001Okay, good afternoon. It is about 12:15 on Thursday, November 20th. This is the meeting of the ASC Finance Committee. I'm board member Kelly Lessons and um we have some board members online and in the room but not quite here but we'll go around and excuse me [clears throat] superintendent >> Third the director of internal for the city >> Bas Jim Anderson chief operating officer Mayor >> Cullen executive assistant I'm Mike. [snorts] >> Larry Morris, planning and design. >> Aurora Coverland, senior director of finance. >> And online, we have member. >> Okay. And my understanding is that member Jacobs is in the building and [snorts and clears throat] around the corner. And um member Bellamy is >> is present. >> Present. Okay. Present. Excellent. was okay. [laughter] >> Excuse me. Um, we have three items on
002the agenda today. The first is the audit. The second is the much delayed act for review from last month. So, thank you for um allowing the the delay. Um, so let's start. And then the third is the CIP. So, we'll start with the building access controls. >> Perfect. Well, Mary and I are are pleased to be here today. >> [clears throat] >> This was an audit that uh was brought up uh by the by the district um as something that we really wanted to uh take a deep dive into. We did do it we started this when school was still in session prior to uh the summer. Um so actually back April and May time period. I know it's been a while. A few things have happened since then have kind of delayed this report
003but uh it's one that's been out there for quite some time and we we did a lot of really good work. Meredith um was in direct communication with Jim almost entirely from the day we started to also try to address items as they came up um rather than waiting to the report which came up several months later um in this process. I will say that uh my 15 years that I worked here this was a real priority for me and and and um was really pleased to see it uh come to fruition at that time. So much so that myself and my wife actually did um many of the walkarounds with Meredith that night from a safety protection standpoint. So I've really valued this audit. I hope the board [clears throat] does as well. Um
004I think you'll find there's a lot of really good things in here that uh we were able to find and u I'm gonna kind of let her go through in detail. Um, and I know the administration has has really taken a lot of these things seriously and have um um a lot of things that they've done since then. So, as I don't know if they want to wait until the end to be able to talk about all those things or as we go through the findings um they can certainly chime in, but we we are pleased to present this and as you know it becomes a public document after this. You know, I [clears throat] would I would say uh Alden and I actually talked about in the barber shop, but that doesn't matter. Um
005how how do we look at um the other priorities in the district and try to come up with a way to audit it because PECards are important and all the stuff that we do every year? They are they're all important. Um and then we started talking about security and and Dr. Bryant and I and several of the chiefs, you know, we can't see what's happening at 96 facilities across the district and we really felt like we needed a good eyes on the ground look at whether our build and it's called um building access controls. It's really the security of our staff, students, and facilities um is what we we really are worried about. And so, um, fortunately, you know, we've all known Merida quite a while now. So, uh, we spoke frequently. We did identify
006some pretty big things we had to fix. And I I think this was one of the most important audits in the last few years. So, we didn't do well. Um, we're better than we were in May and we'll keep getting better. But, it did identify areas. some things were quick fixes that were really systemic problems. So, um yeah, go ahead. >> That's a a good audit to start with. This was one that they had uh wanted to do back in 2020 and then the pandemic happened. So, it kind of halted the actual checking of the security of the buildings and so this was the first time I got out of schools and see um about trying to open doors and things of that nature. So, I'll get started with introduction. >> I'm gonna interrupt. Member
007Bellamy is online, >> correct? So, the Anchorage School District oversees uh 40 oversees educating nearly 43,000 students and provides confinement to 500 staff just to give an idea of the number of people that are um at dependent schools and departments at one point in time. And according to the district, staff safety is top priority and by providing a secure learning and working environment at all schools and buildings. This was something that was really echoed throughout the audit was how important safety is in Dr. Brian's priority with it. So, we were excited to be able to help kind of identify areas that needed improvement to achieve this goal. Various support departments, including office of emergency management, maintenance and operation, and capital con planning and construction help manage different aspects of school department safety. The support facets
008provide services [clears throat] throughout the district from implementing secure desk at elementary schools and vendor management system to implementing and maintaining lock and key systems to control access to the district's more than 100 buildings. All buildings have traditional lock and key access with limited access to the exterior doors. While some buildings have electronic fob devices which allow folders entry through doors where the device readers have been installed. The plan for the district is to implement fog devices at all locations as it does allow easier access to deactivate quickly in cases are lost or theft in case they're lost or stolen. However, when a key is lost or stolen, a risk assessment must be performed to decide uh if building locks are needed as rekeying buildings timeconuming and costly process. In 2023, new security upgrades were
009approved by voters, which included secured vestibules being installed at elementary schools. The secured vestibules add an extra set of uh layers to the main doors with the intent to prevent people from being able to enter the school without about without approval. To enter school, the individual would need to start the buzzer and allow be allowed in by staff. So the objective of this audit [clears throat] um was to determine the if the district was adequately adequately controlling access to their buildings including review of the policy and procedures to determine if they are being followed. In addition, we visited schools and departments to evaluate building access and review records of cookies and fobs issued to contractors. Next is just a boiler statement that we out of all of our audit that we conduct uh this audit
010audit in accordance with generally accepted the rent accounting standard kind of skip over that piece. I'll go on to the overall all valuation. I'll briefly touch over this and then I'll go over each finding in more detail. So overall evaluation is the controls over building access need improvement. Specifically, our review found that work orders for building access specific to exterior doors needs review as work orders were not always resolved timely. We also found access to school and departments were not always secure and multiple storage units were not secure after operating hours. Moreover, we found some processes with the key control procedures were not always followed. And finally, the list of file folders we received from the schools did not always match the list of file folders we received from the support departments. So I'll go
011over each finding more in detail. If you have questions as they come along, let me know. Otherwise, we can address them at the end. The first finding we had, we put it as most important as it affects specifically out. The work order process for building access needs review. We found that uh the work orders for building access specific to exterior doors needs reviews as the work orders were not always resolved. This appears to be due to several factors which included multiple work orders for the same request being created, the priority of the work order being sent to low or work orders being closed without resolution. For example, one elementary school had repeated work orders input to the front door that was not closing properly, allowing access directly into the elementary school during operating hours. The
012elementary school reported the door not closing on work orders dated August 24, September 24, October 24, and December 24, and again in January. [clears throat] One work order created by the elementary school stated front door will not properly latch closed after opening. We understand this is due to construction. However, the problem keeps. Close the ticket if you need. We just want a secure building that stays secure. Although the work orders for input for this issue, the door was not repaired by May 2025 when the exterior exterior door evaluation was completed for the audit. The school actually thought I was there to repair the door, which I like, oh [laughter] no, sorry. >> And it may have been a year, almost a year that this particular school had been requesting to have their front door. And
013this is one that had a vest in this one from the bond. >> The district's um online employee bulletin in August 2022 did include if there are any security or if there are any issues with doors or locks, please immediately submit the work order to maintenance as a safety issue and set the priority is high. However, we found when a secure vestibule is implemented due to the warranty period, it can cause uncertainty on which support will oversee the repair. The cost of the security improvements at the elementary school we the cost of the security improvements [clears throat] we visited at the elementary school were estimated to be 2.9 million with a benefit to protect student and staff from existing crime in the area. However, after the installation and upgrade sorry after the in installing the
014upgraded security features the elementary school is still not secure due to the exterior door not closing properly putting staff and student safety at risk. We try to be a little bit more specific in our recommendations and management did a great job being specific in their um in their followup as well. So we ask that the building access should be reviewed regularly and this by the support departments and the schools to ensure they're working as intended. In addition, the work orders for building and uh and any safety issue should have an automatic high priority set kind of keep that low priority from being able to go in and guidance on how to complete the work orders to ensure that they're resolved timely. management was very responsive in their comments. They let us know that they would
015um all the work orders for exterior doors, locks and windows or access related to be flagged as emergency priority and addressed immediately. Supervisors and leads have been instructed to contact field technicians and work directly uh I'm sorry and redirect work address immediate perimeter security concerns. >> Yes. So I can add to this because we've done things since then. So the not the good thing about this but the best thing for me about this was it identified that that we had over pressure in the secure vestibules that we have been installing over the last couple years. >> Over pressure >> over um it was so airtight the seals on the doors were so airtight that there was an over pressure coming from inside the building preventing it. And you you couldn't just keep increasing the tension
016on the the uh mechanism that closes it because someone could get hurt if there was a power outage. This thing would slam shut and of course you don't want that. And and they so they did find a a a pretty good fix and they're going through um checking them now and it was just putting one more vent inside the vestibule and then you you the door can close. So that was a good thing to fix. we did go through now everything that says door or exterior security is automatically flagged in the limble system where it wasn't previously. Um so honestly that's why we do audits so we can find the things we don't know especially when it's something systemic like secure vestibules. So it caused us this summer to start looking at all the secure
017vestibules again because there there legitimately was over pressure if you open u and and tried to close it just it was too airtight. >> Interesting. Um pause and just acknowledge that members Wilson and Higgins have joined in the 5 to 10 minutes ago ballpark. [clears throat] So we'll go on to the second finding and the reason we made that the first finding usually they're in the list of the most important uh one and two are both very important but because one affects specifically elementary schools we wanted to make sure to include that first finding. The second finding which is also important is uh building access to schools and departments were not always secure. Uh we visited a total of 30 buildings which included 26 schools and four departments. Uh again, this is during during the
018school year, so we had a good um chance and it was kind of a nicer days just sometimes when you know maybe it's easier to leave doors open and things like that. But out of the 26 schools we visited, 15 or 58% were not secure due to exterior doors either being unlocked, a jar, propped open with objects, or broken. For example, we visited three high schools. We were able to access all three buildings during operating hours due to side doors being either unlocked, propped open with objects for less control. Specifically, one high school had manually unlocked the exterior door with a master key to allow students and staff to freely enter the building, although a fob device reader had already been installed at this entrance to allow staff easier access. At a different high school
019we visited after operating hours, all the doors to the teachers entrances were unlocked, allowing anyone to walk directly into the building. We also found seven schools that had windows open on the ground level during and after operating hours, allowing access into the building. That also affects um heat and things like that, but we also wanted to just point out the safety when it's on the ground level. Out of the four departments, one was not secure with the back door found a jar. The district act uh district's access control documents does read, "Lock your doors. We want all students to get inside the school for safety as quickly as possible. So lock your doors at once the entry time has lapsed." We also found signs in the doors that do not doors open and all staff,
020please close door, please close doors behind you fully fully latch. However, it appears these signs went overlooked. For example, at a high school you visited after operating hours had a rock that was propping a gym door open, allowing access directly into the building. Although a sign had been placed there at the entrance, do not prop open. Although the support departments created documents to assist the building access, it appeared some of the staff some staff were unaware of the protocols such as keeping doors locked. When we spoke with a school, when we spoke with the middle school, we were informed that a reloc relocatable building we reviewed had been broken into three different times during the school year. And while reviewing the relocatable buildings during operating hours at the same middle school, we found some to
021be unlocked, no staff or student inside, but did find the computer accessible for theft in addition to classroom supplies. Furthermore, we found an instance where after school activities took place in a middle school building. However, when the after school activities were completed, the building was left unsecured. Unsecured access point, schools and departments at risk for safety and theft issues. We did include some pictures in this audit to just give an idea of things that we were finding with the doors propped open um with doors just left the jar um and then also with some doors that were propped on the next page just to give an idea of what we were seeing during the audit. I have a question. Um, recognizing that you probably don't have the answer, but especially with the bigger schools in
022secondary, I mean, to what extent are students possibly at the root of door getting involved with them? >> Uh, that's a great that's a great question. Well, one of the high schools that we did visited, it was a group of students that were doing an art project, and you could definitely tell that the students had like just prop the door open to finish the art project outside. and I had made the staff aware and they had gone and kind of talked to the students to close the door. So when I left the door was closed and so I definitely think there's a lot of factors that could be left into there. >> I would say most of the staff. >> Okay. >> Yeah. There was one one of the high schools I had visited. I
023I got pretty good at being able to tell when drawers were a jar and a teacher was walking in. I was like sh I just went to my car and I was like jotting that down. Okay. Um, so I think there's a little bit of everything and and Jim mentioned the pressure with the doors that's also, you know, when you have a lot of students coming out and not everyone is checking to make sure it closes behind them, that can also present an issue as well. >> So we we also started I get an email every morning now on every alarm that goes off across the district whether doors were open or closed. So we can look for trends, especially schools that have repeated violations. And it includes whether windows were left open. You know,
024we have two night custodians for all of West. They have 67 doors. If all they did was just check doors, they wouldn't do any cleaning. So, um, so we are using the automated alarm system uh, triggers as well as when the custodians sees something, they can put it in their night report. Um, and I think we have a better ability now, um, to see which schools had the most challenges. Uh, you know, a lot of it is well-intentioned. Staff were well-intentioned, but but forgot to close windows during the day. Um, and and they just were left open even on the ground floor. Um, so that's why this new report that comes in, I'm able to send it out to senior directors, office of emergency management sends it out, Steve Brown, and we are getting a
025better handle on it. And now that this audit is official official, um, it'll be in front of all the principles during a small group briefing at the next general leaders meeting. And you know, these kind of things are never about the just the principal. It's about getting it all the way down to every person in the building. And frankly, most of the stuff in the evening was probably, you know, groups and and coaches. And it's it's really got a spread all the way down, but um I wasn't pleased that we found so many, but it definitely um created the sense of urgency to to start making changes. Yeah, >> I hope that it also with some of the schools going there, it reminded them of, oh yes, we do need to have the doors locked
026there. I think there are some people that were definitely surprised when I showed up to say, hey, I'm here to check the doors. Uh so the management had great responses and they were very um detailed like Jim had said with um having uh going over the audit with the principles um including this office of emergency management and um emphasizing routine door security checks. um reviewing the security vestibial upgrades to make sure the air pressure wasn't um too much and the maintenance capital planning or confirming additional vent like the vent within the vestibial produce pressure. That was definitely something we saw sometimes with the air would be blowing so hard that someone would have to actually physically close the door behind them. >> But this is the one finding that really affects all the areas. student
027safety, theft of goods, uh utility expense and so forth. So just doing, you know, one thing at every building affects many different aspects of safety and and the budgeting of that school. >> So the third finding we'll move on to is that uh storage units. Storage units were not always secured. We wanted to keep this finding separate because this is more to do with fact than anything but also does show importance because um we don't have have items um stolen. So we found storage units were not always secure after operating hours. These were specific to after school hours that we're looking at. Two of the secured storage units included propane tanks. Two of the unsecured storage units included propane tanks and expensive John Deere tractors that could be accessed and stolen after operating hours without
028being unlocked. Although some storage units had additional security, such as fencing to protect the storage supplies, fencing was also left unlock. During our review, we found un we found locks on the ground, locks that have been locked to itself, kind of like the locking mechanism, and locks that were missing from the storage units, leaving them unsecure. Some of these storage units were used by after school activities and sports clubs. How if the storage units were left unsecure immediately after use, there was potential for leading the units unsecured. When we spoke with staff to understand the responsibility of locking the storage units, we were told the storage units were always secured. However, we found gas cans, propane tanks, tractors, wood, boxes of brand new flooring, and field supplies that could easily be taken down due to
029the storage units being unsecured. Again, we included some um pictures in here. We also found an unlocked storage area that provided direct access to a school's generator. So, the school was pretty responsive. We did have um one coach who tracked us down asking us what we were doing around the place, which was nice to see. So, that was good. But also just reminding them to relock the um items right after use. So, management comments were again very responsive. And our recommendation was just that that the storage unit should be secured um immediately after use and a double-checking at the end of the day. >> Management. Okay. >> And we've added the checklist for the for those secondary schools that have school security officers. Um and that's now also on the night uh the night check.
030If an alarm goes off while they're there, they check all the exterior doors, windows um and also the containers. So, um, it's it's much easier when someone like Kirsten or Sven or Eric Bachman can call a principal or me, if it's repeated, call a principal and talk about it than it is for them to get an email a week later. Um, so, you know, it's it's still happening. It's hard to say. I think we're going to want to do this in about a year or so again and because it's going to take time to change that culture. Um, but it's something we definitely want to add to this cyclical uh list of things that we do. >> Yeah. >> Um, and if we I wanted to ask this question at the end, but I don't
031think I can wait any longer. I'm curious, we from a from a budgetary standpoint, budgetary process, we cut maintenance at least two years um that I can remember recently. And >> maintenance has been cut a lot. again. >> Sure. Yeah. I'm thinking of two cuts that that made me nervous. Um because we try to direct dollars as much as we can to the classroom >> and but we know that every every district position has a in impact direct or indirect on the classroom. And so I'm wondering if these reductions that have been made over the last decade um to maintenance have had any bearing on some of the findings in this audit. So, for everything that gets installed from doors and hardware and everything else, there's a preventive maintenance schedule that the manufacturer says to
032do. [clears throat] Last year, um, I had to approve that we double all of the PMS. So, if it was once a year, it's now once every two years. If it was once every six months, it's now once a year. And with the staff that we currently have in some areas we still can't keep up with double and may have to triple it >> and >> but that's I mean that's what that's what it means when you >> and I guess my question is can we meaningfully address the findings in this audible ones we've covered and the ones that we haven't yet with our current maintenance. That's why we're augmenting with contract because we can't keep up and once we knew how big it was um we can't keep up with everything security related. So,
033>> but we can't we were not going to be able to address the findings. >> Well, we're using we're using contract support >> with our current staff. We can't address it. >> Not with we're using contract support because we no longer have enough staff to be able to do it without going out for contract. >> We're saying the same thing. I'm just being more blunt. >> I'm just making sure. I had to explain C four times. >> I hear you. [laughter] >> Our current staff can address the needs of the district and I think that that's important >> because safety I mean maintenance isn't >> it's not a classroom teacher or pair professional counselor but it's important clearly and so >> I don't think we're pretending anymore that that we're doing it. We're just going
034out for contract for all of the um most important things because we're also cut the major maintenance budget last year by a significant amount, right? So um flat funding for quite a few years. So yeah. >> Well, and also budget priorities. And so I I I don't know. I there's no good uh part of the rug to tear from to cover another part, but um recognizing that our choices have consequences and bring it back and you see things like this I think is important. Thank you. >> And if I can make one comment, our community is different now though when I went to school here in the 70s. Um you could leave some doors unlocked and you didn't have to worry about it. Uh we have a huge homeless population wandering around and doing nefarious
035things and so forth. In fact, this picture that's on page 11 right outside this is a shopping cart from Walmart or Target. I don't know. I find it highly unlikely that cart was brought by anybody from the staff or and so forth there. They they're they're living in all different places. They they're looking for opportunities. You hear about the crime that we have. So, some of these things just get ex get exposed more often now because there's more people out there that can commit crimes. And um where we may have had some issues in the past believing things, now there it's just more accessible to people because we have a larger community that's trying that's actively looking for things um >> so next finding we'll move on to is going to be more specific to
036um controls of keys and paws. So this is what keys that are issued to employees and how that process is um what the procedures were and how that process is going. This is the next two areas were more of what the last audit on the building access focused on and so um I think there were improvements but there's still room for improvement with this section. So the key control procedures uh were created to assist schools and departments inveing or detailing and the duties and responsibilities to principles and managers and the employees of the district as they relate to the distribution of keys. The below processes within the key control procedures were not always followed. Key inventory is not always accurate. Schools are supposed to do key inventory in uh May and in August. However, it
037appeared that key inventories were not always accurate. For example, when we visited an alternative school, review the key inventory and comparisons list provided by the support department. There were numerous keys at the at the school location that were not included on the list provided by the support department. Specifically, we found rows of keys in a lock box that were not included on any list. In addition, the school staff was using a key list from 2015 to complete the inventory as they were as they were uncertain on where to obtain that updated key inventory list. We see this sometimes with turnover when uh maybe one position is training another one but they're not able to give them the full picture and that employee um they were very nice but they were adamant that this list from
0382015 was the only one that they had and they could provide me a copy but they couldn't lose that list. Um we were able to work with maintenance to provide them a more updated copy which was just nice kind of showing bridging those gaps between the departments. Furthermore, when reviewing the key inventory, the key markers did not always match when comparing key lists and did not always include names of employees assigned to the keys, making it difficult to ensure the key inventory was correct. For example, the support department provided a list of keys for a middle school that included 11 master keys. However, when we reviewed the list by a middle school, it showed more than 30 master keys. Finally, a key inventory list we received from an elementary school did not include all of
039the keys and instead only included classroom keys, but did not include any master keys or keys assigned to the principal. The key control procedures references several [clears throat] documents that are intended to assist the user key inventory and reporting. However, we found that the documents were not always uniform and instead the instructions um and instruction on how to complete the inventory varied depending on the document. For example, the key control uh sorry, the access control document states to upload inventory to a Google Drive while the key control procedures references an appendix that requires keys to be completed on a paper form with no reference to the Google Drive due to inconsistent key procedure due to inconsistent key inventory practices. keys that have allegedly been returned to the school went unaccounted for. For example, a key
040uh key lost form for a master key had been that had been reported as stolen. So, sorry, the master key had been reported as as lost. Uh although the comments on the form stated that the employee had in fact returned the key to the school, the description stated the AA was out. The employ and the employee says she returned the key back in, but it's not here. Without accurate in key inventory, it's difficult to determine if the key had been returned to the school. We also found there was no review of the key inventory to ensure the inventory had been completed. I always say this when um you do something but then you never hear back from the person that you submitted to. Sometimes you wonder is anybody looking at this? Do I need to
041keep doing this? [clears throat] No. >> We also found that lost key process was not always followed. Keys that were marked as lost on the school's inventory list were not always recorded on the lost key form. In addition, a master key that was lost in 2020 was not recorded on the lost key form until 2024. The key control procedure state report lost keys on the same day or next business day when the loss is known and to complete the lost key form online. However, when we reached out to the lawy data from the support department listed on the procedures, they asked us to contact a different department for the data. However, when we contacted that department, they referred us back to the original the request. Lastly, we reported outdated procedures for the lost key form
042that included instructions to contact a department that was no longer involved in the lost key process and only in the stolen key process. So just a little bit of outdated procedures and a little bit of trying to remind which department is in charge of the keys and things like that. Now the next process within the key control procedures that we found was not always followed was keys loan to employees. The key control procedure states keys cannot under any circumstance or sorry key holders cannot under any circumstance loan keys to an employee. However, a set of keys was lost due to the staff allowing others to borrow them. Specifically, the lost key form stated keys were borrowed by a teacher or parent teacher or sub and they were not brought back. Many people borrowed them that
043day, so I don't know who had them last. The key set lost included a master key, employees fob, front door key, and a key box key. We our recommendations was that the current practice um for inventorying keys and reporting lost and stolen keys uh be reviewed to make them more easily understandable in one document. Sometimes we have multiple pieces of paper. It's pretty hard for users to try to follow along on what's supposed to be um implemented and done. We also um recommended that support departments review the key inventories to ensure that they are accurate and reconciled to the department's records. So, if they're um reporting the key, just writing the keys down wrong, helping the schools kind of understand how to complete that analysis. [clears throat] >> I'm just keeping an eye on the
044time and like maybe we can tie this up really quick so we can have >> Absolutely. The next finding is very short, so I'll go over it. [laughter] >> So, [clears throat] for both FOBs and keys, >> uh we're working on the FOB, you'll see when you read it that there was a list that weren't current at the school. We've had it go in and create a new report so schools can have updated fob lists. As far as the keys at the end of this school year, we'll start messaging and providing everything to principles. Um when they clo do close out at the end of the school year, they'll have every single key brought back in, clean everything up, um create the log, create a duplicate so we have a tracking mechanism, and then correct
045it moving forward. Sounds like this is a really thoughtful audit that has led to some >> smart necessary actionable movement forward movement. >> Right. >> So, I I appreciate the audit. I appreciate the questions and I appreciate the administrative responses and it sounds like we're going to do it again. >> Yeah. >> In in a um in a year. So when we talk about um next year's priorities, I will um the board will will look to identify >> well be the following year because the key control will be at the end of this school year. >> Okay. All right. >> Um member Bellamy. Yes. >> Yes. Thank you for uh Thank you, Madam Chair. Um I for maybe for the next or the following board connect um if we can get I'd like to have
046some I'd like to have a deeper understanding of um the impact of the budget. [clears throat] >> We've got to be able because these are some serious findings and I just need to I think that needs to be uh in our top of mind when we go into our budget discussions. And then the other um request would be just an overview of what kind of training and communication strategies we might be implementing uh to do like you said Jim you said to and I like that change the culture uh around security and safety in our buildings. Um I mean I think as a community we're having to think about our own safety and our own security a little differently. And so I'm not surprised that uh when it comes to um managing our buildings uh
047we've just got we we've got to height we've got to find a way to just make sure that who that we can be responsible for our safety as well. So training for staff, how what kind of communication strategies might there be? And uh can can somebody Jim, can you just briefly or and you can put it in a board connect the difference between I think I understand it a maintenance product uh project and and a capital improvement project. I know the capital improvement ones are usually the big big like the whole in safety vestibules. That would be a capital improvement, but fix it. >> I can explain it in word connect. >> Okay, that would be great because I know we're running out of time. Thank you. >> All right, thank you. >> Um, okay.
048Thank you so much for a really thoughtful audit. They're always comprehensive and it's just great to know that important conversations are happening quickly uh before they necessarily get to this, you know, why delay. Um so, so thanks to everyone involved. Um the second item on the agenda is the long awaited actor. Um so we'll pivot to that and I assume that there is slide deck or a link to the document. >> And so just board members in your box right behind President Jacobs here in the conference room you can get your own paper copy of the act. And for community members it should be housed online. as well as attachment. >> All right. Um I guess first did you want to how much time did you want us to leave for the CI? >> Um
049at least five minutes. Um >> yeah, I mean I'm I'm happy to go over an extra five minutes if that's okay. I think communication starts at 1:30. Maybe we can take an extra five minutes. So, let's try to end by 110. >> We can do this. Um, so we'll go through it fairly quickly. We did uh finish up our annual comprehensive financial report. Thank you to Aurora here. Um, for those of you that are unaware of the document or haven't looked at it very much, it's broken down into uh a few different sections. Our introductory section is really someformational stuff where we transmitted our organizational chart um who the school board is. We get into the financial section will show the independent auditor's report. So we did receive an unmodified audit. That is good. Uh
050meaning no significant findings that they need to address. Um there's management discussion and analysis. I know this is really probably small. So we pull it up. Um but really just kind of details how the management is viewed, why these why the finances are the way they are. Uh we will get into a little the basic financial statements. We'll actually start going to these sections and look through them. Um explain some of the differences between our governmentwide presentation of expenditures and revenues versus our governmental funds which are also listed out in separate sections by fund. Um, but then it has all the different schedules. So, just kind of jump into it. And >> I do want to leave you time for questions if you got them. >> So, I'm going to start by scrolling down to
051>> basic financial statements. So this is our um districtwide look at our financial statement and acquisition really you know your your balance sheet um and with >> I have a question. >> Okay. So we're talking FY25. So this is as of June 30th 2025. So effectively it's already out of >> I mean you put it that way. Yes. But but we're talking about last year and so the numbers may not necessarily represent. >> Yeah. This is what actually happened. Most of the stuff we deal with in the finance and the board is what >> not even where we are. It's like looking forward like what are we going to do now? >> So then we come back and say well here's what actually happened. >> Okay. >> So this is what actually happened. This is
052all the audited um documents we have to do. Um we ended with about $2 billion in assets. Uh by and large that is uh depreciate or land and and links um some cash right to use assets. This presentation is our full approval fund. So it's going to have things like our pension obligations. So the unfunded pension obligations from the state are included here. So you'll see it in like non-current liabilities there is um oh what's it called here the net pension liability of $43 million. Um that's one of the big ones but that's something we do in our full approval fund versus our fund statements like just saying here's our general fund otherwise you wouldn't get a real kind of picture of our current resources. So this is really, you know, if the state were
053to fail to maintain its obligations to our our pensioners, then this is the amount that the state says we would owe. Um, overall, we end up with about $955 million in net position. Almost all of that is tied up into our reserve for capital assets. So that's our again our land building equipments things that don't really have a a liquidable value. There any questions on this this one in particular? Um this one's got a lot more Oh, one new thing we have in here is the acred compensated absences. Um you'll see it's the same or pretty similar to what it is as last year, but if you look at the FY24 financial statements, it's going to be considerably less. There was a new statement from Gazsby that came out, Gazsby Statement 101, that required us
054to quote uh sick leave that doesn't have a cash value. So, if it's more likely than not to be used, um then we have to record it as a liability on our governmentwide statements. So, that added, you know, $35 [clears throat] million or so um in total. So, it's separated into two two sections. one is due within one year and one is kind of the the full amount. Um so that is something new for this year that we've added those liabilities. Uh but that was the only significant change we made in our presentations. I believe >> you gave us a heads up about that a few weeks ago. >> Yeah. Yeah. >> But it doesn't really affect our spendable resources necessarily and our different funds. Um so as far as the full acrual goes on
055our expenditures, we see those changes in the like the pension obligations or the increase in um or changes in the compensated absences that wouldn't necessarily get recorded on any of the other funds, they're recorded here. So as we say, okay, the pension obligation goes up by 100 million or down by 100 million, you would see that as a change in expense in here. Um and again it shows about you know $32 million net position loss from the prior year. Uh most of that's as a result of just spending down current resources through our general fund which we'll get to. So there any questions on the full acrual? That one's a little that one takes a little more time to wrap your head around than the other ones. That one's there's a lot that goes into
056that. We could probably spend a few days going through it if [clears throat] you really wanted, but um probably ironing. So, exhibit three will show up by the fund level. So, here's our balance sheet by the fund level. So, this is where kind of all aggregates up. Um and then there is an uh another schedule that shows the crosswalk between this schedule and how you get to that full and that's the one after this. But, um we'll go through the funds individually really quickly. So just to note this is here the next schedule as you can see here's all the differences. So it takes the governmental fund balances from the previous schedule up here and then crosswalks the differences that aren't included in exhibit one but not in exhibit three is really what this does.
057So it details out all the long-term liabilities we have uh all the amortization and things like that. Um, exhibit five is the similar look except it's the income statement or statement of revenues, expenditures, and fund balance for all the different governmental funds. So, this is really our expendable resources in each fund um and how we or how we spend them. So, one thing to highlight here in the general fund, we'll get to it. You know, when we talk about law losing about 32 million on the governmentwide, 30 million of this is on our governmental funds. Um, primarily as a result of our planned usage of fund balance of about 37 million. So, while we plan to use about 37 in fund balance, we only spent about 30. So, better than we had uh planned whenever
058originally built the budget, but still our resources are going down. Um, and then this statement, exhibit six, crosswalks that previous one of our revenue expenditures at the fund level to that governmentwide look on exhibit two. All right, that'll try to get to the there's lots and lots of notes in here about what goes into our capital assets, our health plan or um the state's retirement plans, our long-term debt. There's a whole wealth of information in here. Uh but kind of want to get to the things that you guys would be as from a management perspective or governance would want to know. >> I think an important thing on page 43 is where it talks about the transfer in and outs. So that's from one fund to another and then that note on there will explain
059exactly what we've done and why. And there's another one that was 43. >> Yes. >> Debt service capital projects >> sort of that bottom >> y >> area there. >> I want to draw your attention to the page before that as well. Um this is you know you probably get asked a lot as board members like you know here's your fund balance. how are you spending there? >> Why do you have this fund balance? This schedule really details out what those fund all those funds are what they're reserved for. Um you know you see in the general fund we have $164 million of fund balance 13 of that at the bottom that's really our unassigned amount. That's what's truly flexible spending. Uh the 49 million you'll see 49.8 in subsequent years expenditures. That's what we're
060currently allocated to spend down in this fiscal year. >> So the 13.2 that I see here on on page 42 and I've seen elsewhere sort of the same figure that is what is remaining after in our as unassigned in fund balance for potential use in FY27. >> Correct. All things being equal, I mean we have to figure out, you know, where we're in this year. We have lots of enrollment changes. >> Yes. >> Well, no. I mean, >> okay. >> In concept, we would spend down this 58 or 49 million and we're >> leave that 413 alone. >> So, the sub because this is an FY25 audit. We are in FY26. We're using 49 million in FY26, which is technically subsequent. >> Yes. Yeah. That's that authorization of fund balancement this year. >> Right. So
061when we we talked about overriding board policy to an unhealthy and unsustainable level, we've spent every penny we can down to 5% and that's this 49 million. >> Yeah. >> Jacob, >> is there a is there a better way to fund balance to to most folks in our community implies that it's money sitting with without a purpose? And I'm trying to figure out how we and maybe we can't maybe we've gone we've done as much as we can to communicate that fund balance doesn't mean the money isn't already going somewhere and so is there is there a way to describe is there a better way we could be saying it >> yeah I mean this is essentially the description of here's where that money is reserved for >> right but I mean we aren't I
062mean aside from member lesson yeah that we're bringing out a page from an acter at a meeting. Only Kelly's going to do that, which I appreciate, but I'm not going to do that. So, is there a is there a way to describe the term fund balance almost seems disingenuous when it it's not a balance. Those 90% of those dollars are going somewhere like it's it's really 13 million >> um to some extent. I mean, we have like the like self insurance, we have 22 million sitting out there for the potential of claims to happen. And it would be irresponsible to have that be zero. And so I I consider that allocated. Yeah, we have to have that unless we're going to go pay a broker, right? So, >> well, so you still have to reserve
063the funds to pay >> to pay the rent would be a different expense somewhere else. And so maybe there's not a better term. Um it just seems the term fund balance just is >> it's not it doesn't seem >> and we're really prescribed in how we do this by the governmental accounting standards board. So we can't call it anything else without getting a finding in our audit. So going Thank you. Um, can you help and maybe I'm asking some prognostication for the future, but of that $13.2 million which I see here on on the bottom of the sheet, to what extent is all of that available or um is it limited because we need to protect the municipalities bond rating? >> Nope, that municipal bond rating is pulled out. That's already pulled This is all
064I mean this really is what is spendable at this point. >> Okay. And is that within our B%. >> Um it would probably be in the 7% range maybe in total because it's going to be the well be it's about 2% of our expenditures. >> So we have about 5% or so a little more less wrapped up in our bond rating. >> Okay. >> So we talk about the state's chart. You know, the government considers this 26 million for bond rating restricted like we can't spend it. >> The state says no, it's not. You guys can't spend it because they don't have any mechanism in their on their reporting to strip that out and say it's something that it's authorized to be able to to as unreserved on their calculations. And Anchorage is the only
065one that has that bond rating reserve. So they didn't carve out a special thing for us, I guess, years ago when they developed the statute. Uh should be noted that the state's policy for unreserved fund balance versus reserve fund balance is different than the Gatsby standards. The Gatsby standards changed what a decade ago at least. Um and the state hasn't updated theirs. So there is a page and I'll scroll to that since we're kind of top of mind in the back of the thing. last page. >> So there's this page that kind of provides a crosswalk between what's required in uh Gatsby versus what's the state of Alaska's. So, [clears throat] Gatsby says anything that is either uh unrestricted, assigned or committed that is considered or unassigned unassigned, assigned or committed is all uh unrestricted
066per the Gazsby rules. Anything that's non-spendable or restricted is considered restricted. Um so that's why you see like on the bond rating here you have it under the Gazsby standards as a restriction but on the state of charter accounts we don't. Uh but there's other categories too like the you know the self insurance or something is reserved under state policy but not under Gatsby. It's technically an assignment so technically spendable. Um so there's just a lot that goes into it. We did end the year at 13.4% was our uh was our state calculation. Um but that also includes the nearly $50 billion we're going to spend down. >> So that's how that's broken down and it's really just compare it. Uh for those of you listening, it's the unreserved portion divided into the total expenditures.
067So 89 divided into 669 is the 13.4 is how they get to that percentage. [clears throat] >> So it is 10 after >> is 10 after >> goes by really quick. There's a lot of information in here. >> There is and I I mean I find it a really helpful document. There are some charts towards the back that let you understand PTR over the past decade. Um data on our teachers. you could looked at our charter schools fund balances. So I think this is such an an important and timely document. Um >> yeah, the statistical section at the back has uh a wealth of information for the last 10 years. >> Great. >> Um the if you have time peruse that and it answered a whole lot of questions with respect to like how much
068bond debt we had or what our enrollment was, what our fund balances were over time. So, a lot of information in there. Uh, it is a fairly dry read, so kind of chunk it up at bedtime. >> Um, I think I think insults were just hurled. Um, but uh, but there's um, there's a lot of great information here. I've also heard that budgets are love letters. Does that makes [laughter] you feel better? Um I don't know if actors are >> um okay well thank you um I will just alert that we can always direct questions to our finance team um and and I may do so I've sort of pulled the top of the page instead of time is short >> yeah if anyone wants more time and you're happy to come in and meet
069with us and walk through it more it's a lot easier to do it on paper through the book than it is on the PDF through there >> um I appreciate again kind of wrapping that up that we received an unmodified audit uh at the at the start of this conversation. So, um it's good to know that our finances are in good hands. Um okay, with that, um let's pivot to the CIP was the third item on our agenda. And if um folks can stay an extra five minutes, maybe we can encroach a little bit on the window between finance and communications. there. >> So, um >> first wanted to see if there were any questions from the CIP brief we gave the um everyone knows the bond passed in the consent um portion on Tuesday
070night. So, the next step is the CIP and discussions on that. We did get questions uh from Carl about do we have three or more roofs per year? And because of the size of some of these that we're doing, the answer is yes. Um, the one thing we haven't discussed, I've talked about it. Um, on the one-on-one bond briefings is is, you know, it's going to come up during the approval of the CIP is what does the board have for guidance since Lake Otis didn't close is the plan. And this is a committee of three people right now, but it's going to have to be discussed as to um what is the board's intentions. We have not always provided buildings to charter schools. So there's always that as a possibility. Um you know, just to
071make sure everyone understands the timeline, it they don't have to be out of there by the end of next school year. They have to be out of there by the end of the school year 2728 or we have to have a fire suppression system in before the start of 2829 or an extended waiver. Um, one new thing that I that we didn't have a week or so ago when we talked about the bond is that we did finally receive a little over 1.8 8 million from FEMA um of the 10 million that we're expecting to receive. So, we know that money will keep trickling in it. If Abbott Loop is going to continue for a period of time in use, um it does not necessarily mean we would have to put it on a bond.
072Um if we were to do some repair to give it some extended life. Uh, but like many of our old buildings, if if it were to be looked at as a strategic long-term use, it would need significantly more than that. It doesn't have a secure vestibule. It will need a new roof at some point. It needs boilers. It It needs a lot of work. It's an old building. Um, so I don't know if we wait until it's the whole board and and we talk about this, but [clears throat] but it certainly needs to be discussed because I don't know which way to go. >> Yeah. Yeah. >> Um, [clears throat] I guess I want to clarify a couple things. One, the CIP is and can be a living living document that's can be amended aside
073from the annual submitt >> and it's also not binding >> because of that. Okay. So I want to clarify that. The second thing I think I understand is that Abbott Loop um could continue to operate as it is with this its regular budget for maintenance and operations without any additional investment >> through 2728. >> Right. Okay. Um, a and yeah, the last thing I think I understand is we have not even attempted to, which for understandable reasons, I'm not saying we should have, but we have not yet attempted to contact the state fire marshal and ask for an extension on the deadline. >> I have not. Um, I mean, it was just Tuesday night that we found out. >> I'm not saying we should have. I just want to make sure that we haven't had
074conversations yet. >> And it's the city fire marshal. It's Brian Dean. Um, >> obviously I'm going to end up talking to him over the next few weeks, >> right? >> Uh, but but no, I I haven't yet. >> Do we have any reason to believe um the city fire marshall would be a firm and automatic no on a modest extension? I think if there was a clear-cut plan >> with a timeline for either them relocating to a new facility, >> right, >> or repairing the current facility and putting in a fire suppression system, he's pretty reasonable and and honestly the municipality is easy to work with. >> Yeah. >> If we say we might have a plan, then he's not going to be as easy to work for because >> Right. I So I guess
075in terms of a proposal, I've been thinking a little bit about this >> and I don't think we would even ask yet. I think we would ask a year or so from now about extending a waiver. >> Understood. >> So we have time and space. >> I I I I think that Roachul might feel better with that extension in place sooner than later. Um they also might feel better if the board provided some sort of guidance and plan. And uh the only guidance we've provided thus far is we're really uncomfortable reducing the number of elementary schools we use. Um and that's just through our votes, not through our words. And so I I guess I'm personally comfortable and what I think I will pursue with the CIP if there's an attempt to invest funding in
076Abbott Loop through a school bond is to place that further towards the end of the CIP and as a backs stop um recognizing that our right sizing conversations are not over uh but in my opinion will not re um occur until 2728. 8. And so I think having a having a Abbott Loop Elementary building investment in 29 or 30 is my preference with the um the other preference I would have is to address that need through right sizing versus um addressing a addressing structural needs in a building when we have previously decided it's excess and have a 1.5 billion dollar deferred maintenance backlog >> 1.5 actually a little bit more >> perfect yeah so I don't think we want to add more to the list I don't think we have that capacity I don't think
077anchorage taxpayers even with SPDR state bond debt reimbursement have that capacity in their wallet >> it will be difficult to justify a waiver to 2930 knowing that because he also knows that one We're also going to have to throw more money into this building before that. The boilers are ending end of life. Um when when both boilers go out, it it would be as it would be a problem in the middle. >> Well, I and I would support that case holding that 1.5 million from FEMA to repair the boilers when they finally go or when they're close to that point. I I guess >> Oh, they're close. I I I think we would want to go ahead and and uh because you got to order them. They got to come in. We've got to get
078a contract. >> So if if I I guess a clarifying question, if if we want to continue using Aboot for the next school year, we need to replace the boilers. >> Yes. And then we need to do a deep dive into what else really should we replace. Now, can they maybe make it another year? I I guess. I mean, we knew Clax was end of life two years ago, and in the middle of middle of the year, they both went out. We got one of them back up again. We ordered a new one, swapped it out, kept the other one limping, ordered the second one, but we know when it is getting close to end of life. What we don't know is the day and the week and month that it's actually going to die.
079>> Um, if we can keep one of them limping while we order and repair, replace one of them. We can do it like that. We've done it all over the district like that. >> Yeah. Um, but I feel fairly confident we're going to spend half a million dollars sometime in the next 12 months just allowing heat and in a few electrical upgrades. >> So, I'm only speaking for myself. I personally am comfortable with because the board hasn't provided us another option on expending that money. I I because we're going to spend $500,000. I'm less comfortable with saying, well, we might as well spend 4.5 million or 5 million or 10 million or 20 million. We don't have the money to attack our deferred maintenance backlog already. I I can't fathom increasing it further. I I
080can't that it's it the fis fiscal justification for it um is something I can't even begin to approach. I >> I agree. I think it'll be difficult to get a waiver putting in a document 2930 when prior to the year of 2829. So we're asking for a waiver not having a >> my proposal to the city fire marshall would be we have a backs stop of at 2930 um putting it on a bond and then in between now and then we know as a district we're going to have to continue talking about school consolidation. I'll start working with them >> if if the board feels that's >> I mean it doesn't harm it doesn't cost anything to work with them. >> I I I just I I don't see another path forward unless we really
081want to balloon our and and if we if we choose and if we choose to invest $20 million in Abaloop Elementary that means a leaky roof isn't going to get get addressed somewhere else and then that spirals into additional maintenance that's required. I I can't get there in terms of it being a sound fiscal investment. And so a backs stop of a bond in 2030 mostly for the fire marshall's comfortability like we're going to bond for this and we can use the CIP for that coupled with the fact that we recognize we're going to have to talk about right sizing in my opinion just not next year. Um I think that would make him comfortable but it's been a while since I've talked to a fire market. >> Yeah, I'll talk to that. >> You
082asked for feedback. >> Well actually that's what I needed. I need feedback because otherwise I I have no idea going in what anyone thinks about >> always happy to tell you what I think Jim I just can't promise you're going to like it. >> The other option is to recognize that we have three months until we have to pass a balanced budget and that in order to support students optimally there may need to be a right sizing plan 2.0 which is another conversation. >> Yeah. um but could generate a separate facility. >> And I I recognize that there's >> but it's not >> there may be some support on the board for um attempting to identify and close schools for next school year in December. I'm not weighing in on that at this point because
083I I think it's premature. But what I will say is I'm not confident that a majority of the board will support it. So I'm waiting until we get to that point to have that discussion. I appreciate this out of the box thinking that we don't have any other options. >> You know, I know how much effort it is. I know that I'm out for the bulk of December because my youngest daughter graduates nursing school followed by spending the holiday break with my grandchildren. And frankly, >> there's no chance you could come up with a plan where you would have all the information to be able to brief it in three and a half weeks in January. >> Good to know. >> It takes it takes way more effort than you think to be able to
084do. I mean, what you didn't see was all the behind thescenes stuff. There may have only been two scrolls on that list. That was not where we started. And and it's not going to be that way. If we look at a district-wide, frankly, we had that exact same discussion on Eco River Elementary. The difference between their non-special program and their gened side. And everything you said about what we should have been looking at, we talked about it. just at the end of the day didn't wasn't strong enough. >> So [clears throat] in three and a half weeks you you cannot produce a professional product. It's not possible. >> I apologize for getting us down this rabbit hole. I just want to fight over. >> Okay, we are over time. Um >> I know online. >>
085Um yeah, dropping back to boilers for a moment. I just wanted to ask Jim if there's a significant cost difference between proactively replacing a boiler versus ordering one midy year when when both have failed. >> No, you know what we're actually looking at is uh trying to create our own mobile boiler um out of some of the funding that's coming in. Build it on to like a dynap pack for a engine if you guys are motorheads. Um where you could have a boiler. They actually have them on the market. They don't have one for that will work for our school. Cornerstone has one. It's >> wrong kind of liquid, so it doesn't work. >> Maybe throw a few teachers on there as well. >> Well, if we can build something like that this summer, then
086we will always have a backup boiler that you literally can pull up to the back of the school, run a line in, and heat the building in emergencies. Um, so we're on the engineering of that right now. >> That sounds like a a great idea for us. Um recognizing um really quick Pat uh member Higgins we are out of time >> and you've frozen. Okay Pat feel free to Oh member Higgins feel free to send your >> Yes. Quickly. >> Okay. >> Yeah. Thank you. I I just want to comment on a >> couple if you want to turn off your camera. >> Can you can you email your closing school? >> Member Higgins. Unfortunately, we cannot hear you and we are 10 minutes over and comm starts momentarily. So if you could submit your
087question to the official >> to the superintendent. Thank you everyone for your participation. Um we will see you next month. >> Okay. I'll I'll hold back. >> Thank you. >> For anyone who knows the song Rock Meadas. >> That's part of it. >> Can we agree to um start comms at like 1:35? >> Okay. >> Give folks a chance [clears throat] to >> break. Yeah. Audio breaks. Yes. You guys will be sorry always finishes early. Yeah, of course.