hopeful that we will not have to worry about it this the rest of this year so we will hope for that at this point thank you okay I think that takes us to the adjournment of the work study and so I will call the brief board business meeting to order and I will ask Mrs Wilson for a roll call please cute here thank you that will take us to the consent agenda and I would ask is there a motion for the approval of consent agenda items I move that we have approve the consent agenda items as presented thank you Mr Jetty it's been approved is there a second second thank you Miss Humphries it's been it's been moved and seconded that we approve the

190consent agenda items as presented all those in favor please vote by saying aye and any opposed with nay thank you that pests 5-0 that will take us to our action items 6.01 FY 2023 revised budget number one Dr McCord thank you madam president governing board members as presented in our work study we bring before you the 2023 revised budget number one thank you board members is there a motion I move that we approve the FY 2023 revised budget number one as presented thank you Miss Humphries it's been moved is there a second second thank you Miss C Jetty it's been moved and seconded board members is there any discussion I just wanted to remind everyone that they need to sign the signature sheet on the revised budget so don't take off thank you so we

191discussed this in the work study tonight and we were able to ask questions and and hear what was needed so seeing no further discussion or questions I will call for the vote all those in favor of approving FY 2023 revised budget number one please vote by saying aye aye any opposed with name thank you that past five zero and that will take us to the adjournment board members is there a motion I move to adjourn thank you Miss Humphries it's been moved as our second thank you Mr Thompson it's been moved and seconded that we adjourn all those in favor please vote by saying aye aye and any opposed thank you thank you