4/21/25 Finance Committee Meeting

001Thank you all for attending. Kate has offered to take the minute tonight. And before we start, I just wanted to hope that to wish you all and hope you all that you had a very pleasant vacation and Easter Passover holiday after a week off now. So back to work and picking up the brunch. So it was tough to get back after a week of work to catch up. So with without any further I think it's going to be lengthy conversation tonight any delay I'm going to turn this over to Mike Weaver and Angela so they can get started on the financial Michael you want to start and take it over. Yeah Rich thank you. I'm just pulling this up so I can share my screen. Mike, the page numbers are referenced. Don't you, it'd be

002good when you, you know, are discussing something, just make reference to the page number. See that? But since you've numbered the pages, so these are the financials that were uh presented for the uh month ending March 31st. Um it was a very typical month for us with two payrolls. Um we came in uh just over $14 million for the month. Um for the year-to- date expenditures, we're at 100 million uh.7 100 um 100 million 73,000. Uh and our balance, you'll see, has changed a little bit since uh we spoke last. The current balance is projected to be 1.8 8 million. Um, and I just wanted to go over a few things um, that changed there that drove that number to change. Um, one is our continued efforts to reclassify staff into the proper locations. Um,

003we made a significant effort to move people that were supposed to be in our alliance grant to Alliance. Um and upon doing that we realized that there were people that were in alliance that had to then be moved back into general fund. So there was a a a surplus being shown and then when we finish moving everybody uh you'll see the balance now for salaries is 30 uh 382 383 uh000. Um and that number is um is still fluctuating as we continue to uh move folks. Uh today we were able to sit down um with our grants coordinator and go over um another big grant, IDA grant. Um so there's going to continue to to make those numbers move, but um as I'm doing now, I'll go over those numbers with you and and how

004they change. Um the other big benefit is the next line under that uh employee benefits. I know it says employee benefits, social security, it's it's uh much more than just social security. That's where our health sits, our dental, our long-term disability sits, as well as social security. Um, that number is an uh the actual number that you'll see is a number that's generated when we run payroll. It's um really a placeholder that needs to be reconciled quite often. And I'm going to speak about that a little bit later on when we talk about the 20 24 audit and where we stand and some of the variances there. But um when I um started about a year and a half ago, there was no reconciliation being done. And that reconciliation that happened happened at the end

005of the year and it was a large surprise to everybody. Um we have a much better process now. how we actually reconcile uh this number and I I'll share the reconciliation so you can see what it looks like on a weekly basis. Um our um health and dental are charged uh in two ways. One of them is through the accounts payable process where we have a purchase order put in um and then every week we uh have an EFT taken out of our bank account for the actual expenses because um as most of you remember we are uh self-insured. So that reconciliation is now happening. It's being updated on a weekly basis and you'll see those numbers will be uh will be changing with the financials each month. Just pause right there in case anyone

006has any questions. Yeah, just the the balance that we have that you have. Um another uh if there are no other questions, you'll see that there is a number um Mike hang on a second. I'm sorry. from the bottom 1 $1.7 million in enrollment impact equipment and building repairs. Um that number you're also going to see change as we move forward. Some of the expense that's sitting in that overage is about $1 million and I'll bring that up again. Those were IT purchases uh purchased by our IT director. Um, and if you recall, we have a total of $7.7 million in our ARPA allocation. And the process to get that money back from the city is that we have to produce um quite a bit of paperwork, the requisition, the purchase order, the receipt, the

007proof of payment. Um, and we send that to the city. The city then sends it to external council whose um job it is to review all the expenses and make sure that they're in accordance with spending and once they get get the green light they give it to the city and then the city can um give that money uh to us. So I have in the pipeline um 1.01 million in with the city. Um we're confident that everything that we've submitted has been accepted and that'll be coming probably in the next month. Um, so you'll you'll see that again. Hey, Mike, just let me interrupt. Last month, the balance that we showed was somewhere about a $9 million balance. Line item details. You'll see again, we're still working through getting many uh of the variances

008by by line item. So, as I said before, we're moving people between the general fund uh and the grants fund. And part of that is also making sure that their individual coding is correct. And you know, looking at this this big long I don't even know 16 or 17 digit number. Um each of the uh each of these numbers have a significance not only in just their location um and to what fund they're charged but also their uh job title and their responsibility. And what we're noticing is as we're going and moving these individuals in and out of alliance and today with IDA that some of the coding is incorrect. So we're also going to be correcting that at once. This way when we roll the system forward for the next year, we're not rolling

009forward mistakes. We're rolling forward the the corrected numbers. So I just wanted to bring that to your attention. Mike, can you hear me? Again here you see the benefits uh are are favorable. Um and we are going to see those uh changing u month monthtomonth with the reconciliation. I've got a question. Go ahead. We have our professional services and our property services. Um property services is slightly uh slightly favorable. um usually due to just the um budget uh repairs that are uh budgeted for but we haven't quite incurred yet. And um to jump back up to professional services, um when I say that we're adjusting the individual um salaries to be in the correct account, you may notice that there is um I can't highlight it, but this this line right here um that ends

010in uh that starts in 53. Those are um special education tutors. You'll see there's a favorable variance there. um that's partially offset because those people should be um budgeted for and charged out of salaries and for whatever reason when the system was introduced uh that wasn't the case. So um you're going to see this number um in the future also uh change as as we uh request to move them into uh the 5100 series. Mike, can you hear Mike? Can you hear us? Can you hear me? I don't think he can hear us. I don't think he can hear purchase services. The big animal here is um transportation, not only just our regular pupil transportation, but special education, um vocational and non-publiclix. Um right right now you're going to again you're going to see these

011numbers change as we go um on an actual basis. Oh, and Teresa has her hand up. Yeah. Thank you, Kate. I I actually cannot hear you. Okay, you're on mute. Everyone was on mute. Can you hear us now, Mike? Okay. Um, should I pause there for questions? Yeah. Hi, Teresa. Yeah. Okay. Back on employee benefits. Two questions. Uh, first are we still is did we have the consulting give us the figure for what we anticipate for health benefits? Sorry, Teresa, if I still can't hear you if you're I I'm I've got audio. I I'm on Teresa. I can hear you. I think this is an issue on their end. Yeah. Yeah. I I was plugged in. I can hear everyone now. Okay, there we go. Cons um the figure for the health uh cost for

012the year. Are we still going to a consultant to give us that estimated figure? Didn't work. Uh yes, we use um Gallagher Health. Uh they give us the um the basic number and then we book based upon that. Okay. My second question is [Music] um the number of employees in the district does that fluctuate wildly? The ones who get the benefits and all? Actually, I should just say everybody. Does that fluctuate that much? It can change, but not much. So, I don't understand why we can't get a better handle on that number. Let me share with you Yeah, I'm just reverberating with yours. I think I got it. So this is the um reconciliation that uh I've created. The number that we get from Gallagher is a placeholder and that's automatically booked when payroll is

013run. So the to get the best uh number or the truest number when that's run, we back that out. And then this top period is what we pay out of accounts payable. And then every week we receive a wire uh we get a wire taken out of our account um in these various amounts. So they they swing weekly, you know, sometimes they're 400, sometimes they're um 600 700,000, sometimes they're low. Um the most recent one we see jumped up to 825,000. And that's because as we progress through the year, our health care benefits are not on a calendar year and they're also not in a school year. They're on a plan year which starts in September. And as uh the the year moves on and people meet the deductible, um we see that the last

014three months uh really start start to creep up. Does that answer your question? Yes. May I ask another question? What? Why can't we get them to operate on the same yearly schedule as we Sorry, one more time. Why can't we get the instead of starting September, starting July to June? Um, I think we probably could do that with working with the broker. I'm not sure if there'd be any benefits. You know, it would just maybe shift the uh more expensive months forward a little bit. But can can I I actually have something to add to that because we do talk about that periodically, Teresa. And part of the problem is that we hire people um and and they either come and quit or we have problems with how we staff and so we tag it

015to the academic year so that we do the hiring in the summer and they come on and they go teachers go on the insurance right away. So that's why we've always staggered it because the fiscal year would have us putting people on the insurance in the middle of the summer and they won't have paid in yet or anything like that. So that's always the reason. So technically then it should end in what? In June. Yeah. Well, yeah. The plan year is September 1 to August 31st. So what we do is we take out their premiums in 20 pay periods. So we take out a little bit more rather than out of the 26. and that covers them for the summer months because we don't have paychecks for them in the summer, right? So, we take

016out enough to cover right through the summer and then um and then we start the payroll deductions again when they come back and start their payroll again. I was just thinking, but we still have to pay the bills after the fiscal year has ended. Yes, we pay it through the plan. Yeah, we pay the bills through the plan year so it leaks into the next year. Um, but otherwise we wouldn't have a way because we don't take premiums just by check. So, we wouldn't have a way to be getting people onto the plans. So, it's that's that's just kind of the weirdness of it. And I think what happened is for everybody else, and we could certainly change it, but like for 12-month employees, we we do the same thing. We only take the premiums

017out of 20 pay periods. So, we don't have premiums taken out all summer, which is a little silly because we're all working then anyway. But I think it logistically was just easier to do it all as one. But we could look at that. I was just thinking, you know, getting our books Yeah. done more efficiently. But what you say is more practical. Yeah. Yeah. The details. You're welcome. Let me go back to something. If you would go down to the bottom of the screen where you have the the reconciliation Mine's cut off. But essentially, mine's cut off. So, for some reason, the the problem from what I'm hearing in terms of health expense, which is probably the second or third largest expenditure we have, is in the estimating of the budget going forward. you know,

018in totality at the end of the year, we come up close with what we're projecting, the month-to-month swings are, you know, not not that important because it it's on an actual basis and it's it's on a claims, etc. But if at the end of the year in total with what we've encumbered and what we've incurred, we're in a positive number in a relatively small positive number where we're not millions overstated. I tend to think that's more in in the budgeting of this particular expense. But when you first started out, the my comment was, as I recall, last month's balance was somewhere about $9 million and now we're down to close to $2 million. Are you saying that a good part of the you want to refer to it adjustment or to clean up accounts out

019of the general fund or into the general fund whichever way things went into other um other accounts being grants to to to get erroneous uh postings that that were done. Is is that the reason for basically for this large decrease? Yeah, that that's certainly uh a big portion of it was um people moving from general fund into alliance. In in alliance this year um we had to go undergo a little bit different of a task than we've had to go through uh previously. we had to break down the budget by not only location but we had to include um folks names and their salaries and benefits that were associated. Um so we had a list of people that actually should have been charged there. Um and uh at first the first step of it was

020taking the people that were in the general fund and moving them to alliance if they were correct if they were budgeted there. And then the second part of that was u moving people from the alliance that should not have been there any longer back into the general fund. So you did see a temporary increase in general fund and then when we found that there were individuals also incorrectly charged to alliance that should have been a general fund um that that flip happened. Um off the top of my head I want to say it was just over $5 million um in movement um in salaries and then the corresponding benefits and then of course you know we had additional expenses uh this month which also um brought the balance down. Now that after you've gone through

021this this investigation and this cleanup process, I'm assuming the coding has been corrected. So going forward, things are going to be in the appropriate places and we're not going to see major swings, you know, two, three months later. Is that correct? We moved, I want to say about uh 150 people. Um I think we have a total of about a little over Kim correct me if I'm wrong 2,000 FTEES. So we we just scratched the surface. Yeah. Yeah. It's a little bit of a moving target. We know it's about 1100 teachers and we're going to add a bunch in the spring or you know for the fall. Um but we know we're circling around 1100 teachers. So that's the line share of it. But um yeah, the rest of it kind of fluctuates a little

022bit. Yeah. But to your point, I I know it's a lot of work, but you know, and don't take this the wrong way. The statements then are meaningless statements. You know, of course, for miscoding, not pointing any fingers at you guys or anything there, but to the point where you've cleaned up stuff that you found so far, I'm assuming those adjustments have been made going forward. that we're not repeating this process and generating statements that have wrong information and then a period of time later coming back with whopping adjustments to it. I mean, yeah, some of the some of the coding I'm I'm referring to when I I said that some of them still could um probably benefit from a once over, it might be moving someone from one ele school to the to location,

023not necessarily that we're going to be moving people back and forth between the funds. Yeah. Okay. You know, I'm not concerned at this point with, you know, what school they're in. That's for, you know, a later cleanup. But all I am concerned is when you publish, you know, financial statements and we have swings from a $9 million positive balance down to $2 million and we say that it's attributed to coding differences. You know, we're we're nine months into the year. it it's it doesn't make any sense. So all I'm trying to say is going forward we have to have a better handle on the mechanics of the coding so when you publish the statements you can take them at at face value that that's all I agree with Rich. I agree. I mean this is

024crazy. Yeah. I mean it because we still got April, May, June. Yeah. I just want to jump I just want to if I could just jump in for a second or we're going to reverberate here. Um, just to clarify, a lot of the work actually has been done. The grants getting folks assigned to the correct grant. Um, you know, there was staff that were um traditionally or historically assigned to the alliance grant that were still being charged there in addition to new folks that were rewritten for for the 25 26 year. And so once those adjustments were made, everybody is basically in their correct home, their charge code if you will. But every time it's going to be a real like a laborsome process every year. So for example, right now we've got a lot

025of staff members that are sitting in the one-time ARPA funds. When that expires, then those all of those staff members have to find a new home, a new charge code, a new location and funding source. So it's really just a handbyhand uh person byperson project that you that you you know embark on. We did that a lot with the with Alliance um to make sure that folks are being charged especially um you know under the new strategies that we that we have written. Um same thing with title one, same thing with um some of the other grants and IDEIDA. So there's been a lot of changes that have been made there. Um that's good, but but every time, you know, as we head into a new hiring season, we have to be super mindful coming

026in that everybody has their correct location and the correct charge code. Um, and that's something that in the last couple of years with all the turmoil, um, you know, has has, you know, folks have been docked or assigned, if you will, to to the wrong places. And so what you see in EGMS when we enter those names in is different than what's in the back end of our Tyler system. And so the work has been to align what gets entered into EGMS and how the charge codes are actually firing in the system. So I think we're in a good space now. There's just there's more, you know, this it's going to be ongoing. Uh, you know, labor to continue that process, especially as we turn staff over and especially as we head into next year

027with so many staff coming on board. Rich, a lot a lot of work has been done and like I said, there was there were places that were getting overcharged and places that were getting undercharged and I think we do have a much better handle on that right now. I I appreciate that and I do want to to thank you for the tremendous work that that's been done and Mike and Angela and staff to to get this to get this cleaned up. And I understand the complex the complexity, you know, particularly getting into a new budget year in terms of, you know, what you're proposing and the final appropriation and then how you move things to what I refer to Rob Peter to pay Paul may change some of this coding in the future. The only

028thing I I'm saying is that I understand it's labor intense, but we're going to have to figure out a way how to keep current on this particular process so that when you publish these statements, you don't have these big adjustments, you know, going forward, you know, you know, as to how you do it, whether you hire attempts to do it or however the the process is. So, that's going to be up to to to you guys. But the this is a moving target. It's just like you you know I use the phrase ra to the f because we constantly move people back and forth and like you said from barber they're going to go someplace else that means a tremendous amount of coding. It it's just that it seems like in the past we've never

029kept up with this and that's why things are screwed up and it's evident in in the last two audits that we're having. But you know from that we have to put in place something that at least keeps us more current going forward so that we have more reliable you know financial statements. No criticism on on the work. It's just on the procedures and the process. Yeah. Absolutely agree. We agree with you 100% Richard. That's that's been the the work and will continue to be the focus of the work. Thank you. And yeah, I mean, if you're going to be toggling back and forth all the time anyway, I mean, putting positions in uh grants or back in general fund, we got to get a better handle. I I do think we're there. This was a

030lot of there was a lot of work recently done. This was a big mountain to climb and I do think that we are we're there. Yeah, we're doing two years, three years worth of cleanup, you know, which is, you know, devastating. It's, you know, what comes out and shaking out through the leaves is, you know, it's a surprise, but that you don't want to lose that momentum and and just have it recreated. So, um, you know, enough said on that. Mike, I just wanted to get back to you on your your narrative. I think a couple of paragraphs in the bottom make reference to some sign remake. Can you tell me what that is? Yeah. Uh, let me pull it back up. Rich, just so you know, Julie had her hand up. Oh, I'm sorry,

031Julie. After he answers a question, you could ask a question. Okay. Thank you. Um yeah, so uh every year um inside the our agreement with Sigma, we're um entitled to but not guaranteed um a benefit uh on the pharmacy program. And this uh this year the number um that came in was a little a little north of 1.6 million in pharmacy rebates. So, you will see that number reflected when I show you the 2025 numbers and uh and where we are as of today. Um I think that's what you're referring to, Rich. So, you said the the numbers they they came in in in March, but you record them in April. Is that correct? Right. So, they're not in these sets of financials, but they are in the current set. Booked in April. This is

032a a pharmacy this is a a pharmacy rebate that that we get. Is this something unusual or we get this annually? Uh, yes, we get it annually. Uh, last year it wasn't quite as big. I think last year, if I remember correctly, it was uh just about 888,000. Um, this year it was just over 1.6 million. And let me ask you, where in the budget is would this the cost for for for this to to be? I guess what I'm getting at is this rebate ever estimated in the budget to to come to reduce our expenditure. Yeah. So I think that's one of the reasons why we've been uh favorable um in healthcare benefits. So that the number does sit uh or that that number does get booked to health care. Um it is as

033we saw from last year to this year it be going from you know 800 something thousand to 1.6. It's uh wild all over the place. Um and additionally my question to Gallagher was is this something that's definitely guaranteed to us? Is this something I can bank on or is this something that we should get? Um and I got that it is not guaranteed to us. Um so for this fiscal year moving forward it's not included in the um in the healthcare number. I think can I one of the places where I I know because it has always been kind of a black box this um pharmacy rebate it's actually from the drug company rebate and I think the reason why we saw a big jump this year is because our broker Gallagher renegotiated with Sigma

034how much of it we would keep to get us to 100% with a minimum. So that's why we saw the number jump but so up so high this year. But the place where I've seen it recorded is when Gallagher does our estimates for our insurance costs for the following year. You see it as an offset. So like for example, if they say you're going to spend $30 million on benefits next year, you'll see it in that chart as a minus whatever the estimate is for this year, 1.2 million. So it kind of gets baked into what Mike will budget for insurance costs. Okay. That makes sense. and Mike. So, if it is something that we could sort of count on, but it's just a a guesstimate how much it it is, it might be something

035to consider in the future, Mike, to set up a special line number on this where you can show it as a a credit and, you know, and just have it as as a reduction of the expenditure under, you know, underneath that line and and just post it as it comes in so that you know these are big numbers and we're not you know it's nice to have a very favorable you know surprise um for for this amount of money coming in but again I look at the financial statements and say okay if we're aware of something and this is a large number that's an offset we should at least highlight it that we're expecting it and then just we can see where it falls rather than net it against these numbers is we have too

036many numbers that were netted together. We don't really understand what the makeup is. So, it might be something to consider, you know, going ahead. Yeah, I could certainly talk uh with Gallagher um the the next time uh we meet and ask them if there's any more a guarantee and see if it is actually something we can book as a receivable or if it's uh just a bonus. But it sounds like from um what Kim is explaining that it's um might be a little more solid. All right. So, you know, it's a nice surprise. The the the other thing is when we had talked on the financial statement, you said you had some adjustments that you were going to make. I think one of the line numbers my memory service for consulting you said there were

037some offsets. What I'd like to do is is before the next month is to have like a key at the bottom that says that this particular this particular budget line that shows nothing on it, you know, is offset by this particular line number where it has the expense in in it. so that we start to explain some of these variances, whether they're positive or negatives, that have offsets someplace else, right? Yeah, we can certainly include a key at the bottom with um any of the adjustments we're making. Yeah. Because when you look at, you know, again, when you look at the details and you got these variances, and that's why I've been reluctant up to this point is to discuss the variances because you're so in the cleanup process. So, it's kind of hard to

038determine it. But if there are items in there that you're aware that the opposite or the offset of that is in someplace else, uh, then it should be noted on the bottom. So when we look at it, you know, it makes a little bit more sense to us. Yeah. And I I also think moving forward, um things are are just going to be a little bit different in that they'll be booked where they're charged, where they're budgeted. So those negative variances and offsets really, uh should be at a minimum going forward. All right. Thank you. Julie, you had a question. No, I was just gonna um add what you said, but you already mentioned it about how to offset. I mean to put a note on something just in case, just for notice or just

039for reference, I should say, but you already mentioned it. So, thank you. Okay. I got one question. Go ahead. thinking of a separate line. Do we ever get um in connection with the state we get these mandates? Do we ever get a line um stating what the current man state mandate is costing us? Mean unfunded mandate. Yes. So can I jump in? Yeah. So, so I wish um that that would be a consideration for districts when they when uh legislation is passed. Um but districts are really left to kind of figure it out um and how that legislation impacts them. And so um sometimes there's um costs that you know about and sometimes you don't really know until you experience something for a full year as to what the real hidden costs are. Um there's

040known and hidden and um you know those are things that usually in the next leg legislative session superintendent and and folks would go and advocate for or bring to light about the unintended consequences of some of the legislation that gets passed. Um, I would love to have a bucket or location that was called unfunded mandate so we could uh put everything in there that was not budgeted for the pre previous year. But we do try to keep track of things like that. Um whether or not it falls on, you know, deaf ears uh at the state department is a whole another, you know, whole another thing. But we do uh we'll have some more things heading into next year. Uh we just don't know what the full landscape is yet until you start to weigh

041in through through new legislation. Well, like last year, didn't we have to put in um feminine hygiene products and dispensers in bathrooms and that what was the total cost on that? You know what I'm saying? Yeah, that might have been like 50 or 60,000 I think to install the dispensers, but then the actual products themselves I think were even more on a regular basis. So, no, I realize it probably fell in in in the other uh categories. But just an aside, having that total number is I think a good talking point, you know? I mean, that's a lot of money just for the dispensers. It is. It is. It is. and we're going to be going through something similar with the I sent an update about the uh the recycling program and the the waste

042I should say food disposal program um due to that's another legislative piece that we're not quite sure how much that's going to cost us to haul off our waste separately um you know so that's another thing coming and then the um the airvac system or the air quality controls we've got to pay for that now you know what does that cost you know People got to know this. Yeah. So, these are all things, you know, like I said, we we keep track we try to keep track of them once the the the real numbers are known and as superintendent groups and as uh you know, different different legislative groups will advocate um to have laws changed or amended or to be funded. Can I suggest maybe a separate page of unfunded mandates? You know, just

043an like a PS. Yeah. It's the bait of our existence. Um So, I agree with you, Cara. Teresa makes a good a good point because as I'm listening to her, you know, we had that mandate to to move to 25 credits for the high school. So, that to me that that globalization to to move us into that is a huge a huge unfunded mandate. you know, it's a lot of that past been absorbed. But yes, you know, to Teresa's point, it's it's a number similar to what the mayor gave us for his inind services. Um, it it's a number that is is is out there that what we have to absorb and it could be an interesting and should be an interesting talking point at some point. Put our heads together to to say how

044much we've spent unfunded mandates. So over last five years, I would say. Absolutely. Yeah. And it's not just one time. It's it's it's having to sustain it moving forward. Yeah. Exactly. Easily forgotten. Yep. Yeah. Because we've already met that threshold, so you forget it. And so it's a valid point, Teresa. It's just that, as I keep saying, there's so much to be done, you know, that there's a priority list as to what has to get done first. Time moves by so fast. Um but uh it's a good point and hopefully we can you know get to it so make the presentation a little bit more informative. Mike, did you want to move to Does anybody have any further comments on the operating statement before we move to the grants? If not, then let's just quickly

045look at the grants. Uh Mike and again I want to thank Angela for her for a great job in the presentation and the board voting to adopt this particular format. Zoom in a little bit. All right, let's see. Yeah, this is kind of small. Download it. Actually, Mike, when you're bringing it up, if you could focus, my question would be if you could focus on the the alliance grant. I just had a question that I wanted to direct to to Cara. Is that too small? Yeah, I think it's best. Is there a way? Yeah, I got my copy. I got my copy. It's okay. Are there page numbers on them? 11. 11. Okay. Yes. Good job. I love the page numbers. Thank you. Uh there you go, Rich. Alliance, that top one, right? Okay. Okay.

046Um Carrot with all the adjustments that we had talked about earlier in in this particular discussion that were made to and from the operating into grants in general but perhaps principally alliance. Um, is this going to distort or create issues with you in terms of what the use of this particular grant is going to be in the future? Uh, when I say in the future, I mean once the final appropriation is is set. Um, we always utilize alliance to to go back to my suggestion Rob Peter the pay Paul we we have to be mindful of leaving monies in here for the incremental increases in the cost of living but with the big adjustments that I'm sure have been made to this account. I don't have comparison from the last month. It's just a matter

047of are you are you worried about the sustainability of this particular account is helping us sure in the current year. you know, we're we're likely, you know, if our allocation holds at at the the the number that we were um told, um you know, we we will have to use all of the 9.1 or pretty close to it to bring in the high school staff and everything related to the opening of the the new satellite. So, you know, we are allowed to put operational, you know, Alliance is our ECS. However, we have an an additional I'm going to call it a burden additional burden to um create specific strategies that are bound by the the guidelines of the grant and to fit within those. Um so this heading into this year as a strategy and

048this is this is again you know how this is the volatility that we deal with here in Derry is that you know coming off the heels of of a big reduction last year we had to I I crafted a strategy in alliance uh to incorporate the DHS staff uh DHS west staff that were likely scheduled to go over there. So we we you know our alliance now is a big strategy now is the opening of the DHS academy the innovation that's behind it the transformation component and so approved by the state that those staff members you know that that's a bonafide expense um so we'll continue now that that's been approved and I did get pre-approval for that last year and they approved our grant um you know we the the staff that's that we

049need to open up the campus for 2526 six, we are likely going to have to put all of the staff um you know that we budgeted for in the new with our new budget into alliance and we probably won't be able to to write any more new strategies in there uh or intervention or anything like that. Um but we'll probably have to fit just about everything related to the academy in that grant for next year. So that's an that's an example of the volatility of having staff that were in another account or general fund that we moved into alliance which create you know creates a lot of turbulence um and and shifts but we'll do that again as we have to hire new staff for uh DHS West Academy uh once we get started. So

050we we really wouldn't have any other option our general fund uh would not be able to support to support all of that. In addition, we are negotiating, you know, five contracts coming up. We don't know what the results of those are going to be. That that's another volatility factor that we're going to have to deal with. Uh and and and try to live within the means. Um are we going to be able to get everything into these grants? No. Um but we're going to have to put the preponderance of the new new staff from from the high school into this grant. Which goes to my point in saying you know the urgency and the need to keep the coding current and the adjustments current is so that when you look at this you don't rely

051on a number and then say oops at the very you know today I'm $4 million short because of prior months or whatever it is adjustments that you know have to have to uh we have to be made and this alliance number is a shifting number in itself I I don't necessarily the dollars. It's just a theory behind it because I suspect in my own words that it it's not what we what it was intended to do. But with, you know, within the parameters of what's legal, we are using it to absorb some of the operating accounts or expenses that we're not funded for and within the parameters that that the state allows us are are using this particular money for. So, it's u yeah, it just it just ties all of all discretionary money to

052to do other innovations or to support other projects. So, you know, we'll we'll probably be able to to slide most of that in there, but um you know, we'll be between a rock and a hard place after next year because the increases no longer, you know, they they they sunset. So, um we'll we'll like everyone else will be very uh you know much um eager to see where those increases go because the you know having that many staff members and salaries in a grant with contractual increases over time that that's going to continue to grow. So, um it's something that we have to be very careful about. Um, and again creates a volatility that is a little bit more difficult to manage than if we were just living in the general fund. That's what makes

053things complicated here. Again, in Danberry, we live out of multiple grant streams that change and shift. Um, and one-time funding, you know, I'll never turn down money, but onetime funding is very, very disruptive. I agree. Let me read a few questions. Am I correct in assuming that in the alliance money that if you don't spend it, you have to turn it back? It does go back and one of the things that you know we're working really hard is making sure that you know getting a handle on making sure that every grant is maximized and it's being charged correctly. Um again the volatility creates you know variances that we have to continually work to address. Um so that's something that um the grant allows. So I'll give you a quick example. I don't want to belabor

054the whole meeting here, but the um you know there's a one time one once a year or twice a year a couple times you can make adjustments. So if you're not spending money, let's say on substitutes, right? We had a large amount set aside for subs that we couldn't get. I'm able to reprogram that. So I was able to reprogram it for some equipment that we're going to need for the new high school, right? So we'll we can make use of th of those funds if we're able to address things in real time. So, um, I I guess what you're getting at is is my concern is is that with the alliance being frozen at a certain point, Richard, hang on a second. I can't hear you. Uh, Mr. uh, Mr. Janelli, uh, Teresa has

055a hand up. Okay, let me finish my question to Cara. Y um, thank you, Glattus. Carrot, my my question was was with the concern that with the alliance being kept and this reserve or buffer that we have to keep in there for potential cost of living increases. Is that something that we can just say that we're putting aside x number of dollars to cover contractual increases for the salaries that are in there and that would be allowable? Yes, if you're asking me. Yes, the Yeah, I might lost internet. Um, yes. So, you know, if if we had contractual increases, we we could use the grant to offset and we could use the general fund to offset the increases that are in in all the contractual increases as they go up in alliance. Uh, one way

056or another, we we would just have to rebalance the staff that's in there. So what I would do is I would pull, you know, some a percentage of staff out that would have to stay in general fund and or we'd have to reduce staff to make everything fit, which is ultimately what we do not want to see happen. Um, but you know, we can only spend what we have and within our means and we have to make sure that uh that that grant has um enough room in it to absorb a contractual increase for the next year of the next cycle. But again, we're heading into So, we we may have to program that grant before we even landed all of our contracts. So, it's, you know, it's complicated. Yep, it is. Okay. Thank you,

057Teresa. Go ahead. Okay. My question, I have two questions. Um, so the line positions that you're moving to the alliance grant, those are going to be the ones over in the west side. That's my that's what I'm planning to do now. You know, it's not over until we get our final allocation. But that's my intention is that because that was an approved strategy um the expansion of the high school and the satellite campus and that this innovation um you know transformation project that we're working on that I would be able to continue to slide staff that fit within that same strategy um in so do you have a total number how many people are going to be employed over at the west side I have a general idea I don't have it with me right

058now but we do Uh Mike's looking at it. FDS are on here. We'll we'll get that for you, Teresa, because it's not just the new positions, but it's also people that we know are just going to make a shift over to the campus that are already with us. So, it's a combination of new staff and then existing staff that are moving. So, I'll get that number for you. Well, I just kind of want to know what's going under that grant. It'll it'll be mainly DHS West staff. Okay. Yeah. And we'll probably have to slide some of the transportation in there as well. Thank you. Anybody else have any questions on the grants? Thank you. If not, we'll move to the second item on the agenda, and that would be Mike, if you would give us

059an update on the cleanup process that uh you're engaged in with regard to 2024 and what you're finding as well, if anything on the year 2025. Yes. Let me um pull up a reconciliation. So, we um started the the 2023 audit uh was completed. We started the 2024 uh not too long ago, a few weeks ago. Can you close the door, please? We had um to the city um and the city submitted their numbers to the auditors. We started making correcting entries. Um and I have some of the variances up to uh highlight um what the um what the overages are. So I will share that now. Mike, would you say over this number inclusive of what the balance was before or is it in addition to there is a very yes a very large

060surplus? Um now um and I tried to pull out the items that that really drove that. So you can see so here I have the major categories in um column A, column B is where we're currently at with the fiscal year 24 audit. Uh column D is where we are with uh the 20 um 25. So it's kind of like the cleaned up version. And then uh I highlighted down below 15 some other um items as as they come into view. Um so you can kind of see where um where we're going to sit. So um right now there is a $9.4 million surplus in fiscal year 2024. Uh again this number is very fluid. It's changing as we do entries. Um it changed as as of this morning. I have a better breakdown on

061the next slide. Um but as part of that number um if we remember there was a uh a purchase order entered that was meant to account for the Danbury West uh move. That number was 1.4. Um that there was no expenses ever charged to that. Nothing ever came to fruition. So I back that number out today. And then there are some other um POS in there that we're still looking at. We're about 329,000. So for fiscal year 24, I'm I'm thinking right now, again, the number is fluid, but it looks like there's about uh 11.1 million um in in excess of the 150 million 602 budget um which is about 7.4%. and Mike that okay that includes the the final figure that we were shown of of 2.1 which is I I think the 721

062plus the 1.4 four. Correct. You're saying now, Paul, in total, you're looking at a a net surplus of $11 million. Is that correct? Uh, again, it's very fluid, but yes, at this particular point, subject to change, right? Um, I tried to break down just what what that was and try to make some sense of it for everybody. Um Rich, I I think this is one of the items that you and I discussed of uh things being um offset in certain locations. Um there is this large uh negative number that was in our budget. Um 3.044 million. Um it's labeled as undesated. Um that largely offsets the favorable variance in salaries with about uh 1.5 million uh left over. So those numbers are I wouldn't say offsetting but partially offsetting. Um the other uh the other

063thing that we talked about before is uh benefits. Um health insurance the total number for benefits is about just under $5 million uh of favorable variance. 2.6 of that was in health care about another 2.2 2 in dental and then there were some other like I said there were several accounts in there but about 132 133,000 in kind of other um I didn't really break down purchase professional service or personal property services just because they were uh relatively small to the other numbers but other purchase services um we uh had a favorable variance of 1.5 uh that's made up of about $800,000 of transportation uh and about $600,000 worth of uh tuition expenses and then again there was some other various accounts in there uh and created a little bit of noise uh to the

064tune of about 129,000. Um and then lastly we finished the year favorable in supplies. Um I don't really like that term supplies because in in supplies is utilities. Uh that was the biggest driver we had. Um we actually finished uh favorable u to to budget of about 1.1 1.2 million. Um and then there was about 280,000 in supplies that included not only office supplies but uh educational supplies and I think that was largely driven by at the end of 2024 we kind of pumped the brakes on um expenses going out. Uh and then again about $189,000 in uh you know just various other um other accounts. Mike, when you look at the benefit line of the $5 million, is the variance, do you have any idea is this a matter of a budget being overestimated

065or you know or is could it be that in in the benefits there are positions that when we forecast positions that are unfilled that have not been filled that we provide benefits for for those positions. And if if we we fill it or don't fill it, the the still a benefit line isn't charged. Could some of that $5 million be attributed to that kind of estimating or isolating? So there is definitely going to be a favorable variance from any um open positions. Um the other thing and you kind of hit on it is when we go to do the budget for the fiscal year um we haven't really finished negotiating the contract for health insurance. So the way um that that we get the number um as Teresa pointed out before is we reach out

066to our third party and say hey you know what do you think benefits are going to be uh for this upcoming year. Um this we did the same thing this year. Um we were told that benefits allin uh were going to be going up health and dental I should say about 19%. Um but it is an estimate. So um that that large variance could be due to um the them being uh uh conservative on their approach in giving us a number. And this is still a an ongoing process subject to change as as you get the audit finalized correctly. Yes, the uh this number is uh for benefits anyway um is uh has all of the placeholders backed out and the actuals have been booked. Um so I I don't know how much this number

067is going to change for for benefits at least. Um but it is using the the new methodology that that we've developed to book actuals. All right. Seems like the city will be in a very favorable position again, huh? They don't have to risk Can I can I just ask you, Mike, to talk about the controls that we now have in place moving forward because a lot of like the purchase orders and things like that are are items that you know obviously you picked up on that were of concern and I just want Mike to speak a little bit about this. I'll be speaking about this tomorrow as well. Yes. Um very very important. um in addition to moving all the staff in and out of the various uh locations and and grant funds and general

068funds um we really had to put in uh controls to um I guess for lack of a better term make sure that this stuff doesn't happen. Um and when I'm looking at why these variances occurred in the first place um I think one which is first and foremost is bank reconciliations were not being done um not being done timely not being done at all. Um, so currently we have uh our audit partner, not RSM who is doing the audit, but the accounting firm that we partnered with, CLA, um, and they have um a young accountant that's been helping us uh actually do all the entries for uh our bank accounts. We have five uh five bank accounts that are very large. Not just the um general funds operating, but the general funds payroll as well

069as the grants account, our um school lunch account and our educational services. So, we are uh up to date and moving forward to continue uh having CLA do these reconciliations um until we can fully transition that over to a permanent staff member. So, I I think that's the first and a foremost thing. Um, another thing that Cara was just alluding to is um something I' I've mentioned before and it came from a comment that Teresa had on looking at purchase orders and um really going over them. We we started at quarterly, but printing out the purchase orders and giving anyone who is um I'll use the term a buyer um the um the task of going in and making sure that any of the purchase orders that are in are are still correct and valid

070and if they're not to have them closed. Um that was one of the items that that really hurt as you see with this 1.4 4 million where someone put a purchase order in and the purchase order was never closed. So, we didn't know that that money really uh I guess existed. Um another uh another item that uh we're working on is uh as I I showed you before the Sigma reconciliation. Um health care, both uh dental and health is a very large portion of our expense. Um and not having that reconciled in a timely manner on a weekly basis just it's not acceptable. and it leads to huge unfavorable uh variances. And and the last part is I guess kind of a mentality shift. So for a very long time uh what our staff members

071were doing is kind of they knew they had budgets but they waited until the very end of the year with the mentality of well I'm going to purchase it in June and I'll get it shipped to me over the summer and then I'll have it for next year. Kind of like this pre purchase. Um you know the rules of uh of accounting don't work like that though they say that you know I have to take the expense in uh in the period in which the good or service was was received. So a lot of times people would make pre purchases saying oh I'm going to pay for it in this year and this way I get it for free next fiscal year. Um but but the auditors say no no no to that and they

072make us account for it in the proper period. So there there is that uh understanding that's going out. Cara had several conversations with the staff members just to let them know if if you need something, put the purchase order in because come, you know, come May, we're going to pump the brakes on purchase orders so that there's no bleed over. Um, and then we're going to go ahead again and go through all of the uh purchase orders. And then kind of the last item kind of overseeing everything is creating a closing schedule. Um, in uh every accounting team has to have a schedule. every month that they adhere to that. Make sure that you're doing all the proper entries. And then once all the entries are done, you create the financial statements. And then after

073you create the financial statements, you go and you do your reconciliations of not just your bank accounts, but all of your your balance sheets, making sure that everything ticks and ties. Um, so we're developing uh that closing calendar, which would be I I think it'll be the first one that uh has existed. So that'll kind of be like the overarching framework to make sure that all these reconciliations get done and all these little tasks that that weren't being done in the past are now getting done. Just a couple other things too. We talked about and we'll do this through policy at some point when we get to the financial series of putting in a couple of policies around purchase orders over a certain amount and having multiple signatures and so that the superintendent there were

074some purchase orders that were put in to that fiscal year previous year even when I was here that I was unaware of. So u large ones so it's important that there's multiple sign off on very large purchase orders. In addition to that, you know, the Oh, and one one last thing was um in our system when we create journal entries, um it's very important for anyone to be able to pull up that journal entry and look at any backup that was associated with it so that they can understand where that number came from and they can tie back to it. Um and that wasn't that was that policy wasn't being enforced, but it is now. um we started doing um all of our journal entries with backup. So, um, in the in the event someone

075is isn't here and someone else needs to understand the journal entry they did or why they did it or how they did it, um, that's, uh, well documented inside our Tyler system. And also Mike, you know, as we discussed and it might be getting down to the minutia where you and I like, but you know, it's worth a conversation where you've upgraded the sophistication to the accounting system to have it work with you so that journal entries have explanations and attachments to it. in in addition to being able to upload a journal entry from an Excel spreadsheet to be automatically created as opposed to having somebody go in and create all these numbers again. So, you know, that's more uh that is certainly very very timeconuming and positive adjustments that prevented stuff from being done.

076you know before the only thing I wanted to mention in addition to your policy on purchase orders you may want to delegate I don't know how you work it but it's who's responsible for that review and make sure that the people are following it rather than have the the responsibility fall on your particular shoulders where you know you want to be able to delegate some of these responsibilities yeah it's a great point but Teresa has her hand up Yep. Terry, go ahead. Thank you. Uh, now am I correct to say each school can buy issue their own purchase orders. So there's no centralization to know if the stuff has come in until the last minute. Is is that correct? So there um each school has um a buyer and not just the schools, other locations

077have buyers as well where they could put requisitions in sec. Yeah, the secretaries will usually do it. Uh the requisition is then approved either by myself or um Angela or Wanita if it's uh relating to a grant then gets converted to a PO. Um where I think we could do a little bit better is um when invoices come in to get them all to come in to a central location. Um and whether we decide hey listen that should all invoices should go to the site first for approval and then uh make their way over to finance for payment once they're approved or do they call them all into finance first and then they get pushed out for approval and and sent back. Um there's pros and cons of each. I've done things uh both ways,

078but um yeah, that that is definitely an area that um that that we could benefit from. Okay. So, who who holds the POS? They're um they're in the system. So, everyone has access to them once they're created. You don't get physical POS? Yes, we do. Yeah. So, once where do they go? Once um once the PO is created um accounts payable will send the PO to the individual. We call it the the greens, right? That's their ability to um to make the purchase. So that's why it it's you've got different silos. You don't have a centralized system. That's why the U PO for the move was went unnoticed perhaps. Yeah, you've got to centralize the POS. You got to centralize the POS. Yeah. One of uh one of the functions that we're we're hoping um

079to have an additional team member here uh soon. Um we'll be focusing um very heavily on purchasing. Um right now our accounts payable person is doing both accounts payable and purchasing. Um and you know the glasses more than uh than full. So um that would be a great project for that individual. Thank you. Are there any other questions with regard to this reconciliation? If not, then we move to the next agenda item has to do with the creation of a proposing calendar which Mike briefly talked about. Um the what I was getting at in addition to what Mike was referring to and I think it's a good point is the public accounting calendar as to for month end you know what has to be done you know journal entries approvals etc etc but in addition

080to that I was looking for a calendar that board would be presented uh to show what is required and what has been done so that for example financial statements would be an item. Uh bank reconciliations would be another item, tax returns another item you know whether they they be quarterly or annually. Um different components of the the months type of transaction that we as a uh a board should be aware of. a check off calendar and at each month when the financials are produced they can just have you know a checklist that says okay this is done this is done the bank wrecks haven't done an explanation as to why um I think something like that in retrospect 2020 is always good we would have known that the bank wrecks hadn't been done for a

081couple of years or uh but reconciliations to subsidiary schedules are you know have been haven't been done. So I I think if if we could work on a calendar like that, it would certainly be a big help to the board knowing, you know, what they should be looking for to oversee that that the the thing the responsibilities that we're tasked with are being met. So that's something that we can develop together, you know, moving ahead. Is that okay with you, Mike and Carol? Sounds great. If there are no other questions on that, the final item is basically the doctor care has a mirror on her dog and pony show tomorrow, which is going to be very interesting because as far as I see, this is the first time that we're going into a a meeting

082where we're bringing bags of money, you know, one that we've had and the other that potentially we're saying we're going to give to you, you know, which is good that it's in that position. On the other hand, it's going to create a on our face to defend our particular position now, you know, from all of the criticisms that that that we're going to get. So, I, you know, I I've covered some of this with Karen. She'll know how how to defend it. My suggestion would be just to get that out of the way to to begin with. So we cut off the the questions, tell them what we've done and what we found the controls and things we have in place and let's move ahead and defend the current budget for 194 million. getting to

083that point, just recapping is is the question I have is is that the mayor gave us, you know, as he put it, um $199 million. So, he gave us $172 in the appropriation, which was a $12 million increase. He regifted to us, if I can use that phrase, a unspent balance that he gave us last year of the the city or state arbor money. It's nice to be regifted, you know, present. Uh and then he he threw in the other alliance money which generally in the past had come to us direct of $9 million and the famous $ 122.9 million of inind services which if we can figure out how to apply that to some vendor that would certainly help us. But my my question to you Cara is in going into this meeting when

084you defend $194 million Are you going to say that with what we currently have the as I've said the four the nine uh and and basically that's it that we're going to continue to do what we have and to make things work or there may be a shortfall of x number of dollars that are are you know in terms of even the arithmetic that we're going to be short and we'd like you to pony only need that money up or if not there are other funds we have such as that nonoperating account and non I think it's non operating forget you know what what the ex extra sure terminology is but non-lapsing account uh and and so I I guess what I'm saying is what is the ultimate purpose and request that you're going to

085make of the city tomorrow sure so you know we our needs are are still the needs that we had have going into tomorrow. Um, you know, as always, you know, I don't want to say we've gotten pretty good at, you know, figuring things out, but we are we are coming down to a to a line with this grant where, you know, any flexibility that we've ever um would have had. You know, it it would have been wonderful to walk into next school year with the full alliance grant or a good portion of alliance grant um being available to supplement student services across the school system. Um we won't be able to do that next year. Um but we will be able to slide, you know, staff that's intended to open up the school system um

086in into that grant. So what it does is that it allows it'll allow us to live another day um but does not allow us to really thrive. And that's and that's the difference you know as we go into um you know the the the next school year um again we have not negotiated five contracts coming up um that that are unknowns over the summer. Those contracts and uh contractual increases across the state are running very high. I can tell you that now. We just had some updates, you know, we talked to to Tom Mooney and, you know, get the lay of the land and so we can expect a a pretty, you know, a pretty good challenge on our hands in terms of landing at a place that that is affordable for us um while

087still trying to remain competitive. And that's something that I think, you know, even if we slide into next year by the skin of our teeth, we will be able to stay competitive with um area salaries u and you know, considering the conditions that we have. Um, and that's that's a real concern. Recruitment and retention is a huge concern for us in this district. And so there's other factors that we're going to have to contend with besides just squeaking by uh another year. Um, it's really about what happens to climate in the school system, what happens to conditions, and what happens to our ability to accelerate learning. Um we know that when we apply some direct focus um and have strategy and we put the right people on the job that we can make movement and

088growth in in terms of academics uh for a school system and we can scale that by having enough people. Um so being able to scale it you know scale results will be hampered by not having enough funds. So I can talk about that tomorrow for sure. The other thing I'll just say, you know, when we don't um fund our our early academic um um issues down at at the elementary level, um you can actually create more um special education referrals, you can create more intervention referrals down the road and to try to close gaps that are extremely difficult to close um as the years progress. So, you know, we're going to have to sit and when we get the final allocation and really determine what we're not going to do that we had in our

089budget and there's not a lot of room to to to cut back. Um, you know, if I add up our numbers, we've got, you know, 12 plus the four remaining of our heading into next year and then 9.1 that gives us about 25.1ish million dollars. Um, we asked for 34. So, you know, we have to come we have to figure out where to get that other 9 million and that will come from things that we put forth in terms of our ask on the table for next year. Um, you know, we're still determining the bus routes for Denver High School West that could be have some variables there. Um, out of district tuition, there's there's a lot of variables heading into next year, but um, you know, some of the positions that we wanted to

090restore and some of the positions we wanted to bring on might not happen. So in essence, yeah, we're still underfunded by we're still underfunded by x x number of dollars which we're going to need their help for. But let me ask you this, Cara. I you know I can almost see the face the people are going to ask this question in that why should we put it this way. Why should we believe you in terms of your budget when in the past couple of years you haven't spent, you know, all that that you were given? Um, is it a fair statement to say that the money was spent, but it was can we say that that money was spent, but it was spent out of the government ARPA money and and is that one of

091the reasons why this disaster had happened? Yeah. So, so we have um if you I don't know if you saw the post. Uh thank you for bringing that up. I don't know if you saw the post in the newspaper recently about the 25 or 30 districts or so that had a lot of unspent ESSER funds um and that they were trying to you know that I guess they got cut off and they weren't able to spend the rest of theirs. You know, Danbury that was the one list we weren't on this year was the districts who didn't spend their Ezra funds. So, um, I was happy to, you know, I I held my breath as I clicked on that news article, um, that that we weren't on there, but I what I can tell you,

092but, you know, it doesn't mean that we didn't have it in another place, obviously. Um, you know, if you wanted to look at this on on the positive side, um, we did spend our ESSER money. We used it uh, you know, we did spend all of our ESSER money. Uh, we did not send anything back to the government. Um, but we did have a surplus and that got sent back to the city. So, I guess I would rather see that happen than um you know, for as much as you know, consternation as it's causing us now, that money did go back to the city. But what I will say is that you know, the biggest it's not that we didn't need the money. We absolutely need the money. Um what what we've been dealing with

093in terms of climate and our staffing issues in the last couple of years have been tremendous. And so, do we do we need to spend every do we need to fill every one of those positions? Absolutely. Um and that's, you know, so that money is definitely needed moving forward. The other thing is is, you know, Mike and I, you know, it's completely unacceptable that we haven't um that we did not have accurate and timely information in the last couple of years to stay up to date to make adjustments. Mike and I probably meet in the hallway 300 times a day. And I'm like, where are we? Where are we? Where are we? And we're talking about things and as we see um something coming up, we're able to adjust it in real time. as we

094see a grant, there's a pocket of money that's not being fully utilized and we can revise it and put um supplies in the hands of kids or get um you know new cafeteria tables for a school that has some broken tables. Um that's what we're doing right now. So we're trying to maximize every dollar, but it's because we can see in real time what's going on because we now have visibility. Um in the last couple years and quite frankly when I took over last year I had no visibility. I it was like waiting through murky water. I did not know where the bottom was. Alls I could do is pump the brakes and to to ensure that we didn't, you know, go, you know, land in the red uh for the end of the year

095because we did not know. And so that was the most responsible thing that I thought that we could do um without knowing. Um you know, I knew that there was something not something was a miss. I could not get accurate and timely information in the way that I needed it. that resulted in some staffing moves that you know that I made um you know to to take care of business and we're heading in a different direction. Um but what I can say and what I can you know confidently say is that that we are on it. I'm going to say it probably took us six months of this school year to find the bottom to be able to see our feet and where we're at. And once we were able to do that, um, thanks

096to Mike and and really, you know, this am I saying Mike and I, he's probably so tired of me right now. Um, because I'm I'm in those finance office. I've never thought I would be in the finances financial offices as much as I have been. I've always lived in the curriculum realm of things, but uh, you have to really be on top of things to know what's going on um, to be able to adjust. It's one thing to have a surplus. We're going to have we're going to have other surpluses. We're going to have years where where we have uh high budget, high benefit costs and low benefit benefit costs. That's benefit costs. That's the um you know that's the you know kind of the es and flows of being self-insured. But being be able

097to react to that when you know where you are is everything. How do we um okay we have three or four million dollars. What's the best way to utilize that money between now and the end of the school year? And then how do we take that information and make a better projection for next year? And those are the things that we have not been able to do in the last couple of years because we didn't know. But now that the, you know, the light is coming through here um and things are being cleaned up, it's it's much easier to predict. You know, we're still, you know, going to work hard to land the plane here. Like I said, I wish I had probably three or four more months of the school year. Um now that

098you know, things we are starting to see some things and we we started the school year with the projections that were made by previous administration coming in, right? we use those projections. We're seeing some things differently now. Um, and so 25 26 as we head in, we'll probably set a few things up in in a different way, but it takes time. I, you know, we're going to be cleaning this up over two years this year and next year to get it to really to where we want it to be. Um, and but I think we are headed in the right direction. Thank you very much. And just as reminder, tomorrow it's 6:30 for the ad. Is that correct? And then I think on Thursday we have the public session where I assume I think Glattus

099said she had to leave early but many of the board members that can attend that and speak on behalf of supporting the budget. We'd like to have representation there. Can I ask one question? Yeah. Can I ask one question? I just want to know is it possible to get a breakdown of the inind uh costs that the city gives us in the proposed budget? I'd like to know what they're charging us $12 million. That would be I think or giving us Yeah. I I don't have that, Teresa, but that's something that the city might be able to provide for us. I I think it might report because we have to add that back in. But we might have that. Yeah. Okay. I want to make sure they're not charging us for the roof when they

100hit a bond for that. I'm sure it's a lot of the bonding cost and and financial costs for the bonds, but you can certainly Mike can certainly request it from Dan. You know, that's that's fine. Are there any board members that have any further questions regarding this particular agenda? Okay. Can you see anybody who has a hand up? Michelle has her hand up. Michelle, go ahead. Hi. Um, just thinking about the questions that are going to be coming up, Carara, uh, to you or Mike, based on the fact that we're looking at I think basically $20 million in surplus over two years with 21% backto-back asks. Is there any way that we know, I know this is going to be a really hard thing to say, for the following budget that we're going to be

101looking at or the upcoming budget that we will not be anywhere in that 21% number for our next ask based on the accounting that's happening, the surpluses, and I know we're opening a new school, but what kind of confidence can we give with the numbers that you're now? because it looks to me like you're we're setting up basically 101 here on the accounting and the rec, you know, on our ability to to fiscally be, you know, um accurate in in our accounting, right? We need to be more on time, right? On time numbers. So what I'm asking for is if we're going to go and we have to go and and you know we're going to defend what we're we're doing and and what actions we've taken based on all of the issues over the

102last few years. We can point to so many but can we give any kind of assurance that our next ask for the school budget is not going to be near that 21%. based on what you're looking at now, what you're seeing because we don't see, we're only getting the information today. So, you've been able to see the landscape a lot better than us and based Mike on what you're seeing coming in. And Carara, there's going to be I know changes uh to grants and everything. But this is historic this 21%. Sure. In the state of Connecticut, I think 15 is Bridgeport highest. So I'm so for for us to be able to ensure to the public that we are really getting a good hold on this are we looking at any kind of a number

103like 21% in our next ask for 20 what is it 6 27 27 yeah 2627 yeah so I mean you know that number will be an amalgamation of a few things one one wherever we land this year right our budget um we're not opening another academy thankfully Um, but we will, you know, that was a major part of the of the ask percentage-wise. So, you know, not everybody's bringing on an entire new building or a satellite campus and having to staff it and, you know, tierations. That's a major percentage driver. Um, we won't have that next year. There'll be some additional drivers related to that because we'll be adding some more staff as we bring on the 12th grade. Um, but it will certainly won't look like like it was this year. Um but you

104have to understand too is that some of the ask um in the budget and I can't remember the percentage it might be five or six million uh were to restore some staff that are it's really that's really hurting us that we don't have and one of the things that is important Michelle is that you know we we were not um operationally efficient this year in the sense that um we did not have we we really don't have enough people to handle all of the the reporting the requirements the legislation the mandates um the initiatives coming down from the state but also the ones that we're trying to drive here and so restoring some of those positions are key because otherwise our hands are are are tied and we're limited. So I consider that the priority

105carried absolutely because we have not known where we stood to me that is the one absolute priority that we have as a board. It is difficult for us to know what's happening if you're telling us that you're just figuring like you're just finding the ground. You know what I'm saying? So, I'm asking if you found the ground and what I just heard in this last in this last exchange, which is great. We've gotten a lot more information. We've got a much better sense of where we are and where we want to go. But based on that, you had just said it's going to be tight. The money that we're spending is basically going to the administration to cover the opening of the new school, but will not be facilitating all of the programs that we

106clearly need. So, you know, based on that one line that you just made and then we're going to be getting in there, you know, we're well aware of construction and what happens and what, you know, we don't necessarily see based on all that because the numbers that we have been projecting over the last few years have been with the idea of the career academy already being open. So, I just I just, you know, if we're going to go and we're going to stand together and we're going to say, okay, this is where we faltered. this is what we're we're now looking at and this is the direction like for me as you know a taxpayer just a taxpayer am I looking at another 21% you know are we going to get a real understanding of

107where we are and we're not looking at something like that because that's $20 million sure you know that we're talking about that we've been paying taxes on right everybody's been paying taxes on so I'm just want to make sure that we at least have that in mind for when we go to Oh, sorry. Thank you. That was my question. Just what are we looking at? How do you see the landscape moving forward? And I know that's very difficult, but I'm sure those are questions that as you're moving forward, they're you know, before you that you obviously be way ahead of us in Yeah. So, I can't imagine that we would have another 21% increase. Um, however, you know, it we we do have um, you know, we are trying to play catch-up. So, I don't

108think we'll be at the marginal rates that some of our surrounding uh, towns have enjoyed because, you know, they've been kind of keeping up at a at a at a different rate than than Danberry. So, we are, you know, we are trying to to to catch up. I do think we'll get there over time. Um again the the opening of the academy created a a perfect storm if you will of need um coming off ESSER and and trying to do all of these things. So you know there's there's a lot of variables you know the rising cost of health care the the needs of our students um there are there are drivers such as special education second language learners um transportation uh out of district tuition things like that that are out of our control.

109Um, but again, we I don't think we're going to have another like 10 million of our ass this year, Michelle, was the opening of the academy. Are we going to need that money moving forward every year? Yes. So, that's the hard part is really is the sustainability moving forward. So, you know, we're not um everything that we've done while it's it's a big number, Michelle, um is still actually quite conservative relative to our size and our need. So, um we're going to continue to make, you know, responsible requests. This was a very unusual year. Like I said, perfect storm. Um, we'll make, you know, very responsible requests. We're very sensitive to the needs of the taxpayers. Um, and I'm extraordinarily sensitive um to the point of, you know, and with and with Mike to, you

110know, the situation that we found ourselves in and so and understanding, you know, some of the the angst that that's caused. So, um, you know, might I it'd be irresponsible of me to predict a number for 2627 without looking at our actuals. No. uh and our costs and making sure that we're you know that we have what we need. Um but again 21% would be would be you know I don't think that that is going to be a number or that won't be near given the fact that we we won't be doing some of the same things again. Yeah. Thank you. Of course to your point both Michelle and Cara this is no surprise. I mean this $10 million was reduced. I think the initial estimate was $12 million and that we've been you know

111over the last couple of years phasing in some positions in anticipation of the academy. So it it was out there as a number as to how they they forecasted it or put money aside for it you know is something else but it certainly wasn't any surprise. Uh the problem I think as Tara said is the sustainability going ahead because this is a firm number now and we've got to live with all of those positions moving forward. Don't don't forget too, you know, you just you just made me think, you know, we will we will have another mini cliff next year because if we're if we have this ARPA money, it's $7.5 million worth of ARPA money, we'll probably have about four million or so and change left to rely on heading into the year. But

112then but then heading into 26 27 that that money is gone. So it's not sustained. So we have to absorb at least four million heading into next year. U actually um and then Right. Yeah. So that's what I'm saying like yeah putting that those like the information that Teresa talked about where we have a sheet of things that are non man or things that are coming up that we need to consider. I know when I'm putting projects together, I'm looking at that number today. If it's next year, if we're looking at at reconciling what we did a couple of years ago, that's what I'm I'm like, we can continue to compare ourselves to Norwok and that size and that expense. I I get it. But they're they're growing at 9%. So, we consistently are growing

113at at 21 or 20. You know what I'm saying? So, we've got to find a way to make it sustainable so that we can afford it, right? So, I'm just wondering everything on the table, you know, how do we get there or what are we looking at? Probably, you know, I'm not going to give a number either, but I'm just hoping it's nowhere near that 21%. 15% is is a huge number, and I think we all knew about the expenses. We didn't count on the surpluses and not being able to backfill. So that's where I'm just, you know, I know we're looking at a lot of reasons as to how we got here and it's wonderful that we're, it sounds like we're building a sounder system, but moving forward and if we're asking for that

114trust, it's how do we rebuild that with and making sure like right now that just came up that money that we won't be having next year, what are we looking at? You know, that's all. Thank you for your time. Yes, of course. Just one last thing, as part of our goals, we do once we land this budget and where it's going to land and stays put and we lock lock lock in whatever our final number is. Um we will do a like a three-year projection um you know to the best of our ability so that we can see where we're going in the next couple of years and and try to anticipate some need not knowing that it's not perfect but right one of our strategic goals was to create a multi-year projection and uh

115we plan to do that soon as our numbers settle here. Thank you. Are there any other board members who have questions relative to the agenda items tonight? Uh I can I ask one more question? I'm sorry. I know I'm not on finance. I I appreciate it. So I know that we talked they they're talking about and I know that you had sent an update. Carol, maybe you could speak a little to it regarding uh the cuts that we might be seeing at the federal level, Connecticut specifically regarding um the education and the federal anything that you see, you know, hitting us or any kind of a number that might impact Danberry if you know there's, you know, if we don't comply with the with the administration's um you know, DEI policy. if you could just

116speak to that a little bit. Thank you. Yeah, I so right as of right now, just for the for the sake of the group, um you know, the our our commissioner has sent a response on behalf of all school districts in Connecticut as to our compliance with current um title six uh and and and policies that that we believe we um the state department has certified us as um following, you know, in in compliance, I should say. um to at this moment in time, I think there's going to be some things that we're going to have to be very aware of. Um what you know, what we have on in terms of policy and what we do in practice can be different. Um but at this very moment in time, um the state of Connecticut

117thinks, you know, has positioned us to say that we are in compliance and we should be okay. Um now, I haven't heard of any loss of funding uh for us uh as of yet or that that is anticipated. Um I I do know that there would be um some type of a review process if there was some sort of inkling that we were not um operating according to um you know sort of the the rules that have been set out. Um we do have this you know like I said we had a two grants the IED grants um increasing educator diversity grants. Um we've been told that to proceed as normal um that to continue on with those. Um, I do have I did reach out to attorney Tom Mooney to just review our IED

118plan, our policies to give it a second once over even though the state of Connecticut said um, you know, we're we've we've responded for you and and everybody's good at the moment. Um, but I do did want to get an opinion and so that'll be forthcoming. Um, and and Tom's office will review some of our materials for us just to be sure. Um, and if there's anything that we should change or anticipate or head off, we can do so in advance of any any further um, things coming down the line. As of right now, Michelle, I have no knowledge um, directly or indirectly that there is any particular funding stream or source that could be in jeopardy. It's not to say that there can't be some something coming down the line, but how much is

119the grant? I'm sorry. Go ahead. It's a couple hundred. Each each one of those may be like 200 something thousand dollars. All right. Thank you. They're not supporting um we don't have staff tied to them. They are to support teacher residency, recruitment, diversifying school. So be if it went away, it wouldn't be the worst, you know, thing. Okay. Thanks so much. I appreciate that. Yep. Y clarification. Sure. Therefore, if there are no further questions of 7:42, I'm going to ask for a motion to adjourn. I'll make a motion. Second. Thank you. are above us.