001uh to bring the to our our subcommittee uh and reconcile April April 2023 . John would you like to take it away or Kevin do you have an introduction some opening remarks sure my pleasure and good good evening everyone good evening Jesse Kate um though um Julie Theresa everybody who's on and anyone who's watching um so the the update certainly and just want a quick review and scan of the agenda for this evening uh certainly the agenda is going to talk about our report for the month uh but we also want to talk about um some other things which is impact in the district or the 23-24 school year um and so it's April 22 I'm sorry 2023 financial report um on your on your committee agenda it says city of Danbury meeting regarding Boe
002reserves we want to make sure we update you on that that meeting uh was originally scheduled for today um did not happen today so we make sure we have an opportunity to walk you through the Y's on that and then last but not least reschedule date for June 20th finance committee meeting um because that is now in conflict with the visit our scheduled visit from our folks in Nashville so John and I will kind of tag team the agenda itself um and then we have a new development that did not make the agenda itself but John I think it's important to talk about um very broad Strokes kind of the audit that the city is in the middle of right now um and of course we can't have an audit at the city with the
003school not being involved in some way somehow with the 141 million dollars as part of that audit last year um in a couple of years prior um so the the city the city of Danbury itself is in an audit there have been some a lot of information kind of last minute that's been requested uh from our respective offices meaning John's finance office so John and his team has been working hard to deliver that paperwork to the city um and so that's kind of started on Friday spilled over into Monday now Tuesday um which requires accessing um reports from A system that we no longer have which is certainly stalled the delivery on it um John and the team have found a workaround to deliver a lot of it and it sounds like with the exception
004of a couple of um minor tweaks to the submission it sounds like we're gonna bring this thing home soon but the city is again they're in the middle of their own audit and of course given the significant portion of that the budget is the city of Dan I'm sorry the Danbury public schools um John has been joining in his office have been working hard these last few days trying to deliver that and so um Mr Moosa that's why we're not able to have that meeting today and but I do want to speak to the committee again about the conversation about the reserves so with that I'll hand it back over to John and John and I maybe we can jump in uh together and talk about item number two um okay um thank you Kevin
005um and uh continuing with um I'll call it the theme um in the last couple months I've been uh preparing the reports and what I've um what I'd like to do is use the cover page um call it the narrative as a way to transmit I think what are the bigger issues that we're facing sometimes um they don't they don't show up in the line items um so you know if there's something um trending or what have you then I'm going to mention it and so in in my first paragraph I talk about um what we've seen a sharp uh increase in health care costs and as you know we are self-insured uh yes we use Cigna as a third party to administer the claims if someone um gets sick or goes to the hospital
006the claim goes into uh Cigna and they pay the hospital the doctor but then we pay Cigna the actual claims and the way they do that is they every week on a Monday uh they uh through an ACH take the money out of our bank account it's just the way the system was set up and we get a monthly report from Cigna of everything that's happening in different uh things Uh Kevin there's a email showing up on the screen and can we certain we'll see in your emails right now thanks John um so uh one of the reports we got recently it looked like costs had gone up quite a bit uh in the last three months compared to the first three months of the Lanier so I uh got on the phone with Cigna
007and asked him if they could help explain uh what was happening and um what we saw was the claims um for the first three months of the year were 6.8 million dollar or the the last three months were 6.8 million the first three months 5.8 million um an increase of about 17 percent so Cigna put a little report together for us I don't know Kevin if you could show that it's um I think just one page I'd like to talk about I'm trying to get in touch with Canon I don't think he realizes his emails are showing okay um but anyway uh so we'll we'll show you that when we get it um but they showed I'm putting it up now John I don't know okay um yeah and as as Kevin puts it up
008there there are a number of different things going on in medical care right now or um one one of course is the consolidation of the uh the hospitals and as their buying up different groups as they're buying up different hospitals uh they're demanding uh more money from the insurance companies for the same doctors who were getting less uh when they were not part of the the hospitals we've seen that you know certainly here in in Connecticut with Yale New Haven Hartford health new bonds but that's led to some higher costs you ready for the next page John yeah I don't know can you put the signal one up uh Kevin the PowerPoint I think that was the email I sent you um so so that's going on there's also um medical inflation uh that's out
009there that's not helping um the insurance companies here in Connecticut have found a way um to take advantage of out of network costs that were here it is yeah so if you just um straighten that it's kind of small if you scroll up a little and I'm I'm sorry it's in blue but you can see it's it's from Cigna uh they have a section called cost trend on four there it is in the in the navy blue there and the lines that are important are the the first three the medical the pharmacy and the total plan spend are you guys are you on this side John yeah this is perfect just what yeah okay um so in in this report they've compared uh calendar 2022 with calendar 2021 and in the third line down you
010could see the cost at that point were 15.5 percent higher year over year um the 17 I mentioned uh is since 2023 began it's it's continued to go up um they go through different statistics to explain it also affecting us is we have a number many more high cost claims than we've had before or claims that are more than fifty thousand dollars I think we have a dozen of those some much higher and of course we have an insurance policy that kicks in once those claims get to 125 000 then the insurance pays not us but that Corridor in the middle uh where we're seeing more expense come from that so uh all as all these things come together our our claims are much higher and and um just uh in April we uh in
011one week alone they were 625 000 uh we had a week in March they were uh 725 000 so they're they're big numbers uh coming through and and what it's done is it it's eroded into the savings uh we thought we'd have this year we um the salaries uh the savings and efficiencies um this is eating away at it um so in addition what you'll see if you went back to the re the original report Kevin for a second what we have at the end of April um is 991 000 unencumbered uh as you can see in that the Box we usually use and then um the report that follows uh we break it down there at the bottom uh the major line items um and then further detail follows uh line by line but
012uh what What's also happened is you know we've been trying to fill the vacancies that we had back in December when we first put the budget together we had close to 60 some of those uh Personnel we needed to deliver IEPs and 504 plans um just needed to film we've been trying to fill them but you've also heard me talk a couple times about just the high school and what it's like to try and staff that with their vacancies and with their scheduling uh the overloads I won't get into that again you know what that is there's been what we call period coverage where Dan will just if there's a teacher in the lunchroom or taken on break and we need some coverage we'll ask them to cover a class he does a very creative
013job up there but it's um it's it's costing some money I mentioned that my second paragraph um and then we've you know the the inflation that we've had and it's starting to come down if you you know I think the latest statistics showed it for our area around a little over four percent uh some people think that will stay for a while um but uh over the winter we were seeing increases of six percent our electricity our heating oil just like everyone at home had gone way up we we didn't expect uh that when we put the current year budget together remember this budget we're looking at that was built 18 months ago in December of uh 2021 brought to you uh the following January um just I I don't think anyone thought inflation would
014be uh what it is no one thought the Federal Reserve would be raising rates the way uh they have been um so anyway uh what all of that has done is it's eroded into the savings we were expecting to have and that's now down to nine hundred thousand um well let me just mention the last thing in the report and then maybe Kevin we could talk at that point um about the city and what we think should happen next okay um I just I mentioned uh the governor's uh budget um right now that's still with the general assembly the Senate Republicans have proposed a version to the budget um that hasn't been approved or reconciled yet um but both versions of the budget increase uh danbury's state aid for Education by nine hundred thousand dollars
015and the uh what's what I think is more important um you know there's a plan to increase accelerate the alliance grants to folks like ourselves that plan is untouched from a year ago I think it's still two years away where we'll see a big increase but no one's talking about slowing that down or anything like that as they did a year ago we should uh I think there's a statutory date uh for having the state budget done but we'll we'll know in a couple weeks how that falls um so um Kevin I I don't know if you want to uh start but we uh one of the things we think with the with the gap of the the shrinking Gap um is it's really it's not just a board of ed um situation it's um
016it's everybody and what we want to do and they're they've been very receptive is we've talked to the City Finance director um and to find a mutual solution and and proceed uh together as to what's best um Dan Garrick uh he's enlisted um a rep from the mayor's office and we were all set to meet uh today um and they had to cancel we'll explain why uh boat we're talking about um our reserves and let Kevin explain but the the thing about reserves and you know last month I think I showed you it was uh close to eight million dollars uh those that those don't affect the tax rate the mill rate they've I mean you could say that they've already been taxed and they're uh for school purposes so uh Kevin why don't I
017uh turn it over to you maybe you could fill in a little bit here sure my my pleasure John um so what John is referring to all the reserves and this is the unexpended monies from 1920 school year 2021 school year um the two years that we did not have a full year of schooling and so um we we have an agreement with the city that if there are ever any monies at the end of the year instead of have to having to race and try to spend down monies you know without without any real plan um that the city would essentially hold the money for any unexpected cost that might come our way so what John has essentially just walked you through um or some unexpected costs that we did certainly did not expect
018uh for for this school year and so what we're looking to do is um go to the city um and again these would not be reoccurring um costs so we wouldn't it's not as if we're asking to tap the reserves for Staffing however it is to cover these health insurance claims and increase in utilities and power and gas and propane and so um we're looking to go to them for and ask of close to um was it 3.8 John or four point I think so 3.8 yeah so 3.8 million um you you may or may not be aware um the city to get to our 9 million um and so I think John said that we have 8 million now uh prior to that we had 10 um two 2.4 billion I believe was used
019to get to the 9 million uh that we received from the city um and so we're looking to go back to the same well um our savings if you will um to pay down on these costs um which would keep the nine million dollar ask keep us whole at that nine million dollar ass so you might recall initially um there was kind of a subtotal and I asked for this year of 13.8 uh our ask of this to the city was 9 million uh we were hoping to through cost cost savings and efficiencies find the other 4.7 4.8 million given all of the given all of the vacancies that we had and you know and and for those of you who are on the board for you last year during budget season you might recall
020you know at some point we were anticipating there would be an increase in claims because books just did not go to the doctor during the pandemic and so now we are starting to see that actually happen um and so the claims are you know going up at a and and frankly we're starting to now spin down on those monies from the 1920-2021 school year um and and this is kind of where we are so we were initially playing today to have that conversation with uh some City officials to walk them through the Y um you know just and frankly between our office and their office I think we both would have needed to reschedule today's meeting in light of the the audit the audit situation because John's office is really busy as well we needed
021this meeting to happen but you know there was another priority kind of in front of us so we will Circle back to try to make it happen um but we wanted to make you aware uh that we we there's a need to go to the city to tap our own kind of reserves to pay down on these unexpected claims we're expecting them um when they were going to happen we did not know but we certainly anticipated uh when we put the money in there that you know at some point they would be going back in and it it is now indeed starting to happen so that's what John was referring to earlier um we anticipate we will be able to reschedule this meeting um with the finance office at the city next week um and
022you know kind of formalize the requests and I believe this city has to go through a process in which the council has to approve it as well and so you know we're prepared to walk them through the wise as well so that we can address this kind of gap for the so that we could be better positioned put a 23-24 school year um yeah okay um so I think that um that covers it do you want to take questions Al about the report or the Reserve I know we kind of Blended a couple things together we have um has the committee had a chance to view the report it appears that that the line items are all reconciled and we are slightly below one million dollars at unencumbered funds at the end of April we
023still have May and June John are there or any additional unanticipated or now coming to the surface uh expenses led to further further draw down this number but there are things working both ways um a couple examples are um are what we call our our school district legal insurance bill that's the covers all of us board members administrators for lawsuits um that came in at 4 65 000 um about what we budgeted maybe a little less um but it wasn't encumbered uh however uh Bev our accounts payable supervisors in this afternoon and she felt that the fuel oil budget uh might be encumbered fifty thousand dollars higher uh than it needed to be so those two things offset um so that's what I've been seeing since the end of April things that uh balance both
024ways but what I'm worried about are the weekly claims that that come that just we can't predict uh what those are Teresa you are muted Teresa is there any way that we could uh strategize to get a uh or it's just not gonna happen you know to get notice ahead of time of uh bills or it just happens specifically the claims Theresa like the health insurance claims that we were talking about yeah I I get notified by the bank uh but two or three days before they're gonna take the money just to make sure we have the money there for them to take but uh beyond that it's It's weekly and it's just uh it's what they're paying the hospitals doctors and other services the previous week and and Theresa to your question we we
025actually do John isn't this the work sort of kind of that Gallagher does yeah it's it's almost like having a broker on your side trying to project the market on this um so we we do have someone uh who independently works with us and Teresa I you know something John and I can work on and maybe while it's fresh um we can have kind of that report and kind of what that forecast looks like for next year um you know to to your question because it I think it would be beneficial for the committee to kind of hear some of the things that we're hearing in terms of projections now of course it's you know like any broker in the financial Market it's still projection um but at least it gives us an idea on
026how to budget and that's kind of what John works from you know sort of like the demographer's report hey you're going to have 12 000 kids next year and the next thing you know we have 12.4 all right and so that's kind of what we're working with in cases like this and and they've made a couple of very good uh recommendations for next year for Cost Containment uh with some of our policies tweaking uh some of the coverages and programs we have in place I I think that'd be great to to share maybe at our next meeting Kevin they're suggesting John is there any other anti unanticipated uh teacher salary issues that that could grab bump a creep up on us um are we pretty that is all under control and yeah that um definitely
027um we're we're looking you know the next thing we'll be looking at is um who's going to retire and and start to replace those I don't think uh we have all the names in yet but there there'll be very little change uh if anything uh between now and and the end of the school year is referring to are there any contracts that may be outstanding that maybe need to be planned for um any retro that we might have to pay or anticipate we'll have to pay you know those big ticket items that could impact our budget so I think those kind of things so there's uh negotiations underway uh with the pairs uh but I I I don't think myself I don't think we'll be seeing anything before June it could always happen but um
028it's kind of late for that that anything that's settled would have to come to you of course as a board and right but I think I'm hearing budget how can we budget for that for the 23 24 school year so it's kind of trying to catch up is that kind of what you were referring to absolutely sir is you know a couple examples again the custodial budget you know that their negotiations work and just like subject matter right yes yes sir that's kind of what I had my or do we just have to wait till it happens and then react be reactive rather than proactive you know we we need to be proactive and um John um is you know of course he has the benefit of being in these negotiations and working with Kim
029on these things so um you know this is not something we necessarily have to share publicly because we don't want to reveal what's happening negotiations but uh we certainly can have a number in mind in terms of budgeting so that we can have kind of a buffer of those line items okay thank you sir any other questions Jesse Kate Teresa can I just ask a clarifying question because I had heard at one point that there were some concerns and forgive me if you answered this John um there were some concerns about our audit process but you had clarified at a previous meeting that our audit is complete for this last year and the year before is that right oh this this be a good segue um to describe what's happened this week um I think
030that will answer it so um at least from our side of things I alas I had heard from the Auditors was uh the first week of November of 2022 um and I know in conversations with Dan Garrick uh and even Warren Levy they were expecting uh they get what's called a draft report but it's pretty much um this is the you know the annual report this is what we're talking about it's a couple hundred pages of financial information they do every year and they they were expecting it they um uh you know they they wanted it before they adopted the budget uh because it would tell them how much Surplus they had and that would then tell you whether you're you need to Levy taxes or how much or what and um they didn't get
031it when they they thought they would I think Warren even mentioned at our ad hoc meeting uh he was expecting at any day now so all all of us thought that the work was done and uh we were each surprised a week ago Wednesday when um the audit field auditor and manager send emails both to Dan and and to myself uh asking for more information about the 2021 uh fiscal year and uh much less the 2122 that should be finished by now and is not still in the 2021 and the questions that we got um I found and you know some of you know I I started out as an auditor so I I know it as much about this as uh others and um the questions were very um routine meaning uh they were
032the kind of things they they could have asked long ago they were also the kind of things that as Auditors if you run out of time uh you just say well I'll check when I come back next year things like that for example um they picked out a line from our alliance grant for supplies it I think we had spent uh fifty six thousand dollars or something like that and they asked for the detail of what made up that 56 000 so you know actually we got it we had 14 questions um they asked about they had sampled four four or five people in the title one Grant four or five people in um the idea Grant and they asked typical work where they said let us see their salary notification letters so we know
033what step they were on and and what they were earning and then let us see the payroll registers for these they picked out six weeks in the 2021 school year so that they could match what the people were supposed to get paid with what they actually got paid they did they asked for some information on the priority schools Grant um it just things that um oh they asked for a list of uh purchase orders uh that were open on June 30th 2021. uh that was what Kevin referred to our our system has long since been uh put away in mothballs it had that information but we opened it up we went in we were able to get most of the things um so on Monday we answered I think maybe eight of the 14 questions
034uh there were two questions we invited them to come in and look at because the stacks of paper were so big but they chose to have that scanned to them so that was scanned early this morning we finished the rest of the questions around 11 o'clock this morning the um when Dan Garrett called uh to postpone our noontime meeting he said he had just received something from the Auditors they were asking about a grant they hadn't asked about before and in addition they had given him 24 questions to answer we said I got to do that we'll we'll meet another time I I was feeling pretty good um kind of hesitant looking at my email but today at around 4 15 they came back and they said um we we're seeing some differences between What's
035called the single audit report which is just state and federal aid from again 2021 with a report you filed with the state Ed Department showing those same grants what was spent so explain the difference so that was at 4 15 um and we'll answer it tomorrow uh but my point is those questions not only could have they been asked six months ago but they could have been asked a year or two ago so none of us know what has um caused it to come back but we're just we're making it a high priority um before we do anything else tomorrow we'll we'll answer that question for them and see where we're at but again my sense is it's it's both the city and ourselves that are are faced with this right now I don't know
036if I answered your question yeah I think so um it just like you said it's just kind of odd that these questions are coming about now right okay the only thing I I said to Kevin is there there seemed to be more uh there aren't as many questions on the general fund as they're they're more on different grants um I don't know why but you think they'd either be 50 50 or even more about the general fund than it's just my observation so and none about the Esser funds you know a lot of questions all these other things who knows is this make work or just to fill in fill in some small gaps or so I I think it's important to differentiate this is not an extension of this at least I don't believe
037so an extension from the other audit process I think this is a different audit I think is that is that correct John are these the same Auditors that were yeah RSM and this okay okay and why are they coming back now I I don't know um but they have been back um obviously starting with the city first and then from there um additional requests coming from us yeah so the these requests started again last week um and so that's you know that's what John and um the city's office have been dealing with going back and forth you know what what's what what's slow about the process is it was such a long time ago uh one of the things they asked for and I'm sure it was just a simple test uh they do this
038kind of work uh they wanted to see they picked a employee and they asked for a copy of his term they said we'd like to see his termination letter and uh the payroll register immediately following that so I'm sure they were testing to see if um there was extra pay or we weren't able didn't take the person off the payroll um it was and and when we looked at it it was a guidance counselor who just happened to resign in the summer of 2020 uh to go to another school district nothing unusual at all about that um our guidance concerts work a couple extra days in the summer and we um you know we pay them all the same and and there was no extra payment to this or anything else but what struck me
039was if you remember in August of 2020 we had just been shut down by the governor's order there was no one here our schools were closed everything was remote so even a thing like the payroll register there was no one here to print it it was probably the information was saved and we were able to get them information after we spent a couple hours trying to dig into the old system but you know most of the Auditors um in the 20 the 1920 year in the 2021 year they recognized that business offices just weren't there for all 12 months and they couldn't do everything that they usually do so they they they kind of took the foot off the gas a little bit and said you know we understand those were unusual times this firm
040hasn't done that now 2122 absolutely back to full uh full work and everything like that in this year but those two coveted years were different and I I think we should be given a little benefit of the doubt on on things like that so okay Jesse did I see your hand up before no okay anything else any other questions Mr Walston sir so uh Mr Russo my my comment is unrelated to the agenda so maybe I should wait until the end um to really just thinking uh some of our board members who attended National Honor Society so I'll wait and see your questions have done it that's okay okay anything further Teresa okay thank you Jesse Nick actually I have I do have one more question Mr Russo if I might um in terms of
041strategy I know that we've held on to uh we've been trying to hold on to those Reserve dollars that the the city has been uh storing for us um and I'm thinking ahead to next year to the next budget cycle uh because we're done with this one so why not look forward um but basically what I'm trying to get a sense of is like the likelihood that we would be drawing down some of those reserves to make up uh any potential deficit if we don't you know if we don't meet the ask next year are we looking to draw down those funds even though they're not sustainable if permissible okay and and I say permissible meaning if it's a strategy that's you know accepted and approved by the council and the mayor's office so certainly
042we'll have a proposal we'll talk about a strategy with the board next year um and you know I believe it was 20 my first year as a superintendent 2122 and I think one of the strategies that we try to deploy was actually incorporating some of the reserves as part of the ask the issue is the city of course needs to commit to that the following year and include that as part of the reoccurring budget and so um I I would not be surprised if we have to go back to the reserves again to tap it as a potential strategy um you know whether it's something that will be well received on the other side I don't know um but I I would not be surprised if we didn't have to go to do that very
043thick thank you further questions on the reserves going once going twice next item on the agenda is uh we need to reschedule our June finance committee meeting what did you have in mind Kevin and so we have the 20th of June which is the day before our board meeting so initially well timed um however now we don't have that time we do have a policy committee meeting at six um at Beaver Brook I don't know if if it's possible to meet before the policy meeting in person I I'd certainly be open to that but I don't know if you know everyone's the committee is available for a five to six meeting uh prior to the board meeting what day um on the 21st I mean it would make it would make for a long evening
044honestly um but because we have policy committee from 6 to 7 30. we could we have the dinner event on the 19th so I don't think that would make sense or be reasonable um the week before um is graduation week so it's kind of a kind of a lost week if you will with the middle school and high school graduation we have some rain dates on uh I'm just throwing a bunch of dates now so so forgive me how about a seven o'clock morning meeting well there's no conflict in my calendar at seven that's for sure [Laughter] or the 15th if we don't have um we have the 13th is probably the safest one if we don't have a rain date on Tuesday is open in terms of afternoon because we've kept it clear you
045know and planning for a rain date um so if that's okay for the committee we can go June 13th on a Tuesday what time um whatever is convenient for the convenient for the committee if you want to keep the same time six o'clock or you want earlier all the above work for me because right now I'm I'm clear just in case we have graduation on that day ISO move for the 13th that kid 's okay with me okay we'll put it on the calendar for six o'clock unless you want it earlier okay I gotta get home I get out at 5 30. okay I'm sorry 6 p.m okay I'll bring it to Cara Pompano's attention so we'll reschedule I think we're all set with the day history so I'll you muted yes thank you uh
046I'm hearing TV in the background and by muting my microphone I assured you it was not I here tell me some background noise okay okay so the meeting is now rescheduled okay and I believe you have some final remarks for us for tonight yes yes thank you so so I I just we had a great evening last night um one um just want to mention to the committee members uh that we celebrated our students at the cave awards ceremony um at the Amber Room um I was gonna yesterday at five o'clock and so I was there with principal Donovan principal zalita principal Kimball and principal blue middle school and high school principal is also principal Weber and we celebrated our cave Award winners and so um our finance committee and board members will see those
047students at our next board meeting so I wanted to start there but then then I raced over Mr Donovan and I raced over and a couple of families who were also at both award ceremonies and we had our spring induction National Honor Society ceremony we had a really good turnout it was really and we probably had the Danbury High School cafeteria Auditorium half full with with families and guests and what a really big induction class um and so I just want to thank Julie and Louisa um and Bridget who was there there's a board member and a parent last night but um Teresa was on the committee on Teresa did not know that you were previously a National Honor Society recipient and your heartfelt um speech yesterday was really appreciated by all just want to
048thank you for taking the time to be a part of this ceremony yesterday so thank you thank you that's it for me Mr Russo all right anything else any discussion comments queries quips with that I will entertain a motion Teresa ah God bless you all have a great night everybody