Gilbert Public Schools Board Meeting 12/20/2022

001everybody tonight to our governing board meeting Tuesday December 20th 2022 at 6 PM I'm calling this meeting to order we'd like to begin with a moment of silence led by and Then followed by the Pledge of Allegiance Pledge of Allegiance led by Bill Parker if you'll stand and join me for a moment of silence please I pledge allegiance to the fact of the United States of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all thank you Mrs Wilson could you please call the roll Dr Charles Santa Cruz let's make sure the sound is on one second we're gonna make sure the sound is on is that better okay thank you Dr Charles Santa Cruz Mr Bill Parker here Michela eugetti here Miss Laurie wood

002here Miss Jill Humphries here Madam president all board members are present you have a quorum thank you and thank you for all being here we want to now move to 2.01 the approval of the agenda but I would like to ask that we actually rearrange it just a little bit we'll move the superintendent's report 4.01 for Dr McCord to the end after uh after nine the request for future agenda items that's acceptable if I may have a motion for that agenda as I just explained so moved with the changes explained thank you Mr Jetty as our second second thank you Mr pecker it's been moved and seconded of the agenda as I explained it all those in favor please vote by saying aye aye aye any opposed with me thank you past five zero with

003that we'll move to 3.01 to Dr McCord and the superintendent's recognition Awards thank you madam president governing board members um if you would join me in front of the dice we have one recognition for this evening foreign [Music] squeeze in somewhere around there oh maybe in front of them because they're big they're all taller than we are impressed thank you I'll stand over this way good evening everyone thank you for being here gentlemen thank you for coming tonight last day of uh the fall semester you're on winter break now you excited about that yes sir yes look at it yes they are um this is the Highland High football team they're a 6A football team and for the second year in a row they have brought back the state championship to Highland High in Gilbert

004Public Schools this is their actually their third year in the finals and they were runner-up three years ago and here they are again defending their title and I'd like to turn it over to their coach Mr Brock Farrell to say a few words about this phenomenal team uh really I just want to say thank you to the Gilbert public school district for allowing us to um you know play the the my in my biased opinion the greatest sport in the world um but it truly does teach uh the things that you need in order to become a but you know for the most part uh grown grown men in this country teaches them courage teaches them teamwork teaches them that not everybody has the same gifts and talents but we all can come together and

005achieve a common goal in this case it was a 6A state championship for the second year in a row um you know but moving on in their lives it could be anything so uh I just want to say again thank you for the opportunity to to be their coach and I will say that this year was different than last year and defending the title is as hard as everybody says it is um and these guys did a great job in defending their title we look forward to the opportunity to compete for the open state championship one of these days so there you go all right congratulations thank you foreign I'm going to hand the microphone over and if you'd pass it down the road if you'd introduce yourself tell us what grade you're in what

006year you're in and what position you play um Brigham Stewart I'm a senior and I play linebacker uh my name is Mason Sparks I'm a senior as well and I play a wide receiver my name is Jay Snead I'm also a senior and I play DB I play tackle uh my name is Bertrand Berry II I'm a junior and I played the end and for anybody who's confused this is not our entire football team there's about 90 of them and we pulled up over 130 for playoffs so these are mostly our seniors and guys that led the way and people that could fit in this room that would represent our team my name is Caleb lomu I'm a senior also and I play offensive line my name is AJ dutchover I'm also a senior and

007I play left guard my name is Joseph Walter I'm a senior and I play a wide receiver my name is Ezekiel no two I'm a senior and play DB my name is Cole Crandall I'm a senior and I play safety my name is Jay Martin I'm a junior and I play running back are any of you moving on to play football next year raise your hand tell everybody where you're going I'm going to play a Southern Utah University I'll be playing at University of Utah and for anybody who wants to join us tomorrow morning at 9 00 a.m at Highlands main gym these two will be signing their early National letter intent congratulations to our Highland talked about the the teamwork the collaboration everything that it takes to to put it into place and you

008guys demonstrated that all year long and we're very proud of you one more time for these guys please if we could get a picture are you ready yeah board members you want more members in there come on here one of you want to put that on yeah there you go propaganda oh yeah look at that oh yeah that's awesome that's awesome we went a little overboard thank you guys again thank you so much thank you thank you so much thank you so much appreciate it for being here [Music] while they're shaking hands I want to introduce a couple other people David Ryan from Canyon Valley he's one of our student superintendent Senate individuals thank you for being here and from Canyon Rim Aleister teeny or no you're not a Canyon Rim you're at Spectrum from

009Spectrum Elementary Alice tortini she's in our Aspire program to be a soon-to-be administrator so please give Alice a hand thank you for being here oh oh yeah one last thing they won the state championship but Mr Brock Farrell was the nfhs state and Regional football coach of the year congratulations appreciate it thank you you want to give another speech I just want to say thank you and it's an honor again to award for such a great School District thank you thank you here here's that ten dollars now we're done great that's great thank you with the rearrangement that I made that takes us to the request to speak to the governing board and we have one request tonight so if I could ask that the admonition will be read please yes if you'll read it

010let's see Judy request to speak to the governing board pursuant to ARS 38-4331-02.h the board may make may make an individual open call to the public during a public meeting subject to a reasonable time place and manner of restrictions to allow individuals to address the public body on any issue within the jurisdiction of the public body at the conclusion of an open call to the public individual board members May respond to a criticism made by those who have addressed the board may ask staff to review a matter or may ask that a matter be put on a future agenda however members of the board shall not discuss or take legal action on matters raised during an open call to the public unless the matters are properly noticed for discussion and legal action during an open

011call the board requests that speakers refrain from voicing complaints against School Personnel or any person connected with the district as it may impact due process rights policies Keb and Ked are provided by the board for disposition of legitimate complaints including those involving individuals forms required for use of these policies can be obtained from the Gilbert Public Schools website thank you Mr Jenny I will ask Shelley football I hope I pronounced that correctly to come and as you approach we'll set the timer for three minutes that you'll have to to share your thoughts thank you I'm a parent of two students at Gilbert High School a junior and a freshman and I came tonight to just try to seek some understanding of what district finals are um what the purpose of them are why they were

012created and instituted like the background and who writes the tests um I just came to understand that they were a thing the last few days our boys have come home mentioning a few things about them some of their comments have been my teacher doesn't know what to tell me to study because she hasn't seen the test um the test is written by one person um they also said they couldn't complete half of the test because they hadn't learned any of the curriculum yet they haven't gotten all their results back yet but on the few tests that they have they have flunked um like 35 percent 60 percent um 50 percent our boys are good students they're not perfect by any means they don't study for hours but they are A's and B students um luckily

013these tests have not affected their grades because they were high enough in the A or B category but it was just concerning to me that they have been in class taking the tests and doing the assignments for a whole semester and they have A's and B's and then the final assessment that was made by someone other than their teacher they failed significantly on so I just wanted that to be addressed foreign thank you Shelly right behind you is Dr Cox she's the director of secondary education for teaching and learning she can chat with you about some of your questions thank you very much for coming and sharing that with us and that will conclude our request to speak to the governing board for tonight we will now move to reports and begin with 6.01 FY

0142023 monthly budget report for month ended November 30th 2022. Dr McCord thank you madam president governing board members this is our monthly budget report uh for month and November 30th and I'll turn it over to miss betz it was on so I don't just turn it off okay yeah you're good am I good okay great thank you good evening Governor board members Dr McCord um Mrs wood I'm here to present the monthly Financial presentation and then with a short stopping point we'll move right into the aquifer I thought it would be important to go ahead and address you from the podium this evening just to make sure that we have an easy changeover if you have any questions that Michelle's could answer when we get into the aquifer or any questions that Jackie would be

015able to answer if I cannot so but we'll start with the finance the monthly Financial presentation just give me a second to connect okay so this activity represents all the transactions for the current fiscal year through November 30th 2022 so this this report's fairly short uh we're just sharing the operating funds our federal grants Enterprise funds and a couple of other District funds so to begin we always share the main operating funds grid and note the two highlighted rows maintenance and operations and unrestricted Capital just wanted to share that the available balance so the 29.4 million dollars represents a 2.4 million dollar decrease from what we presented in October we had talked when we left the October meeting uh Ms Madden and I spoke about encumbering that final Recruitment and Retention stipend that's planned for

016may we have had a conversation with our Federal grant director Miss Angela marlar Connor and we are going to revise the sr3 grant proposal to include the final payment of the risk and the Recruitment and Retention stipend so it's possible that that 2.4 million dollar encumbrance will be released so I just wanted to share that in addition under unrestricted Capital the available balance has decreased by about a million that's just reflective of all the work our our schools are doing to get their requests in for approval for Library furniture for classroom Furniture those items and then there's a that's about half a million dollars worth in instruction that has been ordered and then in addition the remaining about 450 000 has to do with technology or operations uh and remember that when there's a project

017out at our Fields that's an ADA issue of course something that has to do with any of our athletic facilities um Albert takes care of those those needs out of unrestricted Capital so before I can go any further is there any questions on that foreign okay great and this is just basically what I said the Federal grant funds Mrs Mrs betz I'm sorry that's okay could you go back to that for just a minute sure um the Medicaid reimbursement seems to be lower than it has been available balance so the year-to-date expended encumbered the 184 000 is that lower than what you've seen no it probably isn't but it wasn't there a couple of years ago where we used a significant amount of that or was that before you were here I don't remember I

018think it might have been before you were here and I think that in the past when I've gone through and looked at Old reports there there was definitely the use of Medicaid as part of mitigation strategies uh to save mno dollars so it's possible that's what you're remembering and that is totally unrestricted we it's ill-advised though to use it for a special education costs because it impacts our maintenance of effort because it is considered a federal fund well it it's basically comes from special education students it does yeah thank you so uh this particular grid is all of our Federal grant funds and I wanted to point out the roads where it's fund 346 but there's two rows there so as part of Esther 3 there's a 20 set aside as we were talking after

019we presented a month ago we thought it would be important to separate those out so we can definitely see how much of this two categories we have spent to date and you can see that in the sr3 the required 20 set aside there's only about three hundred thousand dollars spent to date in the current year that's reflective of the 24 7 on-demand tutoring that we that we purchased for fiscal 23 in addition the remaining amounts were for the first ever fall break um intercession that was done that was very successful we plan on using these monies in April and then possibly in the summer as well we intended to use the set aside for summer school primarily if you recall Last Summer the governor offered the Arizona on track funding so that allowed us to

020save the sr3 set aside and we used the Arizona Arizona on track funding instead so I just wanted to explain that expiration date on the sr3 I knew there were on the other ones and we've passed those I believe yeah there there is the expiration date on Esser 3 is September 30th of 2024 so we have another year and a half okay thank you [Music] okay there are Enterprise funds we've been sharing the Enterprise funds regularly but note that we also split out the DES Child Care Grant from the Des Workforce Grant so these two parts of the same Grant have different rules and the child care Grant we have way more flexibility in how that's spent in comparison to the workforce Grant wanted to share that later on under consent you will be approving

021a request by the community school fund our community school department to be able to use that Workforce grant for reimbursement of employees portion of their their benefits as well as some college reimbursement and other opportunities to get that money spent down so other District funds unemployment insurance just thought it was interesting that we continue of course to take money out of our payroll processing and put into our Unemployment Insurance Fund over the last two years it's been higher than normal due to the pandemic to date we are at a year-to-date expense expended encumbered of ninety five thousand dollars which is lower than it has been reflective of two things fewer claims against unemployment and then secondarily the department is catching up on all those fraudulent claims that occurred back in the fiscal 2021 so we're

022getting a lot of those credited back now the other notable fund is the advanced placement summer Institute note that there is a negative thirty four thousand dollars due to an encumbrance this is part of our operation of that fund it's required that we engage with the Consultants I.E instructors of our teachers prior to them actually coming to Arizona to to teach or consult over the summer and we are just now beginning to take tuition payments to soon make that negative go away but that's this is a standard operating procedure you might be worried you know is there a cash issue here there is not a cash issue remember that we have uh all of our cash is pooled and so we're able to make sure that we are um paying our bills even though One

023Fund might look like it's negative is there any questions on that okay that's all I have for that board members any questions thank you okay great thank you so the next presentation is uh fiscal year 2022 audit update and draft audited financial statements again I shared this on the agenda item as well their draft only in the verbiage and checking for typographical errors the financial statements are done and have been audited and I'll let our auditor Miss Jennifer Shield share the audit results with you but this is what we're going to share this evening and remember this is activity that was a year ago it ended June 30 of 2022 we've been talking about the current year a lot we're also getting geared up to talk about next year but we're finalizing fiscal year 2022

024and much of this information is based upon the annual financial report that you all approved back in October the other point I wanted to make is note that under the action items there is an action for you to accept the con the annual comprehension financial report and so it has been posted to both locations just wanted to make sure that you're prepared for that so to begin we want to start with the audit process and the results we'll get into the fiscal year 2022 government-wide financials then the governmental and then some of the details of funds so here in Gilbert and in other school districts in Arizona we have over 35 separate funds but they're categorized differently depending upon how we are treating them in this annual comprehensive financial report and then finally at the

025end we're sharing some items to note that are part of the the act for that we wanted to share with you so to begin I'd like to hand over the microphone to Miss Jennifer Shields from heinfeld meech and Company good evening Madam president members of the board Dr McCord thanks again it's nice to see everybody um thanks for letting me um speak with you tonight so um did you make flights for me Bonnie I apologize okay so I I don't have any slides for you um but I have talking points so that's good it'll keep me um my talking points will keep me on track um so in terms of the audit process and the timeline very similar to Prior years the audit process actually starts back in the April time frame with the issuance

026of the engagement letter so that happened in April of 2022. and then shortly thereafter we begin our actual audit procedures we work very closely with Miss Jackie matinin and her staff um in terms of scheduling out work to be done that makes the most sense for her team as well as school sites I know that in the past we've talked about the fact that throughout the audit we don't just bombard the finance department with our questions and requests but we also work with individuals out at site levels you know when we do things like test attendance we deal with school registrars and and other personnel um so that usually occurs before the completion of the um the school year because we find that that works um best for the staff at the school sites while

027you know we're essentially auditing current activity for the students that are on on site at that individual campus um during that time frame and then um and unfortunately for Miss Jackie um the audit never stops until um even now and it'll continue on for a little bit longer um but the um throughout the summer months and up through September October time frame we continue to work on various parts of the audit with the culmination of what we call our final field work that occurs in the October time frame so that happened as planned and then the draft of the audit report was submitted to management recently within the last week or so and as Miss bet said the information has all been audited the um the financial statements have been compiled and we're just down

028to some of the you know some of the verbiage in terms of um you know explanations for some of the reasons for changes and things like that so we are expecting to issue the audit report here within the next few days there's a filing deadline for um submission to a couple of organizations for awards for excellence in financial reporting that the district has participated in those programs for quite a number of years so the deadline for that is December 31st and it's expected that the financial statements will have an unmodified opinion so we're not not forecasting anything different in that respect so again just in terms of some of the other required Communications between our firm and you as the governing board the scope of our audit Services was to perform the audit of the

029financial statements in accordance with all of the audit standards generally accepted auditing standards government auditing standards and then also the standards that are under uniform guidance which that's the federal piece of the audit we also are contracted to perform the procedures necessary to issue the uniform system of financial records compliance questionnaire that will that and the single audit will be forthcoming at a later date in terms of other Communications um and and fraud inquiries those occur throughout the audit process you know starting back as early as April up and through will continue through the time that we issue the final reports um just a reminder that fraud responsibility ultimately rests with management of the district and it starts with you at the board level and our responsibilities are to design procedures that we will provide

030reasonable but not absolute Assurance as to the transactions and whether or not fraud occurs um and and all of that so during this fiscal year Ms betz might have this in her presentation but there was a new accounting standard that was implemented and that was what's called gazbe 87 it has to do with leases so there were some changes in financial reporting related to leases and in terms of both on the payable side so when you act as you when you are a lessee but there are also changes in the financial statements that relate to situations in which the district acts as a Love or and so those types of things have occurred there are some significant estimates in the financial statements that'll just draw your attention to those are predominantly related to Capital assets

031and the depreciation of the assets over their useful lives and then some elements related to pensions and things like that that ultimately the district relies on the state retirement system for there were no significant audit adjustments that we need to bring to your attention there were no disagreements with management that we need to bring to your attention and excuse me um last but not least um there are certain services that our firm provides that are considered non-audit services and that's the assistance with providing the actual or preparing the actual annual comprehensive financial report so through that process we work with management and provide all of the information information related to the um how the financial statements were prepared starting from Source records here at the district and then all of the adjustments that get made

032there and um both um Jackie and Bonnie have been going through all of those adjustments to make sure that there are no errors in that and aside from that um the only other thing to let you know is that as your independent Auditors were required to maintain our own ethical responsibilities meet our ethical standards and we have done that on our end and so just reporting to you that we've met all of our standards there and with that I'd be happy to take any questions or turn it back over to miss Pitts thank you Miss Shields is there are there any questions I I haven't I'm good I have a comment if that's okay please I I a few years ago I'm not sure how many the legislature I believe it was passed a law

033that we couldn't use the same accounting firm or auditing firm and then that was changed and and I would just like to say that in I in my past experience especially in a past life that I had um that I believe that heinfield and meech is probably one of the finest firms that we could deal with in very many ways I I've been impressed and you use the word ethical I believe that that's probably the the key word and I think probably what the concern was at that time was you know getting to know people too well but I think that Pinefield and meech has done a really nice job about of that and not like in using different people you might be the ultimate one but then there's different people that come in and

034do the audit auditing so I would like to you know to thank you because I think that we are getting the best of services with our heinfeld and meech Association well thank you for those kind words I appreciate that I don't think we have anything further for you right now thank you again Michelle thank you appreciate it so I just wanted to make sure that when when Jennifer shared that this was an unmodified opinion it means it's a clean audit so I just wanted to clarify that is that correct okay good great um in addition I asked her to stay because I want to make sure she holds me accountable to making sure I don't see anything wrong so thank you for that I also wanted to share miss you jetty about your comments regarding

035the audit firm so this is the first year of the next five-year contract with heinfeld Mage and we did go through an RFP process about a year ago and uh heinfeld came out on top without question the level of professionalism the level of care in their proposal was remarkable knowing that they have been our Auditors for numerous years so there was never any presumption that they would continue to be our auditor so that led to a very high caliber proposal that they presented to us when we made that recommendation to you so I wanted to thank them as well so so how I'd like to approach this this evening is I really wanted to tell the story about what happened in fiscal year 2022 and I'm just hopeful that as I go through some of

036the details that you'll all remember that which I'm sure you will but please know that even in doing this both Jackie and I had to go back to all the presentations we made a year and a half ago to make sure that we could keep all the numbers and what happened straight so to begin recall that the act for the annual comprehensive financial report is is segmented into three main categories of financial presentation so the first is the government-wide where every single activity that happens in the school district is brought forward into a couple of financial statements and then next is the governmental which actually divvies up individual funds into higher into higher level categories than the individual funds you know we got the general fund we've got The Debt Service fund there's non-major special

037Revenue funds and then a bond building fund that government a governmental level and then after that you have all the individual funds which you see monthly enumerated on those rows that whether it's the Unemployment Insurance Fund or the litigation Recovery Fund or classroom site fund or any of our federal funds so that's how the act for is organized to begin we want to talk about the government wide so everything that's associated with Gilbert Public Schools except for our internal service funds they're actually removed because they could represent a duplication of expense so as an example all of our funds pay benefits but we have transactions within the employee benefit trust fund that spends those monies on claims and administrative expenses associated with that program so I wanted to make sure that that was clear as

038well so so those are not reflected in this because that's an internal service fund that would not be included here it's absolutely included in the act for and we'll go through some of those details later but in the government-wide net position they are excluded and they are reported separately okay okay so to begin the government-wide net position so this is the highest level and so if there's anything that you'd want to take away from tonight regarding that government-wide you take away then that position results for Gilbert Public Schools so note that the change in that position is a positive 54.6 million dollars that is a very significant Improvement but as it relates to that net position Improvement remember what happened so what is in there so most of it is in the general fund so

039the general fund is about 32 million dollars of that 54 million in the general fund remember it's not just m o we're including other funds in there such as the indirect fund is in there the the school plant unrestricted capital is now in that 54 million dollars as well so but most of it is that 32 million in addition remember that last February we sold 50 million dollars worth of bonds so we've spent a lot of those but we still had as of June 30 money money's available that's also in that change in that position and then also in this particular statement we it also includes oh what's the third main category um the third main category do you remember Jennifer can you help me on the 54 million dollars classroom site fund I'm sorry

040the fund balancing classroom site fund so all those added together resulted in that 54 million some of the details though remember that when we were in 2021 we we our average daily membership our student count dropped precipitate precipitously from 2020. we were down about 2600 ADM in 2021 again as has been our practice when we went into 2022 we assumed another 400 student loss but that didn't happen we actually gained back about weighted student counts that reflected an increase in our budget capacity of over eight million dollars so all those things contributed to that positive net position growth any questions on any of that before I move on I think I just wanted to make a comment on the classroom site fund there was a significant increase there was thank you for that as well

041right here in classroom site fund when we went from the 21 school year into the 22 school year if you remember the joint legislative budget committee indicated that our funding level was going from about 425 dollars per student up to 733 dollars per student and remember at the time they said but be careful because some of that is one-time money so much of that we've been very conservative in that spend as well because we knew that a significant amount of that was considered one time which led to that falling to the to the bottom of the um and contributed to that net position increase any other questions okay the other item and this is one of my favorite items and Jennifer did mention this so note that since 2012 I think school districts throughout the

042nation not just in Arizona were required to account for a proportionate share of their multi-employer retirement system trust fund on their financial statements so that's why it's shared at the government-wide because it's we would not be required to divvy up that dollar amount across your nutrition services fund or your custom site fund or your federal funds versus your m o fund so it's always shared at the government-wide level so you can see that Gilbert's net that Gilbert share of the Arizona State Retirement net pension liability is 225 million dollars so that negative goes against our net position interesting we gained 54 million dollars but we're hit with a 225 million dollar negative that's recorded as a it's over a hundred million dollars of unrestricted so it's a funny treatment what's also important about that is

043that it's not really ours we're not responsible for that we don't have to say save money if we were if we were to say that well we want to go ahead and give Arizona State Retirement 225 million dollars so we can get rid of our proportionate share all that would do is give them another 225 million dollars and we'd be paying off a portion of everybody's net net pension liability so um it's definitely Arizona State retirements it's just that the it's a gasby statement again that required us to include that on the government-wide statement okay so our proportion is 1.715 of the state and it increased by 0.046 reflective probably of the pay increases that we did were able to to give as well as the stipends between 21 and 22. any questions on that

044okay great so governmental financials as I shared earlier the governmental balance sheet funds include the general fund remember that the general fund is really close to our operating funds we include classroom site fund as our operating funds when we present to you monthly the general fund though does not classroom site fund has different rules so is considered a special Revenue fund but our general fund is mno it's Medicaid it's indirect all of those other funds that are very flexible that we have a lot of discretion over Federal projects is in its own column on the governmental balance sheet then we have Debt Service separated out Bond building and then that's the non-major governmental which includes all those special Revenue funds that I described so one of the items that's treated in the mdna the management

045discussion analysis is how Gilbert public schools has spent these governmental funds across that all that categorization so you can see that comparable to the otter General's report they show the spend by functional area so note that in 2021 a year ago we had 60 percent in instruction and in 2022 we had 58 percent in instruction so the growth occurred in the operation of non-instructional services so we increased that by one percent and then also operation of Plant Services was nine percent so two reasons for that first I wanted to make it clear that we did not decrease instructional spend we actually increased instructional spend but we grew in spend overall so on a percentage basis the non-in instructional the operation of non-instructional services contributed more greatly so that the percentage increased by a percent and

046then therefore the instruction decreased by a percent I wanted to make sure that was clear and remember that because of the universal free breakfast and lunch during all of 2022 and we were full in person in 2022 the amount of Revenue received in the in the nutrition service Services fund was over 14 million dollars which contributed greatly to that and of course we spent you know like 10 million so because we were we were providing breakfast and lunch for all the students whether they were free and reduced or not shins on that let me let me say that again so it wasn't that we decreased our instructional spend it was that when in comparison to the increase of the operation of non-instructional services for example the nutritional Services is in that operation of non-instructional services

047that spend increased significantly because of the universal free lunch so that increased their percentage and which then dis disproportionately well proportionately then decreased the percentage on a percentage basis of the instruction but dollars increased right so to just a simple example let's say we had 100 million dollars worth of spend in 21 and we spent 110 million dollars in 22 more of that 10 million dollars were spent in non-instructional Services okay to allow it to increase by one percent thanks so one of the things that we've been doing the last couple of years is we've been sharing how that how we can use that that pie chart to give us an indicator of how we're going to do with the otter Generals Report the classroom spending uh the classroom spending report so we wanted to

048share that in 2021 that same analysis it's on the right hand side that expense analysis that's included in the MDA mdna the management discussion and Analysis note that it reflects instruction of 60 percent when you look to the left that's the auditor's the auditor General's District spending report it shows instruction at 62 percent and when I say instruction it's purely in the classroom teachers teacher desks teacher computers student computers student desks paper pencils curriculum all that material is considered instruction it does not include support services for students it does not include speech language professionals or social workers or nurses any of that is not categorized in that so the reason I'm sharing is that that it's a nice predictor of how we would do in the otter Generals Report so we won't have that probably

049until the March or April time frame but know that the auditor general creates that report on the AFR and the treatments are very different they use different funds than the presentation in the mdna so I just want to make sure that was clear as well it's just a decent predictor Dr Santa Cruz Ms betz and just to clarify then using your example if we talk about actual dollars and if one were to compare the actual dollar spent in one year versus the following year we would see that the 22 dollars although the percentage was lower would either equal or exceed the twenty one dollars yeah it absolutely exceeded the 21 we definitely spent more on instruction but because those two areas also increased then we play a little game with the percentages correct okay but

050it's not really a game though I mean that's just my attention I just sarcasm anything else okay great so this is where we go through this exhaustive let's divvy up the governmental fund uh balance sheet and we'll give you assets liabilities deferred inflows outflows I can't remember which one it is and then final fund balances so you can see immediately that our cash is our greater contribute contributor to our balance sheet 215 million dollars compared to 148 million dollars a year ago so that's a 65 million dollar increase in cash property tax receivable a little bit less so we received more of our property tax within the time frame than we did in Prior years and then do from governmental entities 63.7 million dollars please know that that does include the delayed payment from the

051state of Arizona due to that cash rollover and then just other um other assets giving us a total asset of 290 from 218 so significant growth most of it most of which is in cash this bit sorry so can you just give some examples of the cash how why that's so much so so remember that when we that we're all based on a budget a budgetary basis we present everything on a budgetary basis and um and that's not really true with nutrition services so keep in mind that and and I will show you this later on but keep in mind that in 21 there was a total revenue of maybe eight or nine million in nutrition services and it went up to over 14 million in 2022 so that cash was still available that difference

052it we we didn't spend as much as that we spent more than we did in the prior year but we still grew in fund balance by about four and a half million dollars so that's where that cash is coming from things like that yeah and then even in our own m o fund balance remember that we reported just under 30 million dollars is fund balance in mno that's supported by that cash okay thank you does that help yep okay so these are the governmental fund liabilities not a significant change year over year just a little bit more than a million a million dollars 1.4 million dollars in liabilities you would expect that to happen just because of the growth in spend pay increases Etc so obviously the story is more on our revenues and and

053how much more monies we had available to us finally unavailable revenues property taxes so that amount declined so we had a really good property tax receipt year so remember that when we set the tax rate in August we're actually setting it for the um the future calendar year so we said it in August but it actually covers through December 31st of the subsequent year so we are receiving so the encumbrance period is through August 31st but we're still receiving property tax revenues from August 31st through December 31st and that's what that unavailable Revenue amount is so very limited and then unavailable revenues governmental that's primarily associated with our federal funds remember that all of our federal funds are on a reimbursement base basis we have to spend the money first and then we apply to

054be reimbursed for those monies from the state of Arizona and then finally um Jennifer mentioned this the leases the gasby 87 requirement so in our case we we have completely paid off all of our energy performance leases so that's not reflected here and we do have uh six months or eight months worth of Konica copier lease payments to make so that's reflected in that gasby 87 requirement but note that it's positive it's a 3.5 billion dollar positive that's due to our cell towers so we have roughly about 12 or 13 cell towers and operations throughout Gilbert Public Schools they all have contracts that go out 20 years so the requirement is to amortize all those revenues out 20 years because it's contractual they're obligated to pay it and so kind of trying to treat a

055school district in the same manner that you would a private company where they have a contract over numerous years that they're expecting to receive a revenue stream so that's the intent of that Gatsby 87. so that's a total deferred inflows of resources you can see that that's a little bit higher higher due to that 3.5 million dollar Plus so the conclusion then is you've got total assets of just under 290 million total liabilities of just under 60 million total deferred inflows and so you have a total fund balance of 214 million dollars which has contributed from 145 which represents that 54 million dollar growth so it's a real positive Year from a financial standpoint our bondholders would use this information to give them an idea of the fiscal sustainability of Gilbert Public Schools questions on

056that okay great so fund balances if you recall this is part of the story about what happened in 2022 we brought to you a request to change policy DB which is our budget policy we wanted to add a different category of fund balance because we wanted to allow for our schools our PK 12 schools to carry over unspent mno discretionary dollars so um in order to do that required a policy change that would allow us to assign that so they saved over the years you can see the total assigned is 20 million a hundred and fifty thousand dollars so 150 000 is the amount that was carried over from all of our schools from 2020 uh 2022 into 2023 so we've awarded that 150 000 and if you recall the governing board policy requires us

057to do that by September 30th so we have completed that that work the other 20 million dollars so we are in this tenuous time frame in which we don't know what the legislature is going to do regarding the aggregate expenditure limit so in order to ensure that we have had some resources available we are making the recommendation and um and heinfeld meech went ahead and put it on those assignments to hold back 20 million dollars in the aggregate expenditure limit as a precaution to ensure that we have monies available so remember that so there's a there's a big part of me that doesn't believe it will happen but you never know are according to our report our aggregate expenditure limit report our responsibility would be 48 and a half million dollars that we'd have to

058pay back so we would be a little bit less than half that we're holding in reserve and fund balance any questions on that so fun level the fun level definition so keep in mind this is where we're going to talk about each individual fund but we're not talking about every single one of those 35 or 40 funds however we have but these are some notable notable funds that we wanted to share with you so first mno and unrestricted Capital so recall that our mno and unrestricted Capital are considered our Levy funds so they are absolutely included in our apportionment calculation and the amount the amount that's the total amount received in both of those funds based upon this the statutory formula are then compared to the qualifying tax rate that determines how much needs to

059come from the local taxpayer versus how much is coming from the state of Arizona general fund coffers so if you look at 2021 our Revenue in both Eminem Capital was 247.1 million and note the revenue in 2022 was 265.1 Million remember that 2022 was the first year in which the district additional assistance which is the label of the funding that goes into unrestricted Capital it was fully funded and in addition as I said earlier we did realize that over 1700 increase in student counts which also contributed to our additional revenue on the mno side any questions on that and you can see how the sources are so note that in 2021 the state had 133.5 million dollar share and in 2022 had 148 million dollar share remember that between 21 and 22 the uh legislature

060or the jlbc I think the joint legislative joint legislative budget committee reduced the qualifying Levy putting more of a more pressure on the state general fund to fund education Statewide okay any questions on that okay so Food Services Fund performance we did spend a fair amount of time with you but I've talked about food service a great deal as they're a huge contributor to that non-instructional services that we talked about earlier also remember that in that non-instructional service it includes Community School in 2021 we were shut down for the first month and a half and very limited activity occurred during the summer in our vik programs and rentals Etc but in 2022 the community school ramped up and became almost normal operations so that that contributed greatly also to that on that instructional service increase

061but this is the Food Services fund again I just wanted to share whoops I wanted to share how that has changed over time and how this tells the story of what has happened over the last few years so note in 2019 we actually gained about 292 thousand dollars but we actually lost in 2020. remember that we still maintained all of our labor at the end of 2020 even though students were not in school and we were not serving any meals so it was very expected that that 1.4 million dollar loss would occur um we we obviously had enough fund balance from prior years to be able to weather that 1.4 million dollar decrease note in 2021 we're starting to go back to normal operations except we had the universal breakfast free breakfast and lunch so

062we're ramping that up more and more meals are being served to students in 21 and then you can see the impact in 2022 where we're full in school the whole year and all the meals everyone got used to the fact that oh good I get to go and have breakfast might as well have it for free and so all of those uh transactions increased accordingly this is yes just quick thought I I know that you said we didn't have any students on campus but we continue to have our staff which was what we committed to do that was 2020. that was 2020. didn't we though have places where we did have lunches and we had some of our staff serve that was that 2020 that was 2020 we did where we had curbside but not

063to the same level okay okay and individuals had to come and drive up and pick them up and all that so we did have some transactions though you're correct okay thanks [Music] this shows the Food Service Revenue Trend again you can see where 2020 was very limited 2021 you can see where we're ramping up on Revenue due to the universal free lunch and then 2022 again you can see the amount of Revenue increasing substantially so you would predict next year would not look as high as this and that's the reason why we've always been including 2019 we believe that we will be more comparable to our activity in 2019. okay thank you I did however receive some good news today for many of our our free introduced lunch students so the Department of Education just

064sent out a press release indicating that those that are free and reduced so those that are reduced will now be considered free and we will be able to feed all of them without the extra 30 cents for breakfast and 40 cents for lunch and those will all be reimbursed To Us by the state of Arizona so that's good good news for our families here's our meal counts again you can see the total reimbursable meals 5.3 million in 2022 almost 2 million more than in 2021 and 2021 was still significant we do expect us to go down to that 3.5 million dollar number like we were in 2019 in the current year and again this is just a graphical representation of the same meal trend and finally so if there's if there's no questions about the

065nutrition services or the Food Services fund I'll move on to the next fund that we wanted to share with you okay so I wanted to talk about the employee benefit trust this is notable as well because there's a couple of action items actually three action items for you at the end of the meeting this evening related to the employee benefit Trust so first I wanted to share the revenue and expense and you can see if we can go back if we go down let's see if I can show my cursor here yeah there's my cursor can you see my cursor I don't know if you can see it or not yeah you can see it so along this row you can see that at the end of 2019 the fund was in a um the

066start of 2019 the fund was in a negative position negative three million dollars and then fortunately because the change in that position we were able to gain by 5 million dollars in that 2019 school year we were able to turn that around to have a fun balance of 1.9 million dollars note in 2020 again making conservative estimates about premium increases Etc the fund balance increased to 11.1 and then in 2021 17.1 and in the current year 19.5 a couple of or in the 2022 year at the reporting Year we're talking about the 2022 school year this reporting year so remember that in 2022 we did make a small increase in premiums one percent but we committed to two premium holidays during 2022 where we actually gave that money back to our employees by um by

067just saying well you don't have to pay it because we're just going to take two pay periods less to put in our employee benefit trust so the change in that position you can see 2.4 million dollars the 2.4 million dollars would have been closer to 5 million had we not done those premium holidays recall that even in the current year fiscal 2023 you also awarded another premium holiday in October which we have taken care of as well again trying to manage that fund balance but making sure that we're increasing premiums appropriately to ensure the ongoing sustainability of the employee benefit trust which is why for one of those agenda items we are requesting that you um approve the changes to the exhibits regarding that risk Corridor how much money should we have available to us

068in the employee benefit trust so I think I shared this with many of you that agent Dutch over and I went to an ameriban conference this past fall they were sharing all the pharmaceutical drugs that the costs were skyrocketing and even in some cases just one patient with one serious illness let's just use hemophilia as an example that one patient could cost the fund as much as two and a half million dollars we have four of that we can draw down the 10 million dollars very quickly so the request later on when you approve the action item would be to increase the the lowest Reserve from 3 million up to seven and then the operating Reserve from about 8 million up to about 12. um also recommending that as we move through time we had

069this one-time occurrence called the covid-19 pandemic so we were able to increase fund balance that will probably never happen again so we're trying to make recommendations to you that would be judicious and make sure that as we are monitoring our claims and the changes in the pharmaceutical environment that we have the resources available to us so that was one statement regarding this net position at end of year are there any questions on that before I move on to the next comment okay then I also wanted to point out this negative twenty thousand two hundred and thirty six dollars that's reflected on our fund statement so if you recall last spring in collaboration with our Wells Fargo investment representative we brought to you the governing board a plan on how we can improve our investment earnings

070in the employee benefit trust knowing that we have some substantial reserves so note right next to it that we only earn fifty dollars in investment earnings in during the 2021 school year even with having uh 11 million dollars of reserves available so that was what precipitated our desire to give you an investment policy have you approved that and then do a proposal on investments so between we started in March April time frame and this is so March April of 22 to June 30 22. during that time we went ahead and bought Investments that were at say one and a half percent and we were going to hold it for three months or six months the maximum that we held was like nine months well during that time I mean a month later the Federal Reserve

071met and all of a sudden now it's two and a half percent so the gasby again governmental accounting standard board Standards Board requires us to present the market value of any Investments we hold at June 30. so if we purchased an investment for one and a half percent and now the market is going to pay two and a half percent that reflects an unrealized loss and that's what that twenty thousand dollars is but once we once they mature and we get it back it's no it's then becomes a realized gain so just because of the requirements we we had to post a negative but I wanted to make sure that in this audience I was sharing with all of you this is going to be out there on financial statements and that you're not thinking

072well Bonnie you told us that these were safe Investments and we lost twenty thousand dollars well I wanted to share that to date our realized gains are just under 40 000 and our realized plus unrealized gains are approaching ninety thousand so it turned over very very quickly this was a moment in time in which we were hit with the timing because June 30 was the time in which we had to capture that value any questions on that okay great okay so the other point I wanted to make about the employee benefit trust so during this time we so during 2021 we had the money placed in in and we now know in trust with U.S bank and when I saw the 50 dollars of investment earnings my reaction was oh my gosh we need to

073do something about that at that point in time we went ahead and engaged with Wells Fargo we have all of our other Banking and Wells Fargo maybe we should put all of this all this money into Wells Fargo keep the accounting simplified Etc so as we were withdrawing money from U.S bank and placing them into Wells Fargo we were informed by U.S Bank that they needed to know what the successor trustee was going to be and at that point in time I went okay I'm a little confused by that why can't we just operate a self-insured fund within Gilbert Public Schools the simple answer is we cannot because state law requires us to have a trust in play with a self-insured medical Fund in the state of Arizona if we are a school district so

074at that point in time in working with legal counsel I asked well what what what's the circumstance here what should we do so we were prior to with U.S Bank they were our Trustee of the monies held in the Mar in the money market but we still were very much operating by ourselves so we were we were getting our own financial statements we received banking statements from U.S Bank we were actually transacting outside of our Ledger during 2022 we moved all the transaction into our general ledger we can see what's happening regularly so before we had what is called a Viba trust it's called a voluntary employee benefit Association so under Aviva trust which is and more of an informal trust you have to have a bank trustee hold your cash so the next question

075was okay well do I have to go back and send it back which I mean when you look at minus twenty thousand dollars you'd look and say well why wouldn't you go back because at least they gained fifty dollars but no again that was an unrealized loss and as I said we're still doing quite well um to date um but at that point in time we really had made so many uh so many improvements to our financial reporting at that we already had an investment policy that we had shared with you and then we had already had a a reserving policy that we did a couple of years ago and so when I'm talking to Legal I said well what's what's my option and at that point in time they said well it's very simple

076to convert your Viba trust into a formal employee benefit Trust so at that point in time we worked and the documents are in the action item later on in this this evening's presentation and that formal benefit trust document requires five trustees one of which is employee one of which is a governing board member and then three at large community members so the second agenda item associated with this so approving the employee benefit trust agreement the trust agreement and then approving the trustees would be the second agenda item so those are the three items that will come to your attention at the end of the meeting during the action items and I'll give you an opportunity to ask any other additional questions regarding those later but I thought this was the appropriate time to present some

077of the details Mrs betz I might be jumping ahead of myself until the next until your next presentation but it's my understanding we are either the only one left or there's one other school district in the state that's Aviva trust and um I don't I don't know if we're the only one left with Aviva trust in the state of Arizona but I do know that we are the only one left for Siegel Consulting who is our consultant yeah I know that for sure so there might be another one I'm not quite sure right I think one thing that I wanted to ask and just have you clarify is we still have our money in a bank yes in Wells Fargo yes but what what happened what occurred was that their Wells Fargo did not offer

078the same Trust type of relationship that's correct so the history of the Viba trust has been um up and down over the last six years it's the last 10 years probably because we had a JP Morgan Chase initially as our trustee and then in 2016 when Mr wollaber was here they went out for bid at that point in time they moved it into U.S bank and all of these Banks seem to be getting rid of their trust arm and that was the case of Wells Fargo as well so our option was to stay at U.S bank which we haven't seen much benefit with them being our having our money in their trust or to convert to a formal employee benefit trust where we can have still see have oversight our money's still in a bank

079but we have more options as far as how we're going to invest it which is in a conservative manner but just not just sitting there earning fifty dollars for a year yeah and that's that's correct it also doesn't change how we operate so um Sean and I have talked about this Mr McIntosh and I've talked about this at length and we still are meeting with the employee benefit trust committee that will not change that group will still make recommendations regarding premiums for the subsequent year any plan design changes and any of that even recommending whether we do a premium holiday or not in the future the only difference is those recommendations would go through a formal trust Board of these five members and then they will you know agree to that recommendation and they would

080be the ones who would formally make the recommendation to the governing board the other important note is that the governing board appoints the trustees which is why that second agenda item is there for you to formally appoint the trustees the other thing is from my from my standpoint this because we now have all the activity in our general ledger it's much easier for Jackie and I to see what's happening on a month-to-month basis so I can tell you today because we just received the statement um Monday yesterday that we're still in a positive trend and our claims are still as we would have expected them and so we are able to see it monthly because we're actually creating the financial statements ourselves and all the transactions are recorded in our general ledger I I did

081want to comment that one of the things that's really important to me is that we still have that employee committee that meets monthly to go over the claims and benefits and make sure that we're in a strong position because I think it's very important for our employees to have input because that's that's very much affects their what they're paying for their benefits agreed and plus the fund balance has been contributed by employees and their dependent coverages so it's important that they still have an active voice totally agree yes thank you you bet may I make a comment on that I think that one of the things that we talked about is that if we go to this that we're going to be able to do a lot more education with the actual Insurance trust committee

082that's made up of employees in which they can learn more as opposed to every meeting being just a financial statement and you know whatever but where we're going to actually be able to do some some education education so that they have a firmer understanding of what the what the trust is about and I think that's a very positive way to do it I wanted to share too that the same employee benefit trust committee we did have the discussion with them we vetted the idea what were their concerns and at the end they were all very supportive of going forward and they were also very supportive of the reserving policy recommendation as well any other comments I would just have one other question so if we do have investment income how do you expect that to

083impact our employees so um so so we don't have the Reserves to make money that's not the goal but we didn't want to lose ground either but there are expenses associated with running our employee benefit trust so it's very possible that the the earnings on investments could pay for those administrative expenses which in the future will be limited if any premium increases for our employees so there are there are some some opportunities there for sure okay Michelle then two are in place so great okay thank you so um the bond fund we spend a lot of time on bond spend but I really wanted to point out uh this interesting little thing so in 2022 we had Revenue other miscellaneous revenue of four hundred and twelve thousand dollars that represents interest earnings on the 50

084million dollars or so that was held in our bond fund as you know we're spending money quite fast and later on you have a request to approve the bond resolution for a sale probably February early March of our final 18 million dollars but I wanted to point out that there's a transfer out immediately of the 412 thousand dollars because in order for us to be able to use the interest earnings in our bond fund we have to have voter approval for that and I don't know this for sure and I was planning on introducing Mr K wood later but Mr caywood is in the back um he's here representing Gus Rosenfeld who's who's created the bond resolution on our behalf but Brandon maybe you can share do you know if we are to get voter

085approval for to spend the interest earnings is it its own question in the bond pamphlet or can it be incorporated into the bond request you'd have to come up to the microphone please we have to hear you talk for the record sorry and I'm putting that I'm still putting you on the spot I'm so sorry but I need you to repeat the question again so the in order for us I know that we have to have voter approval in order for us to be able to spend interest revenues in the bond fund we have to have voter approval so does that happen in its own separate question or is incorporated within the bond request in that one question it's it's Incorporated in its own request so yeah so it's uh and the pamphlet's pretty you

086know large and Broad but yeah it's it's the inherent in there okay good so and so in here historically we have not requested to be able to spend the interest earnings but know that that 412 000 of Interest earnings goes immediately Into The Debt Service fund which offsets the taxpayer amount that goes towards servicing the debt so in addition I wanted to point out the issuance of school Improvement bonds so this this has contributed to that 54 million dollars we we sold 50 million dollars worth of bonds in February um we are we spent you can see above under the project expense you can see that in 2022 we spent nearly 30 million 25 million and 21 14 and 20 in about 20 and 19. so you can see that we're really spending the the

087monies quickly but it still left a fund balance that contributed about 20 million dollars to that 54 million dollar net position I talked about earlier you can see that we don't we didn't have a bond sale every year in 2020 if you remember that was the year in which we shut down for three the last three months of the school year um and it was in November of 19 of that same year in which we had the 2019 authorization in which the taxpayer approved our 100 million dollar Bond request and so then we have been actively selling bonds since then uh mostly because we needed it where you can see we're going through the spend fairly quickly but also that the interest rates the last time we did a bond sale which was February of

0882022 The all-in Tick the total interest cost was about 1.7 percent the year prior in 2021 it was 0.71 so in order to take it take advantage of these great rates we did it also was a a perfect storm we needed the dollars we were able to spend it quickly and we were able to get the bond proceeds at a very inexpensive cost on behalf of our taxpayer any questions on that okay so other items to note almost through outstanding Geo bonds and assess value so note that our outstanding projected principle at the end of this year is 152 million note that we have reflected here the 18 million dollar sale down from 162 million at the end of 21 and then our primary assist valuation continues to go down go up I mean and

089the good news is that our Geo debt to assess value ratio continues to go down so from 6.6 percent down to 5.9 percent so we're being judicious about our tax rate as well compensated absences we always have shared this with you all these are the value of our sick leave and vacation leave depending upon which employee you are whether you're a 12 month or a nine month or a 10 month whatever the case may be and you can see where we did grow in that compensated absences so we have a future liability of about 13.3 million dollars from 12.4 million dollars a year ago part of doing business also remember that the compensated absence concept is a positive one in this environment where we really want to keep our teachers and our employees in front

090of our students so this is an incentive for them to to stay in the classroom or or feeding our students in nutrition services or driving our buses to get our kids to school every day finally Arizona State Retirement so we've shared this in the past as well wanting to make sure it was clear to all of you that right now the Arizona State Retirement presumption is that the interest rate that they're earning on their Investments is on average seven percent so you can see that this 225.3 million dollars is our proportionate share of the liability again it's not our liability it's Arizona State retirement's liability we are just required to post that to our financial statements but note that if that interest rate could be increased to eight percent it would decrease our proportionate share

091by over by over a hundred million dollars that's amazing just by increasing eight percent and then a one percent decrease conversely would increase our proportionate share by over a hundred and thirty million so this interest rate has a huge impact and it's interesting um Ms matinin shared this this grid here at the bottom showing the Arizona State Retirement rate of return so in 2021 the rate of return is was 25.1 percent so um so due to that rate of return that was the last rate of return published in the current year they actually for the first time in many years decreased the Arizona State Retirement contribution but now because the earnings were only 1.21 percent they actually have already said that the Arizona State Retirement contribution rate will increase 424. so just so you're prepared

092when we get into the development of the 24 budget we will be sharing that additional cost associated with that contribution rate so the other reason why we really wanted to present this information so this is just um showing our contribution rate and our our total GPS contributions in history so we don't know what it is in the current year which is 2023 but you can see over time our contributions continue to grow this is reflective of the positive environment being able to provide pay increases stipends all that one-time stipends Etc so it's because of this 25 million dollars that has led to our contribution proportionate contribution going up over time but this also shows that in 2023 it wasn't in 22 it was 12.4 for the current fiscal year it's 12.17 but again directly related

093to that 1.21 increase at Arizona State Retirement they're making a recommendation to raise the contribution rate up again and though not to the same 2022 level so it's still not a bad story the other reason why we wanted to share more information about Arizona State Retirement is that we do have a request on the action item again for you to approve the um a pre-contribution of Arizona State Retirement contributions to the Arizona State Retirement Trust back in the spring of 2022 the legislature passed a law that allowed School District to pre-school districts to prepay their Arizona State Retirement contributions the specific action item requests up to 25 million dollars which is about our current contribution from 2022 so at that point in time then what happens is that we would make that contribution we would

094be we have the flexibility to use it with as little as 60 days notice and we can't ever pull it out so if we put it in we can't ever pull it out we would just decrease so instead of 12.29 say in 2024 we would say well we only want to charge 10 and that would start drawing down that prepaid balance so the reason for that recommendation is that we do have a significant amount of one-time money with the 54 million dollars in that position increase as well as the cash that's on hand this would give us an opportunity to use one-time money that could grow if we leave it in maintenance operations we are not we we earn interest but we're not able to spend it it doesn't increase our budget capacity and in

095this way if we had the flexibility of having it in Arizona State Retirement as a prepay we have an ability to decide one when we need to use it we could weather another down significant downturn in the economy we could weather it spread it out maybe for a year or two instead of having to hit it in one year because we have this money held in reserves at Arizona State Retirement and finally um it also will be invested with the same pooled money in Arizona State Retirement so again sharing this annual Arizona State Retirement rate of return so note that generally speaking they've never had a negative I looked back 10 years and they've never had a negative annual rate but even in 21 the 25 percent growth was was really significant so so there

096is a risk um 20 million dollars or 25 million dollars up to 25 million dollars would be invested with Arizona State Retirement it's a it's a good risk if we kept it in our m o fund we would not be earning interest on it and you could make a case that we would actually lose spending power because of the inflation rate in today so that's the final recommendation on the action items later on today yes I just wanted to clarify so when we're talking about prepaid that's the district prepaying their share of the Employee Retirement that's correct okay thank you the district paying their share and in fact when Ms Batten and I spoke about this we we decided that we're going to even make it cleaner and just have it prepaid out of Maintenance

097and operations and depending upon the approval on the consent regarding the Community School Department of Economic Security Grant any monies that are not used up with these stipends supporting employees that work for Community School that money we will designate as part of that prepay as well okay thank you so um that's it and you've asked a lot of questions ongoing so but if there's any further questions I'm very happy to answer them [Music] so this was for the action item with several action items you've addressed but um specifically uh you just covered uh sorry eight one one two and three okay and then also oh and the five that's why I was gonna say eight and oh six as well because the right the acceptance of the FY 2022 annual comprehensive financial report that's basically

098what you were just going through yeah you actually did you pretty much touched on all of this tonight so all the action items so we might revisit it no problems to ask any further questions but are there anything anything else right now I just want to make a comment I appreciate the work that's gone into this to it is a lot of financial information but it it is definitely a good review for all of us as we move forward to make those other decisions tonight so thank you thank you to you you smattening your department yeah I really wanted to thank Ms Matton and her staff because actually Jackie in particular because she is the the front line person I'm getting all the audited all the audit requests completed and getting all the work done

099so and with the new regulation regarding the cell towers and the rental income that was quite a heavy lift thank you seeing no further questions at this point great we appreciate it thank you thank you we will now move to the consent agenda items 7.01 um board members is there a motion for the approval of consent agenda items I moved to approve the consent agenda items is presented thank you Miss Humphries it's been moved is there a second second thank you Dr Santa Cruz it's been moved and seconded that we approve the consent agenda items as presented all those in favor please vote by saying aye aye aye any opposed with nay thank you that passes by zero that will take us to the action items which we're just discussing um and let's start with

1008.01 revision of EBT reserving policy exhibits Dr McCord thank you madam president governing board member as presented in the presentation just a moment ago Ms betz talked about some of the changes not necessarily to the policies but to the exhibits as it pertains to the reserves and increasing those areas and Miss betz will answer any questions related to that so miss bet specifically this EBT reserving policy exhibits this is to just tell us what the reserve value is currently as well as then there was a change to the minimum the recommendations for a minimum and a operating numbers is that correct right so this is exhibit um EA so this is relevant to the ibnr so part of our reserving policy indicates that we shall always have the ibnr the incurban that reported fully funded

101within our our financials every month and so this happens annually we have the calculation done every year actually as part of our audited financials we need that Actuarial calculation and so it will change every year the other the other thing is I wanted to make sure that all of you were always prepared that we would always bring at least exhibit EA back to you annually at this at this time once it's once the new value is calculated then the second the second exhibit is it there can we put the exhibit EB up and this one is that risk Corridor or that is the management of the reserves pretty much so increasing them um the low uh changing the minimum Reserve um from four up to I think it says seven I think it says seven

102if it doesn't the operating Reserve is 12 million um if I can make a change there it really should reflect the the four million was the is the ibnr and it should reflect 7 million so if we could change the action item to reflect that the minimum Reserve is to be 7 million and then the medium or operating Reserve is to be 12 million I apologize for that error is that is that the 7 million as opposed to the four million one hundred correct okay yep under the the low below Reserve or the minimum Reserve so basically what it's saying is is that not only will we fully fund the ibnr but on top of that we will have seven million dollars in reserve up to 12 million dollars operating in those ranges so do

103we need to change the formula or it says minimum Reserve equals one times the ibnr calculation should it be yes it should yes five or so there are two or what is yes it basically should say the minimum Reserve shall be seven million dollars shall be seven million dollars yes okay so you'll just scratch out that formula I will fix that um if we can reflect that in the minutes apologize Ms Wilson that's what I shared with you in the board report was seven million and 12 million yes so sorry so this is this is a policy though that will come back to us again this is just the exhibits the policy did not change okay these are the associated exhibits okay so we won't have a second read or through the committee this is

104just as part of our this is an exhibit which we're just bringing yeah which doesn't even technically need approval but we but because it's wrapped up into everything we're doing we wanted to make sure that the board put their eyes on it and all agreed to what we're doing and you took this to the insurance the insurance board the trust yes and we also we also took it to the audit and EBT investment committee and shared it with them too then I think you can confirm that Mr Parker yeah we did we discussed it in the audit committee and concurred okay okay so board members so that we may have a discussion any further discussion can I have a motion on the revision of the EBT reserving policy exhibits EA and EB as explained by

105Miss Betts tonight would that be appropriate yes I move that we we uh approve the revision of the EBT reserving policy exhibits which would mean that there would be a change from 4 million I can't see it right now to 7 million and it will be reflected in the minutes by Miss by Mrs at Wilson all right that's been moved is there a second second thank you miss you jetty and thank you Mr Parker it's been moved and seconded is there any discussion Madam president just a clarification so are we taking action on only item 8.1 or is it 8.2 inclusive this is just 8.1 but there were two exhibits each exhibits there yes thank you Dr Santa Cruz for that so this is just 8.01 but has been that we're going to be voting

106on And discussing right now is there any further discussion then I just have a comment to make that I appreciate that you brought this to us as an as a a vote even though it's a policy because it is so um very important you mean even though it's an exhibit even though it's an exhibit I'm sorry did I not a policy I'm sorry yeah I apologize for that that's good wow and and it is a a big change in the amount of money that we're going to be needing to reserve so I think it's good that we are involved as board members to understand that so can you explain how you came up to came to those numbers again you might have already mentioned this but how did you come to the 7 to 12

107million so um upon discussion with both the the employee benefit trust committee as well as the audit committee audit and EBT investment committee the question was what should it be and so um then we met actually with the employee benefit trust committee and Ms Siegel from I mean Miss Khaleesi from Siegel was there along with our representative from ameriben so I had asked Miss Khaleesi earlier if she would give us a recommendation regarding what those reserves should be so she went back to her Actuarial analyst team and asked them to do what she called a stochastic calculation looking at all of our spend over the last four to five years and the result of that was that minimum of seven million dollars up to 12 million dollars to give us that 95 percent confidence level

108so that was one piece of information in addition the representative from ameriben who has been our a consultant for medical funds for for over 20 years said that she has some clients that actually have a reserving policy that calls for six months of claims activity so our claim activity is right at two million dollars a month so 2 million times 6 million would be that 12 million at the high end and so the two pieces of information were very consistent and so that's how we arrived at those two levels okay thank you could I just ask that not now because tomorrow starts our Christmas vacation but at a later date could you just with the correction send this exhibit out to us oh you bet we'll divorce it away it'll be there tonight yeah okay

109we'll send it so that we have the correct language thank you yep all right board members seen no further discussion on this revision of EBT reserving policy exhibits I will call for a vote all those in favor of the revision of EBT reserving policy exhibits as presented by Mr Jetty in in the motion please vote by saying aye aye if there's any opposed with nay okay past five zero thank you that will take us to 8.02 establishment of a formal employee benefit Trust Dr McCord thank you madam president governing board members action item 8.02 established from a formal employee benefit trust EBT the district May pursuit of ARS section 15-382 in section 15-387 provide for self-insured and or Insurance programs if it deemed such action to be in the best interests of his employees under

110this program The District district and or employees will contribute Monies to a trust fund to be held for the benefit of the employees in accordance with a trust agreement foreign and this is a copy of the trust agreement Miss betz would you like to put anything else into this or so we currently already are in a trust our employees already have invested in this this isn't changing that in any way correct this is just changing from the vbt Viba to this formal employee benefits trust okay that is correct okay board members may have a motion and then we can discuss this so moved thank you Dr Santa Cruz it's been moved is there a second thank you Miss Humphries it's been moved and seconded that we established the formal employee benefit Trust is there discussion

111I'd like to make a comment again okay I've been involved with this for a couple of months I think it it is where we've we've met and discussed and um I think there's been a lot of discussion pros and cons you know what what would happen if what would happen if that kind of thing I believe that that we all of our answers all up you know every question was answered um and I appreciated the process that we went through and I know there was a there was some nervousness about doing this but I think in the long run it is absolutely a huge benefit for our district Plus like as I asked the question about the other districts there's very few districts that do the EBT anymore and are going to this or have

112been doing this for quite some time and it would it makes Financial or financial sense and it also um I know that Mrs bet spent a lot of time with our attorneys trying to get everything in order exactly the way it should be so I'm just going to tell you I support it thank you I yes go ahead I was gonna say I I appreciate that you went to the various committees and got everyone's input and explained it to them because I think that's really important um as we move forward so thank you I guess my final question would just be misvets do you feel like this changes the risks of a trust you know and of what what the employees have been putting their benefit their money into before in any way by changing

113it to a formal employee benefit trust from the Viba so um when uh when I first engaged with a legal counsel the first thing they asked me is well do you ever the first thing you're going to have to do is you're going to have to have a reserving policy and an investment policy and I was able to say well we already have that well that's good and I was able to send that to them so that they had the documents to create the formal trust so we were already moving in that direction but we're moving in that we've always been moving into a more conservative Direction so remember that the employee benefit trust is the fiduciary now for this for this trust so they are the ones who are held responsible for the financial

114sustainability of the money operationally we we in finance would still be doing what we're doing we'd still have all the Committees doing what we're doing we even went so far and I think you can share this too Mrs eugetti to ask the Consultants to sort of ask the American representative as well as the seagull consultant so tell us what it looks like when you have a trust member that goes Rogue so that we have an understanding of what happens and they both said normally what happens is you get a trust board member who is also a part of a an insurance company and they want to try to Direct business to the insurance company under those circumstances remember that you as a governing board can make a recommendation to remove an individual because the appointment

115is totally in your hands so the governing board at any point in time can remove or replace a trustee okay thank you I think what the thing one thing that I like about it is as you mentioned before you've been now moving this into the general ledger all along at this point and I feel like there's more transparency there's more uh I think just we understand better what's going on and so to me it's a it's a good thing to have that closer to closer to the decision makers as far as our board and um I'm saying the trustees you know and just have all of the different people involved with that so I see it as a benefit as well when I think what Mrs eugetti said earlier is an important note it gives

116us an opportunity to spend more time with our employee benefits trust committee on educating them so that they understand well shoot what's the plan design and what are the limits of how much we're covering and so they can focus on that to better help us educate all of our employees they can be ambassadors out into the school system great board members is there any further discussion or comments no okay CNN I will call for the vote all those in favor of the establishment of a formal employee benefit trust and EBT please vote by saying aye aye any opposed with nay thank you that passes five zero that takes us to 8.03 the appointment of employee benefit trust EBT trustees Dr McCord thank you madam president governing board members we have before you has just discussed

117uh request for the appointment of employee benefit trust trustees based on the advice from legal counsel a formal employee benefit trust shall have a minimum of five trustees in which one shall be a GPS employee another trustee shall be a GPS governing board member and the three remaining trustees shall be community members at large all of these individuals have been contacted and have expressed their agreement to be appointed as trustees to the employee benefit trust those proposed trustee board members are as follows GPS employee Bonnie Betts which is a four-year term Community member Reed Carr three-year term Community member Mark wheach three-year term governing board member Sheila eugetti two-year term Community member Dr Charles Santa Cruz two-year term once appointed these individuals be asked to sign the attached trustee agreements thank you board members may

118have a motion so move thank you is there a second second it's been moved and seconded that we appoint the employee benefit trust EBT trustees as as just shared is there any discussion um I I do have a question on that when we have appointed someone um can they come up again for another term or is there a limit on terms or what what exactly is in mind for this so my understanding is that they can still be put up but they would have to be reaffirmed at a governing board meeting so um yes they don't they don't have to end at that point in time there's no term limits there's no term yeah no term limits right okay so it would again it's at the behest of the governing board okay I I would

119maybe at some future time like to see some turn some term limits as an opportunity for more input from other people I just think that's a a good idea but I want to go ahead and approve this tonight I don't want to have that be a a challenge so I just having my input thank you Mr Freeze is there anything further Madam president just as a matter of information I would to avoid any perception of any conflict I would vote present with an abstention thank you along those same lines is it okay for me to vote since I'm a I think since you're an official board member and you're representing I mean you're being on the committee as a board member right but I can see Dr Santa Cruz since he will be on the

120committee as a commit as just as Community member okay so again there was some outlining of of how the that that the board did have final say in how people were appointed and different things like that is there any more specifics on that that we should come up with or I I personally don't think that now you need to do I think I think we go into this and as we move through the process and and if we something might hit us a little bit differently that we might want to address okay it's fine with me okay if there's no further discussion then I will call for the vote all those in favor of the appointment of the employee benefit trust trustees as shared tonight please vote by saying aye aye and we know that

121Dr Santa Cruz is abstaining any opposed with nay thank you passes 4-0 now that takes us to 8.04 resolution authorizing the issuance and sale of school Improvement bonds Dr McCord thank you madam president governing board members as Ms Betts pointed out earlier we are asking you to consider if deemed advisable to adopt resolution authorizing the issuance and sale of school Improvement bonds the district the amount of 18 million dollars I I will not read through the resolution because it's like many pages long but um you guys have been through this process before you understand what that encompasses thank you board members may have a motion I move that we approve a resolution authorizing the issue issuance and sale of school Improvement bonds thank you Miss Humphries is our second second thank you Mr Parker it's

122been moved and seconded board members is there any discussion I I think that um just a reminder that we've been able to do some wonderful things to for our schools to keep them in good condition and in looking nice as a you know a benefit for the community and that our voters have been very supportive on this and we appreciate that and moving forward with this sale I think it's important to just be a reminder that the does provide a lot for our district so appreciate that and I'll just add to that that we have we have spent it as we had prescribed in the original bond in the pamphlet when we went out for it because that's part of it is you spend spend it as you've agreed to so I think some Financial

123opportunities arose during that time too that really benefited the taxpayer as well as our students and our staff of the community and so we we were in positions to take advantage of that and um yeah I think it progressed a lot quicker than what we anticipated but I think in the long run we're saving everybody a little money in that process so I guess I would just ask Miss betz we'd still do have some monies left over for the rest of this year so why are we approving this final 18 million this is the final this is the final Bond sale from that 2019 why are we proving it right now tonight um so um so one of the things we wanted to um approve it as early as possible to give flexibility to our

124financial advisors and the underwriters to try to figure out the best time to sell the resources the uh the question that that they have asked me is well bunny when do you need the money and I said well based upon our plans we're still we're still in the midst of completing some of the projects over the summer we still have cameras that we're still installing we still have the audio visual refresh that's ongoing all of those items along with the operational needs so we in order for us to get through the summer we absolutely need the resources okay and this just gives you by us approving it tonight gives you the flexibility to go out when whenever it's the most advantageous right to yeah to our ours to the cell yeah so it's kind of

125funny so on the one hand I want to have high interest earnings in the employee benefit trust but I want to have really low interest when we're selling bonds so that's an interesting being in the middle that's kind of interesting okay thank you I appreciate that is there any further Dr Santa Cruz yes yes Madam president just in support of the commentary made by both Mrs Humphreys and yourself uh I think this is a judicious move because it certainly is consistent with the override pamphlet and the verbiage therein and it is as we have said all along an improvement in protection of the community's investment in its schools and Facilities so I would be very supportive of approving this item thank you is there anything further seeing no further discussion I will call for the

126vote all those in favor of approving the resolution authorizing the issuance and sale of school Improvement bonds please vote by saying aye aye aye any opposed with nay thank you it's five zero that takes us to 8.05 prepayment of the Arizona State Retirement System asrs annual retirement contribution Dr McCord thank you madam president we're asking for your approval of this agenda item pursuant to Senate Bill 1082 and as Arizona revised Statute title 38 737 the Arizona State Retirement System has implemented an Innovative program for employee employers to voluntarily prepay future pension contribution obligations while maintaining future budget flexibility the contribution prepayment program CPP is a voluntary program available to asrs employers the CPP allows the school district to maintain budget flexibility by allowing employers to determine when to utilize a prepaid CPP balances possibly during

127future economic downturns when budgets are more restricted employers May deposit a lump sum payment in the asrs which is credited with actual asrs investment returns employers determine when in the future to utilize their prepaid contributions utilization occurs when an employer decides to offset their future contribution payments employers determine the length of time amortization period over which to utilize their prepaid contributions during the fiscal year 2023 Gilbert Public Schools is requesting to prepay up to 25 million of mno-funded future asrs contributions any pre-contributions made to the asrs trust pool will be invested pursuant to their investment policies and so there exists some risk to loss of principal below the nine-year history of the annual rate of return realized by asrs note that these have not been a single year there's not been a single year in

128which the Investments have not had some investment earning increases overall asrs outperforms more most comparable organizations throughout the nation and those rates were reflected in Mrs BET's presentation earlier thank you Dr McCord board members is there a motion so moved thank you miss you jetty is our second second thank you Miss Humphries it's been moved and seconded that we approved the prepayment of the Arizona State Retirement System annual retirement contribution is there any discussion well I guess I would like to ask Miss Fitz I have a couple questions so I guess for my part I've asked for the last year or so every time that you say there's a balance carry forward and it's been more significant this year in the last year or two specifically I think because of the Esser funds it's one-time

129funding but I'm but I've kept asking what would be the plan how do we spend it because I I want to be judicious I want to but I want to spend it in a way that benefits our students and staff I also want to address the needs that Esser was actually spent for you know to or given for to make sure that we had stability and address all the complications during covid I guess so all of those things have kind of been going through my mind so I guess I just want to um just to know what was your thought as you came to this how does this make how does this address I guess those questions that I've just asked or in your mind how is this the best way to spend this one-time

130funding that we have or to not spend it but to allocate so um I think because of the one-time nature of the budget balance carry forward in mno and we and we know it's one time because it's directly related to the Ester monies that we received and we spent them fast to build up that that Reserve balance so having an opportunity to pre-fund a future contribution which we know is going to exist allows us to use this this one-time money to spread out a future downturn in the economy so one of the requirements or um or reasons for offering the Esser monies was to maintain staff so if you think about it by prepaying the Arizona State Retirement contribution we are offering another year two three years of bridging a downturn where we wouldn't have

131to cut you know so many staff members in order to balance our budget we would be able to do it incrementally at the same time time have the advantage of having those monies invested where we actually receive some investment earnings giving it even greater value just doing a quick calculation I know that it was incredible that in 2021 Arizona State Retirement earned a 25 return but on our let's just say it was 20 million dollars that's what is that 4 million that's four million dollars of additional resources that would be credited back to um to Gilbert Public Schools so it just it just made sense I think to us in in finance to best to utilize that that balance and sharing it with leadership team too we all we all agree this is the best

132way for us to use that one-time money and make it last longer [Music] I think allocating those to uh this to the asrs is it frees up our ability to look at other funds differently and how they will directly impact students I also think that if you'll notice it says up to 25 million if things don't go well with AEL coming up here in March and let's say we have to give back 48 million dollars um we will forego this and and be able to utilize that money in different ways that's not how we want to utilize it but um it'll help mitigate us going forward at least getting through the rest of this school year so we have options when it comes to this um but I think as we can't predict the future

133um as we have changed leadership at the state level we can't predict necessarily where we'll end up in the next year or two so we have to in in a sense protect our students and our staff and this is one of those ways to be able to do that I think it was interesting we had a joint conversation with Paul Matson and a couple of his staff members at Arizona State Retirement he's the executive director of Arizona State Retirement and his comments were this was this occurrence of the pandemic was a once in a lifetime occurrence so it likely will not happen again but there are many school districts and employers throughout Arizona that have that are sitting on substantive amounts of um of fund balance one-time monies and actually Arizona State Retirement went in

134and advocated for this law to be passed for that very reason and they agreed to take on the responsibility of keeping school districts money accounted for and applying annual interest earnings to those monies as well so I felt very very positive personally after speaking with Mr Matson that this was well thought out and uh and when he expressed the flexibility of we can we can start using it 60 days from now I thought that that really made a big difference too on on the flexibility that we would be afforded into the future yeah Mr Parker just for the benefit of uh anyone who might not be familiar with asrs my understanding is that half the contributions that go come from the individual and the other half comes from the school district that's correct so and

135and we're talking about the 50 that the district puts in uh my understanding also is that currently that money that that we put in as a district we're going to have we're going to have to put it in eventually anyway for for those employees that's correct this enables us to actually draw interest on those funds and be able to use them appropriately so I think it's a great idea thank you anything further yeah I guess my one last question would be um just in how how would you say and I know I asked this regularly Dr McCord okay how would you how would you say that we have used the Esser to the funds that were given again to address um to address the teachers to address the student learning loss to address the other

136challenges of covid can you just give I'll give you like just something off the top of my head and one of the big ones I think there's there's been retention bonuses that have been handed out and the question well how does that help kids well it helps keep trained Professionals in the classroom and I think that's one of the biggest assets of this I think it's really difficult to say I bought this program or I bought this material that readily really helped out learning loss the best component to help out learning loss is having the very best people in front of our kids and so a good portion of that money has went towards our staff over the last couple years and so that's what that's how I kind of answer your question it's good

137and I know it's hard I think people look for direct things not just here but out there and I think that's why you're asking the question to say this money this program turned to this around well if it was that easy in education we'd all be millionaires could we come up with our own programs but it really is about that trained individual who cares about kids every single day up in front of them and we need the very best and so I think we've helped mitigate losing people to other places I've gone to different campuses we've had we were able to have the flex Subs cribing that was directly that was partly that was part of that yeah part of that we have Flex Subs at every one of our campuses multiple actually at some

138campuses and that really helps out with uh making sure those individuals are are paid well for being a flexible substitute and being able to be dispatched in other areas of the district if we run short on Subs because if we've learned anything over the last couple years is that finding quality substitutes is extremely difficult so this was our way of keeping them within our system keeping them busy on a daily basis and again they understand how things operate in Gilbert so it took a lot of the guesswork out for those people that show up for those kids when our employees can't be there that was another thing I think okay I I think we've done we have addressed it and we've used it we use it for supplies during covid we used it for um

139custodial systems don't don't freak it out that was deaths we were wiping off every day oh yeah we've done the summer sessions the intercessions we've we have a tutoring and that tutoring I think we really work to look and put money as as efficiently and effectively as we can to where it needs to and and this I think is still is another way to do that because basically it gives us flexibility so I like that you've come up with this plan that we don't just have the money sitting in our account not earning interest not with a not with it designated to do something for us this does something for our students because it helps our teachers and it will it helps a fund that we have to pay to have our teachers here and

140then it allows flexibility going forward to other funds just as you guys have all said just as has been mentioned okay great if there's anything further Dr Santa Cruz just a comment in complimenting what your last thought was sometimes the benefits that students derive from the fiscal responsibility held by the district is indirect it doesn't always create a linear path to the student but when you look at the full comprehensive View 60 percent of the budget in the instructional line is nothing to laugh at and all of these additional pieces only support that because we're not needing to spend from that 60 percent to try to keep quality programming and Personnel in front of those young people who so desperately and eagerly want what we have to offer thank you seeing no further discussion I

141will call for the vote all those in favor of approving the prepayment of the Arizona State Retirement System asrs annual retirement contribution as explained tonight please vote by saying aye aye any opposed with nay thank you that passed five zero then 8.06 the acceptance of FY 2022 annual comprehensive financial report and that will require a roll call vote but Dr McCord thank you madam president governing board members I won't expound any more on this that was uh the presentation that Miss betz went through I just will say that um this document there may be minor typographical edits but there won't be any material Financial edits that will be made so with your acceptance as a roll call uh we will move forward and get this transmitted I think it's by February 1st is that correct

142I'm sorry when is this due by February 1st is that correct um in order for us to be eligible for the financial excellence and financial reporting it's December 31st December yeah December 31st statutorily I think it has to be completed by February 28th March 31st a lot of dates are we going to get it by December 31st yes we're going to have it done by December and then we're going to win all the awards and we're going to win all the awards yes sir see you heard it here guaranteed it gets better every year thank you thank you Dr McCord is there a motion I'll move to accept the FY 2022 annual comprehensive financial report second thank you Mr Parker and thanks Mrs eugetti is there any discussion Madam president just again a comment I

143think the collaboration that has manifest and exists between our financial staff and our auditor the shields in particular uh has created some efficiencies within the financial structure of this District to make it a healthy vibrant financially solid place in which to do business and I would like to complement them for that collaborative effort and to thank Miss shields for her efforts in working with our staff in that regard and I wish them continued success in their financial Endeavors and keeping this District solvent and strong thank you Dr Santa Cruz is there anything further Shields you get Hazard pay when you come to Gilbert what are you good we're just checking all right so I will then see no further discussion I will call for the vote for the acceptance of the FY 2022 annual comprehensive

144financial report Miss Wilson will you do the roll call vote please all those oh you say it then right Dr Charles Santa Cruz hi Mr Bill Parker aye Ms Sheila eugetti I Miss Laurie wood I miss Jill Humphries aye album remembers voted I oh thank you Miss Wilson thank you all thank you that will conclude our action items for tonight um we will now go to 9.0 requests for future agenda items board members is there any requests as always please let myself Dr McCord or Miss Wilson know if there's anything for the future that will take us actually we'll now go to the superintendent's report Dr McCord thank you madam president governing board members again thank you everybody for being here tonight tonight's almost over winter break has arrived and I want to acknowledge and

145thank our students teachers support staff administrators and families for a great semester of Education I'm genuinely grateful for our community and how they support the education of our students we are incredibly fortunate to live work and learn in Gilbert and East Mesa tonight is our last governing board meeting for Dr Charles Santa Cruz and Mr Bill Parker collectively collectively they have served students families and parents for 69 years Dr Santa Cruz for 46 years and Mr Parker for 23 years Mr Parker you have served on the governing board for the past year and a half you stepped up and went through the interview process to replace Mr Reed Carr you have been exceptional your military and education experience have been precious and I appreciate how you approach each situation with an open mind and an

146open heart Mr Parker thank you for your service not only to our country but the success of our students and public education Dr Santa Cruz you've served on the governing board for the past eight years you were a classroom teacher and assistant principal and a principal your last paid position in Gilbert Public Schools was that of the principal Gilbert High School I was an assistant principal for you back then during 1999 to 2001. I can't begin to tell you how much okay [Music] it's getting late I'm getting choked up sorry can't begin to tell you how much your leadership and mentorship meant to me then and means to me now thank you for Lending your skills to this board our students and our community for the past eight years those eight years were not necessarily

147all Grins and Giggles but having you as part of this governing board sure made things much easier you're a true gentleman who's extremely intelligent and most of all dedicated to education thank you Dr Santa Cruz I appreciate you and love you thanks Dr McCord we sure appreciate your service and I add that as well thank you for the years of service both of you in public education and Dr Santa Cruz especially here in Gilbert Public Schools appreciate you very much I would like to say thank you to Mr Parker um having served on this board for six years now I it's been a pleasure working with you the last couple of years I think that our board is um should be a model board if you look at board meetings around the country and around

148Arizona and some of the nonsense that goes on at them and we have never had that happen among ourselves um and I I you know I was a little nervous when he came on board because we'd had Mr Mr Carr but you've been you've been delightful and it's been delightful to sit by you and to get to know you Dr Santa Cruz I might get emotional too um I'll try not to but I think I've known you most of those 46 years maybe not the first year for you few years where you were in Tempe and I just want to say your expertise your caring and your dedication to the students of and the parents of Gilbert Public Schools is second to none and um I guess I'll still be serving with you on the

149insurance trust committee so you can't get rid of me that easily you know you thought you were going to get rid of me when you retired but it looks like we'll be working together so between the two of you I can't tell you how much I've appreciated having the cohesive board that we have had mutual respect all of us I would like to well I I also want to add a few words of thanks um both of you have worked very hard added some very great insights to our board um Dr Santa Cruz and I have served together these eight years and and when he came on the board it made a huge difference in that we could start focusing on kids instead of having a dysfunctional board so I very much appreciate his election

150to office and um you'll both be missed thank you very much for your work and I hope you hang those plaques proudly on your wall and and share some stories about Gilbert public schools and and still continue to be involved in um advocating for our Public Schools thanks but please don't share all the stories that's it okay well we will now have our board committee reports oh Dr Santa Cruz okay Dr Santa Cruz you know it's difficult for me to keep quiet but I do want to say that it has been my pleasure and a privilege to work with five board members actually six who care about what happens to young people and teachers and staff in this District and you for including Mr Carr V have been a pleasure to interact with it has

151been my privilege to be associated with so many fine Educators and staff members and it has been really worthwhile to listen to the perspectives that you bring to this District I said when I began my stent on the board that a governing board must Embrace consensus and Trust I think we have done that must nurture a culture of accountability and support the efforts of Educators staff and staff in preparing students for the world beyond our school doors I encourage you to continue in that effort I know you will thank you very much for your kindness and for your wonderful sentiments when uh I was appointed to the board unless you get a uh gave me a call all the board members were very gracious and call me and her comment was she questioned my sanity

152uh you remember that and I told her I was a retired Marine so she didn't have to worry about that but it has been a pleasurable experience and you know I don't have the silver tongue that that Dr Santa Cruz has but I I will say you know a great group of people in this District I alluded to that earlier the the staff here is Top Notch he's got a good superintendent and and I work for a lot of them uh it's probably the best one I've ever met well thank you and the board members here I couldn't have asked for uh better group of people to to bring me in to the fold and and help me out and the short time I've been here so I would just like to also express my

153appreciation to the staff The Faculty members in all the schools the students and the parents uh so thank you and have a great time [Music] anticlimatic but we will have a board committee reports now starting with me 10.01 Gilbert Education Foundation I just wanted to let our students know that the Gilbert Education Foundation student scholarships are open and they close March 6 2023 to find out more about them please go to g e f a z dot org and apply there's all different types of scholarships for all different situations of students so please uh please go ahead and apply that's my um that's my announcement from the Gilbert Education Foundation thank you um 10.02 city of Mesa liaison and legislative representative Miss Jill Humphries um I'll just share that the asba annual conference was last

154week also a new board member orientation and I was able to attend those and came away with some very good information and some good interactions thank you 10.03 town of Gilbert liaison director Santa Cruz nothing to report thank you finance and audit committee Mr Parker we have not met thank you 10.05 Insurance trust representative Mr jetty I think Mrs Betts stole my presentation tonight thank you that will take us to our 11.01 meeting dates Dr McCord thank you madam president governing board members will kick off 2023 with a board meeting and organizational meeting on January 10th a policy committee meeting on January 24th and a board business meeting on January 31st those who are not going to be with us for that and welcome those who will join the board shortly we that takes us

155to adjournment um thank you again for being here board members and those who've attended with us who've helped us with our business tonight those who are watching online or what you're recorded we appreciate your your attendance as well um I will call for an adjournment then is there a motion I think Dr Santa Cruz and Mr Parker should do this excellent excellent uh I will move for a German second thank you it's been moved and seconded by Mr Parker and Dr Santa Cruz that we adjourn all those in favor please vote by saying aye aye aye thank you good night