001the board finance committee meeting, Kelly Lesser, board member and finance committee chair. We'll go around the room uh to do introductions and then visit online as well. And board member Jacobs board member superintendent >> Scott Lee inadvertent CFO >> online. >> We have no one online. >> No one online. >> Oh, sorry. Aurora Koker, senior director of finance. Christy Centa. Um officially the finance committee members are members uh myself and member Higgins and member Bellamy. Um we do have three board members here today. So not officially we're not voting on anything. >> Um so I I'm encouraged I would like us to continue with the meeting. >> Yeah. President Jacobs can also >> and President Jacobs back community committee member. Okay, great. >> Okay, so we have three items on the agenda today for the
002next hour. So, let's um focus on the next 20 minutes or so on item number one, the PEART audit, which is a topic we've h had on the agenda before and um interested to hear how this year's PERA audit, purchasing card audit has um has gone. Let's start with and I'll take the detail. >> Okay. front of you. We are presenting our ASD internal audit report 202601 procurement card purchase review and this is one of the more regular and routine audit be performed for the Anchorage school district and scope of this audit is that if the P card holders adher the district policy and procedure regarding the P card use and overall We found that most of employees complied with the Anchorage School District policies and procedure regarding the use of the PE card and
003in this report we have eight findings in connection with this audit. However, compared to the total volume and number of transaction and total amount of a P card, what we found was just a fraction of it. So I'll have Meredith to go over each finding and recommendations. >> Thank you, Scott. I'd like to mention the time period that we covered for this audit was from July 1, 2024 to uh June 30, 2025 with a little over 60,000 uh PE card transactions in that um in that time frame. What we found during our audit, let's kind of start on the first finding, try to do the 15 20 minutes and not to go too much over Um so if you have any questions along the way please just let me know. The first finding uh this
004is the seventh PCR audit we've completed overall uh the first few findings are ones that we see typically when you have uh about 922 PCAR users things will eventually come up. So the first one is transactions sometimes appeared split circumvent the dollar limit. Each transaction uh each card holder has a transaction limit of $2,500. And upon our review, it appeared that there were 69 purchases that were split totaling a little over $264,000. Examples of split transactions included um audio equipment that was purchased totaling 3,8 $3,800 that was split into multiple transactions all authorized on the same day. when we reviewed these with the um card holders, we're told things like no, end of year can be difficult to budget for or kind of plan for and things like that. And so when we review it,
005we still look at anything that's purchased on the same day at the same vendor as potentially going split as they could have requested an uh concurrent limit increase to the finance department. So you include a few examples on here. Um you include something we see more regularly, which is sporting good retailers. So things like polos or um jerseys and things like that will occasionally be appear to be split. Uh for example, we see one that was about 2,00 $2,700. So just over the transaction limit, but it will appear to be split into a $1,700 transaction and a $900 transaction, both authorized on the same day. With split purchases, it can be difficult to identify as sometimes the transaction doesn't always go to the same approver. So it makes it a little bit hard to always
006identify. However, if there was we uh included in our recommendations included more examples within the key card manual so that way card holders can really understand what a split purchase is and the importance of making sure that they go through the right steps of increasing the transaction limit or working with purchasing when they need to. We also included in this audit was the first time was a split transaction um table to kind of help highlight the areas that really um could use a little bit more training as far as a split transaction value goes. Throughout this um audit, you'll find that management responses were always um they were always responsive um and they agreed with our our findings. Move on to the second finding which is conditional purchase process was not always followed. This is
007another finding that we see kind of typically within the district. There are certain items like personal service agreements, software purchases, rentals, and gift cards that require finance to be contacted first so approval can be received for that purchase. I will say that it has gotten better throughout the years. There's just some areas that do require a little bit of attention. For example, the personal service agreements, there were 20 total and only one included um conditional approval. Finance didn't flag these some as violations. And what we found was sometimes as card holders go through the process, they get a little, well, this was approved before. Why wouldn't it be moved again? Not realizing that something may have been added to a conditional purchase. For example, donations was previously not a conditional purchase. As of this year,
008it is. That way, the finance staff can be aware of where those donations are going and are they on the approved vendor list. >> Okay. I have a question. What's a personal service agreement and why would a PE card holder in ASD engage in a personal service agreement? >> That's a great question. I'd be happy to answer. >> I believe that would be like if they're hiring a DJ or something. >> That's the big DJ. Okay. >> Um so it's a great example to bring up because like as with some of the um right sizing is happening and things like that. Those were some of the transactions we found. Probably just kind of trying to get things nicely lined out and kind of forgetting that we need to take our account the key card manual
009and include finance when you're making those decisions. Um it's kind of a great time to really reassess how we want to, you know, if we're going to get DJs or face painting or things of that nature. Basically hiring anybody to come in and give a type of service. And it's pretty they can email accounting and get that uh conditional approval. So, just making sure they're actually going through the steps that they need to in order to purchase those items. Um, that's the same with uh rentals. So, when they're renting a space, they're needing approval from the finance committee or I'm sorry, from the finance group. And we found that there's probably still a little bit of training that needs to happen in this area. Specifically, when we reached out to understand why conditional approval wasn't
010received, the card holder had assumed it was more of a permit that they were purchasing instead of a rental. So easy to understand where those confusions can um kind of be in. Uh the next uh conditional purchase we briefly talked about was donations. This is something that was newly added to the conditional uh purchase process to kind of help make sure that the where money is being donated to is on the approved donor list. What we see with some of the conditional purchases is that card holder has to reach out to the accounting group for approval while also making sure it's on an approved list. So there's kind of two sets of things from the card holder side. And it sometimes appear that maybe one only one of the steps is. So they made sure
011that they uh either the software or the donation was on the approved list, but they didn't reach out that approval to include it in the supporting documentation. So fairly easy um recommendation. For example, the licenses and software. Initially, 96% did not include conditional approval, but when we looked further, uh 52% of that was on the approved uh software list. So, dismissing that approval in the supporting documentation. Another item that's a conditional purchase is gift cards. And this one has actually gotten much better over the previous audits um when there was uh all except for one included uh conditional approval. That was u I thought that was a kind of a little win. So on our recommendations, we just uh gave some advice to maybe work with the departments to understand is it easier to up
012the card holders to review the list and contact accounting or maybe just removing the lists. That way there's only one step to take and then that way they're not assuming because it's on the list that it'll just automatically be themed on there. We also included a little table on here as well to kind of break out the um different conditional purchases that were on there and amounts that were approved and not approved. Again, management respond management comments for respond. Uh the next finding is finding three. Personal transactions were not reimbured in accordance with district guidelines. This title is a little bit different than previous ones, which is uh personal transactions weren't reimbursed timely as a previous one that we've had. We found that all the transactions, all the personal transactions were reimbursed. They just weren't
013always reimbursed with the district guidelines. So, the um purchase card manual states were required to reimburse the district immediately and within 10 days at the education center. We found that wasn't always happening. It appeared that once a personal transaction was made and approved that it could easily kind of fly under the radar and it was up to that card holder to really come through and make sure that they're paying the district back. And one of the examples we included was a card holder who was on the previous PCAR audit as taking additional time to repay the district and that happened again. They made a personal transaction in November 2024 and in February 2025 and did not repay the district until they had terminated in March 2025. This was leaving the uh finance department have it
014follow up with the individuals and creating extra work for the support departments. There's another example that we included where the it initially appeared that the card holder did not repay the district but when following up with them they had they had just not come to the education center. they had deposited the funds at their student activities account and that's why we weren't able to see it on our end. So, just little things to kind of um reinforce what the process should be as far as personal transactions and how they're reinforced and management responses. Um, so our recommendation was to kind of monitor those personal transactions a little bit better where not only the card holder but the person approving the purchase if you see it's a personal purchase. And it can be hard because sometimes
015they're worded as mistake or just word of what the transaction is. So coming up with a better way to track those personal transactions to make sure that they're reimbursed for timely. The fourth uh finding is one that we've also had before, but the one difference is you won't see the approved time frame on here. This f this finding was specific to purchases were not always allocated within required time frames. So the approval process has actually um improved since the last audit. We did find and the amount of transactions that were approved within the percent you will see is pretty low. So only 35% of the transactions were unallocated beyond the five days. And when we reached out to the card holders to understand what was causing some of that delay um fairly it can happen
016with when one of the examples is the transaction took 91 days because in the system you're able to reassign a key card transaction. And so if a initial allocator gets it but maybe not might not be aware of the transaction or how to approve it prop properly, they'll transfer it to somebody else to deal with. And we saw that a little bit where in the system transferred one qual sorry one allocator to another instead of somebody just going through and kind of taking care of that transaction. Um in another example we included uh that took over 50 business days to allocate the employees had just been waiting for the receipts. And so again, um it's just there's a little bit of time frame, but it goes outside of the district policy and just with a
017little bit of training and a little bit of followup, I think this um this finding could be easily corrected. Uh we our recommendation was to include a bi-weekly review of the unallocated transactions. That way it could make it a little bit easier. If card holders aren't always reviewing what's outstanding, it could easily allow time frame to go on. The fifth finding is a new one for this audit and it was excess gruduities identified on multiple food related purchases. This one was new. The district actually does not have a policy set on gratuiti. So it's pretty easy finding to correct. We found on our review of food related um items uh whether it was or um whatever the purpose of the food was included gratuitities of sometimes up to $490 or $481 on food that would
018consider would be considered fast food and not typically me gratuitity. So really looking at how um those funds for food is there a set opportunity that can be implemented or at what point do we say well this was at this type of establishment this is the appropriate amount that we would if we included a tip or if we wouldn't include a tip for example one of the transactions that we identified included a 37% tip. Um the total transaction was about $528 and it included a 400 I'm sorry a $143 gratuitity. >> The recommendation was was that for this uh finding was to set the gruity limit at about 15% which is typical reasonable for um business needs and things like that. There are times where gratuitity is required but there are other vendors that can
019be used for food vendors and things like that. So a question sorry if I one member Wilson joined at 12:22 and my question um is that in the management comments it's suggests that the management agrees with the recommendation and will update policy. So are we going to ex will the board expect a board policy or an AR coming from >> it's typically just within our pecard manual >> policy not a not a board policy manual. Okay, >> so the sixth finding is uh high-end jackets purchased did not always appear reasonable. This was a finding where management comments were responsive, but they didn't always agree. This specifically was paid through the student activities account. So that's an account that's managed by the school. What we found was at one school in particular, they purchased six high-end
020jackets which each cost about $228 or totaling for six jackets $1,300. When we reviewed other schools or in different uh regions of the city, typical costs were anywhere from $35 to $70. So really just our recommendation is looking at what can be more reasonable and equitable across the district. And we definitely understand while some schools will have a higher activities fund just really reviewing those practices to make sure it's equitable for all. Um so uh we suggested adding clear guidance for apparel to ensure it's reasonable and equitable. Management uh management sorry management agrees with the guidance um should be should be reasonable across the school board. However, since it is paid from the um student activities fund, it's a little bit harder um to say you guys can't spend what you know was donated for
021this cause. And so the last time I believe we did a student activities audit was in 2017. So that can always be an idea for a future audit. The seventh finding was also one that hadn't been on the card report, which was airfare. This is specific to air for purchase with this uh with air for purchase with purchase with key cards did not always comply with district policies. So um this included both the key card manual as it references the travel policies. And so within the travel policies it stated if a cancellation results in a loss the travel will be held responsible for the cost. And in the example, we found there was an airflight that was canceled just hours before the return to Anchorage, which cost the district an additional a little over $1,000.
022The finance department had to follow up with this employee a number of times to make sure that the uh the district was repaid for the additional cost, which takes times from the support departments as well as the um the approver and things like that needing to make sure that it was repaid. Our recommendation with this, which is a which is similar to a lot of them, is making sure that the initial person approving the purchase is really reviewing it to make sure that it would comply with district policies. Many of these transactions by the time they are in get to finance. They're just kind of trying to go through and clean things up. And so it's hard to then follow where the approval when was this done and now we need to make sure it
023gets repaid. So putting a little bit more of the um process on the leadership or on the approver who approved that transaction. So that way when it gets to finance, they aren't having to kind of chase the person down to say, "Hey, have you repaid this?" We see that kind of too with the personal transaction. Fairly small accounting department for such a big school and they wouldn't be able to run down every single purchase. This one again um management was agrees with the findings and recommendations. Hope they're not going too slow. But the last finding is that um this one we have had on the purchase card before. Um and again there's no real district policy. And so this one, when I ask when I find this, I go on to the spring documentation and
024I review the address because there's no district policy as far as you cannot send or making it clear that if an item is sent to another school or another location outside of the school, people are initially a bit confused like am I, you know, breaking a rule? Is there something that I've done wrong? And we always just like to say well we just want to make sure that the items that are being purchased from the pecard are actually going back to the school for that need. Um so if our recommendation is if let's say they are using an alternative address adding something within the supporting documentation either an approval or a reason otherwise we're left to try to reach out to the individuals to figure out why was this not sent to an address outside
025of the school and also was this brought back to the school. And so there's a just a little bit of community transparency that can happen as far as with where items are sent and things like that and management was uh um agreed with the recommendation and we'll um update the key card policies to include that. That way it's easier for card users to say oh yes I see this in the policy it's not allowed and I won't do that in the future. So, we discussed the um audit with management staff on February 9th and we made time to make some changes and some edits and things if needed. Um and then I'll welcome any questions. My favorite part of the report is always the tables. So, I really appreciate so like some time to kind
026of go over the different um top 20 departments in school, the um the food purchases and the total vendors. I always find those to be pretty interesting as well. Hopefully I did not go too fast or too slow, but if you have any questions, I'd be happy to answer them. >> One question. I was looking at table or attachment A on page 14 and you know our high schools have the largest enrollment uh generally speaking. I'm just wondering um if you were to look at that on a per pupil basis, do they seem relatively in line? having maintenance is maintaining not a high school. West is a bigger high school than Chak River. You know, it seems like perhaps on a perical basis those expenditures are relatively in line, but did anything strike you as
027excessive at any of the schools? >> Not particularly. Um that I that that jumped out at me as far as I would like to review the previous year's tables to see were they the same kind of spending and everything was just about in line with them. Um, I think there were little things like Teimu purchases I hadn't seen before on Neon, you know, but that wasn't anything that was uh concerning you. >> Yeah. I mean, they look pretty well in when you look down the list, they're fairly well in line with the enrollment, too. West Barlet, >> those are those are big schools. Yeah. >> Yeah. Nothing really big. And some of them like Golden as big as school, but they have like um more booster clubs and things they're generating more in student activities.
028>> Gold is actually bigger than >> Wow. >> So >> yeah, that's true. >> Um but activities are >> a lot more activities, that's for sure. Um, any other questions from board members? >> Thank you so much for your time and attention to detail and diligence and thank you to the management for already having done the work of responding um in service of making a stronger school district. >> Thank you guys for coming. Thank you. >> Yeah, these are all >> um I can >> All right. The second item on our agenda today is the fund balance update. And I think there is a presentation. And just to remind the board, uh, we want to make sure that the fund balance is on track for being available to lean on to help balance next year's
029budget. So, >> yes. And then we'll kind of go over some of the changes we see throughout the year. at. All right. Um, so we'll look at this. Uh, starting on the revenue side on the local revenue, we're fairly well in line with we expect to be. Uh, one of the things you'll see and kind of jump out at you is the, uh, rate. Um, the inquiry, it shows, you know, half million dollars there. Um that's more reflective of our change in accounting process and budget process where uh the - program those you don't know it's like a reimbursement on telecoms so internet and phone. Um so they reimburse us. We recently changed the contract with our internet service provider where they're applying for this reimbursement directly. So the bill we get is net of
030this reimbursement. However, according to our accounting and auditing standards, we have to book the total value of those phone services and the total value of the e- rate that the vendor receives. Um, so we'll see that corrected next year. And I think in the FY27 budget, you see like a half a million dollar increase in phone services. That's because we increase the revenue side on the right to get the budget to match up with what we're doing in our on the accounting side of it. Um, so that's kind of a big thing that stands out. to see a reduction in state revenue. That's generally tied to a reduction um in the number of students. So, as we lost enrollment this year below what we projected, we also lost state funding. Um and then the same
031goes for the raffle funds that is also per student based. Um the foundation funding does include I think approximately I want to say about 1.2 two million for the students we got from Western Alaska when they came in. So, the state did go through and provide us with a grant for that. I think be giving that to us quarterly based on the number of students still remaining. Um, but overall, and then we expect to lose some money on federal impact, lower than what we budgeted, as well as the Medicaid that we continue to have drivers getting their money reimbured from the state. Um but overall about 52.3 million below what we budgeted um keep in mind that of almost 50 million of that is the usage of fund balance which doesn't actually reflect in an
032actual revenue line item. Um so that's kind of this minus 49 million is reflective of that uh use of fund balance not being recorded as actual revenue. Uh on the expense side, I'm tracking fairly well with recent historical patterns on our salaries. Uh the big ones you'll notice our pair professionals and certificated employees. You know, that's kind of where those big pots of savings are. Um the flip side of that is on the substitute line. and we're about 93% over budget uh due to the long-term subs and just coverage for other folks that are out vacancies whatever it might be. Um so that's kind of that the layout but nothing really other too concerning on the salaries from what we had budgeted. If you see anything you want to ask about please stop me but
033so about 5 million over in salaries after we factor in attrition about 1.4% 4%. However, we kind of make that up on the benefits side where we're saving about 27 million in medical due to a combination of things turnover having 60-day weights uh waiverss of insurance and then vacancies. So, that's kind of the big combination of that. Um the pers and tours and the other benefits generally track pretty well in line with the savings we see on the in the salaries. Um, and then our benefit attrition about $26 million. We'll be in the positive on the benefit side by about 5.3. So overall between salaries and benefits, we're really about right where we thought we would be when we created the budget. However, the depression factor probably needs to be shifted a little bit from
034salaries to benefits. Uh, on the services side, we're generally doing pretty well there. Uh you'll see kind of the outliers there is travel and registrations. A lot of that is you know one we haven't been traveling here even with a small pot of money that we did have but then a lot of that's also incorporate student travel. So as we suspect you know the number of buses we're using for events a little bit less. The unallocated is about you see about 5 or about $5 million left over on there. By and large, when you guys approved the budget memo in February, that included a transfer to an unallocated account for all that kind of old incomerance money that we swept swept up to try to offset even more cuts next year. So that's just the
035object code in which that live that that pot of money that's going to eventually lapse back into fund balance. That's where it lives is in this unallocated. So I chose a bunch of money left over, but this is what it would be dedicated for next year. Then our cost recovery is also kind of a bit of an outlier and that's the amount of money that we recover from grants. So as we uh charge like our title grants or whichever ones are, you know, five or six% rate, indirect cost rate for the management of those grants between uh payroll, accounting, HR, uh just kind of those business functions that still be used by grants. We suspect expect a little bit underwater on that. Um, we got some federal grants pulled that kind of made a swing
036in that with the FDS grant getting pulled. Um, so that that that's kind of the bigger changes on there. Supplies and equipment that's generally in line with what we tan is having a little bit of money not left over. Our insurance claims are quite a bit higher. We had a couple of big payouts at the beginning of this year. Um, it's kind of onetime things we hope. Um, so we are showing over in that. Overall, we're a little less than 1% off of what our budget was. So, we're about $6 million under. So, doing fairly well or at least on on par with what we projected. So, any questions on the revenue expense side or kind of get to what you care about? Um, the big piece. So really kind of the bottom line here
037is we're about $8.5 million above the 5% fund balance mark. And for those you may be kind of new to looking at this the percentage of fund balance is percentage of expenditure. So if we spend 600 million the state would allow us to spend uh there's a 10% cap allow us to save $60 million in what is undesated. and undesated is our truly up here. Our truly unassigned money will leave us about $8 million a little less. Uh it also includes our bond rating even though it's restricted by the municipality for usage. And then it includes what we plan to use for next year and that's the $8 million that was approved in the FY27 budget. Um so we approved 8 million. We have about 8.5. So, we're really right on par with what we
038approved. >> And I I have a question. So, just just to clarify, we have our border minimum of 8%. We should be retaining fund balance to that 8% level, but now this is the third year I think in a row we've spent down to five plan to spend down to 5% second or third year. >> Yeah. So, in a better world, would you as a CFO like to see us retain fund balance at an 8% level? >> I think I'd like to be closer to the 10% >> ideally, but you know, given the times we need to, >> we're 26.5 million below the 10% level, >> correct? >> That we should have to make you feel comfortable. Yeah, >> that's a big that's a big so eight and a half million dollars above the 5%
039>> and I'd be comfortable at 9% with 20 million more of course. >> Yeah, but but just you know being above the 5% level by $8.5 million doesn't seem like anything to really shout from the rooftops. >> No. And this is planned I mean and by and large this is planned to be spent >> and they're going to be spending it down to balance next year's budget. >> All things being equal, we would end next year with you know kind of this se this section minus the 8 million because that would be spent. It would just be the about 35 million between these two components. >> So that this 7.8 million that's really what our flexibil flexibility is. >> Okay. >> To say you know if we have a lot fewer students roll next year
040this is where that would kind of balance out at. um or if we have, you know, the earthquake fire or something that happens and we need uh some money to spend quickly. >> Um thank you. For the record, member Bellamy just joined as well at 12:4. >> I got stuck in the outer room. Sorry guys. >> Um so that's really kind of we're really on par where we plan to be. So not a lot of surprises. So, >> but from your perspective, it looks as though we will as planned spend this down >> to balance FY27's budget. >> Um, >> essentially to >> Yeah, I think we'll be where about where we said we we thought we'd be at this time or in January when we're saying, "Yeah, let's spend $8 million to help shore
041up the next year's budget." >> Nothing too surprising there. >> Great. Um, if there are no no other questions on fund balance, we can move to the last section of the agenda which is focused on a legislative update and um I had asked uh Mr. Ratliff to address House Bill 274 which is um which has been introduced and the House Education Committee took it up. It is a BSA bill um Senate Bill 277 has been addressed. It is a comprehensive bill um pulling a lot of different things together and Senate Bill 278 my understanding is being introduced tomorrow. So hoping that you can talk about these in your presentation. >> Sure. And so the first one was I guess was let's start with Cabel 278 because that's the one that I have written up. >>
042Okay. >> Um so this one took me a while yesterday just to try to figure out how to display it to make it where you folks might understand it. Um I don't know if I've done a really good job on it, but we'll attempt to walk through it. Uh really what the bill says is as it relates to the required local contribution that municipalities must pay, it would limit that growth to 2% year-over-year is my understanding of the bill. Um it would be backdated to July 1st, 2025, uh according to what's out there yesterday when I was looking at it. Um so really what that effect would have is if we go back and start with the 2000 or FY25 required local contribution apply the 2% growth estimated to that it's about $5.1 million difference
043than what the current law says the 128 million that we have to pay. So we're all FY26 the current year we're budget on this 127.7 million. Um, if this were to go into law and be retroactively applied, I believe it'd be about 5.1 million that would come back to the district. And that would be it's really just a shift between who pays. So, it would be a 5.1 reduction in the municipal portion and an increase to the state's portion of the same amount. But since our budget's set and we have our tax request in and we have authority within the state's upper limit spending because we have the BSA late, um we could just accept the state money. So it' be additional 5.1 million. So that one's fairly cut and dry. When we look to
044FY27, this is where it gets a little more complicated. Um we passed our tax request on Tuesday. So that's in there. That's this piece here. is this uh we requested 235 million. Um if that changed because that included 130 a pretty substantial increase in required local contribution this year the it would be about nearly $14 million uh delta between what the state and city would have to pay. But since we've already requested that um here's what the new limits would be. So we could take up to the additional it would kind of switch between the additional local and that required local. We'd still be about 1.6 million over the state cap potential. Um this doesn't factor in any sort of changes in a base student allocation or onetime funds that may increase that local limit.
045Um but it could put us in a spot where we've got more authorized under the city than we could actually collect based on state statute. um not a bad problem to have, of course. So, and again, this stuff is probably this just hasn't really even been introduced until today, so we don't know what's going to change. But, you know, if everything played out exactly as it's written, this could flag potential scenario. If we add that special tax levy to it, then we could be over the state cap even more. Um, so at this time, I mean, that's kind of the the lay of this one, but I think there's a lot that's going to change and affect this. So, I wouldn't, you know, really caution against kind of coming out and say, but overall, like
046long term, I think this would present like a one-year kind of challenge to work with the city to see what to do with that money. But long term, it would be great for the city to have that in place to limit the growth on the city if the state's not going to contribute an extra amount when they take that money from us. >> And just for my own clarity, if um the state were to deliver onetime funding to schools, that would raise the state cap and minimize the the issue that you just described. Am I understanding that? Correct. >> Correct. So any money they distribute based on on the basis of adjusted ADM is what gets counted in that state cap. So it's the basic need plus anything. So quality schools grants any one-time money
047that's distributed on that basis. Um I believe the oh the what you call it the the raffle funds get added into that as well. Um so there things that would bring that down or how much we could collect. So, >> yeah. Member Holland. >> Well, there's a lot of things that change still. >> Um, I haven't read the bill, but if we didn't set up an agreement with another school district, >> that's SB 277. >> Um, which we can get to next. >> I have maybe one question on 278 and that is so you've just done this analysis. Have you had a chance or are you intending to reach out to the municipality to let them know? >> They had asked about it, but I want to kind of give you guys the update first.
048>> Okay. >> And frankly, wanted to see how it was received. You guys understood it. Maybe I'll send it to them. >> Make sure they if it's it's somewhat straightforward. But u yeah, they did uh reach out and ask about the effect of it. Great. Great. So, that's really all I have on 278 was really just a kind of one line item that added that 2% escalation cap. Um, as for 277, see, I don't really have anything for that. >> Hey, Andy, I'm sorry, Madam Chair. >> Yes, please. >> I'm just curious where where is 278 uh in the docket on the docket? I mean, is it have they had testimony and everything for it? Is it going to go through this? >> My understanding is that it is slated for introduction and public testimony
049tomorrow. >> Oh, okay. >> Um, I saw that via an AASB update towards the beginning of the week, which is why I reached out to Mr. Ratliff and asked for um I was going to say your two cents, but one more than two cents. >> Okay. um >> analysis so I can uh check and get back to you um on where 278 will be tomorrow. >> Okay. >> You mean just >> and do we do we have any information on where the state board of education is or the commissioner is on the other local uh contribution issue? I haven't seen anything from the state board to say what changes they might have. >> Okay, that's good. That's good. Let's hold that thought. >> Yes. >> Thank you. >> I believe it was referred to Senate
050Education, so it may be tomorrow in Senate Education. >> Oh, dang it. Okay. All right. And then the other one, bills 277. Trying to find I'm sorry. The meeting was cancelled. That's why I'm struggling. It will not be tomorrow at 3 p.m. >> Okay. 277 is the omnibus >> 277 is the Senate omnibus bill. Yep. >> Um have some information on that and this is I don't know I don't think anything's really changed since I sent you the update a couple weeks ago. >> Great. >> U but the things that were in that bill were one it would change the indirect cost rate. We could charge charters from up to a cap of 8%. Right now it's capped at 4%. Uh I don't think it would have a material change for us at least not
051next year. Our indirect cost rate is going to be like 4.19%. Um so it's the it's capped it's the lesser of you know 8% of your actual rate. Um so we can only take up to the actual rate. So that's in there. I don't think it would really change. There was a $35 per student transportation increase generate about 1.35 million. the correspondence, it would change it from a 90% of the ADM to 100% of the ADM. It would still remain towards the end of the formula. They wouldn't get the special education multipliers. Uh generate about 1.45 million to the district. And then there was a $126.54 BSA increase which was I think 1.9% inflation based on 1.9% inflationary factor and would generate just under $9 million for the district. Um and then there was that
052$450 per student for proficiency or growth standards um for grades K through six. I really don't know what the scale of that would be. I think um just for illustrative purposes if half the students met that criteria it would generate like 4.3 million. Um, kind of the other thing in that bill that was regarding the correspondence programs was uh kind of a directive if there was like in Anchorage we have about 5200 students that enroll in nonASD correspondence programs like Raven IDA cyber links. I think there's like seven or eight different school kind of statewide correspondence programs. But what would happen under this bill is those students would enroll with ASD and then we'd have a cooperative agreement with those seven or eight different uh statewide correspondent schools to funnel money back to them and
053we would take an administrative proportion off. Um, you know, just kind of the rough math on that be maybe a billion and a half that it might generate administrative costs, but then we have to hire more registars and people to supervise this uh the enrollment of our students and flowing that money back through to the these correspondent schools. >> Um, so I don't know that it really gets a whole lot more money back into students or families rather than just increasing some staffing here to to manage it. Um, so that was kind of my initial concern with that piece of it. Uh, so I don't I don't know where they'll end up going with that, but I think there's quite a bit of consternation around that. >> Yeah, you had shared also there was something
054about students would be in the current language students would be affiliated with our smallest school which is >> they've been taken out now, >> right? So it would just be um straight correspondence. >> Okay. >> Funding. >> Okay. So it's not going to change. >> Yeah. So that piece was I think corrected already, but I the rest of it still remains. Um so yeah, it seems I don't know where they're going. And then there's some questions about, you know, if we enroll those students, do those does it get cut counted in I mean it would obviously get counted in our financials but into our graduation rates or do we have to practice and make sure they're on pace for things? So, I really don't know the kind of the answers to some of those more
055instructional side questions. >> Yeah. >> Are we are we sure we're capturing the total indirect cost for charter school supports? We've heard I've heard anecdotally for years that 4% or so was far short of the actual value of what the support was provided. >> Um uh yes, I don't think we're capturing that. I mean, particularly with, you know, one and the 4% is just kind of the cost for our business functions, you guys, me, Dr. Bryant. Um, but we spend like our budget office spends considerably more time working with our charter schools than they do with the neighborhood school. Like a lot more time. >> So, are you saying we couldn't get to 8%. >> Well, well, it's based on that federally approved indirect cost rate >> or the state approved. It's audited. So we
056have to that the way we create that rate is not going to change and I don't think we can have a separate rate just for charters. Um but yeah there's other things too is like you know supervision of those charter schools like they don't pay for Robin Harris to supervise them. Any sort of professional development we offer to our principles here they they just come and do that. We don't charge them back even though it comes out of our all our total pool of revenue. And so it's why can't I guess I'm still struggling to understand why we couldn't capture those funds. It's federal rule how the federal government categorizes what we're going to build it for. >> Yeah. Well, the the indirect cost rate is made on it's specifically to how much you spend
057on in certain state functions compared to the total and that that cost rate that's dictated by um kind of state and federal entities. the the laws pretty much says either that rate or the 8% whichever is lowered. So it is specific to that one rate that is calculated standard across all districts. So the proposed solution because of the language 8% or the lesser of 8% or this rate that we're stuck with doesn't effectively change the 4% >> because we have a low indirect cost administrative rate. It doesn't really wouldn't really help us. the districts that have higher indirect cost rates um they would be able to charge charter schools more >> um you could potentially like direct a bill them for the cost professional development and things like where it's not necessarily a revenue thing
058but it's an expense you guys need to pay for your share of this >> is there a way the board can directly I mean could direct the administration could directly bill charter schools for those >> potentially I mean a lot of what we've seen though is just the capacity to do so like if we want to if we provide uh I'll use our general leadership meeting where we have all our principles come in and kind of get some professional development calculating out a you know per person cost for that um is the juice worth the squeeze >> frankly more people do it I don't have time to do it probably doesn't have time to do it >> um >> and I would I think my bigger issue with that is that we might have all
059of our charters opt then they don't want to go >> and then we need more policies to direct them to do more things >> if we want to make sure they have those experience. >> Do do we does our maintenance department um for when a charter school occupies an ASD facility? Does ASD allow their driveways and parking lots? I mean is that an example of an expenditure that >> You build for maintenance. Okay. So when they pay to keep the lights on, that also includes >> Yeah. the utilities are all direct charge to their budgets already. >> And then like if they come out and plow or come fix some plumbing, then we do charge the schools that. Okay. >> Um they don't necessarily pay for the overhead and maintenance to say like, you know,
060there's a director and then some support personnel that manage the um our maintenance staff. They're not paying to submit a work order, but they will pay for the work. >> Yeah. So, any work we do there, they pay for. It's just the kind of the the maintenance and overhead or the overhead of those maintenance programs that may not be included. >> All right. So, an omnibus bill that is ambitious but may not close a $90 million gap. >> Correct. >> By by quite a bit. >> Oh, yeah. Um, and just just remind me the $35 per people boost to transportation for about 1.35 million. Um, this year we saw effectively a $48 per people increase and last year it was onetime funds of $50 per people, >> but we're still not up to 2016 levels
061if you were to >> as far as total dollars. >> Yeah. Yeah, probably not just because we've lost students, >> right? And the cost of diesel has gone up >> quite a bit. Yeah, >> quite a bit. >> Okay. Um All right. So, 278 277. And then the other one that I wanted to have a chance to discuss um was 274, which is maybe the oldest of these bills. >> Was that the >> That was the BSA bill. >> $630. Mhm. A $630 per pupil, which >> I think we r that out to about 44 million. >> About 44 million. Um, so so the effect for ASD would be about $44 million, >> I believe. Do the quick math on it here. >> That's what Yeah. And if remind me again the cost to implement
062the target class size of the legislature. >> Um was it >> does what I remember in a slide deck was about $46 million. That's >> from what our 27 PTR was projected to be. Yes, that sounds right. >> Okay. So it maybe that $630 is not enough to establish >> it would not >> what the state would like class sizes to look like. >> Correct. >> If we applied every dollar towards towards that. >> Yeah. I think they'd still be short >> short. Any question? >> The um the funding that was put in the operating budget was for 278 or 277. Uh, I think that was three uh this this um 274 >> 27 >> and that's the 153ish million that they put in. >> That's what gets us 44. >> Yeah. Yeah. That's what
063And that's Yeah, exactly. That was newly reported yesterday that um in the state operating budget that amount has been inscribed. >> And where is 274? >> What's the proc where where is it in line? I think it's still education. I don't think it was moved out of committee. >> Now still working on the bill for the Andy Stories bill to change the ADM counts where it would be kind of a smooth a three or five year averaging of the ADM kind of smooth out the effects of enrollment loss and make it more predictable. Um well, it's an interesting time of year where things both seem to move slowly and very quickly um based on conversations that are happening in the legislature. So, I appreciate uh the tracking and the the first um explanations of a
064couple of these bills and um we'll be really watching and um I guess taking a stance on them as as opportunity arrive. Will I guess will >> does the administration expect to testify uh or or speak in support of any of these in any formal way? >> Likely. Yes. >> Yeah. That's >> okay. Um unless there are any other questions, we'll end a few minutes early. Um our upcoming meeting is April 23rd and then we will meet again at the end of May. But with that, I would adjourn. Thank you.