I'd like to call the
Oct 24th 2022 finance meeting to order
and a knee and announce that this meeting is being livestreamed
and audio recorded.
So first we'll do a roll call.
I know we have some new Senate advisors joining us tonight.
What we do is do a roll call for attendance
and then we just follow the agenda.
If you have if you would like to speak, you can in your in this room,
you can just hit the button on your microphone to speak.
And then we ask that you do say your name before you speak
for those who are live streamed and for the audio recording.
So I'll start.
My name is Cathy Sticker and the Treasurer and school director
and we'll go this way.
Mike Rizzo, School Board.
Tonya White Assistance of Business Manager.
Michelle Agee Board Secretary.
David Katz Citizen Advisor.
Cheryl Frizzell Business Manager.
Josh Smith As an Advisor.
Lindsey Drew School Board.
Stacy Winslow Superintendent.
Okay, that was everybody in person.
And now we'll go anybody online. I see.
Brian, do you want to go ahead and unmute and introduce yourself?
Well,
I do see our citizen adviser, Brian Estella there as well.
So we will Mark him for the record.
So moving on to that.
Sorry about.
That.
I was on double mute there from session advisor.
All right.
Thank you.
And I'm having a problem
opening websites now with this
security.
Oh, got it. Okay.
So. And when is there a motion to approve touch?
Sorry, My computer is spinning the summary minutes
that are attached From August 22nd.
Some of Lindsay drew. Second. Microsoft. Okay.
Is there any discussion at all those in favor say I, I.
All those opposed say no. Okay.
The minutes are approved.
And I just like to note that we did not have a meeting in September.
That's why we were approving the August minutes.
I will move on to there's no unfinished business under new business.
We have a quarterly update on the Milton Hershey Trust Fund from Fulton
Financial Advisors.
Thank you, Kathy.
And this is live.
So thank you for having us for this quarterly update.
And we thank you for having us in quarterly regularly.
Now, we've been coming in regularly to provide this update.
We have a couple of things in the presentation
and that will be on the screen.
Buffet is we did put in a little summary of the Milton Hershey Trust.
We don't provide that every time, but I think it's good to bring it in
once in a while and just remind everybody of the history of the trust
and that Fulton took over as trustee in September of 2012,
and that basically we are managing it in accordance with the terms of the trust,
our own internal policies
that we follow for irrevocable trusts, and then to pretty much provide,
you know, the best return that we can, given a set of criteria
for the for the school districts of the school district benefits from us.
There's a little summary page in there.
I think what we're looking at is the first page, second page of summaries in there
just for anybody to see and just to remind how it how it works.
And then the next page is really just a little bit more about us
serving as the fiduciary and serving as a trustee.
But we do appreciate your bringing us in and being able to chance
to kind of give a review of things and keep everybody up to date.
So we have two other folks from Fulton Financial Advisors.
I'm sorry, Leo, if I didn't say that, but we also have Keith LRT.
Keith is going to come up next to kind of introduce himself
and talk about a transition that's going to happen.
And at the very end, we'll do what we were asked to do,
which is give a quarterly update on the returns for the amount necessary trust.
And Liz Paris will do that. So thank you very much.
Thanks, Sherry.
Good evening, everyone. I'm Keith Appleyard.
I'm the chief investment officer of Financial Advisors.
I was on the call last quarter, but I was virtual,
so I wanted to take the opportunity to be live in person
and and first and foremost say thank you.
I've been on the trust since.
Since we became trustee back in 2012.
I've been involved in it ever since, along with Liz and and the rest of my team.
If you don't know anything about it, Fulton Financial Advisors.
We're the asset management business of Fulton Bank.
We have a specialized group, as Sherry alluded to, that works
with nonprofits, that works with irrevocable trusts.
So we have a lot of experience in this area and
greatly appreciate the relationship that we have with the school district.
I am it's
hard for me to say, but Liz has announced her retirement,
though I her last date is December 30th.
I keep asking her maybe to rethink that, but I, I have probably stretched
that too long.
So Liz will be leaving Fulton at the end of the year
and I've asked if I can take over the day to day
management of the trust, mostly because it's very important.
It's very important to the bank, it's very important to us and our team.
And it's a great opportunity to to take over where
Liz leaves off and and have an opportunity to work with you all.
So with that, and if there's any questions, happy to answer them.
If not, turn it over to Liz to do a quarterly review of the portfolio.
Okay.
Thanks very much.
Look forward to working with you in the future.
Thank you, Kate.
I'm Liz Paris and I am looking forward to my retirement.
Even though my 401k is now a301k,
But I just want to go over the portfolio.
So if we could move to the next page, we'll just do a quick snapshot.
And I will tell you that this year
has been brutal for both the fixed income and the equity markets.
The bad news is your portfolio year
to date is down 18 and a third percent.
The good news is, had you been in the index, it would have been down
over 20%.
And we did a lot of things very well this year to help defray
some of those downside risks that we saw in the portfolio.
The first thing that we did was we raised cash
during the course of the year and we're keeping an elevated cash position.
This is all an effort because of the rising inflation
rates, the Fed's policy response to those inflation concerns
and then also the slowing economy with the high risk and the high
probable idea of a recession in the near term.
We also, during the period with our fixed income,
we kept our duration short, so there was less
sensitivity to those interest rate changes.
We also increased the credit quality of the portfolio significantly,
reducing our below investment grade credit and then putting the dollars
into investment grade credit and including
some treasuries in that mix.
The other thing we did on the equity side
is we continue to have a high concentration or overweight
in the Internet into the domestic markets
as opposed to the international markets.
We probably have I'm going to say
70% of the portfolio is in domestic, where our long term allocation is closer
to about 45% significant overweight in the domestic markets.
We as a result underweighted international
both the developed and the emerging markets.
And I would say at this time they're about half of what we typically have.
We just have a placeholder stake in the emerging markets at this time.
So the other thing we did during the course of the year
in the equity markets is we did a rotation into a more conservative portfolio,
more defensive,
rotating into those value components which have a more stable revenue flow.
They also had tend to have a higher dividend payment structure.
This has helped to defray some of the downside risk we saw in the equity markets.
And at the same time, we had
a number of our active managers outperform the market just ever so slightly.
So all these things have contributed to the performance year to date.
How to help defer some of those downside
risks that we see.
The other thing is you can see under the quarter to date that represents
the new quarterly payment to receive of about $572,000 each quarter.
And we will continue that through June, I believe,
in a pause and see if anyone has any questions.
Before we move on to the next page.
Okay.
Not hearing any we can move on to the next page just to give you an idea
of what the returns have been over the last five and a half years.
You can see that the portfolio
at the beginning of 2017, it was at 40,250,000.
And as of the close of business in September,
it was over 42,800,000.
So we've been able to have the portfolio to grow very normally during this period.
I think we what we really want to concentrate, though, is on whether this portfolio
is keeping pace with
what the expectations have been for the long term.
And to go to that, we can look at the next page
and I'm going to constant rate on the since inception column.
This is a ten year number.
So when we look at our expected returns
for the long term, we usually do a ten year forecast
and with an asset allocation of 65% equities
and the balance being in cash and fixed income and some alternatives,
we expect long term the portfolio return to be about six
and a half percent
during this ten year period.
You can see your portfolio down at the very
bottom has performed in line with that 6.4%.
So we have met that expectation.
But during this same ten year period, we can see that the
that the markets have underperformed that long term expectation and it is still
within the range that we would expect to see after ten year period.
But it is lower.
It's down about 5.3%.
So during this ten year period, because of our asset allocation,
our investment process, our manager
selection process, we were able to deliver that additional one
1% over the market.
That return of 6.4% has allowed you to maintain
a 4% distribution, a spending policy of 4%.
It has exceeded that last year as well as this year.
And then we've also been able to cover the administrative costs of the portfolio
and then keep pace with that inflation
for the long term inflation rate that we have seen in the past.
You know, going forward, inflation will be elevated.
So we have to be cognizant of that as well.
Are there any questions from the group as to the performance in an update?
Josh Smith Quick question for me.
I don't I don't see any comments on your fees for managing the trust.
Share.
Again, it's Jerry Leo.
And when we took over the trust in 2012, we set up a special fee schedule
for the trust.
So the first 40 million
is that 30 basis points, 4.3%.
And then any balance over 40 million, which is about 2 million, 2.7
million, goes down 2.25%.
Thank you.
Welcome.
Can I just ask one question how this looks?
So this year we approved a distribution that was larger
than what we typically do because we had the ability to do that.
Obviously, the market
was performing differently then.
The projections looked different.
We were coming off of a huge growth year for the portfolio.
How does that work?
Do you have any feel for what
that actually looks like now
and kind of where we thought the impact was going to be?
So when we did the scenario analysis for this organization,
I will tell you the market value we see today is at that bottom threshold.
So we we did a 95% confidence level.
So it's at that bottom rung of the 95%
confidence level.
You know, you've got another,
you know, ten years to get this back to normal.
But we're not we have not dropped to an alarming,
you know, below that to to really throw off
what some of those projections look like for the long term at this time now.
Okay. Okay.
Thank you.
Yeah, that was actually a very good question.
You're looking at the long term. Very good.
Does anyone have any other questions?
Question?
Sure.
So when you say it'll take ten years
to kind of rebound, is that really what you're seeing?
We would just say we.
I don't know.
And I know that it could be it could be five years.
It could be three years.
It could be ten years till we get back to that normal trend again.
And, you know, when we look at this portfolio,
we need to look at the long term,
you know, this year is an anomaly
When we look at what happens typically with the markets
and this is an anomaly and it's one of those circumstances
when you look at that 95% confidence level, it is below that 95%
confidence level.
This one year.
Any other questions?
Thank you.
Thank you very much.
And just for the record, I'd like to say that Eric
Schmidt, board member, is now in attendance for the roll call.
And good luck in.
Yeah, let's think in your retirement.
We don't see you again.
Good luck, Liz. Thank you for everything you've done for us.
Thank you very much.
It's been my pleasure and great working with you.
Next, we have the 2023 2024 budget timeline.
Mrs. Purcell.
So this is a very broad one,
not a broad overview of what happens every year.
For those that don't know the state puts out the Act one index in September,
and then they follow up with their Act one
timeline for the 2324 budget process.
And those are all very mandated
dates or, you know, very specific dates that things are due
by or it's a calendar that you back into based on calculations
of your board meeting dates, approval dates.
A lot of this is actually geared off the primary election and in April.
So there's its calculation.
So that said, so we take the state timeline
and then we boil it down into how things need to work based
on our meeting schedules and those kinds of things
on here.
So just point of
let everyone know Act one for
2023, 24 is actually 4.1.
So if you remember last year it was 3.4, which was pretty significantly higher
than it had been. It's now 4.1.
That means that
that is the
limit that all schools across the state of Pennsylvania can raise their taxes
to without having to do anything special to go for exceptions.
Now, there also does come out to be an adjusted act one.
Now, because of still the wealth factors in our district,
we do not get any increase.
Act one.
So our Act one is the state set limit of the 4.1 after that.
So on here,
because this really does still need to be a conversation
or the recommendation of Finance Committee coming out of it.
The the green and the orange.
There are two different
you have two different options as a board.
You can do the the green is the opt out resolution.
And you can see there's a whole lot less steps if you do an opt out.
Basically when the opt out resolution is
chosen and you go that route, you say, we're not doing anything.
We will not go above 4.1% increase.
So no matter what we do, that would be our max and we would go less
the orange, which schools?
When you hear in schools talk about seeking referendum exceptions,
that's a whole more convoluted process
and a lot more deadlines and things that you have to do to file
preliminary budget and some filings with the state
and some advertising and those kinds of things.
So that's why there's more there.
But I'm putting both things on here just to have the conversation.
Schools that think they might need to go above
the index will do that early on just to give themselves the option.
And basically the only thing you can really go above the index for at
this point is the increase in your special education costs.
At 4.1, we're probably
where we need, you know, where we want to be anyway at a max for tax increase,
but still want to have that conversation with the committee
because basically by December 12th, so coming out of finance in November,
at that point, I would ask for the recommendation
of the committee, which way are we going in December, we doing the opt out?
Are we actually going for referendum exceptions?
That's why that's the kind of the importance of that piece of it.
Are there any questions on that part of it?
Okay.
So outside of that, a lot of this then just has dates in here
that we will follow this timeline as to when things will come forward for vote,
when we need to do
advertising filings with the state, just various different pieces
I am requesting of all of the departments
that the budgets are returned to me January 27.
So that's when I will start seeing what the requested budgets are.
Mrs. White and I are planning
budget meetings with all the areas, then February, March kind of timeline.
But we're also going to sit in on all of the technology
has separate kinds of budget conversations with all the departments.
So of course last year, given that I only got here in January,
I wasn't able to have any of those
preliminary conversations, you know, So this this year we really get to that.
Both of us are here and seated in these roles that we really get to understand
what the requests are across the districts and what we want to close
with all the technology budget meetings and then also the buildings and grounds.
We will be doing the building walkthroughs with with Mr.
Anderson and the principals through all the buildings
so we can get a better idea to just coming out of General Services
as we start building that capital plan or what are things like that
we need to think about.
Either of that just have to happen in a building
that are normal wear and tear, and we just want to make sure
we're taking care of our buildings this year
versus what are we need to do in the future.
So those kind of meetings are all going to happen November, December, and then,
like I said, the department budgets will all come forward, end of January.
We'll start having those meetings. So then
and I plan and I will I just didn't do it yet.
But I do want to for like the the
February, March, April, bring some specific area conversations
like a little more deeper dive into some of the budgets are
what we're really seeing so that we can start getting some
bigger budget conversations in those months
as well as any kind of capital planning that we need to do.
So that's just an overview on the budget.
Any questions on budget building, timeline
conversations?
Okay.
We'll move on to an update on the tax collection services.
We have three items I know that will probably hit all of them with this one.
Yes. Okay.
They're they're all in one
present.
A copy.
First, we have the RFP result
for the local tax service and occupation service.
I can't get it to do anything but
I'm not sure what to do.
Okay, That's a good idea.
Now we're just trying to open the attachment right now.
Well, we all have paper copies
so we can go on to that one.
So the one I wanted to talk about first is the RFP proposal.
Okay.
And I shared this information with the board last week.
We did receive back to RFP proposal.
So this is for the collection services for the Act 5115 11 taxes,
which are local services tax, the LST as well as the occupation
tax that's
billed to all the residents, that's the $250
that the township bills and the district also bills.
So for those two pieces of collections and just to step back, as you all know,
the Tax Collection Association has been collecting up until now
all the real estate taxes and these other two taxes as well, real estate taxes.
We did board approve in September that we were going to move
those collections to the county, starting with the July 20, 23
bills that go out.
The RFP was issued then in
late September
that went out again, we got two proposals back Keystone collections Group,
Bruckheimer, Keystone's collections group, just to remind everyone, they also
they are the Dauphin County Tax Collection for all of earned income tax.
So it does sort of make sense.
Keystone Collections Group already
has all of our resident tax information, so to speak, on file.
So it does make this collection process a little probably cleaner for them.
So in the proposals for these two pieces were very similar.
They were
so for the local services tax list, they both are 1.75%
and of and that's of the budgeted revenues.
So the two taxes fees are collected
calculated a little differently.
Last year we only we only get $160,000 of revenue from last.
So that's a very small component piece of our budget.
So at 1.75%, you can see that the fees are very, very minimal.
And then there's mailing fees
a little more significant of a fees
tax structure for us is the occupation tax.
You will notice a difference there.
What's driving the difference?
Keystone is going to be less $0.50 per notice.
Bruckheimer will bill us a dollar per notice.
Again, Keystone
having our earned income tax, they know what our residents make.
They know where there's occupation bills should go.
So they've already got the addresses, they've got the, you
know, the revenues, which is the anything above $12,000.
You pay occupation tax, as you all know.
So it makes sense that I would recommend and that's the proposal
that's on tonight or the voting item that's on the agenda this evening
to move forward with appointing Keystone
as our at 511 taxes.
What will happen after this if it if that's the motion the board goes
tonight, we will work with them to develop a contract
which we will be we will bring back then for board approval at some point.
But we want to get them started.
Given the this goes live January one of 2023,
just to
follow up on that, I know we've talked a little bit
and as we were going through all this, like what
what would those savings look like?
And now that we've got all the proposals back, it is pretty significant.
So we pay $13,000 a month right now for the tax association.
And remember, that's us and the township are paying,
but each paying that 13,000 a month.
So for the district we pay annually $156,000.
And you can see the component pieces by going to the county and the
were the Keystone collections.
So while there's definitely sensitivity to the
to the community and to the employees of the association,
it does really make a lot of sense
for a lot of reasons to to move the collections.
So I think we want a motion to come out of finance.
Don't wait to approve this, but it's already on the board agenda at 7:00
on the board agenda except Keystone to accept Keystone.
But can I just confirm one thing just for the numbers?
Purpose at the bottom of this has estimated savings to DTC is 156,000.
But it's. Actually like 116.
Okay.
I just want to make sure since it's on the agenda, that.
I pulled it from another sheet and obviously I didn't do the math,
so I apologize. That's okay.
Do we still want a motion come out of it coming out of finance,
even though it's on the board approval for tonight?
Yeah, because we're doing because we're doing the appointment
kind of outside of our normal, you know, thing.
That way tonight it can be recommended
to the full board by the Finance
Committee in your report, since it's a new business item for tonight.
May I have a motion to approve the RFP for Keystone Collection services
to collect the
local service tax and occupational tax for the Derry Township School District.
So move Mike Rizzo.
Second Lindsay Drew.
Is there any discussion?
And so just so everyone knows for Finance Committee,
the board member, the four board members vote to advances to the board.
So all those in favor say I, I, i, all those opposed say now,
okay, Keystone collection is approved.
Thank you.
Do we want to move on to an update on the tax collection association?
Sure.
That's and so so following tonight's meeting what will happen
is there is a tax association board meeting on Thursday night
just to fill in the whole board.
Wendy, Mel Horne, who is the runs the tax association,
has given us her resignation effective November 4th.
So we will be working with her through transition,
going to actually Mr.
Chrisman, Derry Township supervisor, our manager and myself
are meeting with Wendy tomorrow.
We're going to start laying out some part time
evening work for her on an hourly basis, will be coming back to the board
for a contract, basically an agreement on an hourly basis
with some sort of terms for her to help us finish out collections
through the rest of the year and turn over for delinquent anything in January.
Just as we follow up.
Also with that, then we're going to be talking and looking at how do we
how do we keep the Tax Association office open in the short term
might have to change the schedule a little bit.
So those are things that the Tax Association Board
will be talking about on Thursday night, the one to fill in the committee now
just so that it will be very important that we come up with a communication plan,
kind of between a joint communication plan between us and the township,
so that, you know, the community is aware of the changes.
Anything else on that?
All right.
Going on this act 57 of 2022.
So this is just some information you can read.
I wanted to put this together.
Our past
group would kind of come out with this,
but this was something that started in July, July 11th of 2022.
The governor brought this forward.
So this is this is now tax law.
So there's really not much of an option.
We are mandated that we must pass a resolution
by January 7th of 2023.
Right.
So it's some sort of number of days prior to when we our tax collection
period, July one, 2023, starts.
So all municipalities, all schools, anybody
with any or taxing real estate, taxing entities must pass this resolution.
What it does basically is it gives new taxpayers because right now,
when a tax bill goes out, if you're a new homeowner or you're a new homeowner
and you don't receive the
tax bill, because a lot of times maybe the tax bill went to the prior owner. So
you didn't you didn't get it,
but you didn't reach out to the school district or whoever, and you become
in a penalty and interest situation.
This bill gives that the
that taxpayer in that situation the opportunity
to fill out a waiver form to be looked at and review.
But they would have to there's things that you have to attach to it
basically to prove that you bought the home in this current year.
I think you've got 12 months.
So I've been talking to Janice Christen
with the Downey Dauphin County Treasurer's office
just to see how they're going to be doing this.
And, you know, there's still a lot of logistics
that everybody has to kind of work through this.
Now, fortunately, the township's go live January one, so
they'll kind of have
this all worked out prior to us starting July one.
So this is something we won't have to do.
It's something that they will. And I attached a waiver.
I didn't I didn't print it out, but there's a waiver in there.
What the state has,
I think that's the resolution.
So I did copy the resolution.
The next one.
So we'll be putting this out there.
That's that's the form that the new homeowner would fill out.
And basically then the taxes
and the fees, the penalty fees and interest will be waived.
Again, it's a state mandated thing.
My plan then is to bring the resolution forward
for full board approval November 21st.
That way we can get it board approved and I can get it where it needs to go
so that we're on file by January 7th that we've completed that requirement.
Again,
nothing that I don't really have a choice in it.
The governor's pretty much said we have to, but
I wanted to make you all aware of it, too,
because it is a good move so that at least it's it does
given out for those fees for the new homeowners.
Any questions on that?
Okay.
Now here any questions?
Move on to fiscal updates, quarterly update for the food Service fund.
So I will I will start this part, this whole
fiscal update section.
I am thankful we have.
This is Tanya White with us as our assistant business manager.
I think she's in week four now.
I five.
We're starting week five.
It's been it's been a big transition so we've been new just in January
and her being new five weeks, we are really working
through a lot of the financials in preparation for audit and
that's what we're doing.
So she's going to be working really closely with Greg Hummel,
who is our director of food Service, to revamp
sort of the food service
financials that have been coming to you.
We're going to look at them a little bit differently.
But until we do that right now, that right now
our priority in the business office is really just to get ready for audit.
Auditors will be here on Wednesday.
So we are still rapidly going through some last minute journal entries
and adjustments and those kinds of things I did want to share with you.
I thought one thing I think that's very important
from a food service standpoint is now that we've had two years of free meals
because of COVID and all the fees, all the food prices were waived.
Knowing coming back into this year, we expected to see, you know, a bump up in
negative meal balances, basically, that means students,
families that have not paid and they still receive the meals.
It's just they keep going on to charge accounts.
So I wanted to give you just a little bit of idea.
We had asked Mr.
Hamill to fill us in, just kind of how we're seeing it.
So it is sort of it's not alarming yet, but it's definitely
something that we're going to have to really tackle on,
you know, kind of get out a side of audit and really see what we can do with this.
So he's made basically, you know, email mail, phone
calls, the normal kinds of attempts for collections
some have paid.
But you can still see there's an escalation here that we want to keep an eye on
the free and reduced
first couple of months of a year, it kind of reverts back.
You've got some grace period.
But now that we're beyond that, so these are the true free
and reduced numbers as of the beginning of October with people,
with families that have completed the the application.
So it's really important in some of these conversations.
And I know the assistant administrative assistant for Mr.
Hummel in these phone calls is really encouraging parents
to do that process if they might qualify just to see if we can and then we can work
with those, you know, those balances, but that free and reduced and we can
maybe that some of it I don't have any breakdown on here
that is one thing when we met with him just to try and get a handle on
who might be in free and reduced and who might not.
So I don't have any of that kind of granular detail as to
the income levels of the
families that are really driving those numbers.
Do we have any idea by building.
The number where the.
Where the
largest balance growth?
I think you can probably provide that.
I do not have that at this time.
So we talked to him about trying to get down into some of this detail
or some of the things that we talked about is trying to identify
some of the larger balances and how do we we start I look at this
and I put over 50 or, you know, just some just to get sort of a
drill down a little bit.
And we even I haven't seen anything.
I don't believe we've seen anything from him yet to drill down on on that.
Also is it families were maybe it's you know,
many children across all the buildings that sort of
or the family itself those so we need to get a better handle.
And again, I just wanted to kind of bring it here.
So to let you know that we again, expected to see it.
I was a little surprised to see that quick escalation in a couple of months. But
I'm not sure if
if this is, you know, anything that that could be real.
But what I've heard from some families in the district is that currently
the only way to put money onto your lunch account is through the school cafe.
And there's
an administrative fee every time you add on to that.
And I know that there are some families that have struggled with it
because if they have several students throughout the district,
they have to put it on for each one of the students separately.
So kind of returning back to having, you know, the the need to
to have that budget expense for them putting on their plus, you know, maybe.
So now it's 185 $90 a month,
you know, for lunch when they're doing that for each family, like they can't
they don't want to be just putting money on every week
that would be more comfortable
for their budget because they're also getting these fees
for the service part of it.
And so that's why, you know, from the billing perspective, I'm
curious, one, is it people that maybe just didn't understand the transition,
but also is there a way that we can
look at it and what the options are to
to make it easier for people to put the money on there?
Because if you're a family that needs to be
re-upping, you know, because you can't put it on
for the entire month, say, at the beginning of the month, are you
are they waiting and doing one on there so that they're not paying those fees?
And I'm that's a good question.
That's something we can definitely follow up with them on.
I'm not I have not used Primero Edge so I'm not sure the fees
I do it And yeah, there is a fee.
I mean I only have one now, but when I did it for the three
because they've always had a feed or it was the other thing, but it was like
dollar 50 per child
for, for a fee I mean for how much you put on.
So and you can only put $100 at a time.
So you're, you know, sometimes
you do have to do it a couple of times a month.
So yeah, I mean, you could be up there like, you know, ten
plus dollars.
So I'm just curious, maybe people are waiting and like,
I know as a parent, I get the balance notification when it drops down.
And in my situation, I said it was kind of like,
do I need to turn off the card privilege because you're blowing through this,
you know, significantly faster than you should.
But I just think that there are a lot of potential variables.
And so
it would be
nice just to dive into this a little bit more and understand it,
especially if it's continuing to grow so that we really can get a gauge for what
that is.
Because
my understanding is that there is no longer an option for a student
to bring in a check to and have it applied to their lunch balance account.
They can only do it through the school cafe app.
That's not my interest, but I think but when we have met with them, I remember
there were checks that were deposited that were from a family
because there were larger checks and there were more than 100.
So that's their guess.
That's where my mind was as to if we're accepting checks
for greater than $100, why wouldn't we accept primarily
deposits
the school cafe for greater than 100?
Yeah, we can definitely explore that. I
the the other question too is.
Like are the negative.
Balances, are they from like
just everybody or is this kind of mostly on.
Our you know.
On the students that have the freedom.
Well it wouldn't be the free but the produced like is there
is it just kind of all over like are people
just forgetting to pay it now parents or is it they can't pay it?
I mean, what are we kind of looking at? Well, it could.
It could. It's probably a combination.
It's it probably is some of the
it might be families that can't pay it but haven't done the paperwork.
And that's where they
I think families have gotten out of practice
because the there was no need to file the paperwork in the last two years
because everyone was free and reduced.
So we expected a little bit of a struggle to kind of retrain parents
or new families or, you know, movements that might not be familiar with it.
So I think that is part of it as as my understanding,
as they're making the phone calls and doing the mailings,
they're also sending along with the mail and the emails,
the application itself for the free and reduced
just to try and get families that are in that situation,
you know, trying to get them the help that they would need
so that we can kind of get down to
who, you know, just who's not paying it.
I would bet just based on personal experience,
if you had an auto reload, that feature, I'm sure would get rid of some of this
as personal experiences like, wait, there's something I have to log into them.
I need a password attachment. What that is.
And I do believe there is an automatic reload option.
I know in my household I'm sensitive to
$100, you know, just not paying attention
to tracking the money and having that just come out. So
I think that could be an impact as well.
And this is a platform that my
my kids, when I went through school, used to my school buck.
So it's a similar platform but different.
So I don't I don't know all the particulars of this one,
but that's something definitely as we work with Mr.
Hummel going forward, that we can try and
learn a little bit more, get up to speed with what some of the options are.
Maybe, you know, just so that we can make sure
we're communicating all the options for families
or there's something with the CIT software that we're not familiar with is,
you know, is there better that are different way
that other schools are doing it?
I don't know. Do we
like are
the students are told, I believe
when their balances are low like by the when they're checking out or.
We have a policy that does not permit
for the child to be notified of a delinquent or negative balance
at the end in high school, they are able to discretely say something
for children who are, you know, over a certain age.
But that's not allowed to take place in the rest of the buildings
for regular lunch services otherwise.
And it's in policy that it can only be communicated to the parent guardian.
To anything, anything else on food services.
Move on to Cyber Update.
We have a quarterly update on the cyber school enrollment.
Good, good news in that area if you look at it.
So again, as I mentioned when I first brought this forward in August,
it's kind of tough over the summer because you really don't have a good idea.
There's still a lot of moving parts in August.
So if you look at that, so there's 21, 22.
You can see we spent almost $1.8 million on 109 students,
but right now we're down to 90.
So we've only got 90 students
that were being billed for in
cyber placement, which that's exciting news.
I did talk to our district registrar today and she you know, just
to make sure I was our numbers were good because I wasn't saying the payments.
It's odd, the payments were still up 456.
So there's still a lot of adjustments that go in the first couple of months
that were billed for students that maybe aren't here yet or backed off.
And we just didn't get the credit.
But I think the number of students is 90, and she actually has two more
that are going to be withdrawing coming back to us, too. So
so that 400,000,
50, 400, 6000,
that's what's already been billed for the whole year.
So that could go up a little bit, but not much.
Now. It'll it'll continue to go up exactly.
It's charter schools can start billing.
Why It's charter schools can start billing you in
July for students who are enrolled in June.
So July, August, September, you're making payments for students
that really are not going to go back there.
So till everything kind of gets out in the wash,
the numbers are a little out of whack the first few months,
all that kind of levels out.
But with that change in enrollment, with that much of a decrease,
we could potentially be looking at being a few hundred thousand
dollars under what was budgeted for charter school tuition. Yes.
Yes. On its face.
And so as of right now, we're definitely have moved in the right direction
with with some of the efforts to bring the students back or
that's good news.
And pre pandemic.
Do you know how many students
we had just said.
It's usually hovered around 50?
Okay,
thanks.
And that would make sense
because I think that the budget number was 800,000.
So it was budgeted for significantly less number of students.
I mean, prior to this year.
All right.
Thank you for that.
Any other questions about cyber school enrollment
and financial updates?
Like I said, just just real quick, we do have auditors
coming in on Wednesday, so we really do
appreciate your time and patience.
We will be updating all the financials once we get on the other side of it.
Right now, it's just been focused primarily on getting through audit and
doing the year end work that needs to happen and
learning software.
So once we have some preliminary audit numbers,
I will share those with the board as soon as we have them.
Okay.
Now we have contracts to see
are you letter of commitment, cybersecurity solution.
So both the the contracts for tonight and for the seventh
or are there any questions wanted to bring this one to your attention.
We will be bringing this forward in
November but wanted to go through it with this group
first looking for the recommendation of Finance committee.
This is something new.
This was not budgeted.
It was in the works last year with the IU, but they just pushed it out to us.
They're looking for us to sign the letter of commitment at some point
and they will be issuing a formal contract.
Do not have that yet.
What they're looking for by the end of October is a verbal commitment
that we are in.
What it is, is a five year cyber security consortium with C IU 15.
So they've put together a group.
They're doing several things at their level.
You can see the
what they these steps the overview of model
year one what they the five steps that they want to do in this current year.
But basically they're going to be looking at all
the schools who are in there looking at their their data,
what they already have in place, how they do things better.
They're going to be offering group wide trainings for districts.
So you for what
Mr. Nicholson and the rest
of the tech department to keep them up to speed on on cyber.
The big piece of this that I know Australia is very
excited about is a
a program it's a statewide this Albert Sensor
it's a statewide platform that basically it will
oh it will make you aware
that you them the tech department and the IU have any kind of intruders
if there's any ransomware or anybody actually getting in your system
that shouldn't be there, it will automatically alert.
So what this does is it can shut,
give everybody the opportunity to shut things down a lot faster.
So rather than try and trying to restore from backups after the fact, you
this buys you a whole lot of time
to do some things in your system before anything bad really happens.
So that's probably the biggest plus of this right now.
But to be part of the consortium as they as they build and try and really ramp up,
as we've been talking, the increased cyber security concerns,
even with our insurance,
this will just be a whole lot more that when we renew our insurance
that we've things that we have in place for cybersecurity protections.
It is a five year commitment.
You can see on the back end sort of why we wanted to not just do that go ahead
without at least talking through a committee
just because it's not a this is not a budgeted expense for this year.
There will be some offsets, something that we've already purchased
from the IU we won't have to pay for.
So there will be a little bit of offset, but you'll see the five years
15,500 this year and then 23
Any changes going forward?
Thoughts, questions,
but sounds like it's something that we need.
That's sort of where we came out of it, that it's a good and
being part of the consortium, you know, it brings everybody
sort of on the same page and it's somebody they're really developing.
They're looking to ramp up their I.T department to better assist schools
get this point. The some of the concern was
you're not to be able to
support all the schools with all this initiative, these initiatives.
So some of this money will actually help them do staffing to better help schools.
So it's it's a whole there's there's a lot to it but it is
sounds like a very good thing to be a part of.
And it includes an annual vulnerable
vulnerability assessment so that above you know,
to be included inside of that annual fee is something we would be receiving them.
I don't know that we do now and.
So that to pay for
but we don't we do we have cybersecurity like
any kind of software.
There's a lot of different pieces of cybersecurity like the MFA that you the
that was just implemented for emails and things.
So there's several different layers of things. The
for logins
we below the level of for the contracts we have
don't we or they just not
they're they're very layered this this would actually add there's
nothing that this alberich sensor that the one of the key component
that I said that I think they're most excited about
everything that we have is after the fact
some things you the backup systems, what we do for backup, the offsite backup
that we can restore from part of this, though, is actually initiative
to identify it when it's happening and shut it down right away
so you don't have to back up. If you can just shut them down
and keep things, keep them out of taking your data.
And that's not only just doing things, but then trying to sell it or do it
that way.
They don't even get their hands on it.
So I think that's the biggest component piece of this, and that's not anything
that we have currently.
And that if we were go to I mean, if I think the estimate,
if we did it by ourselves
would be almost $30,000 on our own, Just if we just purchased it
with outside of a consortium, just that product itself.
Now understand this is to be board approved.
And. It has an October 31st deadline on it is.
So you're looking for the Finance Committee to recommend this to the board?
Yeah. Well, yes and no.
The IAU has agreed that they will take a verbal commitment
if we we would let them know coming out of finance that based on the recommendation
of the Finance Committee, we are going to move forward.
We would then
count on the Finance Committee to basically say we do recommend this,
we would bring it forward as to the full board for approval
of the actual letter and the contract in November.
So when would we start paying those
bonds?
I'm sorry, that the 15 five. Yeah.
That we would get billed this year.
I don't know They'll bill it at some point.
They they're still working to get schools on.
They're still getting this up and running.
So but as soon as we do get it up and running, then we have access
to that Albert Sensor and they'll work to get us live on that program.
My guess it would be pro-rated based on what was left,
if it's an annual school year budget.
No, that's special thinking.
I we did ask a question
like we're halfway, so we already just renewed the contracts.
Did we knew a bunch of contracts.
I know it's not the same thing in July.
So now we're going to double down. I mean, this says better.
We didn't the contract any
of the contracts we've done in the past don't cover any of these things.
So the next year, I mean, will we still be doing
if we move forward with this.
Then do we not do.
What we had to still do with the other layers of because there's
different contracts of different pieces that either in
think goes on here and we can come back to that.
There are other pieces that help our network run better.
So some of what you see are just network networks contracts.
And I'm not remembering specifics.
There is one.
Piece that that might be is what standing out for you? Mr.
Schmidt There is a we currently pay about $7,000
for Jerod Help me with my words, please.
Data recovery
piece.
We have a I so like,
we got that like three years ago.
You remember that
basically all the windows were affected
and a bunch of servers and we were down
probably from three in the morning till that entire day.
And a bunch of like we read through all the time laughs Any kickback to.
The the forums.
And that sort of thing happening at all.
So that's that's a big relief for us.
Not to mention countless people lost a lot of data that they is
in fact that not to thrive on that stuff.
So that's the sort of thing that I want to check this.
Oh yeah, this sounds like it's great.
So we already have that back up piece through the IUE that we pay $7,000.
For that would be wrapped into this.
So we would not.
Be paying that 7000 on top of that would, that would wrap into these fees.
So yeah.
So there are some pieces that would wrap into this that we already have.
Okay.
So this would technically replace that $7,000 cost, but provide enhanced
additional security above and beyond what we currently have in place.
Correct.
And you'll still see IU contracts because there are still several
other network service contracts that we have through the IU
that are separate from this that still have to happen
just for other services, not just the cyber security piece of it.
This is just very specific to cybersecurity.
So do you need
a motion from the Finance Committee?
Okay.
That I would move to recommend verbal approval with the IU pending
full board approval and Finance Committee recommendation.
So moved Kathy Secor.
Second, Mike Rizzo and.
I make the motion.
I made the motion.
I don't call for the motion regulation switching.
It's like, okay, I was confused.
Just need a second.
Is there any discussion?
Okay, all those in favor
say I, I, all those opposed say no.
Okay.
The CAIB letter of commitment for cybersecurity solution is approved.
Okay.
Is there any public comment
online or in person?
I know
we don't have anybody attending in person or online
or anything else for the good of the order.
Okay.
So I'm going to move to adjourn the Finance Committee meeting at 604.
So move Mike Rizzo.
Second. Lindsay.
I was in favor.
Say I was opposed.
Now we are adjourned. Thank you.