NPSD School Board Finance Committee Meeting 1-6-26

001Okay. >> I blame my I blame my husband. Fantastic. >> Thank you so much. >> How was your holiday? How was your trip? >> Good. Glad to be back. I haven't been alone to 15 days on Thursday. Where's the work? Kids are at school. >> It'll be It'll be co time. How are you? [clears throat] >> Good. Um, >> happy to see you. >> All right. The danger of the of the gavvel. All right. Uh so first of all, welcome everyone. Happy new year. Uh it's been a great one so far. >> I have to call the meeting to order. Okay. So let me I'm going to do over. Okay. This is my first meeting. So bear with me. I have to call the meeting to order first. So tonight's meeting is our regularly scheduled

002committee meeting. In order to meet the requirements of the Pennsylvania sunshine law, it is necessary to record the names of all the citizens who speak to the committee during the meeting to ensure compliance with this requirement. Why are we reading that now? >> You don't need to read it now, but go ahead. You can finish [laughter] it. You can finish it. As long as it's read at the meeting, you're >> all right. It is essential that those planning to address the committee state their name and municipality and members of the audience are asked to limit their questions and comments to three minutes. So I'm going to read that again much later. Oh, >> you're okay. >> Oh, I'm okay. All right. Excellent. So now we have to stand for the pledge of >> allegiance to

003the flag of the United States of America and to the republic for it stands one nation indivisible with liberty and justice for all. >> Okay. Can I now say happy new year? >> You can. >> Okay. Just check in. All right. Happy new year everyone. And I had this incredible speech uh prepared, but alas going to keep it brief now because Dr. Bowers like just messed up my mojo. [laughter] All right, I'll keep going. I'll keep going. Um so first of all, we have to approve the minutes of the November 10th finance committee meeting. >> So moved. >> Second. >> So that is Mr. Rash and Mr. McBain and then I will turn it over to Dr. Bower. >> Oh gosh. >> All in favor? >> I. >> Okay, now I turn it over. >>

004Great. Thank you, Mrs. Rednick. Uh, good evening everyone. Happy 2026. I'd like to offer a warm welcome to Dr. Tio and Mr. Bell. This is your first board meeting. You are luckily seated next to some veterans, Mr. Kaiser and Miss Coin uh who have sat up here for [snorts] one whole meeting. Um but really pleased to be with you this evening. I do want to remind the board and those in the audience and those watching online that this is a committee meeting and the dynamics are a little weird for us because it's the full board. So it's a committee of the whole. But the work of a committee is simply to make recommendations to the board president and the superintendent for items to be added to an action agenda. Okay. So when you vote on

005agenda items in a committee format, what you're voting on is we think this should go to an action meeting so we can actually vote on it. If that makes sense. So and you're making recommendations to the the board president and the superintendent. They set the agenda. Um just because there's some things tonight I want to be clear that when you're voting, you're not actually voting yes or no in the item. You're voting yes or no. Do we want to put this on the agenda to have at the action meeting? Okay. So with that, I'll turn it over to Miss Hower Hower, our CFO. Miss Hower. Uh, thank you. And also, Rebel, if you want to join us at the table, you can come on up. We I I had gotten you're No, you're totally fine.

006I had gotten an email from Harshy and she said she was at mock trial and I thought you were with her, so I had told I had told them you wouldn't be here tonight. My apologies. Um, so I the first item that we have this this evening is a presentation from Zelanchoski Axelrod. I got it out right without stumbling too bad. ZA, we'll just call them ZA. Um, our annual auditors. They they completed our annual audit. Um and every year they come and speak to the board about um the findings or the lack thereof. Yay. Um and they'll go through their presentation. Okay. You guys want to I'll let you introduce yourselves. Sorry, I should have done that. Okay. Just want to make sure it's on. Uh good evening. Thanks for having us this evening.

007Uh my name is Timr. a partner with ZA or Zelinkovski Axro. It is a mouthful. Um, thanks for having us. Um, and there are no findings, Tara. So that's uh that's happy to say that report that um so we are here to present the 2020 2025 audit results to you guys. Um on the first slide which we are on, we are expressing an unmodified opinion on the district's financial statements. Uh that's the highest level that we can issue. uh that essentially is saying that the financial statements are fairly presented in all material respects and in accordance with accounting principles generally accepted in the United States of America as part of your audit. Since you guys expend more than $750,000 of federal funds, you're required to have a single audit which we did do and we

008were expressing unmodified opinion on compliance for the major programs. Um the two major programs that we tested this year were the child nutrition cluster and the special education cluster. Uh we did not identify any findings there. Um we as part of our audit every year we're required to assess the internal controls of the district which we we did this year. Um had we found any deficiencies we would have reported it to you guys previously which we had not find we did not find any u deficiencies in the district's control structure. Um so therefore we're not issuing um a management letter. Um on this slide um just to mention two new accounting standards that were adopted by the district in the 2025 financial statements which is also disclosed in footnote 19 of the dis of the

009financial statements. Uh Gazsby 101 and Gazby 102 compensated absences and certain risk disclosures. Um along with me Matt is going to touch on some of the financial results of the district during the year. um as well as I believe some other pending Gazsby statements that um are are disclosed in note 20. >> Thank you Tim. Tim gets to read you the good news and then I get to read all the numbers. So he's the good guy. So are we on the right side? Yeah. So for here we have the financial results for the governmental activities. So the governmental activities are on a full acral basis which means they include the fixed assets, the debt and the pension and oped. So the total net position deficit for the year was 94.2 million. This is a 19.6

010million deficit decrease from last year. So the 260 million unrestricted net deficit is primarily related to the district's pension and oped plans. The restricted net position of 24.8 8 is restricted for health claims and student activities and the business type activities uh the total deficit is 1.8 which is a deficit decrease of 0.9 from last year. So some [clears throat] of the changes in net position for the governmental activities um as we said there was a 19.6 6 million decrease 586,000. Uh there was a net decrease in bonds payable. The net pension liability decreased approximately 25.1 million. Uh related to pension, the deferred outflows decreased 28.1 million. The deferred inflows decreased 1.9 million. Then for the net OPED liability that increased 18 million for the peasers and the district plan combined. Then the outflows decrease

0111.4 million and inflows decrease two million. And here we can just see the revenues and expenditures for the governmental activities uh in a graph form over the last two years. So you'll see the revenues were up. This was mostly uh property taxes and grants and contributions that went up this year. So here we have the fund level results. Um these are on the modified acrruel basis. They don't include the fixed assets, the debt or the pension and OPED. So they paint a much clearer picture of the standing of the district. So the fund balance um for general fund was 90.2 million which is an increase of 15.1 million. The non-spendable which represents prepaids and inventory is4 million. Committed to capital projects is 49.1 million. Um assigned for self insurance was 2.7 and the unassigned was

01238 million. The Total revenue was 33.7 million which was 11.7 million over budget. The total expenditures of 313 million were 2 million under budget. And there was an excess of revenues and other financing sources over expenditures and financing uses of 15.1 million. [snorts] Um and here we have the general fund um the revenues and expenses over the last two years. Again, it was mostly tax revenue and grants that went up. um local revenues and state sources. So, moving on to the business type activities, the first one is the school nutrition fund which had a total net position of 2.9 million. Um 593,000 of this net position was the net investment in capital assets. Um there was an increase in the net position of 0.95 million from last year and the pension and OPED liabilities decreased

013by 423,000. The next business type fund is the extended care fund which had a total net position deficit of 4 million. Um there's a change in the net position deficit was a decrease of 30,000 from 2024 and the pension and OPED liabilities decrease 294,000. And the last one is the community education fund. Um this had a total net deficit of.7 million. uh which was a decrease in the deficit of 7,000. Operating income was 243,000 and operating expenses were 240,000. Investment income uh for the community ad fund was around 4,000. So in the beginning, Tim read off the gazsbies that were adopted. There are some pending gazsbies coming down the pipeline. Um and we just wanted to let you know that, you know, they will be coming and we're always happy to help the district implement

014those new gazsbies when the time comes. So, with that, um, that's all we really have. So, we want to thank Tara and Mary and their staff. Um, it was a very smooth audit. As Tim said, we had no findings. We had no issues. Um, and with that, we can open it up to any questions if anybody has any. >> Um, I I do have some questions. Thank you for the the report as well as the um summarized presentation here. Mhm. >> Um I I have some questions and I'm not sure if if Tara you answer or the auditors answer. >> I'll I'll start and then if I can't then I'll I'll throw it to them. How about that? >> Thank you. >> Yeah, sure. >> Um and again, first time looking at the the auditing

015report. I have a lot of questions possibly because it's because I'm new to the board. >> It may be. Um my one of my questions was how is the auditor chosen? Um, so every we have a board policy and we go out um every five years for an RFP. We did that earlier in 25. Um, and so we select through an RFP process and ZA won the last RFP process. >> Uh, real quick, if I can interrupt, just to be clear on the intent here, are we uh planning to accept this audit report? >> Yes. >> So we have to have a motion in a second. >> Yeah. >> And then conversation. >> Oh, okay. My apologies for the order. Yeah, that's my fault. So Mrs. Renick, we need a motion and a second. >>

016Good. Can I have a motion to >> accept the audit report? >> Second. >> Okay, Mr. Kaiser and Mrs. Ramage. Now we can open up to questions. >> Thank you. Sorry. [laughter] >> No, no. Um, and I a lot of my questions are like to specific pages in the in the report in the longer report. >> Um, and some of it is for my understanding. Um, some of it is something that I thought might be helpful for the public to understand as well. Um, I know I know that it's not necessarily a problem for our total net position to be negative. >> Um, I made note before you you know you you made note that um pension um post-employment benefits which I believe is the acronym that's being used >> other post-employment benefits. OPED >>

017other post-employment benefits. there's pension expense and then there's other post-employment benefits, >> right? And I I guess if there could be any explanation why that's not necessarily a bad thing. It's good to see that it's decreasing, but it's it's also something to be expected. Correct. >> Right. So, I'll start and you can jump in if you So, essentially, fund accounting works a little bit different than traditional um for-profit accounting. So, in fund accounting, we operate on a modified acrruel basis. So you don't see all of these big big acruals and you also don't see depreciation. So when we buy something we just expense it but then we go back and we reate our net position in that statement as if we took depreciation and we those fixed assets were depreciated. Similarly with pension expense and

018OPED um we don't put those on our books because technically the liability is held at the pasers level and what you're seeing there is if pasers if pasers disappeared tomorrow what the district would have to take on itself in order to fund the pension. So that's not really a case that would ever happen. Um but under so but under modified acral we have to include that in a statement of net position. So you will always it will always look like we're losing money. Um, I think probably the better the the the next um the other statement that just shows where you come your your revenues less your expenses gives you your fund balance and the stuff that we're going to talk about in the financial reports later in the audit. Those are the more um

019the the statements that you guys need to be looking at on a regular basis and that's more of a real indicator of of the activity of the district. Um, so our true revenues less our true expenses is what you guys approve in the general operating budget that we do or the general fund budget rather um that we do in the spring. Um, and that more ties into what you would traditionally see that huge negative number is an accounting is an accounting requirement but I wouldn't it is technically reality. I mean I guess pasers could blow up tomorrow but I doubt it. Um, and but it's to show you what that liability would look like if we didn't have pasers. >> Thank you. And also I I know I have a number of questions, but I

020also want to make sure that I'm asking them at the appropriate section. >> Yeah. No, you're good. Okay. >> Um, so why don't I because you sent me an email, so why don't I just go down through a couple of items. We'll we'll just go do it that way. Um, so we talked about pasers um and a modified acrruel. um the committed funds for for the fixed asset piece or I'm sorry for the capital piece um in the fund balance section of the of the audit. Um currently we have 38 million in unassigned funds. Back in October I had talked to you guys about leaving approximately 25 million in unassigned and moving any and you weren't here. So at moving any anything in excess of 25 million up to um up to committed for capital

021projects but leaving it in fund 10 and not transferring it to fund 30. Um we wanted to show you the true unassigned balance because at the time we were estimating it was going to be a little bit higher. It's a little bit lower than what I expected. I thought it was going to come in around 19. It came in at 13. Um still a very healthy number. Um, so what we would like to do is move 13 out of unassigned up to committed for capital projects, but leave it in fund 10. By leaving it in fund 10, that gives us a little D's shaking his head. Leaves us a little more flexibility um if something else happens operationally that we need to fix a chiller or something big goes. We don't want it necessarily sitting

022in capital or if we need to do a big um technology spend that can't really be done out of fund 30. And once you move money out of your general fund into fund 30, you can't bring it back. Um, but you can commit it and you guys can say, "Hey, we'll leave it there, but administration, we would prefer that you spend this on capital, which is why I'm asking to commit it." So that fund balance, um, committed fund balance is money that you have to that you have said can stay in the general fund, but it must be spent on capital. If we move it to capital fund, it's basically saying the same thing, but I can never bring it back to the general fund. Um, so if we wanted to do a big curriculum

023buy, for example, and there was some curriculum that we wanted to imple implement that was $3 million and it was new and I can't take money out of fund 30 to to pay for that. I can only do it on construction and buses essentially. Um, so that's what the different levels of fund balance are. We can offline, Christine, I can we can have a conversation and I can walk you through what I talked to everybody about in October about the different kinds of fund balance. There's about >> five kinds of fund balance that you can that you can have. >> Um, and they each mean different things like non-spendable is stuff that we've committed. So that's non-spendable fund balance which is on the financial statements. So yes, Al, >> I know as a board I

024know as a board we've been concerned about uh we have the 10-year capital improvements plan and how are we going to fund the 10-year capital improvements plan? So, so, so we we made a concerted effort to move uh money into these funds. Uh, so the funds are there to do the capital improvements or like uh Tara said, if a chiller goes, we have the money there. If we need to update a building, the money is there to do that. So, that's different from uh the high school project, which is a new development project. Thank you. >> Yep. Um so that's capital. Um you had also had a question about uh fiduciary funds. So the private purpose trust funds um are funds that were donated to the school for a specific purpose. Um so they may

025be scholarships. They may be to fund the marching band. I don't know exactly what all of our we have a lot of them that are wrapped up in that number. Um but there are things that that come with donor intent attached. The student activity accounts are club accounts where the students have raised money um for the French club to go to Quebec or the um National Honors Society raised money for um a trip to Washington DC. So those funds are studentdirected funds. So they are student raised and student directed. So we have an obligation to take care of those funds and make sure that they're properly spent, but they're not ours to decide. So they sit in a separate fund. They're not part of the general fund. the amounts that are in the governmental fund,

026the activity, the student funds that you see in the governmental funds, those are school-based fundraisers where the administration decides what's going to happen. So, if we um I think most of it actually is from vending machines and some other and some other things that we raise funds that then we then spend back at at the school level, but it's not part of the general fund budget. >> And that's different from home and school raising funds. >> Correct. That is completely Yeah. home and school um are 501c3s and their funds are not co-mingled with ours. They have their own um financial statements. They have their own bank accounts and I don't control any of the money that flows in and out of home and school. Um and then the uh and then we have the three

027business business funds which are student uh school nutrition, the before and afterare and then the community education. So those are run more like businesses, but because they have employees, they also get attached with pension liability and OPED liability because they have school district employees that work for them. >> Okay. >> All right. Um, there was a typo on note 18. We are going to fix that before we issue the final report. >> So I wasn't crazy. >> No. Okay. >> Yeah. Line one should have been. >> So on note 18, if if you look at note 18, the second line there, the ending balance is the first is the beginning balance on the on the first line. And so the dates the the numbers are correct. The dates just didn't get changed in the header.

028>> It's okay. I thought I was misreading. I'm like I maybe I just don't Okay, >> that was correct. And I think that am I missing anything? >> Um there were some other items, but I think perhaps we can handle those offline. I'm okay with that. Yeah, the insurance numbers that you the 2.7 million is a reserve in case our insurance goes over and the uh tr the insurance trust can't cover it. >> Um and premiums and stuff are completely separate. Okay. Thank you. >> Okay. Yep. >> Thank you. And I'm sorry if that is duplicative of other people's knowledge that that was helpful very helpful to me. >> Fair questions. Um sorry I just kind of left you standing there. [laughter] Well, they were good answers. >> Um, anybody have anything else on the

029audit? >> Good to go. >> All right. Thanks everyone. >> Yeah. >> Have a good night. >> Can we vote on >> Did you have >> Oh, yeah. You got a vote. >> Just one other just a quick note. A huge celebration of Miss Hower and the whole business team. An unmodified opinion takes a year's worth of work and is incredibly challenging to accomplish. And so, uh, thank you for the intentionality, the hard work here. I think it shows that you're putting students resources in a safe place. So, uh, kudos to you and your whole team. >> Thanks. And my, um, assistant business manager is here. Mary's in the back tonight. So, I asked her to come tonight since we were doing the audit. Um, and it really I appreciate that because it is a

030team effort. So, it really is Mary and the entire team that work with our auditors to get it all done. I actually have very little to do with it until the very end. So, >> and I appreciate Dan's comments, too, because I think both from the presentation and the questions and then the materials that were presented, it also shows the community the complexity of our funds and our and our overall budget and all that goes into it. And to know that we are managing and and are good stewards of both federal and state funding as as well as taxpayer dollars, it's it's really commendable. So, thank you. >> Absolutely. >> Now, you can vote [laughter] >> so just doesn't get mad. Okay, >> there's a motion on the floor. >> Um, all in favor? >>

031I I >> Any against? >> All right. Thank you very much. >> Thank you. >> All right. We have item [snorts] 3B. >> Um, so we will move on to item B. >> Watch the big picture. >> Um, so we will move on to item B, uh, which is a presentation from Amanda Kesler. Correct. >> Yep. and Whitney Bates from Cornerstone Financial Management. Um before they get started, I just want to preface this a little bit with why um these folks are here tonight talking with you. Um over the course of several months, uh the business administrators in Montgomery County or every month I should say, the business administrators in Montgomery County get together through the IU and have conversations. One of the running conversations that we all have um because of the way we

032earn our revenue, so much of it being upfront um with real estate taxes is we sit on a ton of cash um for the first six months of the year and then we use it. So we get kind of like you get paid once a year and then you use it all year long and then you get paid again in July and August and then you get paid and then you you wean it off. But in that time, we're sitting, especially in this district on close to at some points, we have over $200 million in cash just sitting in the bank. Um, while we do have good rates at Univvest, um, there are better things that we could be doing with that money rather than just letting it sit within the legal limits that, um,

033there are very strict rules, um, on how we can invest our funding. Um, CDs are something that we're allowed to use, but you can only go up to about $249,000 in a CD, which is a lot of CDs if you have $220 million sitting in the bank. Um, so during the course of these, one of the things that Zack Trump said, he's like, "Well, who do you want to come talk to all of you guys every month?" Um, and Bill Stone um, at Hap Horscham is my counterpart there. He was like, you know, I have this firm called Cornerstone, and they do a lot of our cash management, and they've helped us really streamline our banking and really improve the um investment of our liquid assets over the course of the year to really um

034make some money on the cash that we have sitting there. Um they came and presented at a Montgomery County meeting. We've had several conversations since um about this and I've asked them to come present to you tonight what they could do for the district um in the way of simplifying not only our cash structure but increasing the amount of investment activity that we do on the cash that we sit on. Um, this is not one of the financial advisor things in admin rag 3360. That financial adviser is something that's required for the state for the issuance of debt. Um, which is what PFM does. Um, PFM does have a cash management system, but they they have proprietary products. One of the things and reasons I brought Cornerstone in and they'll touch on it more in

035their presentation is that they're independent from any from any bank and from any investment source. Um so they are really work for us. It's not a bank trying to sell me a bank product to invest my money so the bank can make their money as well. Um it's a fixed fee as well um which is also helpful um for us because we know how to budget for that. Um, and then there's also a point where they can earn we can earn more than their fee, right? So, we're not always earning, we're not always losing a percentage on everything that we earn. So, with that introduction, I will let you guys talk about yourselves. Um, and then yes, Al, >> you you said that PF PFM I I has a similar system to this. Uh could

036you explain again why you think PFM system is uh >> I don't think it's bad. I think that I think it's it's wise to have more than just one investor, right? So PFM does a lot of our debt I'm sorry not investor adviser. So PFM does a lot does basically all of our debt advising. They help us with issuance of bonds. Um they help us look at our long range debt forecast. And I just in my mind, and it could just be a preference thing for me, um I think it's wise to have a completely independent adviser helping us streamline not only the investment piece of it, but also how we manage our cash um and how many banks that we use and how we can how we can I my first two months here,

037I probably had nine banks approach me about holding our funds. Um, I had people coming in wanting to meet with me, calling and wanting because I'm new and they're trying and Dan, you probably have the same thing with the amount of cash that you guys have. Um, so I really wanted, you know, an an unbiased third party to kind of help me look at how we're managing our cash. >> That makes sense. Thank you very much. Just real quick before we begin, want to point out for some folks if you're not familiar with 3660 that Tara referenced, it's an administrative reg that refers to um professional services. And outlined specifically in that administrative regulation, it says that we should go out to RFP for uh financial adviser. The point being this is not the financial

038adviser. That's the PFM situation. It's also for solicitor, architect, and things like that every five on a cycle. Um, so that's what she was referring to if you're not familiar. Okay. And with that, >> um, can can I can I ask a question? >> Sure. >> Just to piggyback off of what Al and what you were saying, Dr. Bower. Wouldn't this be I'm going to make up a term, but an RFPable situation where we would want to see the offers of several different we we could the the issue that I have found in conversations with my counterparts is that most of the people that offer these services are not independent. So there are there it's an arm of RBC bank. It's an arm of um Univvest Bank. It's an arm of somebody else that we

039already use. I wanted somebody that was completely independent and there's a little bit in the admin rag that gives me a little bit of flexibility there um under like certain circumstances to to kind of pick who I wanted. Um you can hear what they have to say tonight. And if if that's not something that we want to do and you want and we want to go out for RFP, we can. Um one of the things that I would require though in the RFP is that they be a wholly independent organization. So um and and I would prefer that they be local so I can meet them in person. >> And I I kind of concur with your thoughts that we should have an RFP process on this. I I concur with you that uh that

040we ought to have a liquidity management process and that they ought to be independent and and also from reading this that I really don't want I really want them to be independent. I don't want them to be putting on money in in in products that they sell, >> right? >> Uh so, and I did notice in their presentation that they do offer products. Uh so I would want to make sure that we're not in their products. >> Okay. >> Thank you. >> Yep. >> Okay. Now you go. >> Okay. Hi everyone again. I'm Amanda Kesler. This is my colleague Whitney Bates. We're from Cornerstone. Um, Cornerstone is a boutique asset management firm in Bethlehem, Pennsylvania. We work um with school districts. Our team, Whitney and I work with school districts and intermediate units in the

041Commonwealth to manage this big pool of cash that um has been referenced that a lot of school districts and intermediate units sit on throughout the year. So on the next slide, we just talk about our independence. So, we're 100% employeeowned and that enables us to be independent. We don't offer proprietary products and I just want to tout for you that we have over 97% client retention. So, we get these clients and we keep them for a long time. So, we're really proud of that. It also mentions that we're one of the best places to work for. We have a very nice, caring culture and I think that's shared um through our relationships with our clients. So just I'm going to jump forward two slides if you don't mind and just talk about our open architecture.

042So it's a little rare in the financial industry to have an open architecture completely independent firm. Um we will work with any custodian. We will work with any money manager. We have no bias, no proprietary products. So we don't custody funds. We don't offer you any sort of products that we get paid on. We're able to come to Tara and say this is the best place to put your cash for the next six months at this rate without any bias on our part. So we're really proud of that part of cornerstone. And I'll just jump forward to the goals and objectives of managing this cash. So, we're mandated to have the goals of safety, liquidity, and yield and concern with um investing this cash. And I'm just going to go through those really briefly with

043you and how we accomplish that. So, first, safety. One of the first things we do when working with the school district is analyze the um collateral that's behind the investments. So, we go out to every institution that you currently work with and we look at the collateral that the banks are putting behind the investments. And it's really surprising a lot of the times to school districts what banks are putting behind these investments. And so, anything over that $250,000 threshold that Tara mentioned earlier has to have high collateral behind it. And sometimes we find that banks put um something that's kind of on the lower end of the spectrum like auto loans or student loans behind these investments when that's not really the best thing that they could be putting behind your investments in cash there.

044So we encourage banks to increase the credit quality of the collateral that's behind your investments and sometimes they just switch it out for us when we just mention it without even sacrificing the yield. So we analyze the collateral first and we just list out at the top of this that our goal is preserv preserving capital first. Of course we look at the credit risk, the interest rate risk and we make sure the collateral is appropriate. And then for liquidity which is next, we have this spectrum of liquidity when we're talking about cash management. That's different than typical investments. So we have your cash or your checking accounts the most liquid. we can have short-term governmentbacked bonds that we can invest in or then we have CDs that we could roll like every six or 12

045months. So what we do um working with clients like school districts or intermediate units is determine where we need to be on this liquidity spectrum when you need cash. We make sure that it's available to you and then we try to optimize yield which is coming up um shortly and I'll get to that in just a moment. Um, right after this, if you don't mind the next slide, we um look at your history of cash flow management. When we start working together, we see when you need the cash, when it comes into you, I'm sure that you follow the same curve that we typically see with other school districts in Pennsylvania, but it's our goal to make sure you have the liquidity and then some when you need it. And then finally, we talk about

046yield, which um once we're h in safe investments, once we look at the collateral, um once we know you have the liquidity you need, then it's our job to optimize the yield that you're getting in those um investments that are um that do have appropriate liquidity for you. So, we look across the spectrum again with complete independence and we see where you could get the best yield, where we see rates going looking forward, which Whitney will talk about in just a moment, and what we think is a good um is the best bet for your cash. Um, again, keeping that liquidity um in mind and your budget in mind, of course, too. So balancing yield with um certainty is a part of our ongoing work that we do with school districts and intermediate units. And

047then I'll turn it over to Whitney to share a little bit more about how we do that. >> Yeah. Um so on this next slide here, um this is one of the things that we are monitoring on a daily basis. So this is a treasure yield curve. Thank you. Um so we have this here just over different time periods. Again, this is something that we we keep a really close eye on. So the tan here at the top is June of last year. So the end of your last fiscal year and then you can see the dark blue here is end of November. So you can see that's shifted down quite a bit. If we looked out towards uh the end of the year actually 1231 that would have come down even further. So this

048is something that we're monitoring and saying where does it make the most sense right? So this is something um these these different segments these different time periods of maturity impact you in different ways. So on the shorter end is your cash is your more liquid assets. On that longer maybe 10, 20, 30 year is your bond issuance. So this impacts you in a variety of ways and we want to manage that and make sure that we're aware of all of the the different pieces that how they fit together and make sure that we're prepared um for when these do do change over time. Um so on the next slide here, so this is another thing that we we continually keep an eye on. Um what this is is showing the likelihood that the Fed will

049change the target rate at selected FOMC meetings. So the Federal Open Market Committee meetings. So this is actually um people putting money or funds into the futures market and saying where do we expect this to go down the road. So um if we refer to you know what does the market say versus what does the Fed say? Typically those two diverge. Um and we just try to keep an eye on kind of all perspectives again all opinions that are factoring into these things. So if we look at this chart here, um the green arrow shows where we currently are. So this is as of today and then this is where we expect rates to go as of the June meeting for the federal open market committee. So again, as of your next fiscal year end.

050So this is us just saying, you know, again, does it make sense to lock in are you and by lock in, sorry, I mean um purchase a bond so that we know we're guaranteed that interest. Um this is also I think is interesting is seeing the changes over time. So you can see in this table down below uh the tan or yellow highlight is now is current but then you can see how this has changed over the last one day, one week and one month. So again things that we're monitoring on an ongoing basis of how um the Fed is expected to change rates, how that impacts your funds and how that impacts your investments going forward. If we go to the next slide um again as I mentioned this is something we keep a

051really close eye on. So here's the same chart as of a different time period. So, this is as of um expectations for the December 2026 meeting. Um a little bit of a fool's errand trying to predict rates out this far in my opinion, but we do like to look at this just to say, well, what is the market expecting, right? What you know, this is what we see. This is our cornerstones expectations, but where does the market see things going? So, again, you can see that green arrow is the current. Um all of these bars are one expected rate cut and one rate being 25 basis points. So um right now as of December 2026 the expectation is there could be up to six rate cuts. We don't really see that happening but there is

052an expectation I think clearly here that rates will be cut going forward into this year. Um I think part of that too is that expectation um with the new Fed change kind of what that plays into and how that that ends up playing out um on that spectrum. But just again something that we really keep an eye on as it changes daily. Um so if we flip forward two slides, we'll just cover observations for your existing portfolio. So all of this is from the publicly available information on your board doc site. Um this has changed a little bit or your current structure has changed a little bit since um we prepared this since we pulled this together. So these this data is as of 9:30 2025. Um so some of the CDs have matured, but

053generally this is what we're we've seen online. So um you have three categories really. We bucket them into the main deposiitories, your money market accounts, and then individual securities, which are those CDs that we mentioned earlier. So the main deposiitories you have here are Univvest, FCCB, and Trumark. Current market value is about 258 million. Um, money markets accounts, those yields are a little bit higher than your your main deposiitories typically. Um, your zen, unvest, and pizzl, which is about 17.9 million as of September 30th. And then the individual securities. Um, this is just a selection of what you have currently. Um, so I I listed eight here, but there's currently 11 as of November. Um, that number has come down. I think we've seen from from earlier this year even um that those CDs have

054matured, have rolled back and have those assets come back. Um, frankly, that's a lot to keep track of. That's a lot for us in terms of are you getting your money's worth out of these eight CDs or 15 CDs, whatever it may be. Um that's just a lot to keep track of operationally of you know where our funds are we getting current yields are we at or above market. Um so again something that we could potentially outsource as a Amanda mentioned the collateral um this is something that we wouldn't need to stay at that $250,000 threshold um which is the FDIC limit. We could um negotiate a better collateral so that you can combine all of that and really simplify and streamline your structure. Just I can I just interrupt you for just one minute?

055So all of the CDs that we have have there are several different maturity points on all of them. Um and we currently use um a CD placement service. Um the name of that agency is Great Eastern. Very nice man. Uh we work very well together. They keep 14 basis points of the interest that we earn on any given CD as as their payment. Uh on the interest, I'm sorry, not on the principal clearly. Um and so but we are I literally get like a week he'll say you know you have a CD coming due here's the rates what do you want to buy at like no like direction like when are you like part of what we're talking about is looking at our cash flow okay you know and July we issue a huge payroll

056because we do the lumpsum payroll for the teachers so like we need we need to know that we need to free up a whole big bucket of cash like he's not doing any of that work he's just finding me rates right now um on decent CDs. So, and we have I have pulled the last three that have come due. I have not rolled because I didn't know what we were going to do with cash management. So, they are now sitting in the in the PISLF account. >> Just a quick question uh for you guys. Would you be similar to align with that would you guys only be making recommendations or will you actually be placing managing supporting cash flow uh strategies along that way? Would you actually be moving the money? So we can serve

057in two different capacities. We can be a discretionary asset management. We don't typically serve in that capacity. That's 338 um fiduciary. We don't typically serve in that capacity with school districts and intermediate units. um we can um however most well I'll say all of the school districts that we currently work with and the intermediate units we serve as 321 meaning that we give we advise and that the decisions are ultimately made still um at the administration level. >> Yeah. I would not they would not have signatory ability to move funds without my permission and my signature. Yeah. As treasurer. >> Great. Thank you. >> Y >> thanks for the uh presentation. Just a quick question. How many school districts are you working with in the Commonwealth and IUs? >> So, we have two IUs that

058we're currently working with and we work with four school districts. And we do have this is a public um publicly available meeting. So, we didn't um share publicly our client list just for privacy reasons or our references, but we did bring them with us. So, you're welcome to have a copy. I have it right here. but just for their privacy purposes, we didn't want to um share that with the public. >> So, so, so we've been talking about this a while in finance that we don't really have the economic models to tell us whether we should be buying long-term or short-term duration uh securities and and we manage it as best we can. And so what this organization is going to do do for us is they're gonna uh inform us of put a strategy

059together for us to tell us how what kind of um uh maturities we should be buying on securities. Is that basically what they're doing for us? >> I and we're not Yes. Yes. Um I think it's fair to say that my I'll be honest. My expertise is in accounting. Um it's in accounting. It's in management of the accounting function. It's in management of operational functions. I am not an investment person. Um I did not major in finance. I majored in accounting for a reason. Um so you know I have some I have a financial adviser for my own benefit like for my own funds at my at my home. Um and I feel like we need the same thing for the district because I sit on a ton of cash. Um, and it um, it

060really to me I think we need somebody, but they also somebody that's also going to look at my cash flow needs and and basically act as a partner um, to to talk about my cash flow needs and to help me plan my short-term investing to match when I'm going to need that cash. For example, the lumpsum payment in July. Like we know at I know in November that that lumpsum payment is probably going to be somewhere in the you know $10 million ballpark. So we I'm just making up a number. So we can plan that. We can pull that out and plan that for a longer time horizon. That's an easy one. But they can get a little more granular and have a little more analytic like chops than I do um to really look

061at the cash flow maybe over four or five years and really give me a better investment plan for the course of the entire year. And that's why we hired PMBB to to manage your debt load. >> Yes. And the same thing for us on the other side. >> On the debt side. Correct. >> On the debt side. Yep. >> Thank you for that. >> Yep. >> Just I want to do a check before we get deep into additional questions. Miss Bates, Miss Kessler, are we still going through the rest of the deck? I just have one more thing if if I could cover just a few items that we've talked about that I think Terry, you've done such a nice job for for us, but I just want on the getting started slide just talk

062about the spectrum of um how we start to work with the school district and cover just any of those basic items that um um just so you can understand kind of an overview of how we work with school districts. So, first um if we were to work together, um we do Whitney and I and our team researches your historical cash flows so we can understand typical liquidity needs. We see how much you kind of have impermanent capital that maybe could um sacrifice a little bit of liquidity for some additional yield over time. We review all of your existing collateral and because you have so many current investments that um is time consuming and we'll review that with Tara and her team. We um approach things from a best practices um perspective when it comes to

063governance. So we want to make sure your investment policy statement is following best practices. We want to make sure everyone has received fu fiduciary education which we get from a third-party provider. So governance has really escalated in working with cornerstone. We establish regular reporting with Tara and her team. So we meet quarterly to discuss any changes or any upcoming events and also we set an annual budget amount with Tara and her team that you can expect from investment income. Every quarter we report on our progress toward that investment income goal which is easily um digestible and understandable from both a board and administration perspective. And lastly, um, when we start working together, we'll set that overall strategic plan to streamline investments, make everything as efficient as possible, make sure that we're getting you the safety,

064liquidity, and yield that you need. So, it's our goal to um do all of this as easily as possible from your perspectives. we'll really take on all of that burden ourselves, digest all the material, um, provide it to you in an easily understandable way. So, we're trying to take on as much of the burden as we can and make your lives as easy as possible and just be an extension of your staff and take on this, which is our core competency, and let you all do your core competencies. So, um, lastly is is the fees um that we charge for this. I know the first number is large, but all of those items that I listed, it's a really heavy lift working with school districts the first year, going through their history, going through their

065collateral, reviewing everything, and setting that strategic plan to streamline everything, make it efficient, get our reporting up and running, getting all of our governance done so that we can all be responsible co-fiduciaries to these funds. So, that's a heavy lift that first year. And then on an ongoing basis, what you'll see on the very bottom line, if we have access to your main depository, Univvest, which we assume we will, and if we have the ability to streamline your investments, which we assume we will, the ongoing cost is 50,000 a year, which is about two basis points on your assets. So, we feel like that's a very reasonable fee. I know that first number looks like a lot, but it's a heavy lift that first year to um get through that project, but um we would

066really appreciate the opportunity to work with you all and we think we could do a lot of great work um from an investment income perspective here. So, >> so and I just want to make one other comment because we kind of blew past it, but I think it's important. U one of the major places that a lot of school districts in the last five years have had um positive but still variances in their in their budget to actual is in their investment income. Um and while it's nice to have surplus and we need some surplus, it would be nice to have a better idea of what that what that investment income line is going to look like when we go to do budget because that's money that we can better spend. So, if I knew

067I had 300 extra thousand dollars, maybe I can, you know, get an extra chiller or or do something along those lines. Um, so, you know, the budgeting component as well. Um, we didn't touch on it as much, but I just did want to mention it before we blew went too fast. >> So, I'm going to recommend that we take a motion and vote and then continue the discussion. >> Motion and second. Sorry. >> Okay. >> Yep. >> All right. Can I have a motion? >> Motion. All right. Second, Mr. Bell, Mr. McBain. >> Okay. >> Um, so, so when I looked at your cost structure here, uh, so, so in year one, the only cost is $100,000 and then the ongoing charges don't kick on kick into year two. Correct. >> Is that correct? >>

068That's correct. >> So, oh, so just to cl I think I should have we should have broken this up. So essentially the ongoing cost is $50,000 a year. In the first year there's an additional $50,000 cost. >> So it's $150,000. >> No, no, no. 100 the first year and then 50. >> Okay. For >> Oh, okay. I understand. Um and second of all, I know that we formed a a good relationship with a a local bank here with Unvest. It's I I I don't want to give up anything to to uh work with Univvest and I'm kind of surprised when I looked at your go ongoing expenses that you are going to charge us $25,000 more a year if we don't use Univvest in the future. Is it >> Oh, no, no, no. That's not

069that's not what we're saying here. Um we we work again with the other school districts we work with. We have a deep understanding of local um relationships and attachments. We are indifferent to working with any bank. This is not saying we're charging more if you're working with Univvest. This is saying if Univvest doesn't give us access um to see the accounts and you know it's just access if they give us access. >> Okay. So you're not talking about a relationship. talking about access information. >> Absolutely not. Yeah, you're you are welcome to work with whoever you would like to work with. >> So, it's essentially read only access to our accounts. >> Okay. I thought most of the information would come from our side. I didn't know that. >> Correct. Because otherwise, we have to

070pass everything through and it takes longer for everybody to do the work. So, okay. >> Um, if the if our banks are willing to work with them and talk to them about what our balances are, what's collateralizing the money behind our money, >> um, or what the collateral is behind our money and and is willing to work with them, that makes their lives easier. So, we pay less and we assume that they will. >> It make it makes sense. I didn't think of it in that way when I read it. >> So, Univvest would still hold some of the funds. Probably not as much as they do right now in fairness. Yeah. Um because we could we might be able to we might not. Um but we should be able to they would still be

071our operating bank, >> right? Yeah. Wonderful. Um I get this. >> So I I can see the need for this this service, right? And and why why it's why it's needed and why you brought them here. [snorts] Um with the pricing it so the $100,000 upfront, I'm assuming there's a contract annual. >> It's a it's an annual contract. We um it's quarterly paid in a rears. >> Okay. And if it's that's quarterly paid, are there quarterly like KPIs or PGs that I'm I'm just wondering for the $100,000 paid out? What are we what are we are we earning? Are we having an ROI? Are we are we having something um additional funds and interest that we're gaining with this? >> Yeah, >> that's a great um I didn't touch on two points that I really

072would like to make. So, thank you for that question. Um, one, um, is that is our intention to have this fee paid for by the choices that we make and the investments that we make going forward. So, we're hoping to provide you with incremental yield above what you would receive without cornerstone that more than pays for our fee. And I know that sounds a little bit lofty, but um, Tara mentioned Hatboro Horscham earlier today. When we started working with Hatboro Horscham, um their investment income estimation now in their budget is twice what it was when we started working with them. They're earning um or certain of earning twice what they were prior to working with Cornerstone. So, I do think that it's um it's justified that our work pays for itself. Um so, I I

073again I know it's hard to process, but we do hope that the advice that we give pays for itself along with streamlining, making things efficient and taking a lot of work from your staff. And the other point that I forgot to make, if you'll just let me squeeze this in, um, oh, and we will again report in with in our reporting, we'll capture um, the value that we're adding to um, the process. Um the other thing that I forgot to mention I think is important to um propose to the board is that I also think working with an advisor in this capacity provides a lot of stability from a continuity perspective. So when you have turnover like when Tara started working with these funds that your predecessor if you was very comfortable working in a

074certain capacity it was a little foreign to her. um as we have turnover with the board there is you know it's a receptacle of information and continuity working with an adviser in this capacity. So um that you know all of that knowledge stays in one space um even if there is some turnover on the border administration level. So, I just wanted to add that in. >> And and if not for some reason for it does not go the way planned, uh there's no like chargebacks of fees or anything, we just simply wouldn't renew, >> right? >> That's would that would be the deciding factor. >> And I guess and again probably a silly question here, but the $100,000 versus 75, especially 50,000 would it's more cost effective to use a service as opposed to employing

075someone to do the service for us within the district. Yeah, I couldn't hire them [laughter] for for put that out there. I just want to put that out. >> And it's also having a fiduciary, a co-fiduciary. So, we do serve as a fiduciary for all of you. Keep everything out of the newspaper stand in front of you. So, we do serve and provide that layer of protection as an outside advisor. >> Yeah, I would I I don't think I know any school district that hires people with the credentials that they have. >> Fair. [laughter] No, completely fair. I just wanted that out there. Thank you. Yeah, >> I appreciate your getting started map for us and the process in that first year to create the strategic plan. Can you give us talk to us a

076little bit about how you work within other districts to communicate or present back to the board? So, is that strategic plan a transparent document that is shared or is it more of an internal document? Um, and then I second part of my question is more for you Tara. if you have this service and this partnership with Cornerstone, what will it look like look like for your staffing? Like do you have the right staff in place to then be able to reciprocate and execute the plan? Um so anyway, kind of two parts. So what is your engagement with the board and other districts? And then what will it look like >> within your team? >> Okay, you guys go first. >> Yes. So um we will be transparent through the whole process. So, how it would

077probably look if I were to just base it off of prior times that we've gone through this process, we'll do all of the homework, all of the research, all of the recommendations, meet with Tara and her team, get a game plan, make sure she's comfortable with it, make sure everyone's on the same page, and this is um up to really up to the board and Tara, but typically we make the changes and we present the changes to the board of of fully what's happened. So here we show like a before and after. Your funds were located in these 18 different places, this amount here, and now they're here. And here's your collateral, and here is what our game plan is going forward. >> Okay. Um so in my department, we um just had turnover of

078our of our banking staff. Um uh Mary, who was doing all of our banking, um was offered a controllers position at her old job and went back to her old job. So, I now have somebody brand new um not brand new to the district. Joanna's been here for years and years and years. Um so, she's familiar, but not quite as familiar. Um it would be nice to have somebody kind of explain the cash structure that we aren't retraining internally. Um but it's also, I think, a good skill set to have multiple people on staff learn. Um you know, in case any one of us wins the lottery and says, "Peace out. I'm out." um to make sure that there's more than just the CFO that knows the strategy going forward. Um my you know my

079management philosophy in my department is that myself, Mary, and now Joanna should all three know and and whoever we hire to backfill Joanna, those four positions in the department should all know the strategy of what we're going to be doing and how we're going to be investing. Um, and by having somebody come in and really work with us on the plan, cuz I won't be the one calling the bank when they need something, that would be Joanna. Um, so, you know, as we get through this process and really get it set up, yes, I do have the right staff in place as soon as I backfill Joanna. Um, but I don't need any more positions to support that. >> So, you mentioned strategic plan and then quarterly meetings with Tara. Tara gave the example of,

080you know, um, a CD is coming due in a week and we've got a plan. So that would be incorporated into the strategic plan and there would be so it wouldn't be needing to drop everything and switch because we have a week to fix it, you know, to not fix it but to renew or make a decision. It would be >> so it would bring about a little bit of greater stability. Yeah. Okay. >> Yeah. And in those quarterly meetings we say these CDs are coming due and before we talk again here's what our plan is. here's what our recommendation is for those CDs that are coming due before we talk next. Do you agree? And then we form a form a game plan so we know what's going to happen. Yeah. And then typically

081we come and speak to the board on our performance once a year and that's really up to you all too. >> I you know and if if if you guys want the first two quarterly presentations then we make sure that you have those first two quarterly presentations in a information session in finance committee. I mean, that's I have no, you know, it's kind of the same way we have PFM come in and just give you an update on debt. We can have these guys come in and give you an update on cash. >> So, >> and and I'll add in too, sorry. Um, you know, it's Amanda and I here, but we have a team of 38 behind us. And I would say at least half of that work on our investment side, our investment

082asset management side. Um, that would be familiar with your accounts, with your portfolios that if you should need something that we weren't anticipating, um, we're available, you know, every day. We're we're in the office. close by. We'll come as much as you want. >> Yeah, we we both do. We live close by. So, um you know, that local presence again that we can be available with with little notice if necessary. >> Okay. I have a question. Um [clears throat] we're we're doing a a motion and a vote for going on to an action meeting. Um but but the end result would be to approve it for this fiscal year. Why aren't we voting it for on the budget for next year? So, we would vote for we would probably spend and and uh Amanda and

083I had talked about this. We probably would outlay 50,000 in this fiscal year and then I would put the second 50 of the year of their year 1 into our 2627 budget and then 25,000. So, I would put 50,000 in this year, 75 in for next year and then it would be 50 in year three. >> Okay. So, so on the agenda The only money that would be out of pocket in the current year would be $50,000. That was not budgeted. >> So on the agenda, it's 50,000 because you split up the first 100. >> Correct. >> Okay. >> But but the the question still remains, why are we doing it now rather than delaying and waiting until the next budget >> because I would like to try to get them set up in this

084first quarter so they can help me with the investment funding, the investment line of the budget, >> the first calendar quarter, not the first fiscal quarter. >> Right. So the first calendar quarter of the 26 calendar year, third fiscal quarter. So if I can get them set up in my third fiscal count third fiscal quarter of 2526 during the fourth fiscal quarter when I do budgeting, I would I would have at least probably a good preliminary number um of a preliminary strategy so I can put that in our budget for 2627. >> Okay. And then the other question I had was the the current uh system that you have they take you said they take 14 basis points off and that's how they get paid >> about the interest on that little >> of the

085interest on that. So that's actually not seen right because they they're doing it and we're getting the interest. >> No, I actually pay an invoice. >> Oh, you do? Okay. All right. I wasn't sure if it was >> No. So and he actually is not he doesn't take control of the funds. He he acts as an intermediary [clears throat] and says go to Ken State Bank. So we went to Ken State Bank and got or Solera Bank or whoever and buy the CD and we send the we wire the bank the money. He doesn't take control of any money. He sends us an invoice for the for the on the basis. >> Okay. >> The basis point you said 2% I mean two basis points. >> Two basis points. >> So it's 14 versus two.

086Is that what we're doing apples to apples kind of thing? >> Apples to apples. No because that was they're talking about basis points on all of our cash and I was talking about basis points on just the interest on one CD. >> Got it. Okay. Great. Thanks. I still for clarification, Tara, would this service, whoever we go with, be additive to sorry, would it be additive to the the other service we already have? >> We would replace. Okay. >> All right. Oh, Dan, >> last last little thing. I I do think it's really wise to have an independent uh third party firm that's coming in and adding capacity to the business office. And I do think it's incredibly impactful in terms of the strategy and planning and maximizing resources as the fixed income market is

087really changing quickly. Um, and I I love that the firm has deep background in actually managing school district funds, which is a complex stance. Um, I I do agree with this coin. I do think that there is a value uh in understanding the projected ROI here. I think that really having a clear picture of not just that you're going to beat it because I do think you will, but at the same time understanding from those fixed income products, what do we anticipate that would look like? I do think would be impactful and helpful to really understand the value ad versus the fees that are being proposed. I think it's simple to manage that uh in terms of like understanding it and planning for it uh versus 14 basis points back. But at the same time,

088I do think that it would be helpful to understand the projected ROI. >> Okay. Could that be addressed kind of through two separate things? One is in between now and like the action meeting that we do that we do our own they take some of the the neighboring school districts or others within beyond just the you know kind of an presentation with the IU but we do some discussions with school districts about reference checks how did it work you've given the great example of Hapahor show which was really good um but then I'm also wondering if some of it also then comes through how the me you know is it measured measured in the strategic plan and the quarterly meetings or the quarterly reporting. Do you have standard things that you that we could either

089that could be shared with us if we move forward if could be documented through a presentation? Something that is shared with Tara that then becomes part of the finance committee report. >> So be before we go into the details um Mr. address. >> Uh, I want to I I've listened to the conversation and I thought about this a while and I I'd like to make a motion to table this for the time being in favor of of uh um going out and doing an RFP. Uh, one thing that concerns me I is the talk of that they're only active in four school districts. What makes a firm like this valuable is the uh the is the economic models, the computer models that they have built to to give us this information. And I'm wondering if

090there aren't other firms out there that handle a lot more school districts that do that. So I I would like to make a motion to table this until we go out for RFP to see if there's uh other companies out there. >> Okay. So we have a motion on the table. Do we have a second? >> Second. >> Okay, we have a motion and a second. Can we vote? >> Can I ask a clarifying question? From start to finish, how long is an RFP process? >> Um, with the three other RFPs that we have going on right now, it's going to it'll I won't have anybody in place for the budget. >> Does that change anyone's position? >> So, take a vote. Okay. So, we'll take a vote. Um, all in favor of tableabling this

091item. >> So, a positive vote on this does not necessarily obligate us to go through the RFP position. It just tables it for the moment. So, we could hypothetically discuss it to decide whether or not we actually did want to pursue an RFP or move forward with this as opposed to moving forward on the January 22nd. >> Yeah. So the the the actual item is you're right, it's just tableabling it. However, Mr. Rush indicated that the purpose for making the tableabling would be for to allow for an RFP process to come forward, but I think you're correct that if there were to be an RFP, that also would be something that would be presented to the board, uh the parameters of what that RFP are and and that would have to come before you as

092well. So, and at that point, you could decide, yes, okay, we want to move forward with this. Um or you know, in looking at this RFP process, we think it's not necessary for this service. uh and and you could decide not to pursue it, but you're correct that the only impact of the proposed motion that you're voting on is is just a table not having this appear on the next uh action agenda later this month. >> Okay. Any addition? [clears throat] >> All right. Uh so we have a motion on the table and a second to table this. Um can we get a vote? >> Can I ask who the second >> uh our second? >> It was Mr. Yeah, Mr. Kaiser. Thank you. So, do we want to do this um just all in

093favor of tableabling or if we need to go individually, I'm happy to do that? >> Can I ask a question? >> So, now that they've put made their fees public >> and if I went out for RFP, do they have to respond in order to be considered? And I don't know what to do. like I've never >> So I mean this professional services are not subject to mandatory uh bidding or lowest responsible bidder requirements. So it's not something um that the district ever has to do for professional services, but you there is a policy in place and and it has been the practice to utilize requests for proposals for professional services for a variety of reasons. So um there isn't necessarily law governing um when those RFPs are put in place. you're not bound to

094select a particular entity and you can choose. You don't have to pick the lowest cost, for example. Um, so they could certainly come back and say, "Yep, we still are willing to to honor our our costs that we put forth earlier." Or in light of that, you know, this is a longer process. We're we have a different proposal that we're now uh submitting in response to the RFP, and it would be the the board's discretion to choose whether to accept that or not. So, and and just clarifying for me too, this RFPs for services are a North Pen requirement, not a state requirement. >> Correct. There is no legal requirement to have an RFP for professional services or to select a, you know, the lowest cost. Uh there can be other factors that are taken

095into consideration. >> Thanks. >> And and who who is responsible for writing the scope of that art? >> So, ultimately um there there isn't a a law that says that. However, the practice has been that uh RFPs are are generally written by the business office [laughter] um and then brought before the board for consideration. So, it has been the practice that the board uh approves when there are RFPs issued and then would you know review the responses to those and make a decision. >> So, in theory the scope could be a lot different than what they proposed in theory. >> Um if yeah, if I wanted to change the scope. >> Yes. Okay. The only thing I will add to the discussion, uh, great questions. I appreciate all the thought here is, uh, we do

096partner with the McGomery County Intermediate Unit for a reason, right? It's a consortium of school districts that come together to share resources to, to brainstorm together, and this is something that was discussed among all of the business administrators in Montgomery County, a presentation given at the IU. That's why it's not just Miss Hower saying, "Oh, I heard about this firm. I want to bring them in." This was someone that was brought to us by the MCIU. Ultimately, a number of school districts are working with the firm moving forward. So, just want to add that to the conversation. >> All right. So, I'm going to go individually just to make sure that we got it right. Jess, I know Jess was uh struggling before. So, um the this is um I would be we are voting

097to table. Nay would be we are voting to go back to the original >> to go back to the original motion. Okay. All right. So Dan >> nay. >> Um yay. >> Yay. Nay >> nay >> I believe >> that's a table. >> Yep. It's six to three. Uh it's a table and so you can move on to the next item on the agenda. >> Thank you so very much. >> Thank you everyone. Thanks. >> You guys want to I'll call you in the morning. Okay. Thanks. >> All right. Um the next item that I uh the next item for action um that we would send to the meeting at the end of the month is the assessment appeals for the Reese properties um at 1218 Welsh Road and 1222 Welsh Road. The total cost

098of the revision is approximately $70,000. Um it was around 18,000 on 1218 and around 50,000 um that we'd have to refund on 1222. Um and all of that information is in the executive content and typed up there, but it's not it's not totaled up at the top. So I would need a motion and a second. >> Yes. Can I have a motion? >> So moved. >> Second. >> That's Mr. Rashian. Uh, Mr. McBain, any questions? >> Okay. All in favor? >> I >> So move. >> Um, and the next one is just the month the monthly budgetary transfers um and it for a couple of departments to move from um most looks most likely from one object to another. Generally, we put um for uh clarification for the new folks, um if it's within a

099major object. So, if you're staying within the 600s, you're staying within the 300s, you're staying within the 400s, it's not it's usually just a matter of we budgeted something, it's it a lot of school districts don't even take those to the board because they're staying within the same major object. We just show them all for you. >> Any questions or concerns? So, first let me get my motion. >> Okay. >> Can I get >> motion >> and second? >> Second. >> All right. Mr. Bell, Miss Ramage. Now, any questions? >> I I just had a question over um the the movement for looks like transportation. I didn't know what that was from or or again if that's a silly question because it was discussed already in a previous >> It it wasn't. They um they

100took money out of their fuel budget um to buy some licensing uh some additional licensing for some of the software that they run for um tracking the buses. >> Okay, thank you. >> Yep. >> Great. >> Um all in favor >> I any opposed? >> All righty. We have uh information. Yep. So, just to update you real quick, um the general liability insurance RFP went out. All of the responses were received on December 19th. We had six respondents to the general insurance or general liability insurance. Um I'm reviewing the proposals. My intention is to try to do some interviews um the week of the 19th and the 26th um the last two weeks of January whenever we can get those firms in so I can present something. I'd like to get something on the work

101session of the 3. Um, so I would bring it to finance on the third and then we would approve it that same night at the work session on the 3 because I need to get the process started for applications for next year. Um, so that's the general liability. The feasibility study also went out. We're doing interviews for that next week. Um, I want to say we had 10 eight or it was like eight to 10 respondents to that one and the responses were all over the board. Um there were um like $20,000 responses and $500,000 responses. So we really Mr. Slaughter has been going through them kind of with a fine tooth comb um and selecting who we're going to bring in for interview for that. Um all of the major players responded to that.

102Um all the people that we've worked with in the past have responded and they're um so um basically everyone we thought pretty much brought us a recommend uh brought us a proposal. Um, and the last one was for the demographic study that came back the same day as the insurance um one which was December 19th. Uh, we got seven responses to to the demographic study. Um, a few local. There were a few national firms responded as well. We had somebody out of North Carolina, somebody out of Florida, um, and I think somebody out of DC. Um, so we're reviewing those. I probably won't do interviews in those until I get insurance done. So, probably the first week of February, second week of February. Um, and then hopefully [snorts] would be able to bring those at

103the end of February. The feasibility study, I think Mr. Slaughter is shooting for um the end of January to present the candidates at his committee meeting at the end of January. Um, and then they would either be on work session February 3rd or action at the end of February. Um, so hopefully we would have by the end of February, we'd have those three selections made. Um, and that's all I have on that for the moment. Um, we did get information next year the Pasers rate is dropping a whole 49 or 041 um percentage points. Uh, so we currently are withholding 34% and or M spending 34% of salaries on pension. Next year we will spend 33.59. So I'll take it. It's better than up. Um, workers comp. Uh we do have a safety committee and

104we were certified so we will receiving our annual 5% premium discount. Um I have not gotten what that discount is dollar-wise. Um I will hopefully have that number for you next month. Um but we qualified. Uh so every month we have a safety committee that's made up of a cross-section of people from the district. We meet down at the op center um and we discuss um basically things that created workers comp issues um and how we can prevent them in the future and then we pick one building and we do a walkthrough of that building um uh every month to look for things that we could improve for safety purposes. Um sometimes we pick two or three buildings. We try to hit every building once a year. Um right to know requests are there for

105your information. Um the budget timeline, this is a tentative timeline um that I would like you guys to review, take a look at, and then Julian and Kumbi will probably need to sit down and talk because um looking at the way that you guys have looked at them in the past, I don't know that we can't do it without some special meetings, but I don't know that we need four special meetings. Um we might be able to find a way to do it with two. I've presented it here in the months that I would like to do things. I don't know if um can you pull it up maybe? Um so, you know, in February, I want to give everyone a brief overview of what the budget process looks like for our new folks. Um

106with some revenue expectations, a first look at our medical insurance rates. We should have that narrowed down. maybe some preliminary salary, gross salary information, what it looks like, what the percentages are contractually that we're obligated to on the agreements that we have. Um, this would not be at the person level and requesting new positions. It's just if we have the current positions that we have, what the contractual obligations would be for next year to give you a starting point. Um, and maybe some departmental overviews um, sometime in the month of February. I don't think that anybody's going to be ready for February 3rd. Um, which is the finance committee. We might, but I don't know. Um, we need to talk about that. I'm trying to group them a little differently than we did last year.

107They're here for you guys to look at and then we can have some I wanted to give you something tonight to think about and then I'll circle back to Julian and Kunby to share with the rest of the folks. Um, if that works. the only dates that are important um that we need to keep in mind. Our final vote I would like to keep on June 18th, which is our our our full action meeting because that gives us enough time to turn it around to get the bills out to the printer. So, they're out on July 1. Um and then there's a 10-day obligation to advertise your final budget. Um so, I'd like to present the final budget at the June 3 finance committee meeting. Um, so we can advertise on June 8th and uh

108vote on it on June 18th. Oh my god, my eyes. Um, and then with proposed final, we would propose we would present at the 55 meeting because I have that has to be 30 days apart. So that gives us 30 days between proposed final and final. And I did not just do 67. It was proposed final and final. >> I did 55. So, um, so that's the tenative budget. Um, the new finance reports, I just want to draw your attention to them. The revenue and expense projections, that's just what it's going to look like. I have not tweaked those numbers. I have not dug into those numbers to make sure because they're all generated by Frontline based on past history. I'd need to go in there and make sure that front line didn't pick up

109any weird payment that maybe we paid this two quarters in the same month because I paid a back quarter and so it throws off my curve. So, but that's what it would look like. If there's something there that you don't like or you would rather see, I kind of wanted you to see what the canned report looks like first and then we can tweak from there. The same thing with the general fund financial reports. I've included October's traditional report as well as what Frontline will create for us in the system um for November. Um what I can tell you is that the October report includes a mini balance sheet. I don't really know the purpose other than making sure that we tie out in our world um for you guys to need a balance sheet

110every month. P&L. Uh, yes, P&L is what you vote on as part of the general fund budget. That's your projection. That's how you know what your fund balance is going to look like. That's our, you know, our revenues versus our expenses. I would like to drive us more towards looking at revenues and expenses and analyzing those numbers rather than my team spending a good 20 hours creating balance sheets that don't really serve a purpose because you have your fund balance as part of the the revenues and expenses. We do we would still create that annual budget or I'm sorry annual balance sheet as part of the audit obviously but I don't know that it serves much of a purpose every month. If someone disagrees with me I'm happy to continue to do them. We just

111might do them in a different way. Um the earned income tax revenue report the reality transfer tax report the investment report um and the budgetary reserve reports are all standard reports that we issue every month. There's been no changes to those. um the enterprise fund statement. We will have those for you. I will have those on the as anformational item at the end of the month at the action meeting. Um we're because we moved the meeting earlier in the month. I don't have those prepared yet. So, we'll be behind a month going forward. Um and with that, we're down to public comment if we don't have any questions. >> Yeah. I just wanted to ask our student rep if they have any questions. >> No, thank you though. >> Sure. thing. Um, all right. I

112think that's it. >> Down at the airport watching TSA and you know, everybody's waiting to get on their flight. >> See, they don't talk about and I will say that my name is William Bachel. I've been coming to these things for like 13 years, you know, and I've seen the faces change, you know, the attitudes and the political parties and all the subjects that they have to deal with. And uh I have to make a few notes. I'm 79 years old, so I I really shouldn't be doing this under the uh advisements of my cardiologist. I am meeting a lot of people that are doctors, but they have an IST on their end. uh neurologist, cardiologist. [clears throat] So, um anyway, I was just thinking while we were talking here and I was looking at

113the London Ballet and uh a Nutcracker. So, I just was thinking a moment ago, the second Nutcracker is trying to figure this budget out. You got to crack that nut. So, uh an interest income, you know what that is? THAT IS SO RIDICULOUS. They got a bunch of old people riding by the bank there. We got a you got a one-year CD paying 4%. Got to pay tax on it. And then you can figure out can I afford a [clears throat] beat or not? You bought any meat, man? They got it in a jewelry case. So, um anyway [clears throat] Oh, I live at 404. No, I won't say Montgomery Township. Okay. Now, act one, which was 4.9, and they were gracious enough to raise my taxes by a a fairly substantial amount. And uh

114this year, I was told by a a person that was recently hired in the in the dismal science of finance that it would only be 3.2%. So, that would be a dramatic drop in income. Oh, 1 minute and 34 seconds. All right. Okay. And uh uh I was looking at, you know, you really don't need an RTK. Now, what I do is I just bypass that. Now, North Penn School District previous electric bill cost of blah blah blah blah. Wow, that is super fast. Now, it almost made um made uh RTK seems like they're the F-16. I don't hear them much anymore. I think they're all sitting in a scrapyard now, but they don't want to talk about that. Okay. Um it is said that uh there might be a large [clears throat] rise in

115the electric bill. Mr. Skaraki through his intellectual astute approach was able to um get options for the electric but I according to AI uh consulted minding and uh I'm going up to 11% per kilowatt hours. Woo. I'm telling you what, everybody's going to be going back to candle making. So So uh unemployment is rising. We must be considered that. Uh if you're a Stalantis, I mean, my god, you got you got uh Ram trucks 30,000 rotting in rotting in a field somewhere. Nobody's buying that stuff. How about a Jeep? Same thing. I'm sure they have some very smart people. >> Thank you, Mr. Patchel. >> Oh, >> don't say it is so. Do not say it is so. You'll pull the lever and I'll drop with a rope around my neck. >> Thank you. Uh

116good evening Jason Lair Lansdale. Um I wanted to ask a couple of finance related questions. Uh see with the order of these. Um well these are quasi has to do somewhat with the legal in terms of the movie lot sales. never saw seem to got that resolved in terms of we took the second highest offer and I was wondering why we didn't take the first highest offer when we sold that and that seems to be still working its way through the courts and in terms of why that information has not been uh provided but maybe you could update me if I'm wrong on that uh seems important to if we're going to get rid of assets we would want to get the most for them might be a good reason but nobody seems to understand

117able to see that the actual None of the public has been able to see why we did that. Um, second question is regarding I did I did a little homework and went through our expenditures on legal fees, legal legal settlements and it's kind of a it's kind of a chore taking PDFs and extracting this information and I I wasn't able to get it working auto uh do it automatically or auto with automation. So, I did a little homework and over one year, it looks like we're spending in legal settlement payouts somewhere between $640,000 a month to $200,000 a month in legal settlement payouts. Now, maybe I randomly picked two crazy month, but I did just a year apart on those from November to nove November 24th to November of 20 uh 25. That's a lot

118of payouts, which one makes me wonder how much how much our liability insurance is going up because if we're paying that much out that our liability is is is been expended or has been drained already, then we are that's a lot of lawsuit payments. That's to me that seems like a lot. I don't know if we have a 300 thousand or $300 million budget maybe in in how many thousand people maybe that's normal but it seems like a lot to me I'd like to kind of get a little bit of better picture of why that's such a high payout. Um and then we this is one of been I've been beating this uh horse for a while is the the healthc care center talk about them our expenditures for insurance have gone up. The whole

119purpose of the health care center was to curb those increases and they have not been curbed. In fact, they've gone up and we're paying on top of that to run a healthc care center. I I got the idea. It might have some uh uh function beyond reducing our premiums. But that was the high the entire uh intention of doing this. It was to reduce the return on investment had to do with savings in our healthcare expenditures and that's not happening happening. So these are the things I'd like to hear some feedback on. Thank you. >> Thank you, Mr. Laneir. Dr. Bower, um Dr. would you like >> uh happy to respond uh just in general because we have some new board directors. Um regarding the right to know requests that Mr. Laneir referenced uh with

120the movie lots, um we did publicly discuss we did a private sale of the movie lots and uh we received I don't have the exact number pulled up. I'm going to say we received seven offers from uh four developers for that property and uh we weighed as a group uh the number of parcels or units that they were going to put on the movie lots they were proposing at least and uh the number of settlements and the monetary value and the timeline of the settlements. So it wasn't just a raw figure of take the highest number. it was weighing all of those things and ultimately the board decided on which one they thought was best for the community. Um and then the other matter that was brought up was um health care center. Mr. Laneir

121is correct that healthcare costs have risen here and everywhere else across the country. Um however the health care center is strictly for primary care. That's doctor's visits and going to urgent care and those costs for us have gone down as a result of the healthcare center. So yes, our increase um is very similar to some other school districts, less uh because of our primary care costs being reduced, but still similar. Our healthcare costs have gone up. We are self-insured. Um and those costs have gone up just like they have everywhere else. Um so the hope is that we can mitigate or limit the increases by offering that service to our employees and their dependents. But it's also a recruitment and retention mechanism as well, giving some access to primary care to substitutes for example or

122people part-time employees who work in certain departments in the school district. So um and our uh absentee rate has gone down um and so people aren't using as much sick time because they're able to utilize the healthcare center. So there's a number of reasons. It's not just looking at your healthcare rates for the year um to kind of weigh the value in that uh venture. So thank you, Mrs. Can I can I just comment on that? Um Dr. Bower, um just to say that I I do work in healthcare. Um and it is a a national issue with rising health care cost. Um not North Penn School District is not alone in that adventure and that journey. Um so any efforts to mitigate it would would be positive. Um something I look I look forward

123to learning about more is the healthc care center and its benefits. And I know that we're we'll get into that and and all all throughout the the year. Um but also something that I I'm interested in as well and interested to see that the school district has taken kind of a proactive movement to do something a bit innovative. >> Okay. Great. So um we from this meeting we have agreed to move items 3 A C and D to the work session. Okay action >> to the action meeting. I was on a roll too. [laughter] All right. The next meeting date is February 3rd. With that I am adjourning the meeting. >> Good job. We need a few minutes.