Board of Education Budget 1-23-24

001M Mr pres m g here M here M Mosen here thank you please stand for the pledge allegiance pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible liberty and justice for all thank you if there are any audience members that would like to speak it does not look like it so thank you for coming this is the public budget review and discussion regarding the superintendent's recommended budget at this moment in time I am going to pass the microphone over to the chair of Finance Dr herrian thank you and I am going to pass the gavl right along um first uh Dr Solen could I have you give us a brief explanation of the order of these meetings these budget uh

002meetings um because we missed last Tuesday's first meeting and um that's being and uh just to give us give the audience an outline of what's to come after today sure thank you Dr Aran um the is as you just said we had the overview of our budget um way back uh even remember when that was because of weather unfortunately if you're watching don't know we do have a two-hour delay tomorrow on uh Wednesday the 24th so uh sorry about that but anyway uh tonight we're here to talk about our operations and uh with a special By Request uh dive into medical benefits uh we will transition on uh Thursday into kind of wrapping up our overview of the operations uh and do a bit of a dive into special education and kind of the costs

003associated with and uh the outcomes uh associated with because we're really pretty proud of that investment that we make in our students and their families and our our staff there um and then we are hopeful that by next Tuesday we can begin in Earnest kind of deliberating what this means and uh starting to make some decisions about uh what we might put forth for the Town Council to review in the spring uh and Vin will you know quickly touch upon these things uh that same sort of schedule in his presentation so I welcome up Mr [Music] masana thank you Dr Solen members of the board welcome administrators welcome I wanted to start with just a couple of words this is a milestone budget for me and Mr perini this is our 15th budget that we've

004worked on since 2010 so we're both here we're in this together we're in it together I have at least one more left how about you um and then the other thing I would like to let you know is in addition to our administrators tonight I have Heather Santi our finance manager I know that you've heard Heather santi's name I'm not sure everyone has met Heather and including our our new board members but Heather is instrumental in the development of the budget for the last six years so she's here tonight as a subject matter expert if we need it right Heather okay good so I do have a PowerPoint presentation and I will take you through the first few sections of the budget book um which the board members have we won't um necessarily refer to

005it in detail but certainly if there are questions as we go through each of the sections that you have on the budget book Let's you know certain ask the questions we'll address them um as we go along and if there's any answers that we can't give you tonight we'll follow up at our Thursday night meeting so the the topics for this evening you see here on the agenda we're going to do a just an overview of the budget including the assumptions that we use to develop this year's budget and review Revenue uh accounts as well will cover employee salaries and employee benefits this evening Thursday evening's agenda you could see is the instructional expense which includes our special education services Robin an Cary our director of pupil Personnel will be presenting that portion of the

006agenda then we'll go um back to support services maintenance and operations we'll talk about the capital budget which is still in the early stage of development and then we'll clue conclude on Thursday night that's the agenda depending on how tonight and Thursday night night goes the next meeting is on January uh 30th where we can continue to work through the budget or it gets turned over to the finance committee for deliberation so that's our agenda um in terms of the process of the budget and I know that the board members that have been been here um you've seen this before but I certainly would like to present it for Mr 's benefit and just to kind of give an overview but we begin developing this budget in September we um as we prepare the budget

007there are specific sections of the budget that we look at we look at everything but it's important to note that the salaries which we're going to go through tonight those salaries are uh determined from existing payroll um and then any staff additions or staff subtractions so the the salaries come from our financial system and with the contractual raises that we have for most of our bargaining units and our employees those are rolled up into the salary lines medical benefits which we will be covering tonight those are based on preliminary renewal projections um our administrators and now department managers as we go through the budget I'll explain where they've input the non-salary line items things like instructional expense or some of our maintenance lines those are uh requested from the department managers for those areas respectively

008um any new programs or Staffing requests those are submitted separately and those are reviewed you know by Dr Solen Miss Solano and we work with the administrators to deter if any of those new program requests are going to be included in the budget uh one of the requests is fencing which we Dr Sol presented in his meeting on the 11th um and then every after everything is input we review those new program requests you know there's a period of time that you know Dr Solen in particular weighs in looks at District goals and makes a determination as to what stays in and what the budget recommendation to the board ultimately will be so tonight begins the board's detailed review of the budget the um board has to by Charter approve a budget and submit it

009to the town manager by February 15 um we anticipate meeting that deadline the Town Council once they receive the budget from the town manager they have to approve a budget by April 30th uh and in doing so if the Town Council makes any changes to the budget whether increase or decrease um they can't adjust any particular line item they could just say the budget can be decreased or increased by X dollars and then that comes back to the board and the board applies the line item changes and usually that happens in May of 2024 so we begin in September we end in May so tonight is the is the second night of our budget preparation process so a lot of detail you know goes into the development and approval of the budget ultimately this is

010Dr Sol's slide from his presentation but the budget is filtered with District goals in mind complex thinking and social emotional learning I know the board members and administrators that are here you know know that those are two of the district focal points so everything that's in this budget including Staffing request is focused around making sure that our budget you know meets our long-term goals so here's the key assumptions that are in this budget and I'm going to keep you know going and talking so if I need to come up for air I'll do so but if you have questions just let me know um so here's what we know the net enrollment for 2425 is projected to increase by 56 students to 4224 uh prek to six goes up by 28 grade seven and eight

011at Doug go up by 21 and the high school actually increases by seven we also included in this budget one new elementary teacher the way it worked out though is Highland and dle increased by one but based on projections Chapman will be lower by one again those are Elementary classroom teachers and Elementary classroom sizes increase on average from 18.7 to 18 .8 um special education the requirements um in special education are increasing in line with our enrollment increase over the last several years so in this budget we've included an additional special education teacher and a par professional that's to um have a second intensive education classroom at Norton we we did this last year as well it moves some of the programming from Highland over to to Norton um and that does help because we

012know that Highland is at capacity currently um there are positions that are being retained in the operating budget that were funded up until this year so next year's budget includes um several positions that um needed to be funded two math coaches one at chesa high school one at Dodd an assistant principal for Norton and Chapman also in this budget one of the assumptions is that the need to increase our medical benefits um based on expected claims by 1.06 million we'll go through that in some detail later and then also an increase in operations and maintenance um you know that is driven by um couple of things one is higher utility and heating costs expected to continue into next year you know plus our aging building needs so we are looking to increase the dollars we

013have for Building Maintenance and repairs so those are the assumptions that we use to develop this budget quick word here um and maybe not so quick but you know as an as an education system K through 12 we are responsible to comply with many mandates that come down from the state so the next few slides list them all I'm I'm only going to go through some of the newer ones but you'll see that was slide one uh this is slide two of mandates um some of the newer mandates um are shown on on this you know particular slide you know not the least of which is the minimum wage that was increased by the state over the last several years so the minimum wage went from10 to $15 an hour that's a 50% increase over

014four years and it's actually at 1569 now so we're somewhere around 53% increase that didn't affect you know employees that are well above minimum wage but it did affect all the employes that we had right around the minimum wage level so that that's definitely had an impact on prior Year's budget as well as the budget that we're presenting for next year this evening um the newest mandates that we have you know shown on this slide I know the board is familiar with some of the ones that that are bolded but maybe not all of them so the right to read act you know that is um I know it's gotten much discussion there is no dollars budgeted if we do need to um by the the um programming required to comply with that act there

015is a request for a waiver a second request for a waiver um the other one that I wanted to mention here is there's a five-year HVAC evaluation and reporting requirement that kicks in um in July of 2024 what that's going to require is that every school building not only here in chesher but in every school building across all the districts in Connecticut have to have an evaluation completed of their HVAC systems you know ordinarily that would come out of our maintenance budget we didn't add incremental dollars to complete that um you know there's I know some districts have already gone through you know the effort of trying to determine how much it's going to cost it could be as much as $30,000 per school is what the initial uh reports I've heard so you know

016as we get more information on that we'll have to determine exactly what we need to do we did do an HVAC evaluation um during the pandemic um but that doesn't meet all the requirements that the state is requiring out of this this new evaluation ation um I don't think that there's necessarily anything more here I want to touch on but just you know we'll we'll leave it that you know the requirements of mandates do have a financial impact on the budget some are larger than others you know we're hoping that the the two big ones on here right to read and the fiveyear HVAC evaluation aren't going to be um you know incremental and and very expensive two um couple of different types of of money that we receive outside of funding from our operating

017budget state and federal grants these haven't changed very much um you know from last year and prior years we have about $1.58 million of state and federal grants that are received by our district the largest one being the mil 50,000 for idea which covers there's um students with disabilities those are used for special education services that we provide in the district uh and you'll see that there are a number of other grants including the Smart Start Grant which is for the two uh prek classrooms that we have running at Darcy uh open choice we do receive a grant we accept students from New Haven into our district we have somewhere around 45 at this time we get about $3,000 per student and then some some bonus based on the number of students so there is

018grant money that is received for that so grants total $1.58 million for next year again hasn't changed much revenue is different revenue is uh funds that we budget that are paid directly to the town um and the reason we budget it is so that the town is aware of the amount of Revenue they expect to to receive they includeed in their revenues it goes into the Town Council and the town manager's evaluation of you know what the um ultimate cost to the taxpayer will be in the mill rate so revenue is important the total 10.7 million again in line with this current year um the largest of those grants is the educational cost sharing that's provided by the state special education that Grant is specific speically for um students whose needs including um what we

019do for them in schools plus Transportation when it exceeds four and a half time our average per pupil expenditure so about $80,000 next year we get a reimbursement from the state of about 70% of the cost above that $80,000 um and this year we're actually trending above that so um again that that speaks a little bit about the special education needs and again those are the students that typically we can't service in District that we uh have to outplay and those are the ones that typically Drive uh where the excess cost that we receive in the form of Revenue okay so what's the impact of Grants and revenues it's obviously important because in total if you took this 10.7 plus the $1 million in Grant Revenue that's about $12.3 million that is received you know

020to offset our budget cost and had it not been for those grants and that Revenue the average taxpayer their cost in taxes would be about $958 higher so there is clearly a significant benefit to receiving the Grant and revenues we good okay and Dr Solen spoke a little bit about uh dur B on January 11th when he presented the budget just wanted to give you a little bit more detail um you'll see here this is the new dur B configuration we talked about that at the meeting on the 11th and you could see chesher here um on the lower end our average per pupil cost is about 191,000 South Windsor is the lowest in dur B at 16.8 and then up at the other end it's reading that's 28648 per student so quite a variance

021but if you look at these little green um bars that represents the amount of ECS funding each of these districts receive and just eyeballing it you see that chesher received leaves fairly large amount compared to some of the other districts you know such as Greenwich and reading so you know we receive quite a bit more ECS money primarily because we have a prison in town and that helps to lower the um household income that's used to calculate uh the ECS payment town by town so now if we look at the per pupil expenditure net of this educ ational cost sharing instead of chure being in the middle of the pack in terms of cost actual net cost to the taxpayer per student we're on the lower end and this is the old dur configuration that

022um included Madison for example in 2223 with the new dur configuration we dropped to Third from the bottom in terms of per pupil um expenditures net of ECS so ECS is a is a is something that's important to us we need to protect it every once in a while the legislators do try and shift the ECS funding you know more to the cities and away from some of the Suburban communities like ours so I know our legislators in the past you know have fought to maintain the ECS funding formula the way it is okay so now we're going to shift and dive into the budget sections so this is just a recap this is the year's this year's budget is 84.9 million the recommendation from the superintendent is 90 milon 132 265 that's a 6.05%

023increase so if we examine that a little bit further you'll see this is the 5.1 million being requested you know of our total budget request or our total budget 54,675 is for salaries that's all salary certified and and non-certified which we'll go through in more detail another 17.7 million or about 20% of the total budget is for employee benefits so the total of those two line items salaries Plus benefits is about 80.3% of our budget um and then on the next slide I'll I'll show you what we consider our our six core service categories that takes us to about 95 and a half percent of the budget so these smaller sections of the pie chart Support Services which will will review on Thursday night that includes student transportation and that is the bulk of the

024support services line instructional expense includes special education outplaced tuition and and um the Consulting Services we call that line pupil services so that's about 6% of budget and then maintenance and operations including utilities is about 5% of the total budget if we look at the $5.1 million um a little bit differently which we will in a minute I just quickly here 95% of our budget is in salaries benefits cost of Transportation which is is mandated we have to provide student transportation the cost of special education outplaced tuition and Consulting 3.6 million then if you add utilities Heating and the energy contract payments that we make that has to do with improvements that we made to our schools about nine years ago um that we still paying for over 15 years that gets us to 92.2%

025and then finally if you had the cost of cleaning maintaining our facilities that gets us to about 95.5% of the total budget so those six categories account for 95 a half% of the budget so what's left four and a half perc of the budget is in these categories that are smaller compared to the 95 a half% but these are none the less important category so you know the the caveat that we have on this slide is that you know if we make reductions to the budget which we have in the past you know we're careful where we apply those those reductions so as not to hurt the student education um but generally speaking when we make budget reductions it's in some of these lines you know maintenance is typically another line which is on the

026previous slide so that's kind of a high level look at you know relatively speaking where's the bulk of the budget so now getting back to the point I was starting to make this 5.13 million well where is that going 43% of it is going to salaries and if you look here 4.22% is is the amount our salaries are increasing that's 2, 21857 our average salary increase is below 3% for 2425 what makes up the difference between that 3% and the 4.2% are the staff additions that I just touched on briefly that we'll go into a little bit more detail so when you look at this 4.2% I just want to make it clear that those are not raises those are raises which are contractual plus the cost of the new staff that's being recommended um

027benefits which is 24% of the 5 million we requesting 1.2 million for benefits most but not all of that is for medical benefits we'll go through that in more detail this evening instructional expense you'll see that that's about 133% of the increase we're looking to increase by 677 th000 most of that 500,000 is specifically to increase the outplay tuition line for next year which Miss Carrie will go through tomorrow night but we do expect higher number of outplaced students next year uh maintenance and operations there's a a 12% increase that we're requesting there um a lot of that has to do with some um maintenance that we need to do we've cut our maintenance budget the last couple of years so we're looking to restore some of that plus higher utility um and heating costs

028expected and then finally Support Services that's about 6.95% increase 500,000 most of that has to do with the new Transportation contract the first year increase is 6% under that contract so we're now going to dig into employee salaries um and there's a few things that I wanted to go through first um most of our employees are in a bargaining unit that work here in the schools and you could see this is ranked in terms of number of employees in each of the bargaining units so the teachers um not surprisingly is the largest number of employees approximate wages for next year about 37.3 million you'll see that I highlighted the teachers and the par Educators in yellow because both contracts will be expiring at the end of next year's budget with the teachers the um the

029way contracts are negotiated for teachers and administrators under law is very specific so the board does to does need to begin negotiating the new teacher contract in July doesn't affect this year's budget we already know what the increase is for 2425 that we're talking about but that is a new Union contract that needs to be negotiated and then in the spring will um begin negotiating the par educator contract these three contracts the chesh secretaries and technicians United um the chesher custodial and maintenance employees and the Cheshire administrative Personnel those all were negotiated and are in place or for the administrators will be in place for next year so those are all set those expire in 202 27 2027 and and 2028 so um couple of contracts to negotiate and three that have been settled in

030the last year so if we now look at those bargaining units and what their wages have increased over uh the last few years you'll see that the um wage increases have been reasonable um for 2425 this is the budget Year we're working on you could see that some um some groups are very low facilities but that's because the board knows we just approved that contract and we negotiated a change in how their the medical benefits are covered it's not by us anymore it's being outsourced to the union um and the teachers and the administrative Personnel they're just above 3% Dr Solen and I you know we're looking yesterday actually at what the um Social Security cost of living adjustment ments have been over the last several years and they're averaging well above 5% you know

031two years ago was 8% so these wage increases have been you know not only reasonable not not um not necessarily the fact that they're below Cola doesn't mean they're not in line with other school contracts these are absolutely in line with what other school contracts have been although we think going forward you know some of the settlements that we've heard are you know approaching 4% per year so as we negotiate those two new contracts I don't think we'll be you know in this lower range but that's to be determined the other thing that I'll add with respect to how we negotiate you know wages there's always a balance between wages and medical benefit offerings so you'll see as as we talk about medical benefits that you know one of the things that most most of

032our Union groups have done is you know they they understand that they'll give up some of wages to make sure that their medical benefits you know stay intact and it's not that we haven't negotiated changes there but there is a balance that we strike when we negotiate between those two categories so for certified salaries there's five groups that um fall into this account category certainly teachers being the largest that's 37 million dollars of the total of$ 42.7 million being requested our administrators substitutes are also budgeted in this category Student Activities that's primarily to pay coaches um and other individuals for extracurricular activities and then uh homebound tutoring services that we provide you know primarily for special education students certified salaries represents about 47.4% of next year's budget based on the request it's about 48 and

033a half percent of this year's budget so it's actually going down by a bit on a on a comparison basis we have a total of 429 uh full-time equivalent employees that are part of the certified salary group um and you'll see that the request in total for all those categories is an increase of 3.62% what's going to be approved ultimately we don't know yet um so if I take this and now we look at the line by line increases there so you'll see the administrators um that increases 5.2% that and I'm going to just throw out some some information as we go through each of these to kind of give you a little understanding of what what's happening so the administrators that particular group is three people it's the superintendent assistant superintendent and myself you

034know we are not part of a bargaining unit but we have individual contracts so this number is basically what's in our contract directors uh and supervisors that is part of the administrators the the administrators group you'll see that 4% in director supervisors but the principal line is an assistant principal line is going up by 6 and a half% as I mentioned earlier we have um an individual that's in the aresa grant that Grant is running out this year and so moving that person into the operating budget is why that line item is increasing by the 6 and a half percent um teachers is going up 3.34% the raise for the teachers this year is 3.02 that's General wage increase plus step the reason we're above that 3.02 is because we are adding an Elementary classroom

035teacher as well as a special education teacher for Norton and we're bringing three people from the aressa grant that fall into that teacher line um substitutes we're looking to increase that to get a little bit closer to the reality of what it's been costing for substitutes typically the cost of substitutes if we go over budget is offset by um not being over budgeted in the teacher line so we have teachers that on leave we bring in additional Subs so those typically offset each other but still it makes sense to increase that budget line 50,000 you'll see that the tutoring line we're holding it flat um that account has been you know managed pretty tightly um over the last couple of years in fact Miss Carri who who's responsible for that has brought that expenditure down

036from around 250 two or 280,000 a year you know now we're looking at 200,000 per year um Student Activities that's increasing 4% that goes the increase in Student Activity pay is incremental with the teacher contract the reason it's going up 4.3% is we're adding the two fencing coaches which is recommended as part of this budget and again I know that you know the 4.3% you look at the at the percentage and larger increase than the 3% expected but you know on a relative basis it's $26,000 um and about half of that is for the addition of the the two fencing coaches so as a group certified salaries going up 3.62% including the additional staff that's being added or brought in from the ARP Sr Grant it's kind of it for certified salaries good yes I

037was asking inevitable question do we know about retirements we do not know about retirements if you look at the average over the last few years it's varied from 8 to 14 you know without any kind of retirement incentive so it's it's too early I I don't know of any Dr Solen do you have any inkling yet no we have required to notify us until the spring um but I haven't heard of any retirements we had a midyear retirement which I've shared but that's that's it so far and as we go through the you know not so much in this round of the budget but by the time we get to the Town Council in April we usually have a better understanding of who has um at least given us some notice of intent and we

038do get retirements as late as you know may for June yeah in one of your earlier slides you had mentioned um student count but you didn't reference the moments and time that you were talking about I was wondering if it was year on year or say from January 22nd or 23rd whatever today is forward to October 1st I think you said there was maybe 54 extra kids I didn't write it down but so yeah the what I showed in the enrollment increase is where we were as of October 1st okay of this year and what the New England School Development Council is projecting for next year the the fact is and I know we discussed this at a planning committee meeting this is really people we're already we're already about halfway yeah now to meeting

039next year's projection I certainly on the elementary side which is highly unusual correct it is unusual okay and we certainly believe it has to do with the new housing that's been added in our town and it's continuing to come online you know I don't want to say necessarily month in and month out but you know as new houses are available and open and sold people do move in and they they come into our school you know again we we focus primarily on Highland in our recent planning meeting discussion because Highland is you know has quickly approached its capacity so um it's an ongoing concern and yeah so we're we're tracking to exceed the projection at this point yeah yeah we were project increase by 56 going into next year okay we're already 34 Beyond and

04022 more students and we've we've met that I wouldn't be shocked if we're there by by Spring and it would continue above and beyond that is what you expect I mean just for people who are watching I mean I think it's pretty straightforward most parents who have kids in the school system probably move in the summertime normally typically yeah okay so this is this is uncommon the dozens of kids moving in during the school year so the 30 for students is an increase since October 1st so it doesn't even include like last Summer's movements so we're I think that's the Unique Piece that VIN is highlighting here is that we've continued to grow not in an explosive rate over the school year but steady rate and I think we could anticipate certainly getting to next

041year's projection you know in advance so next year and then kind of shattering that through the year yeah okay thank you one other one other question Vin I some of the numbers are difficult for me to see but when you're talking about the per student cost South windster was about 16 16,000 ches about 16 or 19,000 right we're at 19,000 okay so year on-year equivalent you're talking South Windsor is 16 chesher is 19 and reading is 28 correct do you have any idea just generally speaking what drives that discrepancy I mean reading is like 50% more than us well it's a very small District okay I think that is one of the reasons why that number is so astronomical and South Windsor has actually grown quite rapidly is is it all new schools there now

042is it what is South Windsor just all new schools they've re um the elementaries yes okay I'm not sure Jeff do you know the middle and high school it's at wi not that long ago I mean it's a relatively new school but it's not a new new school um the high school's been there a while but uh and I think when you're looking at per pupil expenditure you're going to see outliers on both sides and that's why I think we tend to look at the average or even the median um I just south jumped out at me because of the I mean across the state that's one town in particular that's had far more new construction the last 5 or 10 years than other towns right they're the only town in Connecticut that has enrollment

043growth exceeding 10% in the last five years or something like that they they they've exploded a lot of that is actually a migrant population that's um come to work in the software industry in Hartford okay thank you okay last um slide on certified salaries which we'll show this for each of the overall uh budget categories at the end but you'll see what this slide shows is you know certified salaries as a percentage of the total budget and you'll see that it's come down from 54% down to 47% that doesn't mean we've reduceed salaries it means as a percentage of budget it's it's a smaller percentage because other account categories have taken on an increased percentage of the budget which medical benefits is one which we'll show you in a couple of minutes um so that's

044it for certified salaries we're going to move on to the next s next salary category which is our non-certified salar so this is all the staff that um falls into these seven categories so our par Educators secretary clerical support Personnel maintenance employee School nurses Board of Ed bus drivers not Taco again those are drivers that we employ um and managers and supervisors so this as a total this is 11.92% is the request so that's an 6.4% increase again I'll go through the details um non-certified salaries represents about 14.2% of our budget in the request for next year and it's about where it is this year total uh full-time equivalent staff is about 350 employees you know versus the the teachers were and certified staff was about 411 uh so our par Educators um primarily the

045par educator group does provide special education support Services some are one-on-one you know per student some are in the classroom helping multiple students there's a small group of par Educators that are General Ed par Educators for example each kindergarten classroom has a par educator um you'll see that um the largest increase in terms of doers is for par Educators but that's because par Educators is also the largest total line item that increases 99.11% the raises for the par educators are a little bit over 3% the reason the request is 9% is because we are adding one um par educator for the Intensive education classroom for Norton for next year so that would be a new position but in this current year budget 2324 we've had to add 6.8 Paras for this school year here to

046cover students that um have been identified or moved in that have special education needs and we're assuming those are going to be kept in next year's budget um you know this again is you know the need for special ed Support Services has increased in line with enrollment you know a little bit faster actually than our overall General Ed cost growth but it does have to be supported it is mandated um and again miss Carrie will will talk about that more detail on Thursday um uh managers and supervisors that um includes you know some of the School District Operations staff that uh serve as as our managers and supervisors um but it also includes a shared person that we have with the town that does project management work with um facilities so our capital projects we

047have Dan bomber which is a split resource with the town that's funded through this account um our secretaries the uh increase there is 4.27% um you know we did have you know an addition um it's not an addition to staff we had a group of secretaries that were in our Ida Grant idea grant that have been moved into the operating budget and the dollars from the Ida idea Grant are being used by par Educators so not an increase in staff but it did increase this operating budget line the custodians and maintenance I know this one looks odd increase of 99.9% in custodians and a decrease in maintenance the difference between those two categories because those are all facilities Personnel custodians are a building maintainer the maintenance staff are our Tradesmen that have licenses either electricians

048Plumbing low voltage wiring um and our out outside ground so we just switch the responsibilities of one of those individuals and that's why one's up and one's down um support that includes a number of of different employee categories our occupational therapists as an example our play our lunchroom playground AIDS um our Technology support staff all fall into that budget category quite a few of those employees were um below well are at minimum wage so they their wages increased and we also had a group of learning support tutors that we gave incremental raises this year that carry it over into next year so that's why that's at 7.1% our Board of bus drivers we have about a dozen board ofed bus drivers and AIDS we do that and we also have vehicles we do that because

049it's gives us a lot more um flexibility in transporting students most of our Board of Ed drivers are doing special education in town runs you know we're doing quite a bit of um work with our special education transition students where we're taking them to job Shar and those are happening intraday so that's what that staff is used for again we do it that way because it's cheaper than having it contracted out to uh provide a Dao we are adding an additional driver next year that's why that account's increasing by 15% and then the 3.14% those are Health Services those are our School nurses that we have um serving the district so as a group 6.1 6.41% increase in this line item again a lot of that having to do with increases in Staffing not increasing

050in in wages only now I just took a little bit of a of a deeper dive into the non-certified salaries and you'll see the annual growth rate and this is from 20156 through projected 2425 I just wanted to show that the in this category the biggest driver of the of the growth in in terms of salaries are the par Educators and our drivers we've had add staff in both areas to provide services for our special ed students and you'll see the rest are you know 4% or below in fact managers and supervisors the reason that's up 4% is because that project manager position was added about three years ago so that's what's driving that and then if we look at non-certified salaries kind of over a long period of time you'll see that you know

051it it has gone up and it's come down and kind of coming back up um from this was 12.69% it's about 13.2% of next year's budget so not dramatically different um and I think that concludes noncertified salary so before we do employee benefits I'll just pause what's the grip B I don't know if this is the right section section ask this question or not so just let me know yeah um outside maintenance is that um is this the correct section for that yes okay well outside maintenance you're talking about our facilities outside grounds parking lots that sort of thing yes um so I was just wondering do we still do we still maintain all of our grounds individually or do we share those services with the town like parking lots and lawn mowing all that

052Stu it's a we do share services with the town the um during the school year you know a general statement our outside grounds um men maintain all the grounds as we roll into the sports season you know which does start in this in the spring we have a a deal basically where we'll mow all the school grounds that are used the fields primarily that are used for Park and wreck in particular but they'll take care of the infield and you know any maintenance required on the infield during the summer where our students are not using the fields for the most part that goes into the hands of Park and wreck although we still continue to mow the other thing that we do which um I'm not sure we've ever talked about it here is whenever

053we have a snow or icing event the town does do does all the salting in our driveways and in our in our parking lots um so we we do have a good relationship with the town Public Works staff and and the director You Know Rich cette our facilities director who I know you know you know and Dan Barbaro who's now the interim a director of Public Works you know Mark Cunningham Rich puit you know those we help each other quite a bit you know we're on the phone at you know 4:30 5:00 usually by text when we have a snow event you know to make sure that we're in sync so it's a good relationship and it it it does save money um and it takes quite a bit of coordination I know we've struggled

054with it back and forth but we're in a really good place right now that's good to hear um and with the uh bartand Park coming online is our relationship going to be changing at all there with the new Fields do we have to incur any additional costs or maintenance there um no I think what it does though is the the new turfield in particular I I think it'll take some pressure off the use of the school field but then again the demand is really high so it it's hard it's hard to judge um and the other thing that we do share you know as I as I asked that question is you know our students do Park you know in bartand Park from the high school so that um in is another shared service that

055I guess that leavs me to my last question you may might have figured out already but uh our own turfield are there uh are there any considerations there where we need to to plan for that or I know you had mentioned it in the past it's in the capital budget the last year the board approved the capital budget we had it in year five and this year the planning committee is is working on the capital budget so it moves from year five into year four we think we're good the the turf field is holding up well we've only had to add two patches we are on a maintenance contract you know with the installer actually we've continued on it was you know mki reminded me it was installed in 2011 it felt like not that

056long ago but you know we're we we'll pass the 8-year warranty which is why we have the maintenance contract we have a tested every year to make sure it's not too hard or too soft for students and it's it's performed well with with the gmax testing so yes we are planning for the replacement in the capital budget great thank you you're welcome just um to go back in the certified staff section is there any way we can get a seniority list kind of speaking to Tim's question about retirement projections thought you were asking for Senor list off sure okay yeah and then I just want to clarify that our custodians also shovel the sidewalks then not not just the town coming into to plow oh yeah I don't want to make it appear like our

057custodians don't do anything all the town does after we're done with the cleanup um the town just comes in and drops salt Andor sand on our driveways and parking lots they they don't do anything beyond that our custodians you know do the plowing shoveling blowing snow and if they if if um the town didn't salt our Lots we would hire we would have to hire a contractor to do that so that is a service that they provide for us thank you good all right I don't want to jinx this but we're doing well on time it's 8 o'clock and we're we're in benefits got that I don't think so I think this year's a little bit easier just wait H okay so employee benefits of about 19.7% of next year's requested budget it's about 19.4%

058so you know not a substantial change the um total amount of the budget requested is 17 mil 71446 if we look at the breakdown 81% of that is for medical dental um we're looking for a 7.95% increase this year so a little bit over a million dollars on medical dental and that's where we'll spend you know the next you know probably 10 slides to go through the detail of that but I do want to point out this year's increase request is 7.37 you see that last year what was approved is 10 and a half and what was requested was 10.6 so we are requ even though the budget request is higher it's a smaller percentage and the year before that it was over 20% so we are moving in the right direction you know with

059with the medical benefits um pension plan we need a 5% increase there I'll talk about that in some detail I'll show you some slides Social Security just increasing in line with wages uh we do have to fund social security for our noncertified staff workers comp and unemployment about a 19% increase and life and disability insurance that's generally pretty flat but a small percentage of budget um if we look at each of the line items here quickly um medical benefits is you know 14 million of the 17 million we're looking for a mil 59,000 increase the pension line that um that increase is based on early estimates from the actuaries um workers comp that increase is an estimate we received from our insurance broker that's not the f final number but I will um just let

060you know that several years ago we moved our workers comp from kerma to Travelers we were able to reduce our premiums by $100,000 roughly when we did that some of that is starting to creep back in but we're still in a better place than we would have been had we um not switched over to Travelers and again Social Security is just in line with wage increases so we're going to focus here on the medical benefits line This 14. 385 million um the important thing that I'm going to show you is that is a net number you know our that is not our total claims cost that is not the total cost of all the insurance lines it is a net number and so what that means is this is the budget request 14.38% you'll see

061it's the total there but it's a combination of these pluses and minuses you know the biggest piece of medical benefits is our budget for expected claims again we we have early projections that's 13.78 million this year this is no we um with the new contract we have with our our building maintainers they're obtaining their medical dental and life insurance benefits through their Union and we're paying a premium to the Union as if it's a fully insured plan so we don't have any claims liability um and this was a it was very good for the custodians and I believe very good for the board to do that so these two lines if you add them up is about 14 um1 million so you'll see last year we did not have that line item because we just

062started this effective January 1 of 24 this month um we pay stoploss premiums 1.65 million as a projection for next year it's going up 15% and what that does is it protects our um it protects us from large claims above hundred $175,000 so if there's any individual claim that exceeds $175,000 anything above that gets paid back to us from the stop-loss insurance company so this is insurance we have to protect us from any gigantic claim and you'll see down in this lower section we expect in this budget that we'll get about $500,000 of stoploss reimbursements last year it was about 800,000 it varies from year to year so we are budgeting conservatively um but you know to the extent we have large claims it does Drive up the premium cost so you know we always

063want to try and keep our claims and our large claims as low as possible but the fact is we really can't control when someone is gonna get sick and and have a very large medical bill to pay um 725,000 that's to fund the employee HSA accounts in line with the plans that we have 300,000 those are the administrative fees we pay to Signa to process our claims um 64,000 those are employees that elect not to take our insurance we pay them a waiver it's either a th000 or $1,200 depending on the bargaining unit um and then we do budget some money for employee Wellness um that's mostly to cover the cost of our employee assistance program siga does provide as part of their service package about 55 5,000 in Wellness dollars that that we use

064that's some part of our operating budget they're paying for those services that we get directly so if you add all those items it's 17 milon 7,051 and then because employees pay a co-share for the plans through their payroll deduction we'll collect about $2.1 million from employees to um reduce the total cost that we have to budget for a medical benefits account and again that 500,000 reduces that budget line further so that's how we get to 14.3 million taking it a step further this number is based on expected claims for medical prescription and dental well where do we get that number that number comes to us from our insurance broker USI uh this is their preliminary projection so you know this lower section identifies the expected claims you know for those categories medical prescription and dental

065so that's how we developed a medical benefits budget um I know that when we track you know for the board monthly we really focus on the claims number but the money that we expect to receiv received from stoploss um from prescription rebates that does show up on the report for next month we're going to have to adjust the report because of the change that we made with the maintenance employees so we'll explain that at the at the board meeting when we present it all right I'll move through the next few um pieces of information quickly these are the benefit plans that we offer to our employees we have a high deductible Health Plan um and we've worked really really hard to get more of our employees to use the high deductible health plan to help

066manage their own care and be responsible for the you know the funding we have an HMO po um an elements Choice plan which is you know was had to be offered in accordance with the Affordable Care Act not a lot of employees in that but it is a good plan and we also have a dental plan so that's what we cover or that we provide so what we have been doing and continue to do in 23 24 are we try and work to manage our health care costs to keep them as low as possible um as I mentioned a minute ago our employees do pay towards the cost of that coverage for next year we're anticipating $2.1 million in employee payments that's their portion of the co-share we've Consolidated plan offerings over the year we've

067increased the rate that employees pay we've increased HSA deductibles as we've negotiated our Union contracts you know this slide just gives you a breakdown um bargaining unit by bargaining unit of you know what what their current contract term is what their deductible is what their co-share rate is and you'll see that down here for three of the bargaining units we've eliminated the PO and HMO options the secretaries our custodians which they're on their own plan now and the Cheshire administrative Personnel they've all opted to eliminate those plans they just weren't cost effective and they were priced so that it was not a benefit to them to stay in those plans so those three groups only have the HSA as their option which is is good it also reduces our administrative costs um rhsa enrollment which

068as I mentioned has been a focus you know we're now about 82% of our employees are in an HSA this just shows you you know back in 2010 when we started um offering the HSA it was about 5% of our employees now it's 82% again we've encouraged our employees we think it's a better plan option and it has worked to their benefit to move to the HSA and then looking at it bargaining unit by bargaining unit you could see that all the administrators are in the HSA 82% of our teachers 95% of our secretaries um are in the HSA and we do have to support retirees in accordance with you know their contract and there's a group of employees um that's part of the 52 TW there's still 25 employees remaining in our plans that

069we have to cover that are Beyond age 65 that would never that didn't pay into Medicare so these are pre-1987 employees that are still in our plan and will have to continue to provide the coverage they do pay premiums towards that coverage but that is you know within this particular group um this is just a number of things that we've done you know we moved our HMO from fully insured to self-insured that saved us money back in 2015 stoploss coverages through an independent company that is actually owned by several municipalities including Cheshire you know we've got over a million dollars in net worth in CT Prime it's been cost effective it's kept our premiums lower than the market they're not low but we've done well by moving to CT Prime uh we moved to siga

070in 2019 after many decades with Anthem more recently we moved our subcription from a company back to to Signa these are some of the changes I just mentioned that a bolded there that we've made some adjustments with each of the bargaining units um and then finally I'll just touch on you know we continue to be aggressive with Wellness programs in our district most of it is funded U through the $55,000 we get per year from Sigma so these are some of the programs that you know we we offer we just had a health and wellness fair in November we had 118 employees we did biometric screenings you know which included blood pressure weight um some blood work as well you know we did that at chesa High School in November we have a new yoga

071partnership with um another Studio here in town I Believe Miss Solano was that where you went today okay and you said it was pretty good it was yeah see look how calm and composed she is so good um and then we are running a another road map to Wellness challenge which has multiple steps you know we run it from the beginning of the year through May um you know with some nice prizes for our employees at the end again we think that that's an important part of of what we do we've increased our efforts and the participation rate has grown over the years so why is this so important and is it helping well we think it is helping and you know the best gauge that I've can find and that I've been using for

072several years now and explaining to the board if you look at um medical cost Trends and I know this is really hard to read and I know you have a copy but um uh Aon provides this a medical Trends rate report every year um and this is 23 and 24 globally the expected rate of cost increase is about 10.1% for next year this year it's about um 99.2% okay and then this is broken down that's Global if you just take North America it's about six .6% this year expected to be 7.6% next year so medical inflation you know has been above the the inflation rate we hear about every day um and then if you look within North America the United States this year it's 6 and a half% and next year it's expected to

073increase at 8% so if we take that information and understand that I've this is information we've been tracking for several years these are the increases for the um United States since 2012 6.4% is the average and if you started back in 2012 with where our claims were our claims if we were hitting the trend would be at about $18.08 million we did better than that even though we've had some rough years our actual gross claims over this period of time have increased about 5.3% per year on average so we're beating the cost Trend in the United States and you could see there are some years where we've been above the the trend you know the three years leading into covid and then through two postco years you could see that 8.6 9.4 and 17.8 even

074with that over this you know 11 years we've been below and then if you factor in after that's gross claims if you factor in the money that we receive from stoploss um prescription rebates and interest on our Reserve balance we're at about 4.1% so we think the efforts that we've made to increase the cost sharing with the employees and raising the deductible and and working with the other programs that we have with siga and our Wellness it is making a difference in terms of how we fund and how the reserve works I know the board members have seen this and and Mr ecki is sees the medical benefit reports but when we budget for claims we don't just send that money to siga we take this the money from the operating budget we deposit it

075so to speak in this Reserve fund and then claims are paid from this Reserve fund to Signa we know and we can control what we put in that's what we budget you know claims is the big unknown that is not controllable okay and then this Center section just shows you know what's happened to our medical benefit fund you know some years it's higher some years it's lower that's not just driven by claims it's also driven but by how much we fund into that account year in and year out we always look if we can to have two to three months of reserves that's been the target we've been as high as five months we're currently as of December 31st at 1.7 so we're just below the two um we're at 1.8 66 million not a

076bad place to be a little higher would would be better but we're I think in in pretty good shape with the reserves I'm going to just touch on this real quickly what this portion of the chart shows is if there's a minus that means that we've had claims that are higher than our contributions and if it's in the black that means we've had contributions that are higher than claims some of this is not completely accidental as as the board members who have been here for a while know what tends to happen is when our Reserve balance gets pretty high we tend to reduce the amount that we contribute in an effort to not have a large budget increase and then when claims start to creep up we have to catch up and that's you know

077what what this chart shows and again there's some commentary here but you could see when we hit 3.2 million in the following three years we lowered the contributions we were making we knew they were going to be lower than the expected claims and then on unfortunately when the pandemic hit we had a really high claim year so our Reserve dropped to 92 24,000 but in the last two years we've increased contributions which has helped buoy and increase the Reserve balance another way um to look at this is is green is good so the last two years 21 22 and 22 23 Reserve balance is actually increased that's because yes our claims were higher but we started funding our contributions to equal the expected claims so that's how we got to where we are today the

078budget that we're requesting is not intended to build a Reserve balance it's intended to make sure that our contributions are going to match expected claims and if that works and if that happens then we should end the year at about the $2 million claim Mark and if we get a break and claims are lower than expected then the Reserve balance will in fact increase so again this just shows The Reserve balance from 2013 really high balances here we dwindled it down we got to a low point of about 72,000 a couple years ago but as I said we're at 1.86 million right now we do expect as we hit January February March which is a new HSA plan year that our expected claims are going to be lower and we should see the fund balance

079go up that's my hope and I'm gonna stick with that story for this evening okay and the really the last point that I wanted to make on medical benefits and this is just to give you uh as board an update from last year we've been doing this the last couple of years but this is our claims for the first six month of this New Year okay you'll and these are claims over $25,000 you'll see that the claims that we had that exceeded $25,000 they range from 25,000 to $224,000 so some of those claims the ones that exceed 175,000 there's two already so I expect that we're going to be seeing about 61,000 in stoploss reimbursements as we go through the remainder of the year we'll see the stoploss payments increase unfortunately and that's because we

080have some high claims in terms of what types of claims consistent with the last few years on a an average claim amount cancer we have six claims the average claim is about 59,000 for each of those six um bone Joint and Spine we've had 13 claims about 56,000 on average each and the highest category this year which is a changes you know and this is a large category but GI e no ear nose and throat you know endocrine other organ issues we've had 17 claims above 25,000 so far this year um 42% of this current Year's claim July through December were above the 40 uh excuse me we're above the $25,000 Mark so you know 42% of our claims or those claims above 25,000 are driving 42% of the cost is the way to look

081at it and then what I did in this next chart is I just showed the trend so claims above 25,000 you know back in 2019 just pre pandemic we had 25 during this six Monon period of time and then as we hit the pandemic mic year it started to increase um last year was 51 claims this year to dat we're 53 these are the dollars and you know the only bright spot I will point out here is that even though we had 53 claims this year um instead of being at $ three and A5 million claim total like we were last year you know we've dropped to about $3 million claim total so that what's happening with the large claims that is pretty much the highlights in terms of of the charts with medical benefits

082so I'm just going to give you a quick summary here um you know one is that our medical claim trend is below the national average which is a good thing um and so even though during 201819 through the pandemic we were well above the average the last two years we have been well below the average the rate of illness with claims that total $225,000 or more has more than doubled since 2019 but the dollar trend is a little bit better this year um as I mentioned the budget increase that we need a million 49,000 is expected to just keep claims and contributions in line with with each other and most importantly this year's budget increase is 53% lower than it was two years ago where we needed 2.2 million and it's about 30% lower than

083last year where we needed 1.5 million so we're trending in a better Direction and that's it for medical benefits yes sir um with regard to the with regard to the medical claims Trends you compared uh treest public schools to the USA yes I'm just curious if you happen to know is that sort of relatively in Apples to Apples the demographics wildly different or are they consistent you know it it's just a broad brush okay Tim I you know it's it's medical benefits as a whole the fact that our okay our plans haven't changed um very much from where they were you know this is over an 11-year period but I think globally and in the US they haven't changed dramatically either so yeah I think it is Apples to Apples but again this is just

084broad brush no I understand I understand um and with regard to a topic I don't think I heard you mention but I think it would fall into this category the wellness program yeah how is that going well if we look at it from from a participation point of view yeah you know compared to where we were three years ago participation in all categories is definitely up the correlation between people participating in wellness and claims I I can't I get that make that connection it's part of what we do you know we we know that the employees that participate appreciate it and they're participating at a greater rate okay um and why wouldn't you do it right if even if well there is a a piece of mind that goes with it I mean if you're

085supposed to go out for a walk every day and you have you know students who are coming to school coming to see you after school every day in high school the time commitment can be difficult so I mean it is it's by no means a guarantee in might that participation would happen but generally speaking participation has increased and satisfaction is good yeah okay absolutely great thank you okay um the uh stop Gap threshold I think has it it's been 175,000 for few years or many years it has we increased it from 150 to 175 I'm going to guess about 10 years ago um and if your question is should we increase it or can we increase it if we did our equilibrium question Max you know it it does become math so we can if

086we increase it 25,000 for an exam as an example and we do talk about this with you know CT Prime which I'm still on on the board I'm still president actually um we're probably going to recommend all the participating you know towns and Boards of that increase it um but there is a balance there so we'll take on the extra $25,000 in Risk it'll lower our premium which is a good thing how much that risk is worth I mean we'll we'll calculate it but it is certainly a consideration sorry so our healthc care firm that helps do the analysis and claims and helps set the help you work with to set the uh um the contri the um medical benefits rate Etc couple years ago if it wasn't last year if I recall they were

087also looking at the Town side of claims too because the medical cost increases are not unique to just CPS and we're still all sharing the same medical trust fund so to speak but has any come out of there that and I forget the name of the firm it's USI I'm sorry USI does anything come out their analysis um from reviewing the claims and trying to kind of pinpoint um how to tackle this and the reason I ask is every other year depending the make up of the board you know we get folks to say hey why are we self-insured why are we out there doing group plans and that we had those discussions I guess the question I have is has there been anything to help identify what we the town and Bard can do

088to offset the medical cost increase I I besides the nature of the claims so that's you know that's unfortunately not controllable um I just I don't know if there's been any updates or reports or report out or even on the towns side is fairing with the same situation yeah I I guess there's a couple of things one is we um met with Sigma to do our annual review um a couple of months back you know and there was just a review done with USI as well what we what we've gotten out of those reviews is identifying well you know what are the large um claim drivers and a lot of it has to do with just chronic conditions diabetes you know number one because those tend to be larger claims and what we can do

089to make sure that employees or their spouses who are on our plans that have diabetes are taking the steps they have to control their diabetes getting their Wellness checks um and there are a number of recommendations that have that have been made which we just Implement you know having to that should improve our claims experience going forward it doesn't mean they're gonna claims are going to drop it just prevent large claims from um occurring as far as you know other things we can do other plan structures you know we did ask Tom last year to take a look at you know what it would look like if we fully ensured our plan moving from self-insured and that's always I mean I know you were in the industry that's always a um losing proposition because the

090insurance company is going to make sure they're not losing money you know so the alternative to that is to self-insure and pay the cost of the administrative fee to process claims I I wish I could say there were Silver Bullet that we got out of it you know we do meet with with the um with our provider and you know with our consultant uh regularly you know we're going through that process now we had our first review of claims for you know next year's projection you know we'll get another update uh either later this month or early February you know on the projection and they use the rolling 12 month average and then they adjust that projection based on trend they're seeing either within our population or that they're seeing on a more Global basis

091yeah I it's I I mean I'm just happy that we're able to give the health care to our employees that are in need that's first and foremost their Wellness I just feel out asking this question what could we do different because it's it's it's not a question to ask this is not e treasure I know it's not treasure and uh so it's not as if there's something happening with our specifically in Cheshire that driving the cost up this is a trend that's been happening in many towns companies and I know you work you know with CT Prime thank you I know it's another time commitment but so I'm sure that group is seeing similar Trends in different districts I think it comes back to the medical costs certainly Wellness prevention will help uh every little

092bit but I just feel you know not asking the question I do know that USI yeah has been looking pretty thoroughly and if there was a silver bullet so to speak we would have had it already but there isn't unfortunately it's just I think you know we've been pretty deliberate on the efforts you know some of which I mentioned that trying to look at ways to keep our cost down you know the one thing I'll kind of add to that is the state offers a a plan it's called a state partnership plan which a lot of I don't want to say a lot certainly a large number of board of AD and municipalities have joined but that's because their medical cost on average are well above ours you know we're still even with family coverage

093you know we're in the $26,000 range many um municipalities and Boards of AD mostly in Fairfield are well above $30,000 and so the state partnership plan because of the way the premiums work benefits them but we're not there yet and so that's a good thing um that is always an option that we look at but the fact that we're below happy about that thank you okay all right last section for tonight is pension uh few things one is that um when we talk about funding the pension and retirement accounts this is exclusively for our non-certified staff our teachers and our administrators they are participants in the teachers retirement plan and they basically fund their own retirement plan the board does not contribute or participate in any way financially to that um in 2012 new employees

094no longer were eligible because we eliminated it through the union contracts the town of ch special pension plan instead those new employees are offered a Define contri defined contribution plan where we uh basically contribute a fixed percentage of their salary every year so as a result of that we now have 54 employees that are still working that originally were participated in the town of pension plan and obviously their grandfather they stay in and you could see that you know back in 2018 18 we had a 126 employees that were in the pension plan now we're down to 54 the reason is people retired the number of employees that are participating in the 403b defined contribution plan is at 221 employees uh back in in 2018 it was 140 employees so one's gone down one's gone

095up if you just do the math net net it's about the same total number of employ employees that are being given retirement benefits um the pension contribution line has been increasing in recent years it's a result of two things one is the actuaries that are um basically hired to do the pension calculation and tell us how much we need to contribute you know they made a recommendation after the 2007 um through 2009 Market declines that you had to start increasing the amount that you're funding into the pension plan uh and the second bullet that's here is and this is the more this is realistically the more important reason why we've had to increase our um contributions is because the actuaries keep lowering the return assumption in fact last year they dropped it from 7% to

096to 6.75% and every time that happens we have to contribute more funds in order to be able to make sure that the people that were promised a retirement benefit continue to receive it so just along the lines of those two points back in 2009 the this is the Dow Jones hit a low of 6500 and then you could see it's been on a steady climb except when the pandemic hit it dropped down to about 18,000 and you know as of January 10th we're at 37,000 so the returns from the Dow have certainly come back um and have actually been quite strong in the last few years so that's helped us um but what has hurt us is the reduction of those return assumptions okay so this is the history of how much we've had to

097increase year over-year you could see back you know 20078 we actually um had small increases then we actually decreased the contribution and it's not that wasn't a a reduction that we decided to do that's what the actuaries told us you were overfunded back then well we we've had to go on a stretch where it increased pretty significantly between between 2012 12 and 2016 and now it's leveled off except you see in 2122 that jump corresponds to when the return assumptions were dropped okay so um for next year the early budget amount is an increase of 20,000 for the pension um nothing really we could do uh to adjust that you know it may change as the actuaries continue to do their work um this I just included again I I know this is a little

098bit hard to see but the return the one-year return and this is as of September of 2023 was about um 10.2% overall 12.3% in the traditional assets and then we have a low return on some of the um liquids in the portfolio but the portfolio that's being managed is about $84 million the town of Cheshire has a pension board that manages these Investments so I just provided that for informational purposes you know we are getting a reasonable return it is a conservatively managed portfolio but um what's driving the increase is clearly the return assumptions have decreased and those return assumptions would decreased um It's Not Unusual you know along the same lines as medical most towns and cities that are responsible have lowered their return assumptions and have increased the amount that they fund to

099their pension plan so the fact that we're doing that is a good thing it's not a bad thing costs money but you have to fund your pension obligation properly um so if you look at employee benefit as a percentage of budget you could see we're definitely on an incline you know back in 20056 we were about 133% of budget and now employee benefits which is mostly our medical benefits is about 19.6% and then if we summarize total salaries and benefits um it's a 4.97% increase this is again we we've gone through each of these categories that's what it is is a total and so what's interesting here is if you look at salaries and benefits as a percentage of budget um back in 20056 it was about 80% and projected for next year was also

100about 80% we know that a larger percentage is benefits and a smaller percentage is Wages but it's generally been in line you know since 2005 20 06 so that wraps up benefits um do you know what our percentage of I don't know what the right term is percentage of funding know like our the the pension is 80% fund you know I I didn't I'll get that for you I'll give you a definitive number last year it was well over 80% um and I'll get an update on what it is again again when they reduce the um return assumption actually lowers the percent of your obligation that's funded but I'll get an update and then um as far as the breakdown of the Investments is that on our town website or Is the no that was

101um the pension board when they meet they they do post their minutes but I had a request that from the Jim jascot the town's Finance director and he sent it so when they post the agenda and they post the minutes they don't post the attachments but that is a document that you know we could obtain I'm I'm just concerned about the um the percentage of what of alternative assets like I just I think it would be nice to know what that means versus what traditional assets are like are they did they load up on bitcoin or something like that you know what I mean to kind of yeah get I don't know I doubt yeah I doubt but but when you call it alternative assets what does that mean you know yeah no I'm I'm

102seeing a the return is not fantastic so I'm wondering what's going on I know some of the people on the pension board it's there's no Bitcoin in there that's not what they do but I just so I'd like to know it's a good it's a fair question and I'll get you some inform know it is it could be a you know we're we're peeking out at the top of the market arguably right now and we had the pony up what almost 225,000 in 2020 and a little bit less in 21 and we're talking about all these other thing other time bombs in our budget that we might have to come up with and so it' be nice to know how we're positioned for the next down inevitable downturn you know okay so any information be

103helpful we'll get it who sets the who sets the return assumption the actuaries that that we hire so we I'm just curious just to be clear on this they tell us number is that advice they they make a recommendation the Town Council ultimately thank you okay the Town Council ultimately has to decide if they want to accept the Assumption and over what period of time because you are allow of phase in Period sure um okay generally speaking well you know certainly since I've been here you know they've accepted the actuaries recommendations um and they have taken the opportunity to phase it in over a longer period of time so the impact to budget right because this affects not only the schools but it affects the town because they have you know police um and other

104employees that are participating in the town's pension plan as well yeah no I seem to recall that back at the bailout 15 years ago because they just dropped their numbers down dramatically um their return assumption so my my point is it has nothing to do with ches Public Schools or the Board of Ed it's the town okay yeah we we we are taking Direction on what we need to do there yeah I mean they basically do they own the pension the pension fund do we have any do we have a say in it how it's treated or is it basically controlled by the council the pension board makes the decisions okay you know really our involvement is you at this point when an employee retires you know they notify they give us a retirement notice

105you know we work with the finance director you know to get the pension estimate and then ultimately the pension paid out to the retired employee sure okay no thank you for that um and how many how many employees do we I don't think you mentioned it what you were the numbers you were talking about before were employees current current employees who will be pension eligible and employees who are or Define defined benefit pension eligible and employees who are defined contribution receiving right now the the there's 54 employees that are still contributing those are active employees and there's I think the number was 212 active employees in the defined contribution plan so just to be clear so the number of retirees yeah is higher than the 54 this is just people that are still working here

106still active not retired okay so the defined contribution after they retire that's done right is there anything basically they they could take the money and go yeah um and the money that's being contributed contributed to them they can also contribute to that fund that the it's a 403b plan like 401K in the corporate world you know the money goes into their account you know they have their selection they could choose from one of nine investment providers and they choose their Investments within those providers but that's essentially their money okay thank you and with regard to the defined benefit plan the people who are active retirees do you do you know how many people that is right now just approximately I don't I don't want to guess that one but I'll find out okay yeah okay

107all right thank you you're [Music] welcome point of clarification you said the actuary recommendations when they decrease we obviously have to step in and increase or it the opposite no when they when they lower the return assumption right that means you have to put more money in to meet that pension obligation in the future so we were at eight now we're at 6.75 so that Gap increased the amount that we have to contribute you know and these are I mean these are long-term payouts right so if an employee retires you know as an example at 65 and their life expectancy is 85 you know that's 20 years of payment that we owe them at the set payment rate um and that's what you have to make sure you have enough funding to carry that employee

108and then all the employees that are in that category through and then the actuaries what they look at among other things is you know what's happening to life expectancy if it's increasing people are living longer than 85 you still have to keep making those payments so that's a yearly recommendation that brought forward to the town and the town decides whether or not they accept the actual projection correct so just to build off of what Sam is talking about we don't have any control over any of this is that correct correct so this is good information for us but that's what it is okay information but if we get a projected retirement the the 54 employees could decrease depending on whether they choose to retire this coming year right right okay but that doesn't change Our

109obligation un unfortunately because you still have to fund it it's been interesting I mean one of the reasons the town and again we're not alone that we did this the reason that we mve to A A Defined contribution platform was so that we would know what our fixed payments would be going forward well a couple of things happen within the pension plan I mean we've lowered the return assumptions especially that was precipitated by the market downturn in 20079 or 2007 through 2009 but also it didn't help us when employees are no longer contributing to that plan so you don't have the opportunity with new assets to in invest those dollars so you know that it's kind of been an interesting set of circumstances that got us to where we are today I'm not questioning the

110Judgment of the decision but that is the reality of what's happened um and then you know similarly or related to that the fact that we don't have a t of chesher pension plan does hurt recruiting or retention you know and I think it's especially true in the chesher police department where a lot of municipalities still have a pension plan which is very attractive so you know there's there's there's pros and cons to the decision and you know what we have to contribute that's you know going to be a continuing budget constraint hopefully we don't lower the return assumptions any lower I mean I I I think we're there I'm not sure that going much lower is necessary but not an actuary and if that does happen where we keep the return assumptions at 6.75% we

111should see that our pension contribution should level out for the next few years thank you thanks um a minute ago you mentioned the pension and the town having Define contribution plans instead of Define benefit plans basically the story I've heard separately is it sort of hurts uh Recruitment and Retention in terms of the police department that's what you mentioned has that had any effect on the ches public schools anything anything worth mentioning I mean if one person says no I'm really that concern but is there a trend there that exists or I don't think so I think it's it's clearly more prevalent in police departments across the state to still have a pension plan we're a little bit of the outlier Not Unusual for the positions that we have in the schools and you know

112it's not been a I don't think it's hurt us recruiting wise I mean to any measurable extent Define contribution plan pretty good plan um you know we contribute 5% of the employee wages to the plan if the employees put in 1% we put 1% more in so they can get 6% secretaries have a slightly different Arrangement they have to put in three and we put in eight for them it's portable so if they leave before they retire and they've been with us for five years they're fully vested they take those assets with them and they can roll them over and you know continue to benefit from them in future years yeah I think there's to me there's there's probably two different issues one of which is um risk who Bears the risk is it the

113taxpayer or the employee um I think Define contribution plan is reducing the Shifting the risk from the taxpayer to the employee it's how I generally see it the longm RIS yeah the investment risk long-term risk that's one concern as far as as far far as dollars though and funding goes if we ever get to the point where it is affecting retention and recruitment I think it's pretty straightforward that Define contribution could change it could increase it could decrease I just I don't think money should be part of the real discussion about DB versus DC pension plans to me the issue is really risk and where does where does that investment risk sit yeah have that graphic you know that there the different I'm looking at a different chart versus your graph I did add this

114switched it off at the 11th Hour however I'll give you new copies on Thursday but the version that we're posting on the website does have this so that concludes this evening so this was our first public budget review the next meeting um to continue on with the public review the second half of the accounts is Thursday and then the public information session is scheduled for Tuesday January 30th so I thank you if there are no further [Music] questions chair um vinc Dr Solen team and all our folks here this evening thank you so much for putting all the time and thank you for presentation and know was more to come I just want to say it's always uh refreshing for me to see our our team here at these budget meetings after a long day

115at work so thank you for hanging out with us tonight and probably a couple more nights so uh it's very helpful so far thank you thank you thank you Mr Marana thanks V you you have at least two more years V I heard that one year comment at the beginning so yeah um motion to adjourn Tim second by Mr grippo all in favor of adjournment it is unanimous we are adjourned