11/04/2025: School Board Work Session

001Good afternoon everyone. We'll call the 300 p.m. work session of the ASD school board to order. It is 3:06 p.m. Um we have an agenda in front of us. Present in here in the boardroom are members Higgins, Lessons, Jacobs, Wilson, Hollowman, and Bellamy. Member Donley will be with us shortly and we'll announce when he joins us. Um, we have our agenda in front of us. Uh, we'll go to straight to item B1 for discussion, financial audit report. Dr. Brian, any opening remarks? >> Thank you, Mr. President. We'll begin with our financial report audit. We're joined by our CFO, Andy Ratliff, and I'll invite up our guests. And you're welcome to begin. >> Good afternoon everyone. My name is James Dowy. I'm an audit principal with BDO USA. It's a pleasure to be here with you

002uh today. Also with me is Rolando Kosio. He's the manager on the audit. [clears throat] Today, what I'd like to walk through with you is the audit wrap-up document. That's the document that you have before you and that Andy is sharing on the screen. So, [clears throat] this first page is really just transmitting you know that this communication is required to be in writing. Uh per the auditing standards, we need to meet with those charged with governance uh and inform them of the results of our audit. >> [clears throat] >> we can move forward to page seven. So that's the overview and status of our audit. So at this time uh I would say we're very close to being substantially complete with our audit. Uh our plan is to always issue by November 15th. Uh

003so there was a meeting that was after that date. This was the meeting before. Um, we've been working on your audit uh pretty much all summer and we've gotten to a point where we feel fairly comfortable. We know the outcome of the audit. Uh, certainly at the end things could change, but at this point we feel fairly certain of the results. Um, so the scope of the work that we performed was substantially the same as what we had communicated in the planning document. So no surprises once we started the audit. Um, probably the most important uh sentence there is the fourth bullet which states we expect to issue an unmodified opinion. So that is a clean opinion. So once we are done with the audit, uh that is what we will issue. We actually issue

004several opinions. Uh some of those will be a little bit delayed this year not because of the district and not because of BDO but because of the federal government. Uh the federal government needs to release their compliance supplement and that tells the auditors how to audit the federal major programs. At this point, that supplement has not been released and so all CPA firms have been instructed not to issue the federal single audits until that final compliance supplement has been issued. Uh we've done the state and federal uh compliance audits. Um and we're substantially complete with those. Obviously pending if there was any updates or changes uh in the new compliance supplement. We're not anticipating anything, but once again we need to wait until that's been uh released. So high level there, we expect to issue

005an unmodified opinion on all of those statements. Uh that is the clean opinion and the highest level of assurance you can receive. Uh last couple bullet points to point out out on there at the bottom. So all records and information uh requested by BDO were freely available uh for our inspection and management's cooperation was excellent. Uh we received full access to all information. We really appreciate uh the support we received from your team. uh supporting an audit uh of an organization this size requires a lot of effort. Uh we have a portal where we share documents back and forth, a lot of requests, a lot of phone calls, and so we really appreciate the support uh that we receive. Let's go to page nine. So these are areas of significant risk. Um this is largely

006the same in most of our financial statement audits. Um just because these are areas of significant risk doesn't mean that there were significant findings or issues related to them for the district's audit. So we review your internal controls looking to see if there's any management override of controls. Uh that's a primary focus from the auditing standards and then looking for improper revenue recognition. You have many different streams of revenue uh across your different funds and each one has a different revenue recognition uh requirement. Uh having said that these are areas of significant risk, it's just to let you know we focused a significant amount of time on these areas but there was no concerns um and nothing came about uh no journal entries or anything of that nature uh to report. The next page is

007the corrected and uncorrected misstatements. So there were no corrected misstatements. Uh that means we didn't propose any adjustments to the financial statements. There were what we call uncorrected misstatements and a couple of these were communicated last year and this is just the result that they were not corrected in FY24 and so when they are corrected in FYI 25 now that kind of closes the loop we we identified them in 24 but based upon the timing um they were not considered to be material and so those weren't posted however they were posted this year [clears throat] and then there was a new um accounting standard it's called Sabidas it's subscriptionbased um subscription based information technology arrangements. Uh that is not a material standard to the district and so currently it's not been fully adopted. Um and

008I think the big takeaway here is you know that last sentence there where it just says you know the uncorrected misstatements or matters underlying those uncorrected misstatements. Well actually it's not that one. I apologize. Um it's in [clears throat] the middle where we say we concur with management's assessment that the effect of not recording such adjustments are both individually and in the aggregate immaterial to the financial statements. So that's why we can have uncorrected misstatements but still a clean unmodified opinion. Any questions over any parts so far? Thank you. Moving [clears throat] forward to page 12. So internal control over financial reporting. We have to gain an understanding of your internal controls. It allows us to properly plan and perform your audit. Uh in doing so, if we become aware of significant deficiencies, material weaknesses,

009we would bring those to your attention. Um we did have one significant deficiency um this year that has been identified. Two pages. >> Yep. on page 14. Uh this does not relate to the financial statements themselves. This relates to the state major programs. So one of the major programs this year was people transportation. Uh as a part of that major program, there is a report that needs to be submitted on a quarterly basis to the state of Alaska. It's not what determines the amount of revenue that you earn. It's more of just a statistical report of the numbers of riders that were transported, the number of students, the miles that were driven. Um there's just the review of that report was not documented. Uh and some of the supporting um documents used to support the

010numbers were not retained. Um that matter has been addressed going forward. We met with management, discussed it. Um and once again, this is more of just a statistical report that goes to the state of Alaska. This does not have any impact on your financial reporting or amounts of revenue that have been recorded. On page 16, we have we review your significant accounting practices which includes your policies, your estimates, disclosures, looking for any significant unusual transactions, excuse me. Uh there was a new standard adopted this year. It's gazsby statement 101. Um previously you had recognized a liability for acred leaves. So like a crude PTO. Uh but Gazsby, the government accounting standards board um has said that basically all um acred compensation uh for leave needs to be recorded. And so the big piece that came

011on this year is related to sick leave. And so that amount will show up on your front schedules as just an additional liability saying at the end of the year we currently have acred sick leave of this amount. Uh then you will adjust that going forward. So at the fund level, nothing changes. Everything is still accounted for in accordance with the budget and actual um expenditures. Uh but then at the full acral level the first statement um that will recognize the additional liability your other than that there was no other significant accounting policies or adoption of new standards that had an impact on your financial statements. And then looking there on the right hand side there's accounting estimates. So accounting estimates are always a part of financial statements. There's just certain numbers that you need

012to develop your best estimate. Before [clears throat] that we have related to um your self insurance incurred but not reported claims. Uh there's the pension and oped assets and liabilities. Uh those are done separately by a different organization uh for the PERS and TUR plan and then you recognize your proportionate share of that liability. Uh that of course is an estimate accumulated depreciation compensated absences and then leases. Uh the big takeaway here is the bullet point underneath where it just says management did not make any significant changes to [clears throat] the processes or assumptions used to develop those estimates. So that means the estimates are being uh created consistently from prior year to current year. Uh so there's no swing in there that is not supported by the same methodology. The last section, well, second

013to last section on page 18 is other required communications. These are areas that per the auditing standards, we just need to mention you're looking for a lot of no answers and that is what the responses are going to be. So, no significant changes to our planned audit strategy, no consultations with other accountants, you know, no significant findings. On the next page, page 19, no disagreements with management and no significanties in significant difficulties encountered during the audit. Uh had we run into any of those, we would have notified you uh when those occurred. Uh but happy to report that there was none of those situations that occurred this year. And then lastly on page 20, just want to reaffirm myself, our engagement team, and BDO USA, we are independent of the district and that's what allows

014us to serve as your independent auditor. So, kind of the highlight of this is we'll go ahead and continue working with your team to finish our audit. Uh, the draft of the ACFR has been done. We've started to look at that and review it and then we'll plan to issue prior to the 15th of November uh in accordance with the reporting deadline. >> Member Higgins, do you have a question? >> Yes, I do. Thank you. I'm I'm interested in there's nothing in here outlining the health insurance issues because we have a liability half a million dollars uh per event not just per per event for every every individual got unlimited liability help you go up it's million dollars type stuff but we we try to do an audit of that we successful but the but

015it's not showing up in in here as a table or what the liability is or how we're monitoring that because that's such a great risk to the district potentially. Um I don't know if we get another CO or whatever we get, but whatever it is, we've got the liability. How does that factor into your review in regards to from a financial perspective? I don't know how much we got reserved. We have been asked in the past to contribute millions more to make up for that deficit. Uh does that factor into an internal audit? I mean, you know, review. >> Sure. So, there's a couple areas where that shows up. Certainly fund 7 is what accounts for all of your um self-insured health insurance, right? And as a part of that, you have the incurred but

016not reported claims. So if I go to the doctor on June 20th, um you know, you're not going to know that bill at June 30 to recognize the liability, but the IBNR captures what those lagging claims are and that's provided by your healthcare provider. Um, additionally, it's not necessarily health insurance, but maybe might help as well to answer the question. Um there is also a reserve um related to workers comp and that number is based upon the claims that you are aware of that have happened right and it's all based upon the actuarial best guess of what those claims will be worth. So if someone breaks their arm it's hard to say how much is it going to cost in bills to treat that right but there might be the guidance in there that says

017hey this claim is going to be $1,200 14 $1,500 whatever it is. So the district is monitoring those claims and making sure that they have the appropriate reserve of fund balance for those so when they're ultimately paid. Uh so there's not a liability but it's more of a reservation of the of the fund balance of the future funds of the district. >> So we're basically uh I won't use the word gambling. I'm not we're calculating our risk factors putting that much in knowing that we may have a much bigger liability than what we've budgeted or we may and may have to contribute millions more again or maybe we're lucky and we have a reserve greater than what we need. >> Yeah. So with the health insurance I mean the organization will always give you kind

018of a a low medium high reserve of the IBNR right and the district has generally been conservative in their recording of the liability. So certainly you have to make an estimate. So it's not going to be perfect. Sometimes it's going to be high, sometimes it's going to be low. But I feel like, you know, between that and the stop-loss insurance that you have, you know, the district has accounted for its best guess as to what those amounts are. Uh so I feel like they're fairly represented. You you have to know that some is sitting in a liability and some is sitting in a reserve of fund balance. Does the internal audit look at the uh risk factors of what's appropriate for a business or an organization versus I mean this is a great big risk

019factor. Okay. U because of the amount of liability that's out there if we get I don't know CO 2 is coming. I don't know what I guess co 10 now. Uh and they say there's a million more like it out there that could potentially transfer from animal to animal to people. Sure. >> So I'm just um what's a is there a from an internal audit perspective and management is there a reasonable and unreasonable level of where that um uh reserves would be held? >> Yeah. I mean I think your health insurance is always based upon your actual paid claims. And so let's say we did have another COVID hopefully we don't right. And you start seeing that you're you know your employees are getting sick that would increase the liability. And I think that a

020significant health event, you know, your your service provider would factor that into the future estimation of what that IBNR is. And we have this large health event. Last time this happened, you know, you take your claims and you double it, you know, and so they would kind of know what your running claims are. But there's no current information that would lead you to make an estimate right now to reserve for a future amount for something that hasn't happened. I think the best estimate has been made so far and it's not really the district coming up with their own number. It's the third party service provider who's processing all the claims. So ASD really isn't stepping in the middle to insert what we would call any management bias towards the number. Um that's all being developed

021by a third party. >> Okay. Okay. So from your perspective, you didn't see anything as far as excessive or anything else in regards to reserves or any issues. >> No, we did not. And you know, I would say obviously, you know, my degree is in accounting, not in, you know, health insurance. So at certain points in the in the audit, we have to rely on the experts, right? So obviously we want those to be independent experts that have no reason to give us, you know, misleading information. And so we receive a lot of confirmation uh from your outside service providers u with what their best estimate is and the district has used those numbers to uh you know to book their liabilities to acrue them. So when we've we do some retrospective review or we

022say hey here's your estimate what it was this year and then when we come in next year then we look back and say hey how close were we did we really miss did we not you know and we haven't found that there's really been anything significant that has come from that retrospective review. And what page is that in the audit? Do you know offhand or what section? Where would I go? >> I mean, it's not it's you're going to find it on one line item in fund seven that says medical claims payable. And then you're going to find it in the equity portion. Um not necessarily in fund one, but when you get to the full acrruel, there will be a reserve for that. And there is a footnote that breaks out all the reserves

023based upon what the components of that reserved fund balance portion is. And there should be a workers compensation piece. I believe it's like footnote two or something like that. So, thank you. >> There other questions for the BDO team. >> Not seeing any. Thank you for the presentation and your work. >> Thank you very much for your time. Have a great rest of your meeting and if something else comes up, please reach out with your questions. >> Okay, we'll move on to item B2, balancing act update. Dr. Bryant. >> Thank you, Mr. President. So, we'll be unveiling the balancing act software shortly to the general public. Earlier today, board members were emailed a link where you can see an early peak at this tool. I'm really excited to launch this publicly. This will be an

024opportunity for the general public to balance the budget in a simulation alongside the board administration as we transition into the FY27 budget development process. Um, it's a great tool. We'd love to share more with the public and the board. Uh, Mr. Atliff. >> Great. Thank you. So, we're going to walk through a quick slideshow to kind of give the backdrop of the software and then we'll actually get into the software and kind of go through a little bit how to use it. Um, or is a little bit of nuance to it just to make sure where you can find the information. So, give you an overview of uh just how the software works and some of the changes we've made. So really the purpose of this is to help engage the public and the board

025and any really community or any stakeholders about um our budget development process and as well as you know give a minds eye how to balance the budget and really go through the same uh inputs and limitations the school board administration has whenever we go try to balance this budget in January and February and really we'll take this data from the submissions to be aggregated and to inform the board administration of community priorities um similar to way we did last year, but really just the idea is that this is going to be our feedback loop. Um we seem to get better data than this than we have in some of the other either town hall style. I don't know if you recall when we had like the little clickers, we're doing surveys live or just kind

026of just surveys in general. Uh we tend to get kind of the same information over and over, but this is really more interactive and updated with uh uh with with new numbers and figures as we go along. Um really some of the updates from LA last year and some of the lessons we've learned when we're going and updating this is this year revenue is not going to be adjustable. Last year we had different uh spots where you could put in changes to the BSA or use all the fund balance which you know we're using it all this year so not a lot there. Um and then you could even put in a suggestion to say I want to spend X amount. So, we had some people putting, you know, maybe a billion dollars and it

027really skewed our overall results in which we're trying to aggregate this data. It it was just skewed enough to where we wanted to lock that down and have those inputs the exact same as what the school board is going to be faced with in February. And that's really just um based on what's in state statute. Uh this time we did have we have a a module where you can change salaries, wages and benefits uh to increase those as um as negotiations and wages are top of mind. We just really want to say give the board and the public a view of what happens when you make these changes to these negotiated agreements. The suggestion boxes don't have a monetary adjustment to and that's really to pervert preserve data integrity integrity. You know, as I mentioned

028with the revenue, we also had that on the expense side where people do minus millions of dollars and not really give a um a directive of where that should be coming from. The suggestion boxes are still there. So, we really want your ideas and we're encouraging you to put an amount in there if you know it. But really, if you have other ideas than what we have, just please put them in there. But, um there's not going to be an amount where you can adjust it. The amounts would be adjusted on the other areas. And then finally, we're going to have a balanced, you must have a balanced budget to submit it. So before people could submit it with an unbalanced budget. So some people just couldn't figure it out and go ahead and submit

029it and still have a $30 million deficit or whatever it is. So on this iteration, we really want people to go through the whole process to make sure they can get it to balance just the way that we're going to have to. Uh it's kind of the funding outlook and the backdrop to this. you know, legislature passed HB57, and you guys have seen these, but for the public's awareness, $700 BSA increase for FY26. That's about.3% increase from FY25 that we got in the onetime funding. Um, we got a $48 per student trans per pupil transportation increase, although pupil transportation is not built in this model. That was one of the increases that we had in that bill, although it's a point4% decrease from FY25's onetime funding of $50 per student. Uh there's also target class

030sizes in that bill of 23 at K6 and 30 at 712. And we've built the cost of that model into the the simulation as well. So you can see what the extra cost is going to add to the district to be able to balance the budget at those class sizes. Um the other ones, the charter school application and class size reporting timeline aren't really relevant to the uh to the balancing act, but um was in the bill either way. So again, here's the funding equivalent since 2011. Actually, the red line shows the or the orange line shows the funding inflation proof PSA since 2011 and then the chart shows since 2017. As we're kind of running out of room to make a really long chart for the purposes of a slideshow. Uh but as you

031can see, you know, we had the, you know, the the BSA went up to 600 6,660 for this year and for next year under the assumptions we're making is that's what stays in state statute, but our fund balance goes away. I wanted to show this slide too. This is one new one we came up with for the local property taxes. Um, one of the things that we're going to contend with this year is a increase in the required local contribution. There was a 5.7% increase in the Anchorage property values from I guess be calendar year 24 to calendar year 25 which triggered about a $7.3 million increase in the required local contribution. Um the state foundation revenue goes down by that same amount when that happens. So while property taxes increase, property taxes pay more,

032the school district still needs to ask for more money because we lost the state revenue and we stay equal. So yeah, I mean people say why are your property taxes going up and you still need more money? This is why because we didn't actually get that money. U it was just a reduction of state contributions. So since 2017 our required local contribution has increased by over 31 million. So that reduces again the state's uh share by that same 31 million. Meaning in terms of total dollars from 17 to 27 projected out of course through uh based on our current uh revenue assumptions uh it's about a $2.9 million increase from a decade ago. Um so that $31.5 million when you accumulate that over the years all the extra money that the city's chipped in that's

033been take that the state's taken away it's over $121 million at this point. Um so that's kind of the the scope of what's been put on Anchorage taxpayers as this has gone on. Um again our deficit we're got it down to about 77 million from the 78 I think we maybe was I don't know the numbers we're going to continue to change frankly and that's one of the things I would like to address is um we don't have our revenue projections or our enrollment projections for next year quite done yet. So, the revenue is going to change. Um, and additionally, so are the expenditures as we get a little more more finely detailed in what we're spending this year and what we expect to spend next year. So, this will change a little bit, but

034I wouldn't think it's going to be any sort of uh there's not going to be anything that's going to make it materially different and to the point where we don't have a $75 million deficit, right? It's going to be in the ballpark. Um, but just kind of understand that as we go along, these numbers do change. We still have eight months until the school year starts for next year. So, we don't really exactly know what those those revenues and expenditures are going to be, but this is our best guess at this time. And for the purposes of public engagement and getting that out quickly um and having time to go through through it and having time for the public to actually use the tool and make their input, uh we felt it was better to

035get it out early and maybe make some tweaks later on than push it all out in December or something. So, still have those kind of challenges and considerations, the unfunded cost of capital equipment replacement, major maintenance that we've cut, of course, the contractual obligations, Chromebooks, curriculum, and then the state standards for class size is a big one at 26 million. So, we still have all these challenges that are not funded that are going to be in addition to our $77 million deficit. And then as far as the revenue changes, the local contribution changes are still out there. the state did vote to table that change. Um, and then we'll see what the deed or the department of law comes back with that. So, we'll still watch that, but that may not be as big a

036deal, but again, we're just got to wait and see what happens. uh changes to federal title grants for the next the upcoming fiscal year with the signal that a lot of those about $6 billion in grants are going to be con uh condensed down to about $2 billion or more competitive grants at the federal level are are that may h really have some significant changes for us and as well as you know our fund balance is going pretty much spent down and our enrollment continues to decline. So these are our real our big challenges that we continue to have um that really are kind of outside of this uh simulation kind of the upcoming dates. Uh the proforma is really when we'll here in a month or so we'll really try to nail down what

037that deficit is. So that's when we get a a better picture of our enrollment projections uh how that affects our our staffing and then what our cost escalation will be. That's where we have the time to really dig into that and have a more detailed look at what the deficit's going to be. A community budget workshop we have scheduled for December 6th. That's a Saturday. I think in the past we've done work sessions with the school board. We've come in on a Saturday try to identify budget priorities. Want to do something similar except quite a bit bigger. invite a lot of folks with um legislature, assembly, deed, governor, anyone we can get to come in and do the same budget workshop, go through the same balancing act and try to get them to balance it

038really to see how education will change given our current revenue picture. And then the board guidance memo for December 16th, we should probably have a little bit of discussion about how we want that to look because that's a little bit of a new process. Previously, we had rolled that into the proforma, which is, you know, proforma really should beformational only. It's here's what we expect to happen next year if we're going to provide the same level of service. Um, but the guidance memo, we're hoping to get some good aggregated data from the school board. I sent you all a link to be able to go in and complete this the balancing act yourselves. And we like to use that kind of specific school board link to be able to aggregate uh the school board's feelings

039and kind of have that um as a reference point for the board's guards and guardrails about or guard guardrails about the budget development. Then we'll approve it introduce and approve in February and it goes to the assembly in March. Is there any questions over the presentation before we jump into the software piece of it? member hands. >> I just want when you're trying to do the the projection as far as population next year, what data are you drawing that from? >> So, we work with Northern Economics is our demographer and they generally take it's they work on like kind of a a cohort model where they see historically how many students go from fifth grade to sixth grade to the um at different intervals. They're pulling PFD data and overlaying that with the GIS maps

040to say here's where the kids are. Here's the kids that kind of opt out of their neighborhood school. Um, and then they're using birth rates and kind of that the outflow out migration data as well from Anchorage. Um, I believe that we have a memo somewhere. We used we had one from a couple of years ago that really outlined the how they went through their processes and we can certainly ask them to update that to get that to the board as well. >> Member lessons. >> Um thank you. I wonder if you could give a little bit more information although maybe it's premature on what the community budget workshop is going to look like. I guess I'm I'm deeply curious about how the event will unfold and how it'll be different than just sitting in

041front of a computer with balancing act. >> Yeah, it's a great question. Um, conceptually what I'd kind of thought about was using a similar presentation to what you received here, like here's the backdrop, here's why we're doing this. Um, but a lot of it is going to be folks walking around and talking to the board members. We're going to have departments there. uh to really if you're going to go in and you're going to say I want to cut this certain area. We want to have someone there to speak to that like what does this area do that you're just going to say okay we need to cut 20% out of not knowing exactly what they do. So the idea would be to have different departments and different personnel represented there where they can go

042and ask these questions and really find out what these different areas in our budget is actually for. >> Uh if I can follow up real quick. So, since you sent the board uh the link to the balancing act software already, is the administration's preference that board members do the balancing act software um on our own and then we are available to interact with the community on the Saturday the 6th as opposed to putting our heads down at a table and doing it ourselves. Then, >> um I think that'd be up to the board preference. I mean, if you guys want to do it ahead of time, that would be great. Then you kind of have a you've walked through it. You'll be able to talk to community members and answer questions as well. Um, the

043link is live, so you can guys can do it now. We'll have a public facing link as well that has the exact same uh scenarios as the one the board does. Uh, and that's I believe we might that might be live now on our FY27 budget page as well. So everyone will have a month to kind of look at it and then if they want to come in and ask questions before they make a submission then and you can make I think probably multiple submissions you can play around with it do a bunch of different scenarios. Um but yeah I think having the board go through the exercise you can always call me if you have questions we could go through back through it at the finance committee too. Uh so All right. So, I'm

044going to stop share on that and then Okay. Okay. So, here is the uh simulation. Um it really starts off with kind of a welcoming page. You can either click off of this. It'll ask you the questions again when you go to submit it, but it's really just kind of why we're doing this. Um it's a little bit of information very similar as we had last year. So, you can hit continue. It'll ask for some additional information on the on the public survey. you put ST parent staff member. So then it'll get you into the software, but you can click out of that. You don't even have to go around just to play around with it. But it will again it will require that when you go to submit it. I think the school board's

045version didn't have that demographic information because we know you. Uh the biggest takeaway on a lot of this of how to use the software, you click on the things, it'll drop down and tell you where the money is coming from. Um and you can click on the little icon there and it'll give you a little bit more information. Occasionally there will be some that says more details. So click on more details. We can put the chart in there that shows that. Um, so we've added some charts and graphs in here in a few of the areas the best we could. Didn't get around to a lot of it as there's not we don't have a lot of folks being able to work on this, but um that's really how we use it. And again, all

046the revenue side is locked down, but you can just really just shows where we get the money. Um, same with that you get the BSA chart. On the expense side, the one thing or one of the new things we added was this unsettled labor contracts. Uh we currently have four bargaining groups that will be out of contract by FY27. We've included about a 3% uh wage increase for those and about $150 per member per month in medical. That's our assumption going into this model. So, if you're going to if you're going to use these buttons to increase the wages, then um no, it's going to be an above above the 3% that's already included in the model. Um so, you can click those. They're different rates in there. The health insurance is the same way.

047It's got additional $100 or $200 per member per month. And you can see a additional cost to the district on that. largely the schoolbased services are going to look the same. We have the repurposing in there if we close one or two schools um class size. One of the things we did change for this version is to include the SB57 target class size and as well as the evidence based model where it's 15 at grades K3 and 25 at grades 4 through 12 and that's from the pyaden study. Um, I don't want to go through all these questions generally, but um, if you have any questions about how the software works, and again, it's all the the information is in these little uh, I buttons. So, if you click on those, it'll give you more

048information about what is included in the in each category. Um, some of them are based on cost of an FTE going down. Some of them are based on percentages. uh if there's a lot of different types of FTE in aggregate, then it's really hard to break those out by FTE for the purposes of this. So, in that case, we've done percentages. Um we did add a new section for instructional supervision, uh development, professional development. Uh one of the things we hear often is the state chart of accounts for administration doesn't line up with the folks that are in this building, which is true. uh like all the folks in this category are coded the same as librarians according to the state chart of accounts, but they are generally housed in this building. Um so we're

049just trying to separate that out to make it in more plain language. It's not going to line up perfectly with a state chart because we've doing this, but hopefully it'll be more uh it'll be easier to understand for the community and the in the board is to say what these areas are. So really just trying to make it plain language. Um, you know, again, you can kind of click on these. Uh, one that has like maybe uh FTE in it, we've started putting on those kind of not necessarily on the school-based. We've tried to put it on the uh on the schoolbased things, we really put like metrics on there. So, if it's the counselors are 300 to1 or 350 to1, then that's the metric that we include. But on the staffing that aren't really

050metric baits, like on operations and maintenance, it'll show here's the the change in FTE over time. So, we wanted to include that for most of the more administrative style or administrative things like click on business management. Um, you'll see it there. So, have that. And then when you click on these, there's going to be limiters on that. So, you can only go, you know, some of them like for business management, I have a 20% limitation for cuts. you know, even that would probably be maybe untenable, but to be able to be consistent with the amount of cuts that we allowed to other areas, it's we wanted to change that. So, so that's really where we're at. And then there's a hand there's a handful of fixed costs that we don't really have a whole lot

051of control over. Um, charter schools, they get their money just based on the foundation formula in statute. Uh fixed costs are rent, lease, leases, legal fees, utilities, depreciation, insurance, uh things like that. Indirect cost, and then the attrition and district-wide contingency, which some of that is going to be contractual, and some of it's just we need to have some small pot of money to be able to address emergencies as they come up. >> Mr. President >> member lessons. >> Thank you. Um I'm wondering if you could scroll back up please to the sort of PTR area. We talk a lot about PTR and we talk a lot about FTE but those are acronyms that um you know may not be easily digestible. I wonder is is there a way and I know that you've prepared

052charts for the finance committee showing that okay you know with with this year's PTR this is how many FTE we have at all of our schools is there some way you could create and possibly attach like well if you increase PTR by three this is what FTE would look like at all of our elementary schools this is what FTE would look like at all of our middle schools. Just so people have an understanding if their kid goes to a certain school, like what that PTR increase will mean in terms of teachers available. >> Yeah. And >> I don't know how you loop that in. So, it's sort of a pie in the sky question. >> And in terms of the software, I think there's like there's just the oneformational section you could put them all

053under. um kind of that more information or that more details section, but then you'll have if you want to do it for every single change in class size and you have a dozen different uh things, it's going to be thousands of lines of data for people to scroll through. So, one thing we try to do is limit the, you know, the sheer volume of what our budget is and try to condense it down to these um several areas. So I mean we could pick yeah I think it'd be difficult to try to attach it in here but we could certainly put even you know we can calculate out the total FTE change that might happen you could put it off to the side maybe but I haven't gotten around to that. So >> thank you.

054It's just sort of a the idea throwing the idea out there if there's a way we can translate uh the con, you know, a consequence of increasing PTR into something that folks might understand at a at a close to home level. >> Yeah. Understand what it does to their school. >> Thank you, member lessons. I'll note for the record that member Donley joined us at 3:43 p.m. >> Um, that's all I had for the presentation side of it. So if you have any more questions, again, this will be live for the school board to look at, live for the public to look at. So encourage everyone to start playing around with it, share it around, and get everyone kind of looking at what the financial picture is going to be because frankly 77 million is

055a lot of ground to cover. And you know, it's this none of this is going to paint a very pretty picture. >> Thank you. Are there other questions for Mr. Riff? Okay, I'm seeing none. I think that completes that item. Our last item for discussion today, B3 is bond update. Dr. Bryant. >> Thank you, Mr. President. So, Mr. Anderson and his team will walk us through some presentations on the upcoming April bond as well as the CIP. So, we'll let them get settled and then they'll begin their presentation. Okay, good afternoon. Um Jim Anderson, the chief operating officer will be going through uh a few slides on the bond and then we'll also go through a draft um look at the next six years on the CIP. Um, we'll also talk through some different funding

056mechanisms that we have been using through the district. Um, talk through a lot of the grants that ED's been working on just to give the board an idea that bond is not our only funding source. Um, and and we've really been trying to find every possible solution to get after our building needs. And I have experts with me because they're experts. Got Edy. She's in charge of all the construction operations during the summer and during the year. Um, she has oversight for all of that. Everyone knows Tom, I think, the senior director for CPNC and Larry is our senior design um person that that is involved not just design but um an awful lot of things districtwide. So, as we go through this, I'll let them talk their areas and if there's any questions um

057please feel free to ask. We are planning on offering one-on-one bond discussions because there are other topics um that that you might want to talk about that how does right sizing affect bonds or any other number of things that could impact bonds or future bonds or the CIP. Um so the one-on-one I think is a great a great opportunity to have those discussions. So the good news for us um is that for the first time in 10 years on one July state bond debt reimbursement has returned to Alaska um school districts. It's it's not the 70 60% that we had 10 years ago but it is 50%. So we've already started talking with communications. We know there's going to be a massive um information campaign to make sure that vot voters understand that um you

058know last year's bond at $80 million is this year's bond at $160 million or something like that. So they just appreciate that uh because the the numbers are always going to seem really really large. Andy talked about how the required local contribution is going up because of the the property valuation for the Anchorage Bowl. Um, so there's always going to be a lot of confusion for how education funding works, how capital funding works. Um, so we do plan on pushing really hard and making sure people are aware and we'll come up with a lot of different products for the board to take to community council meetings. And at the end of the day, as we go through the one-on- ones and then as we go to 18 November when the board votes for this bond

059proposal, um it does come down to what's the level of risk because we know that we can put an information campaign that is absolute stellar out there. But there's a lot of people in Anchorage just trying to live and they're they're not reading flyers. They're not watching the news. They're just trying to live. And so there are always people that won't understand fully um what state bond debt reimbursement means. And those are the discussions either tonight um certainly one-on ones and on November 18th um to help us figure out what is our way ahead and how do we start looking at the future. Um you know this is the first year it came back. So, you know, we're tried to be pretty conservative on this first year, even though there is a 50% SPDR, but

060you know, that might not be our approach in out years. So, on the next slide, >> Mr. Anderson, can I jump in really quick and ask um on the slide we just passed, I think it's important, and hopefully other board members are thinking about the same thing. We uh the language says on the previous page that we expect to receive 50% reimbursement. Is that is the expectation based on the fact that we're we're assuming the legislature and the governor will follow the law or are there other things that lead us to expect that? >> No, that is that that is what that bullet means. Obviously, we've had more than one governor have uh vetoed state bond debt reimbursement in the past. it ultimately came back and and so even if we didn't get it for

061one year, the expectation now because it's in statute again would be that if it were vetoed on any one year for any amount, it could be 10% or all um that ultimately that money would come back. >> Thank you. Okay, this is a snapshot of where we are with the FEMA reimbursement from the 2018 earthquake. Um, I know everybody thinks we're already done with that, but we're not. We're still trying to close out with FEMA. So, um, the top number is the uh was the original obligated value that we received in um well obligated from FEMA. um it was um understood at the time when we were signing documents that their estimates of our projects were low. So we did go through a process through this seven years in the middle um of working on

062what we called scope modifications. So that second number is the um amount that has been approved for scope modifications to those original estimates. So that's again a additional obligated value from FEMA. And then the third line is um what has what I have submitted as scope modifications that has not been approved yet. I expect them to be approved. Everything's been going through smoothly. Minor questions um from FEMA, but that's so the bottom number is what I believe to be a good estimate of the what will you know when we're done with FEMA, what the value that we have been reimbursed is. And then just the the last two lines are, you know, what we've asked for for reimbursement and then what we've been paid. Um they are a little bit slow in some payments. They're

063and now it's even slower with the federal government shutdown and the states people are really really busy with the western Alaska flooding understandably. So um but that that amount is in for reimbursement. It just hasn't been paid yet. And and the reason I wanted this to be discussed is as we look at um emergent requirements because they happen all the time throughout the year um that you know that we Andy has booked that $10 million. We just haven't received it yet. um we fully expect to receive it and as it comes in it it will be a funding source that that we use for other minor projects or crises um in the capital planning and maintenance world. >> I'm going to jump in really quick with a clarifying question. So, is there anything that we've

064received that hasn't been allocated? >> I'm sorry. You mean allocated to an an additional project? >> Anything? >> Yes, there is. How much have we received? Do we not have a purpose for? >> I'm gonna have to defer that. Rachel wouldn't um be able We could get that answer back to you. >> We can put it in board connect and discuss it on the one-on- ones. The first thing that kicked off when um when the earthquake occurred was the board authorized money from the general fund. We had to pay that money back. We did a bond that was for a lot of projects that the board had approved the bond before the earthquake. Um, and so we have been using the FEMA money to pay back what we borrowed from the bond. Um, and at

065the end of the day though, we're we're still 10 million short. Uh, hypothetically, you you could possibly spend some of that, but Andy would be nervous. um because we've all seen this year that some federal dollars that were uh people have been planning on have been shifted to other priorities. So the the real answer to it is we have yet to receive the last $10 million and we we believe it's coming. It's supposed to come. Um but we certainly would be averse to technically that 38 million is what has been booked. So it it looks like we have it. We just haven't received the checks yet. So, I I think Andy would be maybe just a tad nervous if uh if we had that much confidence that the federal government would would continue on path.

066>> But I'll let Andy speak for himself. Thank you. >> After this. >> Okay. This is what we have planned or are asking for for a bond for this year. Um, couple of these we've seen for a while. The roaming middle school has some a very old roof. It's got some seismic and structural issues. Finishes. The educational adequacy is very low and we need to make some upgrades. It has not been upgraded in a long time. Lake Otis Elementary. Of course, we've discussed this before. Um, we have a very old roof that has leaked. We have fair amount of structural upgrades that need to be done as well as of course finishes and some areas that very old uh finishes that uh are badly wearing out. And it also has a very high energy utilization

067index that it's not very efficient. Tutor Elementary, we've got a couple of items. It's one of the schools that still needs to have a secure vestibule installed for safety and security. But we also uh few years ago during snowfall years, we found that there were some uh wood parallel trusses that had failed and we've had collapses around the district, not in schools, but in other buildings. Well, we have had hired a consultant, structural consultant to go look at them. And we have four classrooms at tutor that uh are the same type of trusses that need to be either shoveled completely during the winter or we need to make repairs or do an alternate form of adjustments. Access control. We have 15 schools that did get secure vestibules done, but it was before we had access

068control uh to be put in basically the fob systems and other controls at exterior doors. What it means is that we can eliminate brass keys for exterior doors and just use fobs. Easier to replace and if somebody loses one, you just take it out of the system. You don't have to try and re key the entire building. So clatt when we were doing some a FEMA paid for design and uh to look at the structure there. We found some issues while they were code at the time. We definitely need to upgrade and that's we have completed the design work and now this is money for the construction portion of it. Uh student nutrition we talked last time they have done an incredible job. They've changed their service practice and manufacturing, but they have a very

069old building, very old equipment, and not set up for doing how they're doing now. And their goals, and they're meeting their goals of service, uh, meals served, and they are doing an incredible job for our students. Uh Betty Davis uh we talked a little bit we got 7200 volts running around the building in the ground that is very old and very dangerous. And this will replace a lot of that. Upgrade the backup generator to one to allow it to actually exercise itself once a week. and it will bring the electricity in right directly into the building instead of looping around the exterior of the building. Just a couple of feet underground if somebody digs in the wrong spot could be incredibly dangerous. Plus, some of the manholes that they go through uh when it rains,

070they fill up with water and that's not a good thing. Ursa Major discussed this again last time. We have when it was built in 1952. The concrete uh walls and roof assembly was they sprayed it both in and out with PCBs. Polycllorinated bifphenols which is considered a toxic substance. in fact is covered under uh the EPA's resource recovery environmental laws and in order the landfills in Alaska will not accept it. So it has to be shipped out uh probably to Ridge View which is down in Umatillaa Oregon area and which increased the price. Nobody knew about it beforehand and it's just something we found. And this is pays to do that remediation and get the building parts shipped out so that we can go back to building a new Ursa Major and then planning and

071design for projects and things that could come up for the next two years that's in our CIP plan. So on the Ursa major one, it was not on the initial one. We talked about it at the finance committee. Um, obviously we didn't take a vote as to whether the board wanted it on here, but I didn't see any um anyone who stated clearly that they they didn't see the value for $5 million plus on a bond versus having to come back and pay $10 million a year or two from now. Um, you know, we we went to Jar. their leadership is amazing, but they immediately got with their lawyers and determined that it's on ASD, not them. Um, so, you know, the whole federal government is looking at ways to trim costs and they were

072unwilling to pick that up. So, um, you know, that's really why we added it on. Not that I'm presuming the board necessarily agrees, but but I didn't see any disagreement. Um, so we can certainly discuss that during one-on- ones and uh naturally the the end result is we either bond and get a brand new building that gives us flexibility to um if if enrollment continues to drop, give back another building that has not been condemned um to Jar, let them use it for whatever they want to use it for. Um, and then we could move students into a a customuilt building that's that's been modernized. So, it it does create flexibility for the future whether enrollment grows or drops. Um, so we can talk about it tonight, we can talk about it during one-on ones.

073Either way, we certainly probably talk about it on the 18th of November. And I just kept this slide in. I'm not going to talk about it again, but in case someone wanted to look at it after this meeting. >> So, this is a project highlights of what the bond looks like. You can see we have a good dispersion of schools throughout the district and also there are 20 schools on the bond. So, plenty of schools, a good dispersion across the district. And again, we're focusing on that safety security aspect as well as doing major renovations to the uh buildings that we do have and we do need to continue to upkeep in the near future. And the last slide is is the bond way ahead. You can see we've uh introducing today and then on

074the 18th we'll have it up for approval at least looking at the bond. And then you can also see that the 5th through the 17th of November um we'll be doing one-on-one briefings with the board to answer questions. So just reach out to America. We can do them individually. Zoom really your preference. Okay, now we're on to the CIP. Really just want to walk through the six years. Maybe not every single project, but as we get to year two, three, four, five, six, maybe hold and let uh the board members read it for 30 seconds. And if there's any questions, uh feel free. There were a couple um a couple things we discussed almost a year ago now um that we knew that we were going to prioritize Wonder Park and why and include them

075into the CIP um for some future improvements for those two facilities and so you will see them. We don't have concept for why or design. I don't think we even have the EDS specs finalized yet. Um, so that one that one will be uh moving forward and you'll see a lot of them in the design piece early on in the bonds and then of course they'll they'll start popping out um further down the road. So, I think the important thing about this projected bond and the six-year CIP is it's almost a half billion dollars of construction efforts over the next six years. Uh the good news about that is we are looking at state bond debt reimbursement uh throughout that period. So roughly half of that um should get reimbursed and then we will continue

076uh to retire debt. Fortunately, we will still be uh accumulating debt but at significantly lower rates than we have in the past because of state bond debt reimbursement. So, we'll talk about this if member lessons um wants to make time at one of the future finance meetings because it doesn't make sense when you first look at it and say, "Well, now we're getting 50% reimbursement. Why over the next six years would we be retiring less than what we're increasing?" And it's simply because for the last 10 years, it was 100% on the local community. and and this state bond debt reimbursement doesn't go backwards in time and start paying for all those those bonds that we passed. Um in fact if if I think I know some of you do recall they they put the

077moratorium in place in the spring of 2015 and they backdated it to January because our bond had passed that year and they wanted to make sure they didn't even cover that one. So, we do have 10 years worth of voter approved bonds that that we're paying off 100% of that. And that's why you will see this number. And I suspect that at community council meetings, um it won't be widely understood. Uh when we're talking about moving forward, we're only paying half and then they'll wonder how is this this looks out of control. How is that happening? It's just that 10-year block where we didn't have SPDR. So, we continue our focus on security, safety, and security. Um, we've done a a pretty aggressive job at at getting all our elementary schools done. We'll we'll have

078completed them all by 2027. So, looking forward to to finally getting there with that. We continue to to work on our roofs um upgrading those Irma roofs to the EPDM type roofs which give us a significantly longer life and warranty on those particular roofs. Also, we're looking at upgrading our playgrounds to make sure those playgrounds are inviting to children and they're safe and uh a little bit more fireproof. Larry already mentioned our electrical service and generator upgrades, but that's something that we definitely need to focus on um as we look at the older buildings. This slide is just our deferred requirement projects. We we already touched on year one when we talked about the bonds. So, I'm going to hand it over to Larry to talk about the other years. Oh, all right. This slide

079is actually um a list of the non-bond funded projects that we've have been working on and a lot of them are grants from FEMA. Um there's two different kinds of grants that we've received in the last few years. It's a HMGp which is the hazard hazard mitigation grant program and then the brick which is building resiliency in communities and we've received both types of those. The brick grant has been um cancelled by the federal government. They're no longer pursuing those. Um they're hoping the the state um department is hoping that they'll revamp them and put them out again, but the cancellation did not affect the two grants that we had already received and we're spending money on already. So we're still receiving um reimbursements for those two break grants. Okay, moving on to year two.

080Again, as I mentioned at the finance committee meeting is first was we protect the people, we protect the structure, we enhance educational delivery and we look for operational cost savings. Bartlett High School, the board has already approved a the plan for it. Uh right now we are working on 35% which I will be bringing to the board for approval uh shortly. And then we also have our transportation center and various other facilities that have some structural upgrades that should happen or just need some better increases in efficiencies and operations. Getting back to the Bartlett, that's one that between energy utilization index and maintenance costs, we're spending almost $2 million a year between the two of them, which should be down in the 500,000 range a year. uh we will get there because I gave I

081have given the consultants uh maximum amount of energy they're allowed to use when this is done. So, and if you talk to the administration there, past and present, they have actually had people that their job was to call maintenance almost daily during the winter for classrooms that were too hot and classrooms that were too cold and classrooms that just leaked. So, we are going to fix that as well as make it a better place to have school. >> If if I can break in real quick, um member Hollowman has brought up the natural gas cogen backup power um andor primary power for buildings. And that is the one school that we're doing a deep dive on to determine if that's the technology and is that the appropriate school where we could have more than one

082source of generator power as opposed to what we see all winter long which is Rob Holland and Carrie Shivers getting trucks to come out and pump more diesel in our generators because that's that's really our primary and it requires commercial trucks. So, this will be our first fora into really looking at what are the other options for generators. Um, and and not just limited to that, but we're certainly looking at that for Bartlett. >> I'm going to jump in really quick. Member lessons, you have a question. >> Thank you. I actually have maybe two, so it would require going back a couple of slides to the first to the 2026 2020 uh 2031 CIP highlights slide. And I just wondered um thinking about the the chart that I've seen um that shows the deferred maintenance

083backlog and I just wondered if you could articulate that over this period of time as we make almost a half billion dollars in construction investments. How much does I mean the backlog goes down considerably. So, >> yes, >> it would require $80 million per year, inflationproofed, every year just to keep up without closing and completely getting rid of a school where you wouldn't have that capital expense long term. Um because this is the first year of SPDR coming back, we didn't re think it was really realistic to look at 100 plus million dollar bonds yet. Um it's really got to get out into the community. Um I think I I think at some point the community will understand it just like they very much understood it in 2015 when it went away. Uh but I

084I think it will take some a time maybe a year or two before people start having the confidence that the state really has got their back on the 50%. >> Thank you. I think my next question might be um I might be ahead of myself because I was reading the printout so I'll hold my followup. >> Member Dudley. >> Thank you. Um once tutors best of is completed are there any other schools that need to be safety upgrades elementary schools? >> Yes. Um Bear Valley which is being set up for a renovation. It still has to have a one done. Ursa Major of course when it's done would need one. And then we have an Orion which it is also due for a major renovation and that pretty much takes care of the LA elementaryaries.

085Then we start working on the secondary schools of which we are I have money in the future to start planning because it's going to take a lot of planning. Secondary schools they operate a little differently than elementaryaries. How is this going to happen? And we need to do some planning and designing because again none of them are look anything like the other ones. So how we do that will change from one to another >> and you you can imagine the challenge like if you go to service I know I know member lessons has been there the kids park in the back of the school and they come in the back door um even if you put a secure vestibule we don't have anyone there. Um, so you look at West High School with 67 exterior

086doors. We It's going to be bigger. It's going to be much bigger than um even just figuring out how to do vestibules and plant the equivalent there. It's can can you even provide people to be there to validate anything and do we have to change behaviors of what people are used to doing versus what they would have to do if if we were really to secure it? and we're we're just not there yet. >> We'll go to middle school next and then high school probably. >> Yeah. I think it involves a building that culture of security within the school and then also it's going to be a policy discussion about you know open campuses on high schools what that looks like or will they close them. So, I mean, I think we've got the physical

087security aspect of it down, but I think it's going to develop into policy in the future. >> Member Higgins. >> Yeah. And several questions. One is just when we were pl we're providing money for design of things, it seems like sometimes that's many years ahead and it doesn't happen. And I'm wondering how we select, you know, design stuff before we get to the approval. and then we have to pay for the for the upgrade to the design and sometimes along those lines. Is there a is that an issue or not? >> Well, actually it's not much of an issue because uh in the last five years what we have done is when we look at design ahead of time, we do a condition assessment of the building. You also see it also known as a

088a project analysis reports. But this is actually looking at what are what are the things we need to do and coming down and it in the PAR project analysis report. It is almost like a menu. We got to pick this and this and this. But we do not try to get out and design more than a couple of years ahead of what we have planned in our six-year CIP because once we get a condition assessment, I have it stopped at that point until we get to the next point where we have some design money and we are coming up on the next year for construction. Then I want to get 35 65% design. I won't do 95 until I have construction money. Uh and so that gives us a better idea of what our costs

089are going to be, our estimates. We have had a little problem with estimates from our estimating companies lately because we actually require a professional estimate done while we're in design. Some of them have been good, some have not been good. Uh, so we are not getting too far out. One is I've just don't have consultants and we're also running out of project managers. So, we can only go so far ahead and I've only got so much I can spend. And I would try to keep something when we have something that comes up like uh student nutrition or we get a one that really came up was Spring Hill because we started getting really bad leaks in the roof. So, we had money available to go spend on some design to get it ready so that

090when we could get a contractor on board, we could actually fix the leaks. And and member Higgins, one thing you probably recall, um, and it's been a decade now, but we we used to not wait until we had a 65% um, or sometime it's usually was 35% to determine what we thought the cost would be for a bond. Co blew that out the window. Tariffs have blown it out the other window. um you really need that 65% to feel comfortable um to do to do the estimate to put it on a bond. And so you've got to accept that that you know couple percent of the total cost of a project risk in order to be wildly off on that year's bonds. And that's that's kind of why we feel relatively comfortable. Um but you

091know then the murder hornets will come and all of a sudden that'll have an impact. But right now really co hit us hard with steel and everything else and then the tariffs hit us um in fact they're still bouncing back and forth. But we're definitely more accurate with a 65%. >> And I remember the 90s when they had to go out with a bond and go out with another bond to be able to finish it because of the inflation factors. Even with having a good estimate, you can't always adjust for the inflation. I'm concerned about just Blet being pushed so far back. Uh I remember the presentation coming in here and after the presentation I went out to Bartlett. Did not like what I saw. Uh just a a nightmare of a school as far

092as facilities. Uh the leaking, the ventilation, the everything about it. Just cries for stuff. I'm just not seeing that in reflected in here as a high enough priority. It seems like given we had a great presentation on it. I remember that. I remember thinking, well, this is this is it. This is our top priority, but I don't see it coming up again. >> Well, it is. It's on year two. I mean, but if you look at everything on year one, um Oh, I'm sorry. Here we are. Let me go back. Yeah, year four. It's on year two and four. It was a three-phase project. So when you're doing it in that that first phase, you're relocating all the classrooms so you can work on it as much as you can even during the winter while

093you finish phase one. And then you're relocating classrooms again to do phase two and phase three and it's just an animal. When when the board approved the concept, the concept wasn't a design, it was just a concept. um and it helped break out the phases that made sense for all the different um components of the building that had to be fully linked in together by the end. Um also last year we did have it on the bond for approximately, if I remember right, 10 million or so. It was for both design and some consolidation of items in the building to pre-plan and be able to do. We're not going to put a trailer farm out there. We're going to move students around. This is to plan it and to make uh improvements. You will start

094to see improvements in the next not this coming summer, but the following summer. And at that point, all of our design is going so that when the next bond hopefully passes, we could move right into continuing it. And it's I mean, we got a 70% occupied building. uh it's going to take a bit to move students around and get work done so that in two years after that when the next bond passes and I'm still here uh then we can finish it. >> Well, we got to be optimistic. I understand that's that's acceptable. Um, I'm gonna have to raise Abbott Abbott Loop because when we approved that on the bond, the discussion was that the MUN wanted it level. They wanted it moved out. It's going to cost us millions. And now I understand that

095really the MUN has not taken a position on this thing as as a municipality of Anchorage. Individuals may have spoken out just like they spoke to me. Uh, they spoke to the the COO, but the municipality of Anchorage, and I haven't got anything back from the mayor's office. I was kind of curious. um that isn't there. So looking at options as to what we got one, we don't know what's going to happen on the right sizing issue. That's going to make a difference probably uh and we have to readress it that way. But uh have you looked at are you going to look at other options here other than spending millions to remove the building um if if the right sizing goes as the municipality as the administration has recommended? Well, I I definitely plan

096on talking about what happens um depending on right sizing decisions in the one-on-one brief. Um but like all board decisions where they direct the administration to do something, our last directive was that um the building would be um not improved and it would be closed at the end of the 2728 school year. So, we can't dedicate huge amounts of resources now for one or even two board members to come up with a plan to retain it unless the board reverses the original decision. And I understand the emotion behind and the logic. I understand the logic behind it as well um about keeping every building but the reality is I you know the board directed me that that school is going to close and until that directive changes um you know I I think the right

097sizing decisions every decision creates another decision in your world um whatever however the decision goes and and it could be that that something gets discussed on being relooked depending on what decisions are made two weeks from tonight. And that's why we pushed the CIP. It's on the Well, it hasn't been pushed yet. Uh President uh Jacobs is going to move the CIP memo to December because we know that depending on what gets decided in two weeks, the bond might change and the direction might change. But right now when you look at the CIP on year three, we have declared abbaloop excess and returned to the municipality because that was our last directive, not because we have a preference. >> Member lessons. >> Um, thank you. This is the the follow-up question that now we're on

098this slide. I appreciate the previous question. Hypothetically, what would happen to Abbott Loop in the interim if it were vacated prior to the termination of this sort of five-year plan? Do we pay to heat it in the winter with nobody in it? >> So, hypothetically, the the board agrees with the administration's recommendation and Rico moves to a different building. Um, but it doesn't mean that they would move this summer because we already have Lake Otis uh for a renovation on this spring's bond. And if you were to hold them an extra year at the Abbott Loop facility, you could probably complete the renovation in half the time because there wouldn't be anyone in the building. It would really be the equivalent of Enley View where the kids are going to class every day, but they're

099working round the clock regardless of weather, knocking out the new building because there's no kids in the way, there's no cars in the way. They're just doing it. So, but you know, one step at a time. Um the first decision is is does that school close and does Ricoshula um accept and go into that school? And then if they do, I would come back and with uh or the administration would come back with a recommendation that we keep them in Abbott Loop for one more year um while we're doing the renovation. That would be the plan. But you know, I need four board members to agree with me for that to be a reality. Damn. Uh the uh year three on what we'll see are things that some of we discussed. We got another phase

100coming up on robing. Romig is a big school and they're right now at capacity, a little more than capacity. We will need a trailer park there to make this work. So, there's a lot to be done and the pricing was getting to the point with all of this, it was better to plan over a number of years and phases to get this done. Um, then we start getting into some other schools. King Tech has some stuff that now you're starting to see whe uh that are part of a lot of renovations. Again, I brought up before got over 90 facilities. If we get 30 years on a roof, which is very good, we got to do three roofs a year. And in the past, we have not done three roofs a year. Uh, in fact,

101I get a chart every quarter of leaks. And while last quarter was pretty good, it was also dry. And as they say, roofs only leak when it rains. So, and it didn't rain. So, but this f last quarter was like before and we got almost leaks in a 3-month period. Uh so we have to continue to look at roofs. Uh some of our roofs are such that we can do restorations where we coat them and we can get another 25 years of warranty out of them. So we keep moving that way. So, roofs, renovations, uh, also anytime we do a roof, we do another deep dive look onto structural. Uh, we've had one of our structural engineers explain to us that codes in ' 80s, 90s, the uh, connections between the roof and the exterior

102walls were not what they should be. And so when we have a roof off, it's the right time to do some uh upgrades to the structure. Uh we can easier to get to it. Plus, at that point, it's easier to increase insulation uh when before we put the new roof back on. So we work on again the trying to get some savings from operating costs. We want to reduce those 180 EUIs down to where they should be of 6570s. That's a lot of money just going up a boiler stack. So these are all the things that we have over the next years. And when we if anybody wants to talk about them, we can talk about individual items or how we go about it. You know, we have our FCI, our facility condition index, but

103if a roof says it's at the end of its life, it's going to be the same whether it leaks or not. So, that doesn't change. That's why we have to take a look. I get reports on roof leaks. I also get reports on ongoing maintenance issues to see what's uh changing and what's new and exciting problems we've got because there is always a new one. So, I'm going to jump in really quick to ask so Mr. Morris, you mentioned we were at one point um attacking two or three roofs every year. We haven't been. Does this CIP get us back on track? So, are we are we attacking three roofs a year? >> It is starting to uh now I have ones that say roof and structural as you go through there. There's quite a

104few of them, but there's also renovations. Lake Otus is a renovation, but its roof is in really bad shape. We've got a number of them. It's always most cost effective to do these type of projects as a as one major renovation. We can have one mobilization, we have one contract, one project manager, and it's all done, and we can move on and take care of a lot of things at once. Uh, a lot of times when we're doing roofs or these others, you're talking about ceilings. You do a ceiling, now you run into a new code issue that they have to be upgraded. So, just as a the plan is if we can do them as a major renovation, which is what we do with uh our secure vestibule projects. They're always cheapest if we

105do them as part of a renovation, which is why you see Tutor coming up later, Bear Valley Orion as part of major renovations. While we got the building torn up, let's fix that part. Just so a quick followup that I appreciate that that it's efficient to um address the roof when there's other things going on. I almost I'm picturing a a constructional or engineer chicken and egg scenario. So, while we're in while we're in the building, we would fix a roof. But are there roofs that uh might be the primary or sole large issue that a building has that if left unressed will cause more things to need to be addressed if the roof was fixed 20 years later? >> Yes. Uh, in fact on here you'll see in the past and going forward there

106are just strictly roof projects, roof and structural that it's a given. If we're going to do a roof, we're going to check structural. Um, but the same time I get a report quarterly on leaks and stuff, we have a person that checks out all of these roofs and they she gives me what she believes are her high priority. Right now, everything within our first tier of high priority is either been worked on, is planning on worked on, or is in the six-year CIP. So, we're making great strides. And while I said we were back up this last quarter with more leaks, it was still eight less leaks than two previous quarters, you know, back when it rained again. So, we're making progress. >> The only other one last follow-up question. Um, and maybe it's maybe

107one for Mr. Anderson or Dr. Brian. Have we considered I'm thinking of with school bond debt reimbursement returning and with our major maintenance list significant and roofs being maybe the primary or at least maybe the best um example of a part of a building that if left unressed can lead to other unintended consequences and cost to taxpayers. I'm just wondering if it might make sense to at least consider the concept of a a second bond proposition that's focused solely on roofs so taxpayers could say, "Look, we want to protect your investment and save us money with our primary bond in years to come." Is that something we've thought about? >> It is. You know, the the one reality that hits us in the face is this community only has enough workforce to do three a

108summer. So if you were to try to do six that the the workforce isn't here, >> Mr. and I appreciate that. I agree with you. >> That's really why like we cut secure vestibules from six every summer to three for the same reason. >> Understood. What I think I understood from Mr. Morris is that we aren't working on three roofs a summer. Or maybe I misunderstood. What I said is we in the past we didn't do three roofs this summer. So we have started had stacked up some that are really in need. We are starting to making very good progress towards it at the end of this six-year CIP assuming no new ones come bad. And like I say, many of these when we get rid of the Irma in the inverted roof membrane assembly,

109basically you see the pavers with trees growing out of them. Uh but uh once we get to more of the EPDM roofs, then we can also do the restorations where I can have a 30-year roof at 20 plus years, do a restoration coating on them, which is 40% of a new roof, and now I got another 25-year warranty on it. So, we're going to get there eventually. I'll be retired, but we'll get there. You and me both, sir. Okay, Mr. Higgins. >> Thank you. Um, I I I saw a presentation a while ago about a new technology that's less expensive with the roofs to be able to do it, has the same duration and things of that nature. Are we utilizing that sort of approach or not? Uh, with the technology changes, >> are you

110talking about the restoration, the codings of it? Yeah, that we have done a few of them. Our building >> CPNC has that done. We did a large section of them or doing a large section of them at Chugiak High School uh and other ones that we've done. And but we cannot do it on an Irma roof. It has to be an EPDM type roof. You can even do it on a torch down type, whether it um builtup roof assembly or those types. You can do it on it, but you cannot do it on an Irma. And during late 80s through early 2000, that was what a lot of schools did was an Irma type roof. Theory was good. Practice didn't always work out correctly, but that's what we've got and that's what we work with.

111>> Yeah. I will share with the board that I had a meeting with Jim and his staff and I'm glad Jim's sitting down because it was a very good meeting, Jim. I I didn't want you to be shocked or anything. >> Most of our meetings are very pleasant >> and and but we we looked at the issue of audits and what we could do and one is like energy efficiency that we could end up doing a separate type bond and I like the way that president made reference to that but doing a separate bond for that. We could look at a separate bond in regards to energy efficiency. There may be all kinds of options out there. I still want to look at because you can end up getting um you know things like furnaces

112and pay it back out of the savings type stuff. We could expand rapidly if we can get approval for that, but we have to put it together first. And there are other school districts out there that we should be able to pull from and to be able to get something like that. But I think our opportunities here to break out bonds and to do a larger amount um is really contingent upon being able to show the public how they benefit directly with that. And I do think the energy efficiency option is one, but there were others in regards to maintenance and our deferred maintenance being so big that I think um uh we'll try to do an audit with that, but we're breaking it out into different areas that will be recommended to the board.

113So the board can uh take their time. We've got about a month before we come back with the CIP as a non- action to go through years uh one through six again. We can also talk about it on the one-on ones or or honestly whenever whenever yall want more information on that and we'll be prepared to go as deep a dive as you would like. Um, I did want Edy to give you an idea of the the numbers and uh dollar values of the uh hazard mitigation grant program and the building resilience in communities, which is really uh to protect your structures against natural disasters because she has put a lot of effort into this. And you're going to see over the next year or two that a lot of these are going to hopefully

114start getting approved and really making a huge difference in our ability to uh to keep our facilities strong. >> Thanks, Jim. Um so yeah, this is a list of all of the HMGp and brick grants that I've applied for and the ones that are highlighted yellow are the ones that have been approved by FEMA and we've um started working on. Um I think the the really interesting thing I learned from the you know the earthquake and the response was that um the just the how many grants are available. Every single disaster in the state of Alaska um spins off HMGP grants that anybody that's a qualified um entity can apply for regardless of where their location is and where the disaster was. So, um I've been doing a number of like um structural surveys of

115the buildings till we can identify any potential like um improvements that we could do to make the building buildings more resilient in the in the future um earthquakes. And um also we're we're doing have done a number and have received a number of uh grants for new generators. So, we'll be able to put those in at I've got received three of those so far and I'm going to continue to put some in until somebody tells me to stop. So, this is just a list of um and then the the totals on the bottom of how much you know the total of of what I've applied for and then the total of what we've received funding for. And we've already talked this slide um but I'm sure we'll come back to it in future briefings or

116maybe a finance committee meeting as we try to do projections on um how quickly money is moving. Obviously right now it's not moving at all um until the government opens back up and then we pretty much touched on our way ahead when we talked about the bond. Um, but we will be pushing off um the CIP into December. >> Okay. Are there any questions? I'm going to jump in with one of my own on 2029. Um, maybe it's not 29. Well, the Wonder Park, I don't know if it's 29 or 30. It's 2030. I apologize. Um, Wonder Park is scheduled for a renovation. Does this mean that um, you know, we last talked about Wonder Park during the right sizing vote discussion last year and we asked the administration to make a recommendation on either

117a major renovation or a rebuild of that building? Um, is this indicative of that being determined renovation being the um, more costefficient and practical route and could we explain how we got there? >> Yes, it is. Initially, we'll we'll get the whole staff together and um and try to figure out what is a concept for that building. As you know, there's a lot of things you can do with a building. You could you could split it and have enough offices for two different schools in one building if that was the direction the board might want to go for that facility um in order to meet other board priorities for other schools and lease spaces. Um, so we'll have to go through that process and get a concept because we'll probably look at it more than

118just as a single school building and look at other options for that that space. >> Um, the only other question I have is um the placement in terms of year. Uh, was that intentional choosing 2030? Was it a bandwidth and capacity issue? Um, are there other factors that came into play? Um I think it's going to well one we know we is a higher it's really an it's an emergent priority. Why is not in good shape compared to um Wonder Park, but if you look at all these others, they they all have issues. That's what $1.5 billion dollars in in deferred maintenance looks like. It's you could go to you could go all over this district and it's it's like trying to find the right school to close, right? Which is the right school to

119make a priority. It it's difficult when you have a $1.5 billion dollars. Um we did feel that why was was a higher priority to meet educational needs whereas Wonder Park with um you know that one uh group of classrooms that's being used for prek and then the other the other group is is being used for the rest um that wasn't as high as Wonder Park but you know obviously it's always on the board to to make amendments that has occurred once or twice in the past and uh if if that's something the board wanted. Um I don't think you would give push back, but we do need a concept first because that school we're looking at slightly different. Um thank you. I'll follow up and ask. So U whe is listed on your 2028. Um

120Wonder Park is on 2030. is I'm assuming that the the 2029 list was deemed of higher importance over Wonder Park. >> Well, it it's it's that and we don't have enough construction personnel in Anchorage to move every every priority up in the up in the list, right? I mean, it's it's one and a half billion. I mean, I I don't know if if if if it gets amended and and if you feel strongly and other board members feel strongly that we move Wonder Park up, we certainly can there. But I will tell you that every other school on this list is also in serious need of some love. >> And I'm just asking questions. Um yeah, I'm not indicating a preference at this time. Thank you, Mr. Anderson. Uh member lessons, >> thank you. Um,

121I am aware as a just member of the community that the municipality that we that voters may be voting on a sales tax and I'm not um I don't know where the process is there uh in the April bond in the April election and I don't know what other uh bonds the municipality may be bringing forward but I think the question I have is do we do we have a sense of you know The main question on the front of this is, you know, what's our comfort with risk? And when I I guess when I heard about the sales tax proposal, that maybe elevated my sense of whether the scale of this bond, which I support, might somehow be riskier. So, if we didn't know who the super voters were, which is the the people

122who routinely vote in every election, then I I would if we didn't have that information, like when we send out um cards in the mail and and reach out to communities and try to inform, I would say our level of risk would be high. Um, but we know what groups we're are going to be um more successful and informing and I think that'll be part of the communication campaign just like when Handover does the surveys after every vote. um they know that we should go get survey data from super voters and from those areas of town where where you know typically you have a higher population voting and I would suspect that that we would do that in reverse when it comes to this information campaign. So I feel I I feel somewhat comfortable that

123we can go a little higher than last year. I don't feel confident that we can blow the lid off. >> Thanks. The the other question is maybe somewhat technical. It's about sort of the timeline and if we're delaying a com a vote on the the CIP um to account for the right sizing vote uh which which I think makes a lot of sense. Does that delay I don't know the process of finalizing the bond language and placing it on the ballot? >> The bond needs to be 18 November. So whatever the right sizing decisions are that night after right sizing decisions are made we will go on to the bond and we'll have that discussion as to whether it needs to be amended or not depending on >> um votes earlier >> but the CIP

124wait okay thank you >> I don't see any other questions from the board member Just have a quick clarification. Uh Jim Ursa Major, I think it would be a shame to not do what we said we were going to do, but the $5 million you said the gay bear is not going to pay. What about the Department of Defense? Did you I think you said you asked. No, he asked if we had known ahead of time that there was PCBs sprayed on the inside and exterior of that building and put it in the initial cost estimate, then it would have been in the in in the approved grant. Um, we have sense we have a a consultant going through the other three buildings on post because they also would qualify for a future grant if

125this program continues to exist into the future. Um, and so we would use that information to better inform our estimates. Um, you know, a lot of schools on base were built around the same time. There's certainly a high likelihood that many of the same materials were used. It's not a risk to anyone in the building because it's in a solid state. If it was liquid form, naturally, that would be different. Um, but it it's really we're really just trying to find out how those other three are built. But it's it's too late now. We didn't honestly I've learned more about PCBs in the last six months than than I've known my entire life. Um and and it's just for a very short window. >> Yeah, it was common. >> And then in the late 70s

126it was outlawed. >> Wishfully thinking it wouldn't qualify for a brick or HMGP. >> No, because it's it's not structural. I mean, >> dang it. It's I mean we we closed it because it's already not structurally sound. So right it's too late to do something that's a mitigation >> before the emergency type of grant. >> So and I guess my final question is is there is there any any place other than the federal government that might give us $5 million? I mean, I'm I'm I mean, it's it's a little funny, but I'm serious. I I will ask. >> It's for a good cause. >> You know, it's always possible. >> Yeah. >> Um, you know, we the legislature could write it in. I think all of us have seen over the past half a dozen

127years that almost everything that was written in as a legislative specific grant for ASD hasn't actually made it through 30 June. >> Yeah. Um, >> okay. I'm just >> if if we thought there was a better dependable solution, >> um, we we would have put that on the slide as well. >> I get it. Thank you, >> member Holland. >> And is the building our property or federal government property? >> We are the building manager. The building was transferred to the municipality who owns it, but the land belongs to the federal government. So, >> we're basically leasing for free. I I >> the building was originally having read multiple legal opinions from the Jbear experts. The building was originally built with funds from the federal department of education equivalent. They actually changed the name to

128DOE quite a few years later. They have wiped their hands clean of it ever being military money that actually built the building because it came from a civilian agency. Um it it has gone in and out of ASD hands um once it went back to Jbear for a little while and back to us but it's because so it's the way George Valis explained it the godfather of all information in Anchorage was when it comes to environmental hazards whoever builds it owns it and we are the education local group. So, it it's it was designed built to be an education building and it's it's on ASD. >> And and do we know who actually sprayed it? >> Oh, no. I I'm sure it was the contract. I mean, whoever built it. >> Um I mean, PCBs

129used to be in all of the transformers because it doesn't shrink and expand >> um in hot and cold. It had a lot of good qualities other than killing people. But um but then finally when they realized how carcinogenic it was, >> they they banned PCBs, right? Because the side effects. when you talk about learning a lot about it when when I was in high school and I don't want to actually date that period but um some company in New York was taking PCBs because it had been declared that way and they were disposing of it by driving to North Carolina and spraying it in the ditches. Um and there used to be those yellow signs that said warning PCB sprayed on road sign and kind of the same thing. It's like what do you

130do and whose fault is it and who should clean it up? I just from being on military sites and knowing how much mitigation and cleanup they do from some of the god-awful things that they've used for various reasons. Um it's unfortunate that can't fall into a program like that. But yeah, thank you. >> Seeing no other questions from the board, we're at time. So I would entertain a motion to adjourn to executive session for the purpose of legal updates, negotiations, and contracts. >> Mr. Chair, I move that we adjourn to executive session for the purposes of legal updates and contracts. >> Second made by Bellamy, seconded by Hollowman. Seeing no opposition, we are adjourned into executive session effective 5:00 pm. Thank you everyone.