001All right, we're good to go. Okay, good afternoon. It is uh 12:14 by 1:00, 12:16 by another split the difference. Call it 12:15. Um on Thursday, April 24th from Kelly Lessons, chair of the Anchorage School Board Finance Committee. And why don't we go around clockwise to my left? Jacobs board member Al CFO right super executive assistant maybe and online we have president. Um okay for the finance committee today we do have three items on our agenda. Uh the first being fund balance projections. We have talked about find balance u most recently in the work session on Tuesday. Um so I don't know if you want to underscore any takeaways from that maybe before diving into the projections or incorporate Yeah. I mean I guess the underlying theme of that was there's a lot of misconceptions
002out there regarding how much money we may have. Um, so we did do kind of of a look of like here's how much money that's been reported by, you know, whoever is out there saying we have all this money. Um, and just kind of walk back the the amounts where they're at. So like 121 million we have in CAD at the end of last year's on our audit financial reports and how that's being spent, what we're spending 37 million or so this year, 50 million next year and the 30 or 27 million or so is restricted. Um so really just kind of walk back the the narrative that we that we have all this money if it can be spent to preserve positions next year which just is not correct. Um and to get down
003to to show you actual how much might be spent in the case of an emergency or something. Great. Um so with that America if I can [Music] share I think you have to allow me to. Oh, let me ask you to I'm sorry request Steve. All right. Was this three page document that you're about to pull up? Was that part of the is that this document in Yes. So it's the same one that you saw in session. Um I plan on presenting it to Senate Education Committee as well. So I want to get it in front of the board before it with public. So it's included in that presentation which is posting the basis from yesterday's meeting that never occurred. Right. Okay. Prescheduled to Monday at 3:30. Ah, okay. Okay. Um, I guess to start
004out, you know, usually like to see, we do fairly conservative projections when we're starting this out November, December, and they grow a little bit over time. Um, there's been some things that have come up along the way this year that are kind were unexpected. Uh, so we're anticipating ending about the same position we said we would be back in November, December, but we didn't make any real gains, so to speak. Um, so just going through the revenue side first. So pull that up a little bit here. Um, about same where we thought we'd be on our local revenue. This minus 37 million that represents the amount of fund balance we anticipated using. We budgeted 37.2 million. We're using almost that. Um, our interest earnings continue to be a little higher than we'd expected, although that's
005have you seen the stock market kind of go up and down. Haven't gotten April's in yet. So, it's a little bit um that's a moving target for what our interest earnings might be, but hopefully those maintain um start keep doing well in that. Why do you project student fees 25%. Um I'd have to go back and look at why. I think it's um sports programs being done, things like that. Well, yeah, just less participation and more folks on like pre-introducing, getting waiverss, I think, is probably the basis for that. I don't know if the participation's down so much. And I think um have to go back and check. I don't believe we're charging parking fees. It might have been including the actual budget as you speak. So, yeah. So, that's a fairly big variance and
006I think we kind of corrected that going into next year's budget as well as member Wilson is online. Um, guess it' be great to sort of hear a little bit of an explanation whenever that you get to that why the student fees is down. I'd have to go back and fully get a little more data on that, but certainly look into it. But I think by and large it probably is the parking fees rolled into there that we're not charging and the higher amount of folks getting waiverss on the on the sports fees. Um we're about 5 million down on our foundation funding than what we had originally projected. Um far as we do to just just decreased enrollment at this point. Um one thing we did find out I think it was probably last
007week that 19 of our intensive needs students got rejected based on all the documentation we sent. So our original projection was 1120 students and it came the final count came back 1101. Um while it doesn't seem like a big difference, it's about a million and a half in terms of actual dollars for the intensive needs students. Is there a process for that? Um there's a process where there's our special education department goes back and forth with the department to make sure all the if everything's met or not. So I don't think there's any real disagreement with it maybe. Okay. So you you said we don't think that it's I mean I guess sorry if I are we I guess my question are we throwing the challenge flag onto those 19 students because we think they're
008in the ballpark that those services are worth yeah I'll have to check our special ed department that's typically they do go back and forth with deed a lot in that process I I recall the comparison between Mattsu and Anchorage at one time where Matt Sue was getting special uh the extra funding for kids that in a residential treatment center and Anchorage was not. Um and so I just wonder if we compared ourselves to other districts how we're doing because um that student was getting all the advantages we weren't getting any. Yeah. And a lot of our students that are in those treatment centers probably are in that really I mean they kind of rotate in and out of there and they may not have been classified but if they meet like I think there like
009six different criteria to be in those needs then we can claim them. And sorry, just to circle back, we had budget 1120 and we're at 11. Our original projection had 1120. I think we're about I think 1118 maybe had been in the budget, but I'm not not remember. Our original count was 1120 that we submitted to deed and it came back at 11. What is the can I say another question on the do we know is is 19 out of that ratio of submissions that rejection rate abnormal? Is this a new area of focus for DE is wonder? No, I think it's um generally in the same process. 19's a little higher than what we've seen in years past, but there's always a handful 10 maybe. So, it's certainly not uncommon for them to come
010back and say, "No, the student didn't meet the data criteria for it." Thanks. Uh the other thing to flag is the the Medicaid revenue under federal sources. Um, I know they're having issues going back and forth with the state on, you know, those submissions to actually get the the amount we need to pay in and then get twice that amount back or something. There's a weird process, but we haven't had any little traction on getting those services submitted and reimbursed yet with the state. So, I think we're trying to get I don't know if this problem with their system, but in our financial system, we don't really have anything reflected. Um, I know they are acrewing all these uh services that can be re reimbursed, but I don't have a lot of visibility into the
011the final dollars. This may go up a little bit, but right now we're being pretty conservative on the projection. Is the state projecting any particular areas where they're going to provide less money because of what the federal was doing. You know, I mean, obviously Medicaid is just one example, but there are other issues out there that cut back on providing funding for states. Yeah. Not I don't think directly because most of our money that's we get from the feds is either in the title programs or impact aid. Those are kind of the two the two big pots that we have. And as far as I know, those haven't been said they're in jeopardy. Uh what we do have is the continuing um review of our federal grants that are our direct federal grants. So those
012wouldn't necessarily pass through the state, but those one things we have to watch is um to see if any of our federal grants are going to get non-renewed or cease and assist type letters. Um overall our revenue about 37 million down. That's about where we'd expect to be given that we said we're going to use 37 million in fund balance. Um, can I ask a followup question? You did the fund balances. There's lots of different fund balances out there. We got we got the issue of the insurance because we're self-pay. We got money. I don't know how we're doing with that. In the past, we've had to come back and put in quite a few millions in there to make that up. I know when it comes to to projects under grants, I mean not
013in grants but under bonds, that money is still dedicated for bond activity. So that's not available for anything else. So I'm not worried about that. But when I look at things like the medical insurance, that's a potential liability to us. How much we doing in reserves right now? And do we have any projections on how that's going to maybe impact us next year or this year as well? Yep. And I'll I'll get to that. So, I have that and then we have um a transportation fund balance which we'll need to discuss. And I don't have one for food service. They're still positive. They they're eating away some of their fund balances that they've approved through COVID with those higher reimbursement rates, but that's starting to come down. Um but that's a couple years out before
014I think we start having issues with that. But um really on the expense side is you know our salaries and benefits there you know fairly close to where we had them before between the two these vacancies here or the the variance about 3.1 million over in salaries 3.9 under really close with those that $41 million in attrition that's baked in there. Um so we don't have a lot of extra money sitting out there by from having by way of vacancies and turnover. Um for the medical piece, we do have a few million out there sitting out there as a projected cost to trigger the reserve policy on the health our uh health insurance fund, our self-insured. Um so we do plan on triggering that that retention policy to help shore up that fund. Um but
015and it should be a few million is what we're looking at. better than last year, but um still trying to write that ship. You know, PERS and TURS and other benefits generally track um the vacancy rates with other with our salaries. So, they're all just percentage based tied to a salary. The other benefits is a little bit higher than the Persian tours as a percentage and that includes um having lower than budgeted costs for workers comp and unemployment um as those have come we're not spending as much as we're acrewing essentially throughout the year. So we budgeted more. We're self-insured on those as well. Um so we have we're going to have a little bit of money left over in there. So have some savings there. So that's good. um few million dollars in leftover
016in services which includes you know our utilities, leases, travel and um unallocated. So the unallocated by and large this money is like uh this money sits in summer school account. So we have like a million dollars sitting down special or a a secondary summer school. So, it's in unallocated line now, anticipating it'll be transferred up into like the it'll end up being in like other added duty and extra help. So, when they add those added days and other things for summer school, we transfer that money out. But right now, it sits in this um line item for unallocated. Uh so, it'll that'll change as we go. But, um so, but the overall picture, we don't expect it change significantly. So, that leaves about, you know, 8.4 4 million in total as far as positive variance
017on the expense side. But we do have a transfer out here of about 7.1 million. Um which that's made up of about 3 million to transportation. And we'll get to those projections kind of what makes up that deficit. Uh 120,000 or so for food service for unpaid meal balances that can't pay with federal money. And then I think I have like 4 million or so built in there for of a transfer for like FEMA money received. So we received this money from FEMA or we booked the obligation, I should say. I don't say we're not actually receiving the money, but the auditors require us to book uh the obligation as revenue. So FEMA says, I'm going reimburse you 12 million for this project. We book it as they obligated it, not when they actually pay
018us. Is that something that's legally committed, obligated? Because right now you've got the federal government pulling back on FEMA everywhere, even with the tornadoes and everything else without the funding for hurricanes and else. So, is that something that they can say I've decided not to pay it? Uh, I don't know what they can do legally, but we have recorded I think it as of last today it was about 12 million or so that we'd actually recorded that we haven't received. what they will do at the very end after they've written us the last check which is probably a year or so out they'll come back and audit the entire thing and then there may be u decision changes on their part and of course we won't know really for public three years from now there's
019no executive orders don't honor what you've done yet because it was appropriated not that it couldn't be moved by the federal government but u it was appropriated to the state and we're trying to move it out there But during the final audit, after all is said and done, um there could still be changes. So just for perspective, we're talking about three years from now, there will be a final audit of 2018. We're hoping it's really slow and is very unpredictable as to like resubmit a bunch. Um the state then now has to do their part in processing and as Andy knows some of them take months and months and months and months. Then it goes to the federal government who is somewhat in disarray in some locations. now and we don't have a timeline on
020when that will be done. So, it's really hard to predict. Am I understanding the process right? These are funds that have all been expended but we would be paid back for. Yes. Okay. So, we get reimbured for them and say and they say since we spent this much or going to spend this much you need to book a revenue for this amount we're probably going to pay you in the future. And the auditors say we have to book it as revenue. you see it show up as an increase in fund balance because it's revenue although we don't have the cash over it. Um and if we don't if they come back and say no we're not giving any cash then we have to write that revenue off and we would decrease our fund balance. Um
021so right now like I said that's about $12 million sitting out there that hasn't been paid. We have not received what we reported as revenue. That's a quick follow please. So if we're getting 12 million and we think there's a chance some might get bought back in the audit and that would need to come from somewhere then is I mean is there a standard process where you hold the last 2% or something? Yeah. And that might be a conversation we need to have is as we have this money that's accured in the general fund like I said have $4 million right now anticipated being transferred out because we repaid everything that was spent in the general fund. So this is money that the auditors require us to report it in the general fund. we may
022want to transfer that out, just hold it as capital projects because that's what we've been spending the money on by and large is trying to get those capital improvements. Um, but just hold it and not spend it until we actually get the cash. So, it's kind of like accounts receivable. We just can't factor it into your system until you receive it. Well, we factored it into our system, but we have that chance that we don't get the cash to cover it eventually um because of the the federal, we'll say. So yeah, so we're just trying to um mitigate some of the risk on that and there is some um but overall again so here's kind of where we go back to the 121 million up here that that was our beginning balance. So beginning mounts
02324 beginning males 25 plan on spending about you know 36 37 million of that um through just the course of business like we plan to do and then end with the total is going to be 84 million which is going to be again probably misrepresented but in these categories of you know $50 million for next year's expenditures 27 for the bond rating which leaving about 7.5 million of truly unassigned money which can be used in case of emergencies you earthquakes, volcano, unexplained or un unprotected drop in moment. Again, I mean there's a lot of things that can come out of that. And help me understand um when we how many uh what can you do over what can you do with seven half million dollars over two weeks? Yeah. How what how much of the
024district's operating expenses does that cover? I guess for how long does that cover? What's the duration that that covers of the district operating expenses? If we spend, you know, we have $630 a year at 365 days. That's 1.7 million a day uh for the full year. So So like six days or so, a week maybe. Yeah, about a week's worth of operating expenses and that that how does a week and change depends on which divorce some how does that align with best practices? Um what should we be able to have on hand? I mean typically I think they recommend about two months of expenditures to have on hand but that's in all the categories. So okay, they're not looking at just your un assign when the GFOA or the Governmental Finance Office Association, their recommendation
025of two months of expenditures would be all your kind of um unrestricted fund balance, not just the stuff that's within our state's 10% calculation. So there's different calculations that GFOA uses and Gazby uses versus what the state requires of us. uh when that's you know they changed those rules probably a decade ago through the gazing statement um however the state has never updated their uh statutory guidance on how to classify our fund balance so we have these two different metrics we're have to report on does the 10% I need you have a question does the 10% cap which we will be reverting to at the end of FY25 does that align with guest B54. It doesn't. And there's a there was a page that we included in that presentation at the work session on Tuesday
026that it has like a crosswalk between right the Gatsby standards and the state of Alaska standards. Um so there's some information on there but then no they don't align. And the bond rating is a good example of that where under Gazby the city says you have to reserve this. So it's restricted to us because the higher level of government says to hold this money and that's kind of the standard that they that Gazsby uses is the level of government that has approved it. So if the school board specifically ex uh approves an amount to be spent like that 400,000 for the boiler and stuff we approved at the last board meeting um that becomes committed funds which under the Gazby recommend uh standard says since the school board did it it's all technically unreserved or
027unrestricted is how they phrase it. Um, but if it's the a city or the state that mandates it, then we have to do it as restricted funds. And that's where like the the student aotments are on there because it's in statute. You have to save those and the bond rating money's in there because that's in statute because you or the city tells us we have to do it. So it gets pretty complicated. Yeah. ask about fund balance in particular. I we talked about it being a source of confusion and I don't blame folks in Juno from who aren't used to dealing with the complexity of school funding and have to navigate understanding multiple issues for um misunderstanding information on this. So, it's fine and we're happy to educate them on the facts and get their
028narrative corrected. But I'm curious from a process standpoint and from a standard standpoint, does Gazsby in a world where we aren't and no district is choosing to save a bunch of money um year-over-year way more than they would need um instead of fulfilling their core mission? But if that were the case, does Gatsby standards have any safeguards against that or is that not really within the realm of what they oversee? Is that more of a state function? like is is dee the one who's supposed to be saying why do you have double your budget and fund balance? Um Gasby wouldn't necessarily dictate that. They're more of an entity that's kind of like a self-licking ice cream cone where they just exist to create different financial uh reporting models. So there's this kind of standardized reporting
029model that they produce for governments and it's largely so to make it clarify and unity when you're talking about mostly like investors and bond sales. A lot of that's what this is geared to. Um so they just kind of do the reporting model. Uh there's other places like GFOA what say here's best practice. Um but then the actual regulations that we what we can and can't do would come to the state. Um but really the bottom line, you know, we $49.8 million we're expecting to spend next year. That's kind of we're about 50 just over 50 million above the the the 5%. So that's about where we expected to be. You know, generally at this time our fund balance has crept up a little bit over time, but we just haven't seen that. had kind
030of like I said the water computers and boilers go out and then transportation which is the next topic. Any questions on general before we move move on? Um I'm just you have probably explained this but I feel like um I just would like to hear one more time. Um you you said that the $84 million is likely to be misrepresented. Can you just right because um the key take on why it's likely to be misrepresented is um and going back to the presentation we did on Tuesday, there's that one compliance report that says here's for the state show us here's what your fund balance percentage is. It has all the designated fund balance like we have the incumbrances self- insurance these things that are kind of set aside outside the 10% and then the things
031that are within that 10% it's just going to say 84 million. It's not going to break it into here's what we have for here's what we have for these next year's expenditures already dedicated. All it'll say is $84 million in unreserved fund balance. Right? So that's kind of where the confusion of the 121 million came because we still had that 37 million in there and the the 26 then and that number goes up. The bond rating is 10% of our tax request for the subsequent year. So it generally goes up over time. But the the takeaway is we truly have seven and a half million dollars of undesated fund balance for next year which we could use to pay for a week and change of operating expenses. Yeah. Should bad things happen or an emergency,
032right? I mean, that's the other things like when we had the earthquake, the board immediately was able to say, "We have $30 million available. We'll set aside. Let's go start fixing the stuff now." And we don't we wouldn't. No. So they're trying to get to a solution at some point. So this this report is not useful to the legislature if their goal is to have a an intelligent conversation on fund balance. And so I'm trying to figure out why it's being generated annually. Is it a regulation requirement? Is it something the legislators just ask for? And how do we change our lobbying strategy to to get them a report that they can actually use to have an intelligent conversation? Yeah, I mean that's a good question. And I think it is um a compliance document
033that we get we have and that's kind of what was included in our our financial statement. So that's that's a standard. I don't know whether it's statute or within their as but um it's it's how other districts have to do it also. Can we staple something else to the report? Do they have to read the truth as well? Well, they have our whole financial report which the next page breaks out everything. Um and it's broken out in different ways throughout the report. So it's not it's just a matter I think of reading and understanding it versus having the not having the information in public. So we staple you to the report, right? And that's I mean that's kind of what we're going over and what the seven edet has asked the big five to do
034at their hearing is kind of explain what fund balances you have and what they're um so that's kind of that's the method we have for getting that out whether unless we just want to push out other kind of supplemental this is I feel like a very full explanation and by this uh I'm referring to one of the slides in the work session slide deck which should simply state the misconception the reality and has four very simple lines five very simple lines detailing how $121 million breaks down to reserved uh unreserved balance yeah and that's by and large what the the senad's going to hear from us great um so that's our general fund you know still doing okay. Not as good as I wanted, but um not worse than we said we were going to
035be. So that that's all it uh for transportation. So this one, as you recall, we ended FY24 with about a I think it's like one point a little under one half million dollar deficit shown or about 1.5 million deficit. Um, most of that being that we had that we bought buses but hadn't gotten the master lease from the city yet. Um, so we that crossed fiscal year. So we got the buses in I think May or something and then we didn't actually we didn't actually finish the finalized lease part of it until you know last week. Um, so that took a long time as they were changing vendors through the city and we had to wait and see who got the they went up our RFP and stuff. So we kind it was kind of
036a waiting game on that, but we did get that revenue back. Um, so that's why you see that 1.2 million here. U 323,000 loss in transportation is due to just lower enrollment. Um, so as our general fund took a hit, so does our transportation is that's all just tied to the amount per student. Um so overall it's a um on salaries again about 110,000 under budget. Um some of them are over the bus drivers a little under generally it's a little more than that and then our uh our total for benefits is about 232,000 underwater. Um, some of this was due to holding having the drivers work as uh or over the summer to help retain them versus having them work for the tourist industry or something um and then risk them not coming back.
037So, we did have some extra work on the drivers and then the biggest kind of variance that we have on the other ones is going to be uh the contract of transportation. Um what are the obligations here of how much the state gives us and how is that coming in for purposes for transportation? So the state gives us currently $481 is in statute per 80 or per 80 non-correspondence ADM. So it's not on the adjusted model where it's the 71,000. It's the actual ADM which is like you know 38 39,000 whatever that that number was. Um then I believe there's an extra $50 in kind of supplemental onetime funding from the state on there, but um again that's going away for the following year. Hopefully then we get some money transportation back. Um adjustment back
038to it all they decide to do like the BSA. Yeah, it's the same rate that they've been paying us since 2015 16, but our costs have gone up, you know, double the rate of inflation. We got about $2 million from that one time $50 per student boost roughly for FY25 and then the contracted transportation I don't know if Jim Jim back here so on the contracted transportation it it definitely went up um part of it was we'll start times we used to do the spend prek classes the three and four year olds as a fourth busing but when we did elementary first and then high and then middle. That that wasn't possible. So that increased the number of buses for them. Um as well as for King Tech because you couldn't use buses that weren't
039being used to augment that. So that did increase contracted trans. Yeah. Yeah, and that's really what's kind of driving a lot of the overage is just those um extra buses is that fourth tier of prek or we the lack of having a fourth tier because they were at the end of the end of the schedule last year. So then you could run them and be an extra hour now we have to have the full buses. Now we usually with the contract of these things we usually replace these buses like every 10 years we got a new contract and you get to extend what what where are we at on that cycle? We are initiating negotiations now with Reliant and part of those discussions will I'm sure that is going to come up. Is this the
040extension of a fiveU or is this a new we're on the ninth or 10th year? N it ends in June 26. So we're then you have to go out for bid then. Right. We can do an extension. We can do a fiveyear extension. Okay. You can go beyond the 10 year with another fiveyear potential and things like buses will probably be brought up during those discussions but that would be in negotiations. Okay. I always thought there was a maximum 10 year without bid. No, this had a 10 year with with a fiveyear is it one or two five years? I can't confirm that. I thought there was a one year, five year and then they would that's when they would look at putting in new buses because if you're going to do it for five
041years, you know, you're going to go 10, but it looks like we going to go with the buses to last 15 years. That would be the hope. Yeah, I have a problem with that. I just didn't know what the policy was. The average for us is is closer to 15. Again though, this is going to be a negotiations discussion with Reliant and this might not be the right forum to openly discuss what I don't want to discuss negotiations in open session. I was just worried about the timing issue only. We know that that will be discussed. Okay. Um the other thing to flag too is just a a matter of the presentation style is this equipment leasing. This is the buses that we get from the master lease program by and large. Um, but it
042it shows a positive variance here. However, it's coming out as a transfer because that's kind of technically what happen is transfer out to our debt service fund to pay off the capital lease. Um, but we had budgeted in like a regular expense account. Um, so overall it's looking like about 2.7 million or so um underwater on that. Again, I have that amount baked into our general fund fund balance projections. Um so so we would have it we have the money to cover that currently. Um as far as a matter of practice or you know timing on it um probably we'll need to come back either at the last meeting in June or we can even probably wait until August to get the board's approval to make that transfer because that that would need to happen
043as well. just buses and that also applies the snow removal too, but will they end the point of looking at options with the hybrid or other issues and it's going to save us money on going with that type of system? I don't really know that. I know those options. It's a good question. We had a working committee uh the bulk of last summer um going through and we had Chach Electric, other folks, people from lower 48 helping us uh try to figure out as to whether we would apply for a grant which has now been bold and is no longer in existence. Um for an electric bus fleet, um it didn't allow hybrid buses um and as you're probably aware, electric pure doesn't operate so well. Um, and they using Minnesota and and Boston area
044and everything else. A lot of them had the hybrid so they can run a generator on board to run the heater the whole time. Yeah. Um, up in toque for the ones who did the one electric bus. It didn't have the the AGU. So what what ended up happening was they had to give it a the very shortest bus route they had because the heater alone burned down the battery as it was going on the route. And then of course it took half a day to that's why the hype would make more sense. A lot of people have used them but um there's currently no grants I'm aware of well federal grants in general for that whole side of the house have are somewhat questionable right now. bottom. So if we if about two million
045help short of a little bit of our transportation deficit in FY25, but we're still projecting a $2.7 million deficit. And what I just saw yesterday in a bill was a possibility of a 10% increase to transportation, probably amounting to about $50 a person. 48 that surely would be helpful but not adequate to covering FY26 transportation. We probably okay I mean if we got that money 26 should be okay. I mean, we do have a pretty steep increase in wages coming forward just because of the implementation of the voter approved um minimum wage loss where it's we pay our bus drivers two times minimum wage. Uh in July that'll trigger up to $13 an hour for minimum wage and so bus drivers get 26 over the course of the next couple years. Bus drivers can go
046from 26 to $30 an hour once that gets the $15 minimum wage. Yeah. Thanks. Um, do we know where they got the or 10% was what was floated in Senate finance yesterday for increase to transportation? I mean, it's the latest number, but if if there's talk in Juno about increasing transportation costs or transportation funding in the formula, I wonder if there's some u some wisdom to calculating the average bus driver or maybe just telling them. I mean linking the fact that this this law passed via referendum and using that as a vehicle to educate and and advocate for adequate publicness because they know the there's no um mysticism regarding what bus drivers have to be paid here and there should be a clear link to data between if there's a transportation funding increase what that
047should be and then what should pass. So I don't know. Yeah. And periodically they'll come back or uh ACSA or someone will ask, you know, what's um what do you guys need for transportation funding? And it's kind of all over the map when districts submit that because they have some districts getting $2,000 a kid, some of them are getting zero or very $100 some. So it really varies how much districts are getting. So if you try to do a per pupil adjustment, we can come up with that. It's really hard to make it standard for the state. There's a figure in the joint resolution which from back in December about what the ask of a peral transportation increase. Did they take into account whether the minimum wage it might have because it was a December
048document after the November election. Yeah. Okay. Um as long as they know and I know we're not going to get a disproportionate increase. They're not going to just move anchorage number higher. So that's right. For the record, that number in the bill is $529. So it's about $50. All right, that's what we have on the projections. Um, again, you know, not looking bad, but I was hoping it' be a little bit better. Gives a little bit of cushion, but it's still not there. And you're sure we don't have bags full of money stashed away somewhere? If I've hidden it, if it's something like that, put something away at my house and I can't find it again. But no one does. Yeah. No hidden sources of money. $80 million sitting out there that I'm unaware. Um,
049okay. Well, let's put it to the next. We have about 20 more minutes for the next two topics. Um, internal audit update and a legislative update. But, um, for the internal audit, that'll be great. they are finishing up or they finished up the correspondence and gave us our 30-day letter which gives management 30 days to write our comments and respond to it. Um so we're in the process doing that but they need to get started on the next audit. Anticipate the correspondents would come back at the following meeting but uh for the next internal audit um I think our two choices left on the list were either pecards or building access controls. Um, we're kind of leaning towards the building access controls as we head into summer. Uh, really just kind of stud make sure
050that the folks that have access who are buildings should have access and that when people uh change locations or uh get termed their their access is turned off and their faults are turned in, things like that. So, we did I'm looking at the list of the Anchorage School District audit reports on the MU's website and we have one a card we learned a lot from on you know in from May of 2024 the date. Um I don't know when if ever building oh building access 2020 I can see that there too. Um, so from your perspect, from the administration's perspective, is one more valuable than the other? If so, what would that be? Yeah, I think we like to see the building access controls, frankly, just to um we're going to have a lot of
051staff definitely shuffling around in the next uh couple weeks probably, unfortunately. Um, so it might be good to have that in there to just just to make sure we're being in compliance or point or find any flaws we can correct and the faster we can do that the less liability we might have. The only other question I would like to ask just looking at the list of um audits that we have done is that you know we have talked we just had the the health insurance presentation. It looks like back in 20 January 2017 there was a health insurance internal service fund audit. You know that maybe it has been it's been a while since we've done that. you know, surely I'd like to do move forward with the most pressing and most helpful audit.
052So, I just wanted to say is that one that should be revisited when time probably that'd be a good one to get on the list for next year because I think we'll come back um and start developing what the internal law is going to look like for the next fiscal year here shortly as well. Um I can probably have that as discussion too when they come when the auditors are here. Okay. Is that is if I recalling correctly that we developed internal audit plan the next plan this fall. Yeah. I mean I'm just um I'm just I'm looking at what I was looking at what has been done. I think it'd be good to reconcile too. Yeah. Yeah. No, I think I and I for my my two sense I really appreciate the fact that
053we have an audit plan and we we commit to those so that there's no confusion and six months we are busy with budget or right sizing and we forget or just it's not a top of mind anymore so we can go back to that document. So I hope we continue that practice. Um well you Pat as the other member of the finance committee here today if you're comfortable with the building access control audit. I don't have a problem with that. And the P party issue of putting that back makes sense because we've got a purchasing review that's supposed to be with committee if we have a committee meeting uh you know to that should include people outside the school district. You know my recommendation we could get the head of purchasing from the from the
054municipality of Anchorage because that he has insight into the public aspect. the same thing with the state and we could get somebody outside from from private and and have a review of that process and then get one of the consultants that were involved in the audit because he the council gracious uh pe review makes sense. We just have to have a commitment that we're going to get that thing done and we come out with a time frame. Like I said, we need to justify to the public. When we get a report saying here's a half a million dollars and then his money and his money and we don't follow up, then we're going to be justified in being attacked by an ad possibly um and that comes through the governance committee that that's governance committee.
055We'll head to that next meeting. But I'm just saying the timing of the people makes sense to preach off the people. Yeah, it'd be good to put you kind of our best practice would be to get those any changes in our processes in place and let it go for a while and then audit that. The biggest one that's always been out there in the past has been this the the collections for the sports event and for this and for that and I don't know when the last time you looked at anything like that. No, when we stopped it right after that, we had somebody prosecute the stealing. So, the timing wasn't real good. There there was a decentralized student activities audit 2017. Okay. And then in like 2018, I think is when we got rid
056of those decentralized accounts. So, we did get rid of these all have their own checking accounts and do their own banking. So, we have to go out and audit that piece of it. But now it's um all incorporated in our business plus bus and our financial system. So it routes through just like a general fund would. We've had issues out there with the uh financials with some of the um uh some of the schools that have been you know with the APC overview and some of their impact is one but it's not the only one family school partnership. Have we ever done a comprehensive audit of that process? how they're managing the money because we've had it go through and other schools to go through the school. We've had all kind of problems out there
057both spending the money on different things. It seems like it's it's time for the children schools to have some sort of financial be out there in that group to review because takes a little bit of takes time. It takes oversight, but it it puts at least a third party look at that. I really think that's what we do if we haven't done it. Yeah. And you know, we don't have authority to really go in and audit any sort of like APC accounts. We have we have they have to follow our policy. Uh not the like 501c3 that's in the APC that the APC set up. But what the charter schools do that all runs through our accounts too. So they're all beholden to the exact same standard any other uh school is or any other
058department. So all that money that comes in through charter schools and goes out through charter schools is all accounted for and just like violated our policy. They didn't go out and get a competitive bid to get the best value for the rental. They had to go through the PTA and then they doubled the amount to go to poula. So I don't think that was that was in their authority to do that. And we have we have the ability to enforce everything with policy sep. So I don't see how the they how they spend the money on religious sensitive things or anything else would not be something subject to review by us. Well, that that piece of it like where we talk about private schools that'll be in the correspondence audit because that's all how that
059money that's the specific schools that those type of expenditures um but how they spend it on what they were going to do with one other school came the principal to maintain the yard how one group wanted to get paid the APC to do the development of the IP stuff and they were going to get paid themselves. There's a lot of issues out there that I just want to make sure that we're transparent with it and we're making sure I want to support the tortoise groups, but I don't want to support abuse. Sure. Okay. Well, for the purposes of today, it seems like we've just been appraised that the correspondence allotment has been completed. It will be it's in the administration's hands right now. We'll be talking about it again in a month in May at
060the May finance meeting. That's our goal. And in the meantime, we need to decide key cards for building access controls. And the recommendation from the administration, which I'm happy to support, is building access controls. Yeah, that all for that. Great. Um, the third item on the agenda with about 12 minutes remaining, is a legislative update. Things are hot and heavy in Juno. Uh, is there anything you would care to share with us? Getting lots of phone calls. You're getting lots of phone calls. Um yeah uh really the the latest update is the governor produced his bill for education which had uh some policy reforms on there and some money um equivalent probably to the 700 BSA statewide. It wouldn't necessarily be that for Anchorage is a lot some of that money gets directed towards correspondence
061programs. So districts like Galina that are really heavy on uh on correspondence students would get more per student than other districts. So it's not wasn't necessarily evenly distributed but um about 700 equivalent. Uh, I believe the House has or put together HP57 which includes a $700 BSA increase and then maybe some policy on the wireless communications. Yeah. And just from sort of actually read that it's difficult if not impossible for any of us to define what will happen but it seems that the truth of the matter is that a BSA of X or Y or Z amount will generate different revenues for the Anchorage School District. So we've understood that a $1,000 BSA would have generated on the realm of 71 just north of 71 million for ASD a $560 PSA I think is just
062shy of 40 million. So there's a delta of $31 million essentially between the governor's bill and what the board adopted for an amendment, you know, should a thousand pass. Um so which would require collective triage from that's the word that comes to mind uh that we would decide additional revenue was great but we would have to cut from what we could or hope to bring back and I think that to me is a really important message. So yes, a $700 a true $700 VSA, it seems, would would sort of carry on the the 6801 time funds that we got last year, we could we'd have a smaller gap between $1,000 VSA and the 560, you know, at 700. Yeah. We'd still be cutting. Could you talk a little bit about or I'm happy to read
063um should should we receive no statutory change? What is our long-term outlook? we have a structural deficit this year. Um should they fail to come to agreement? So whether they come to an agreement and I a thousand or zero anywhere in between uh one we're going to have to make up we have $50 million put into our budget for use of fund balance. So and as we're drawing that down and we're getting tighter on our margins with tition and everything, we're not going to have that $50 million the following year. First, you have to immediately cut 50 million out of your budget plus inflation on whatever the remaining costs are. So, if that's $20 million, you're looking at $70 million deficit. But it all kind of depends on and that's assuming you the board choose
064continue to use all that 50 million fund balance. Um, if you get a $1,000 BSA increase and you add back a lot of the stuff we cut, then we may be in the position we're having to go back and cut it again and have this conversation with the state yet again. Um, if we only get a $500 BSA and we can only add back a, you know, a handful of the things that were cut, then we still cut all this stuff. Then we still have this $70 million to cut. Um, but we're just have this lower starting point where we've already cut off so much that finding another $70 million is going to be really, really difficult. Um, so I don't see a good outlook for 27 no matter how we slice it at this
065point. I think it may be worth just airing a hope or an intent at this point in time, but I think the district had a pretty successful fall 2024 session uh giving prospective legislators and those up for reelection kind of funding, you know, ASD funding 101. Um, it seems like we'll have returning legislators with whatever our financial situation is going to look like and maybe we can plan another fall session. Yeah, for sure. I think we um and we can talk about what that would look like. But it seems like however this shakes out in May hopefully and not June um the dye will be cast, right? We will begin FY26 with whatever we begin with, but we will already be looking ahead to passing a proforma for FY27 to building the budget, right? And
066I feel like that work needs to be on their radar very early. So whenever they pass something that will not meet our needs, um they need to know that whatever they pass is not going to be sufficient. Right. Right. And I think we need to do probably a little better job on explaining exactly what the money they give us buy. So if they think we're really heavy on administration and you know maybe we need to show like a picture of this building with where the FTE are and kind of what what they do like okay I got four people in my budget office and how's that compare to other governments the state has like 17 right in their budget office. It may be helpful to even distinguish that you know there are people here who
067are funded by the general fund and there are also people here who are funded with grant funding. Yeah. And so yeah, definitely the funding source and then even a lot of the folks that are even based out of this building on that in a lot of those are just itinerate staff and they're out at schools most of the time. Yeah. So I think we need to do a little bit better job kind of visualizing how that that the limited staff that we have is laid out and what they do. It's kind of a precursor to these conversations about well why don't you guys just cut admin? Yeah. because because I won't be in administration next, right? Here's here's what school, you know, here's how many kids we have in every class and like our office
068staff now it's all we have those metrics but putting them in a little bit more of a easier to understand document maybe and I will just say I'll second member's idea that we gather together in the fall potentially waiting till November and December. Um I I don't know as much as close as we can do to a post-mortem and utilizing the fact that we've we've educated um this 34th legislature on the 101 level at our last lunchon which I think went really well. Um and building on that um post legislative session I think would be wise. Um you know summer would be ideal but everyone's going to want their free time I totally respect. So just make yeah August September I think makes a ton of sense. Yeah. Yeah. So, we'll be doing some leg
069work over the summer trying to get some of the documentation ready. They'll hopefully be able to have those conversations so folks better understand what we've been and and maybe it needs to be a big session, a slower. I mean, I don't know. Yeah, a deeper dive that allows them to hear their questions and get thoughtful answers. Maybe less maybe less food. Maybe we should be handing out more books. I don't know. It's We got all the food money for next year, right? But we have shelf stable lunches. Um, okay. Well, we just about time. The one thing I wanted to circle is that it sounds like you're going to be speaking then to the Senate Education Committee on Monday about fund balances. Um, that's tenatively tenatively subject to whatever wind blows. Yeah, that's good. 3:30.
070Okay, great. Um, okay. Well, with that, I thank you for all of your thoughtful remarks that helped and see you next month.