Please
take it off your
survey.
Good afternoon, everyone.
Welcome to the February 24th Finance Committee meeting.
I like to call the meeting to order at 4:00
and ask for everyone to please introduce themselves,
just indicating if you're with the school district,
school board member or citizen's advisor.
And, Greg, if we could start with you, please.
Good afternoon.
Greg Hormel, director of Food Service,
Regis Berwyn Administration.
Citizen.
Darby Public Citizen Advisor.
Terry Singer, School Board Member.
Cathy Seger. School Board.
Joe McFarland.
Superintendent Lindsay Drew. School Board.
Age Citizen.
Mike French Business Manager.
Okay. Thank you, everyone.
I did hear from Jeff King
that that he wouldn't be here, wouldn't be able to be able to join us tonight.
He's traveling.
I also wanted to announce that the meeting is being recorded.
So everyone knows.
Okay.
Moving on to the approval of the minutes
they were attached to the agenda.
Is anyone have any comments or
concerns?
If not, I'll take a motion to
accept them.
So the second.
Everyone in favor.
I thank you.
I just realized that Cap is not here to decide on that table.
So I didn't hear from him.
So he may be on his he may be on his way.
Okay.
Unfinished business.
Three items.
The first is to get an update on
some of the experimentation that's going on with our
food service program and implications for the National School
Lunch program down the road.
Greg.
Thank you, Terry.
Just to bring you all up to speed.
Typically, this is the time of year where
we've come to the board in the last few years
asking for a recommendation
to stay off the National School Breakfast and Lunch program.
Last year when we did that,
there were a few of you that had some more in-depth questions.
We did a little onsite field trip to the middle school and high school,
and at that time there were some board members
that were asking what needed to be done to go back on the program.
To give a little more background for those of you
who might not have been a part of this discussion last year.
The National School Lunch Program went through some major changes back
in 2012 2014, with the enactment of the Healthy, Hunger-Free Kids Act
and in 2014
Smart Snacks, which can be a little confusing
now, was implemented and that really regulated
the nutritional content of all foods sold in a school.
We felt at that time
it was best to stay off the program
and to better meet the needs of our students.
There were some limited choices available back then.
Our manufacturers were still trying to catch up on some of the regulations.
They were also a little leery because in 2012,
some regulation or changes then were relaxed.
So it took them a little time.
Fast forward here now, about six years
of the manufacturers have developed and reformulated food and beverage options
that really have become acceptable to most, most high school students.
Keeping in mind that there are nutritional requirements
that we must meet.
In addition, there's been a lot of relaxation,
and I'm sure most of you have heard that over the last few years
of some of the regulation and changes
from 2012 and 2014.
So we've been really diving into that
and looking at those changes.
And what does it look like to go back on the program?
First and foremost, we still have
always wanted to meet those diverse needs.
So that is a challenge, of course, with high school students
and then with change.
But we are at the point now where we think with the the change
in manufacturers, with their products, the changes that we've been making,
we have gone back to more whole grains.
One of the changes and the relaxation of the regulations
was from 100% wholegrain to 50% sodium restrictions are on a hold,
so they're not getting as drastic as originally defined
in the 2012 changes.
We've been implementing some different beverages
and basically our special of the day at the high school
for the most part, follows the national school lunch regulations.
There's still a lot of other meal choices now, of course, that do not.
So those would have to be, in some cases, tweaked.
There are some products that would have to be eliminated.
And the largest challenge is finding the what I would call the
the new twin nutritional brother and sister of some products
where we might be selling an item now.
But if we find the reformulated product
just to replace those products
now, granted, there's going to be products that can't be replaced
or, you know, some replacements are drastically different.
So keeping in mind that we're going to have some pushback
with some elimination, but we think by
rolling out different meal options,
we definitely have to address an aging food court and cafeteria,
which will be 25 years old next year, Do so
with some minor tweaks in some respects.
And we've already started because regardless if we're on the program
or off the program, we want to take care of those customers.
So we did a little painting just to brighten it up.
It still needs to be brighter and we're going to change
some lighting with some minimal costs.
We're removing some outdated green pillars internally.
The maintenance guys way to see it, are doing a great job.
There was some tile left over from the project, of course,
and other building projects that can be used to tile certain areas
where these powers are being removed, but really trying to open up sightlines.
Now, of course,
going off the program and then going back on with some changes
of those products, we would need to purchase some new equipment.
And we kind of mentioned out last year, but we didn't get into great detail.
For instance, the fryers we're still presently frying
to offer baked fries
that of course, meet the nutritional requirements.
We would need an innovation
estimated costs of $15000 to $18000,
and I can go out and secure, of course, bid pricing.
I just wanted to first relay some of this information and
and then get your direction.
We really need to look at
how the students come in and enter and exit.
So we're thinking that we have
in selling merchandizing refrigerators to merchandise our products better.
That's around 18,000.
We do have in our capital plan this present school year
funds to replace our beverage merchandizing course.
So I might be $1,000 off, but let's hope
we can get them to sharpen their pencils with their bids.
Other things that we would love to
add to really add to their experience as self-serve
fresh fruit and vegetable bars, and also
it would also be a toppings center for different food items.
If we're offering taco salad, it would house all the different toppings.
So kind of like a mobile salad bar.
But just think of all the colors and having the ability to choose.
They still have their ability to choose.
Now, on the special the day.
But at the high school when it was constructed, it was
there.
There isn't a lot of space like in our deli area
and other areas to offer the required fruits and veggies.
So upon brainstorming, we thought of we added the self-serve stations
that would add to their choice factor and they're satisfied.
Action.
So the equipment like that, that would have to be purchased
next school year, We don't have budgeted.
We're looking at
those cold tables
maybe coming in that we would need to roughly,
you know, these are just rough costs at the moment until I got traction.
But around 28,000,
we would need
some other equipment to change the flow.
That's cashier carts.
We're hoping that we could do double sided cashiers, actually increase
the amount of cashier lines from 4 to 6, but doing it
two lines per employee.
So we're actually freeing up an employee for presently
having some staffing challenges with three different openings right now.
So that could also potentially help with staffing,
but at a definitely speed up the lines.
So we're looking at a total outlay
of estimated cost of 81,000
with the merchandizers
being covered right now this year, 23.
So we're looking at a little over close
to 48,000 for next school year that we would need to have some direction
where that would come from.
But yeah, I'm sorry.
Thank you, Mike.
But that would really add to our experience.
Now we would have to address pricing.
I know where some of the board members that were involved in the conversations
last year, they understood the
trying to keep the sales
steady, meaning the satisfaction of our students coming in.
We might see a dip in some of our sales and some of our revenue.
That didn't seem to be a very large concern.
The focus was more on a healthier variety,
but we would want to do
everything that we can to keep their satisfaction up,
which in essence would keep those sales numbers up.
There could be a dip.
Those things are kind of hard,
but we would have to take a real hard look at the pricing structure
and try to make it fun
and exciting for them.
So we really think that
if we're allocated the funds and the go ahead to make some other tweaks
in the food court, we can go back on the program.
I have been told, because one of my issues, quite frankly,
was I was spinning my wheels
with like, well, if we eliminate this or eliminate that,
we really should go in full force and just do it
simply because we're so close to eliminate
some items, we can receive the federal funding.
Of course, I wanted it to be perfect from day one.
We'll have to tweak in our first year.
And if quite frankly, if it didn't
work,
then we always had the option to go off again.
But once you upset that customer base, that's another one of my concerns.
You know, we really got up to do this
and I've been meeting with a small group finally of students at the high school.
It's been my wish for the last couple of years.
They're just so busy.
But I do have five that have given up their time
a couple weeks ago, and we're going to meet again this week
trying to get in student engagement as is really key
fact, one of the new areas,
one of the new stations, because we want to rebrand and new signs.
We're thinking about doing it
with trending favorites.
And the reason for trending with social media is to set up a way
for them to submit meal suggestions
so they're they're really involved.
So this is a huge, huge process,
but one that we're ready to tackle if we have the support
and the understanding to go back on.
And I wouldn't ask and you wouldn't have to vote to go back.
Why? That's something that we would participate in.
But knowing there could be some small challenges,
some student pushed back a little bit to start.
As you know, we are taking away some things that they got used to.
But keep in mind also, we've been doing what I think is a fairly good job
with them, which some of these are items, you know, from elementary through middle.
So we just have a three year
group of students that are kind of accustomed
what the what they're accustomed to on a daily basis. So
questions I know that's a lot to digest.
No pun intended.
I appreciate that deep dive into this program.
And this all sounds great to me.
I did want to see us move toward
going toward the the program because of the guidelines.
I think that the consumers are getting savvier with what they want to eat.
And I love the idea of like the salad bars and toppings.
I'd like to hear from the other board members
if there's anyone who wouldn't support this, because it's my next
thought is that Mike's going to say, where are we going to come up
with 81 or $60,000 in the capital plan next year or something?
And that's on General Services.
So he might want to hear from the board on that.
Sure.
So thank you.
First and foremost, Greg, for all of the work and research you've done.
And you know, even going back to that day that we spent
a significant amount of time with you,
I appreciate everything that you put into it.
I think it's not a surprise.
I was one of the ones who raised the concern when we voted on it last year
and wanted to make sure
that I fully understood if we were forgoing a federal subsidy
that we could account for. Why?
And then doing the tour
somewhat unearths additional concerns for me that I had of
not being as mindful as we could be about
the nutritional impact for all students, not just a small portion of them.
So I think that with the
loosening of the guidelines and the ability
to roll back into that program and knowing that
all things in a perfect scenario
that we would be saving would be receiving approximately $100,000 a year.
Right.
In federal money.
Obviously, there's the variable of not knowing
whether or not the purchase rate would decline
and what the revenue would look like for that for food services.
But if we don't have the feeling that it's going to drastically reduce
and you're already incorporating changes and not seeing significant
decline, then I would be inclined to want to support continuing
to move forward with that and being able to receive those federal moneys.
Obviously, the the purchases that we would need to make are a one time
investment and an expense, not something that's going to contribute year over year.
So the savings could or additional revenue could offset some of that
within a few years time.
Greg, what what
school year when it started
to start in the 2021 school year.
So so this coming fall?
That is correct
because originally you had said
possibly a four year transition and a two year investigation.
So I guess everything you found like you
said, was looking better than expected.
So does anyone have any opposition to it?
I guess I just wanted to ask Mike a question.
I would assume, since you're thinking this way, that
the budget request
that came through you, that wound up with Mike
included some of these items?
A I can answer that, Greg, because of every year
prior to this cuts cafeterias self-supporting.
Greg does not submit regular budget items
because it's self-supporting.
He has done such a great job that all we see are those capital needs
that we've been providing upfront to this point.
So I think that
would be and these are I would
these are all concerns that I think we can find solutions to fairly easy.
But today I don't have them.
So the first one would be the
the unknown of a reduction.
We are at the point now.
So with the year we're in, the general fund
is already making an $80,000 contribution.
Essentially, we're not making contribution.
The salaries of and benefits for Greg are now being accounted
for in the general fund instead of his cafeteria fund, as they had done before.
And that was something we discussed, knowing that the general fund was going
to have to participate and help offset some of the costs.
So that was a solution that we came up with
together that that made some sense in just moving some of those costs
that are in the cafeteria fund out of that and directly because,
you know,
Greg, salaries and benefits are the administration of this
the system not exactly what's going on day to day into the operation.
So it made some sense to move out of there.
That being noted, Greg and I have not had conversations
going forward of what that looks like for next school year.
Is that does that need to increase or how much does it need to increase?
Rather there isn't.
And so one of my concerns is not, you know, what we were talking about
before gave us the ability to research some of those things.
Greg and I have talked and what he's seeing as he doesn't
believe it's material, but that would be my concern because
as we're pulling together what our needs and wants are for next year
and looking at whether or not we have to raise taxes,
that at this point in time would be an unknown.
I think Greg and I definitely work towards that and come up.
As you know, I'd like to see a worst case scenario of what
not exactly what he thinks we're going to spend.
But worst case scenario, what would the general fund have to come up with
if some of these changes
really took the legs out from underneath the system?
Now that will be offset as as Mr.
noted by the incoming federal funds,
but it's a little bit unknown as we sit here today for the budget
as well as the additional funds for the capital needs.
As we've discussed before.
We want to get through the Safety and Security
project and then I would feel more comfortable
saying that there's these funds left over in
our capital fund.
I don't know that I would have
that information for you until we get a little bit clearer picture
on that other thing.
So that would be two items in terms of I think they're great ideas,
but we still have not really worked out what is the mechanism, worst case
scenario that we would have to to pay for these things to keep them going.
Make the 100 to 100000?
Would that come in a federal during a federal fiscal year,
which begins, what, October 1st?
No, that would come during our normal.
So that become coming between July and June
paid in.
How that would come to us though is
Greg would submit monthly reimbursement claims.
So obviously in the months of July and August or July, we're getting nothing
because nobody's eating anything and then it starts to trickle in after that.
But those funds will come to us
based on the number of meals sold at the high school.
So what we've been
basing that on right now are the number of meals at the high school,
if that changes.
If that goes down, then that revenue would follow it as well,
because it's a direct reimbursement based on the number of meals sold.
So it sounds like what you're saying is
you need to give it a little bit more thought in terms of the
I guess you could make the change without the capital expenditures.
I would assume it wouldn't have to occur right away.
We wouldn't be able to produce some of the food
that we would need to like, okay, eliminating the fryers you need
and you know, you need another vessel to cook food items in.
And if we're able to do the big fries,
I mean, what we need to do now is to develop a menu
that's a large piece menu recipes,
and then enter into a nutrient analysis system
so that we can see where we where we fall
within the nutritional guidelines.
So some of our items, we might be surprised.
We might not be able to offer big fry every day.
We might be able to.
It's definitely going to be a smaller portion than our fried French fries.
And so so Mike, I guess in terms of your
your commentary about it, what.
I think it's a great, great idea
and way to move forward I'm just not certain with
and some of those actual some of those other requests
would as we go through the general services process.
You know we learned last board meeting
about some things at the middle school auditorium.
We're going to get some more data.
There's just a couple of those types of things, Terry, that
we know we have probably have a need,
but I'm not certain we've identified how we're going to pay for them.
So in the committee's standpoint, I think if they were to say
this is something we want to see,
kind of move towards the top of the list or something like that,
that may be different
or just saying, you know, we
would support moving forward this assuming all the other things
fall in place and being able to afford it just like any other budget discussion.
If the funds,
even though Greg may be ready
and he's prepared, that if the funds don't make us comfortable,
then maybe we make our decision based on that.
However, I'd hate to to kind of based
on what we're talking about now, push that any further.
If if the food service areas are ready to make that move.
I guess I'd like to ask Kip, what if you have any feelings
kept about this?
I don't know that it should be pushed.
The top of our priority list,
I think, is certainly a worthwhile endeavor and appreciate Mr.
Hammer's efforts.
My only concern, and it really doesn't have much to do with finances
is the infection control issues associated with the with the cold bars.
And I'm not sure how you how you would quantify that in a in.
A school setting.
Is the cold bar necessary to meet the federal guidelines?
I guess.
But you make the salad bar
necessary. L.A.
So the question was just make sure that we have a record of that.
Are the salad bars needed to meet the regulations?
Keep in mind, or maybe we should use the word cold bar.
I used the word salad bar, so you can just visualize something.
We need if it's not self-serve.
So and it it would have a sneeze guard.
But I understand still the handling of the utensils.
We could do what we are presently doing at the middle school
and which we designed that food court.
So we put in merchandizing refrigerate items at each of the stations.
So. Mr..
I think you remember that we're I mean, it's nicely
provided to the students and it's attractive.
We could do so in these cold tables where we package
our food items are fruit and veggies and we seal it.
We can use that
cold bar in the same fashion instead of having them self-serve.
We would still like to put on put the self-serve toppings
for some of the the like tacos and things like that on the same.
But we could package it.
So we still need something to display our fruits and veggies
to offer additional because of lacking space.
Don't you have anything that's self-serve right now?
Oh, all right.
There are some I don't know what food is.
Self-serve like our pizza and our soft.
Right.
The sandwiches are wrapped in foil.
Aren't there some toppings, too?
There's cracked, and they're not done in the most appropriate way.
When I.
When I say appropriate, I really want it under a sneeze.
We're using mobile carts where we're doing it on a shoestring.
This would really actually tidy up not only in appearance but
properly being able to offer those items.
But you still have the handling of the utensils.
That's one of the reasons I don't eat at a buffet.
I mean, at some point,
like, are you would would you want the board to express one way or another?
It's it's interesting moving forward with this.
Would it be brought forward
as an agenda item on a school board, a full board meeting?
As Greg noted, we were just doing that because of being out on that limb of
just making sure that all school boards
were aware each year that we were off that program.
There's no requirement for the school board to have any action
at all.
So I think
I that's where I'd like to go, is I don't I don't know that I could,
from a finance perspective, support this today,
but probably will realistically get there by the end of March
when some other things become known and some other things have been sorted out
in terms of what our capital needs are and then as well as
what we're doing with our operating budget and some of the other things in there.
So to me, whether we move forward on
this depends a lot on what we're doing in some other areas,
depending on how we can afford it and and what we're doing now.
So if we're going to make some decisions that extend us in other areas,
I would probably turn to Greg and say this would be something
that would be more comfortable to wait.
But just where we're at in the budget process, just getting all the requests
here at the beginning of February, sorting all those things out,
I see a path to get there, but I'm not exactly sure what it what it is today.
Okay, So if we let you know by the end of March,
if those capital needs can be met for the next school year, enough time.
Could you probably be doing it over the summer, right?
Or again?
Ovenden Yes, and what I could do now is get firmer information
so that I make sure that my numbers are as accurate as possible.
I can get some quotes.
I'm just what's ballpark in some of this
that would be helpful.
Okay.
If there's no further questions.
Thank you very much, Greg.
Thank you for all your work and
and how far you've gotten progressed us to this point.
Thank you. Thank you. Broken down.
Okay.
Next item, just an update on the vendor fair.
So just as
as a reminder for those on the committee,
we've been talking about a vendor fair
and actually we're planning on holding it
here towards the middle of the month we're in in February.
And I talked to Mr.
Singer before and due to some challenges in the business office, some of them
personally weren't able to coordinate the vendor fair for the coming year.
And rather than push it off
to a different or a different month or something
that may not make as much sense, I'm just asking that we look
if everybody's okay,
if that vendor fair now does not occur until later
in 2020, it'll be next fiscal year, probably by November, December
of that time period.
But just not something
given some of the things that have happened in the past
I was able to pull off
as well as some of the challenges that we've been met with in the business office
here over the next couple of months,
just not something we're going to be able to make it come to fruition.
So I wanted to update the committee on that and also get some feedback
about that request to to essentially push this off
until late in the calendar year of 2020.
Anybody have any.
Objections? Okay.
That sounds good.
Thank you.
We can appreciate that.
Thank you.
Milton Hershey Trust
review.
That was, I guess, going to be undertaken. Yep.
So we have provided
it. Are Hislop, I'm sorry,
with all of the information that is requested.
And what was requested was a year's worth of
statements that we received from Fulton Bank,
as well as the investment policy
that informed that Fulton Bank operates under
and then how the dollars are spent,
just our quarterly disbursement from there.
So I will have the report by March the 10th.
So I fully anticipate that we will be able
to have the report on the agenda for the March 24th
meeting Finance Committee meeting.
My intent would also be to forward the report out to the committee members
once they receive it, so that everybody can have a chance to review that document.
I would request, though,
that we don't have any questions or you don't send any questions my way
is that could violate the Sunshine Act,
but more or less just to get you what you need.
But then we probably plan on having representatives here
at our next meeting to present the report and everything that goes along with it.
But I,
I know that the report will be in my hands by the 10th of March.
Do you just mean that when you send the report to us
that we don't reply all and start deliberating?
Correct. Correct.
You can. We can get it. You can ask information.
We just cannot reply and start talking about it.
We have to do that in the sunshine.
And just a refresher.
This is to make sure you see.
Where the cash flows are going, but to see how they're doing against their.
Benchmarks.
So that's the key takeaway from this report
and the records that were available.
Before I can make heads or tails of it.
So just out of curiosity, why the delay?
I mean,
I would assume that when they did this,
that they knew what they would need to ask in order to be able to review it.
So if we're looking
at having it by the end of March,
I mean, we're over 60 days past what the
the contract had stipulated.
I don't know that I have a good response
for that.
So, Mike, it'll be available
to, I guess, Finance Committee members who said by all.
All after the 10th.
Time that and then it'll be on our Finance committee agenda for the time.
Correct. Okay.
And my plan at this point would be
to have them present their findings in the report on the 24th.
Yes. Okay.
All right.
Does anybody have any questions about that?
Any further questions?
Okay.
Thank you, Mike.
I know new business.
The first item is a
mid-year review. It's hard to believe or.
So part of the party building
next year's budget is always a look
back at what we're not have, what we have, what we've done in the past.
But how are we doing currently?
Because a of what we depend on is that the information
that we're working with right now today
is good information and doesn't change that much for next year's budget.
So Regis is going to go over some of the expense.
Just a quick review of what was done there and then I'll hit on the revenues.
So this covers, I think,
July to. December. Yeah. Yes.
Because so it's exactly halfway through our fiscal year.
Some of the times you'll see that some things make sense.
Halfway through the fiscal year
and then other times you'll be like, Wow, we've spent that much already.
We're going to be way over budget.
But if I ever get this to load and come up that year,
the salaries and benefits that are in one
and 200, we're obviously only about halfway through there.
Most of the other things, especially for equipment, those in 700,
those are things that we buy
as soon as the school year begins because we budgeted for them,
because we had a need to replace whatever we had.
So we do push that.
Those are purchased as soon as the fiscal year begins.
So you'll
see in some of those it's we've we've spent mostly all of our equipment
money in, which is something that that we want them
to be doing
so much information in areas and.
That's that's what it is.
That's right.
This spreadsheet is getting way
more attention.
So yeah,
that's the chart on the left, the numbers,
that's just the goes from 1617
school year through 1920
on the left hand side goes through each of our accounts.
So the first one there, 102 hundred.
That's going to be our salary and benefits accounts.
So first thing that
jumps out at you a little bit is why as of December.
Were a little bit lower.
In salary and benefits than the prior years.
And really it just
has to do with the number of pays that we've had through
the end of
December 1819, we actually had one more pay
with 1313 pays posted
1920 we only had 12 and
that really catches back up in
what would have been January with three pays in January.
So if we were to do it through the end of January,
I would have been right on track.
So that's why the salary and benefits
appear lower
as you go down
through three through through the nine hundreds.
I mean, they're pretty much consistent with prior years,
might be a little bit higher
in the four hundreds.
But we started a new lease for the iPads
at the elementary level.
So that that's why that looks a little higher down
towards the bottom, the midyear to end of year.
It's just the amount of money left to be spent.
Total year end expenses
are the last.
The 1920 number is obviously a budget number and then the percentages
at the bottom there, those are percentages spent as of December.
So I mean,
when you look at those percentages, when you look at the figures,
they're pretty consistent across the board and
I believe this exercise really one
indicates that we're either on track or are not on track.
And I believe we're on track for the end of the year.
And then
it also helps to see any anomalies.
As you go through.
And at this point,
I'm not seeing any anomalies.
So I think it's a pretty good indication that or we're going to be
where where we're at now, midyear is a good indication
what we're going to be at the end of the year.
And then the graph on the right hand side,
really just to show you kind of really how level
the spending is
in each of the accounts.
What does account 400?
It is services,
services for the school.
But mostly
they would be more operational services.
So when we pay for water, it's the 400.
Um, as Mr.
Baldwin noted, we currently have leases for our iPads
that is accounted for in the 400 level.
So it is just those types of services but more oriented towards
those that we wouldn't consider
as much in the classroom as just overarching for everything.
Yeah, because that's the one category that jumps out at me.
It's got a 40, almost 45% compound compound annual growth rate
since 20 1617.
Yep. School year.
And so it should be noted that so the jump in 1718
would have been the addition of the iPads at the secondary level.
That's when we entered into that lease.
And then, as Mr.
Rory noted, in 1920, we've entered into an additional lease for there
not 1 to 1 at the elementary.
There are classroom iPads, but that's the reason for that
increase in there is is directly attributed to those.
Thank you.
That's really all
I had for mid-year expenses.
If anyone has any questions, I noticed on the agenda
you typed out some information as well, as well as the attachment
and it says real estate transfer tax is up considerably as of December 31st.
I know you're still on my thunder.
That's the oh, that's your job because this all looks.
It all looks good. No, that's right.
That's and that's a little bit of what
we're we're providing with this information is it's
what we're seeing is it's consistent based on prior fiscal years.
Every fiscal year since 2005 that I've been here, we've
ended with a surplus.
And so my inkling is that we're headed in that direction
because we're consistent, because it's remaining that way.
So I'll go over the revenue.
There's not an attachment for revenue, Right.
Okay. This
I apologize.
I've lost my place.
Terry,
Just so you know, General Services is not starting till 515, so
we can run a little late if we need not go.
Through all that to get back to what we're doing.
Really good for revenue.
But real estate taxes, we would have
we collected by the 31st of December.
That's the due date.
Anything not collected by that time is turned over as delinquent.
So we're above our 96.5% collection rate almost at 97.
And I do want to remind board members.
The 100% collection rate is not possible because we offer a 2% discount.
So 98 is about the best we can hope for that.
Everybody is paying their taxes on time.
You can see here in Derry Township, we're we're darn close to that.
So that is a huge help.
57% of all of the revenue that we use
comes directly from real estate taxes.
So one of the facts that our taxpayers
pay their taxes on time definitely is a benefit to the school district.
And something for me
to count on going forward that we know those cash flows will be met
because this is a large part of the revenue that we live off of
throughout the rest of this fiscal year.
The way that it happens with some of the state revenue is that is front loaded.
So we received a lot of the state revenue at the beginning of the year.
We won't receive those payments towards the end of the year.
And it's these real estate tax dollars that keep us paying our bills
and doing everything on time.
Real estate transfer tax
is just blowing the doors off of everything.
As of December 31st, we would already collected 71%.
I actually had a
an article from Pennlive that
I think that was out in November
of December of 2019, but basically showed
Derry Township had four of the large four of the ten largest
real estate transactions in Dauphin County happened in Derry Township.
Is that because of Crystal Way.
That does not include Crystal Lake. So
that payment will still be so.
I know that one is coming.
So we will we will blow the doors off of our budget there.
However, you know, the reason I bring this up, not only because
it's so strong, but also to remind everybody that it's one time
those properties, not every day.
Do you have million dollar properties sold in your township,
maybe a little more often here
in Derry Township than most, but it's still not something
you know, some of those consider properties that were, you know,
in total or about $30 million in sale
value that are included in that number.
Mike, how much do we get to that?
Isn't it 2%, 1% by the buyer, 1% by the seller.
And then we split that 1% get split between the township and the school district.
So we get half of 1% of of that.
Who gets the other 1%?
The state gets one and then we split.
Is it the township or the county?
But we only get half a percent of the one that's left over.
The state gets 1%, and then we split the other 1%.
And I'm questioning myself.
It's either the township or the county that gets the other half of that.
So you promote, you reduce your taxable.
Once again to a one time revenue
driving of that that so my budget numbers
my budget number we will be on target
we budgeted about $800,000 a little over $800,000 to collect this year.
We're going to end up this year closer to $1 million.
You will not see $1 million in my next year's
anticipated revenue for real estate transfer tax.
It's going to go back
down to the six or $700,000 that we normally see on a yearly basis,
because I'm not going to
anticipate that there's more land to be sold in those.
Buildings that were sold.
The K-Mart property was one of the ones
that was on there, and there were some other.
I have heard,
oh, maybe it's
is it the the school on the hill for this or that?
They maybe they wouldn't pay that.
Something noted as purchased
Park Village plaza on Walton Avenue
that happened in November for a little over $12 million
and then the Hilton Garden Inn
on Main Street, Derry Township, changed hands
just a little over, just a little under $12 million.
And then the Hampton Inn and Suites
for a little over $15 million.
There was one more in here.
I'm sorry, Lindsay. Penn State health was part of that number.
I don't know how they
that'll be interesting to see.
That's in here is 28.4 million which that sold for in December.
I don't think that would have been collected and remitted to us in December.
So that's why it could be in there.
But that would have been a real quick
turnaround on that payment since it just happened in December.
But those dollars could be in there.
But those are some of the ones that have changed hands.
I know that the Coke complex
was not as large, but I know that as recently changed hands,
I don't believe that that's in any of this information.
So, you know, we'll keep an eye on that as we move forward.
But once again, that's a hard one to project.
What's what's it going to look like next year
because of some of the anomalies?
Hopefully they're not anomalies.
Hopefully we have a multi-million dollar building sold every year here, but
we'll keep an eye on that payment in lieu of taxes.
These are payments that we receive
for essentially the giant center
and we receive those funds through
receipt of the portion of the hotel tax.
And then we have a payment in lieu of taxes
with the Hershey Med Center for some properties.
So we've collected all of those funds for those,
and we're about a little over $25,000 above our budget there.
And just so happens for earned income tax,
we looked at the collections through December 31st.
We are exactly halfway.
And I wouldn't put that up there necessarily unless it worked out that way
exactly halfway through the collections.
Those are a little weird.
That doesn't necessarily have a great correlation either.
What what ends up being a good number for that is in May
we start to receive all of the payments for people who finally paid their
2019 taxes for income taxes.
And so we'll see a little bit of a bump through April and May
because of those collections.
And those are the best indicators of whether or not it's staying strong or not.
But collecting half of the money halfway through the year is definitely a good sign
for for those
state revenues.
And federal revenues remain consistent.
No anomalies there or anything out of the norm.
Mike, when you do our budget planning and we talk about whether to raise taxes,
you always bake in a general amount that you think we will increase, right?
Like if you eat, you may or may not put in a real estate tax,
but isn't there a certain percentage that, you know, it will grow organically?
What we try to what we shoot for is that if our are far local,
if our revenues grow by 2%, where our revenues have to grow by 2%,
sometimes that happens organically.
Sometimes that needs to have a tax increase to meet that level.
And so that's a little bit of a challenge.
Kathy, when we look at something like real estate transfer tax and so
and this is a little bit of preparation for that,
you might see a reduced figure from me because I'm being a little
conservative in terms of how many more properties are there that
are about $15 million that could be sold and maybe there are a lot.
But I, I tend to look back at what is the history of collections.
Tell me that it is that we can count on
and then we budget based on that not hey, we got this amount next year.
So I think it's going to increase by $100,000 more.
When I, I have no real basis to make that determination.
So that's what I use is, is
we assume as long as our revenues are growing by 2% per year,
that's how we determine how much we can afford
if everything is staying within that that growth.
So when we talk about
whether we need to raise taxes or not, you put that 2% in or you didn't.
But no, don't.
I will. Correct.
So what? Count on it.
Know what I'm looking at in preparing right now is assuming that there's
no there will be no increase in taxes.
I'm just getting through the information that has been provided
by the departments to then, you know, we'll start to talk about that next month.
Here's everything that we received and here's what I'm seeing.
Does it fit within that 2% or here is what we were already short on.
Inevitably, we always know that when we look at the first numbers
this time through, because it's a request and we haven't administratively gone
through any of that information, we know the number from expenses will go down
because that's what it normally does when we go through our administrative process.
But just like in prior years, we want to show you here's
everything that was requested from the buildings.
So that you have a starting point to see what that gets reduced down to by
the end of
the final budget approval.
So what we'll be talking about, what I plan on talking about
or bringing forward at this point is as of today, we don't have any additional
no new employees in there.
And I don't anticipate showing a tax increase with that.
Should that change where we determine that we need
or have needs for additional staff members next year?
That's where we will talk about what a tax increase looks like.
But I guess my question is, if we know 57% of the revenue
comes from real estate taxes and the other 43% doesn't,
can you ever count on like that?
That will go up a certain percent.
You don't ever Bagdad in like, you know, maybe incomes will go up
so income tax will go up or I don't see that.
No I do my budgeting for revenues based on what's happened in the past,
not what I think is going to necessarily happen in the future, because
I should qualify that.
If we have control over what's happening in the future, I may bake that in.
But something like earned income tax, we have no ability to
to tax any people any more than they make.
And should that drop or should that stay stagnant, there is no way to say so.
I could look at the information and say, if we're up 2% in real estate
or earned income tax today,
I might not necessarily say, well, we're we're going to be up
2% a year from now because I have no indicators
that would seem like that's that's a rock solid decision to make.
And thus, you know bacon to school district budget in forward.
It's those things that we know we can count on that we know we're billing for,
that we receive dollars back that we that we count on like that.
I guess I'm just trying to figure out what school districts are doing
because when I go to the Dauphin County Tax School,
everyone does something differently.
Like you'll say, well, what this will do, we haven't raised taxes in ten years.
And they'll say, well, we rely on natural budget growth.
What does that mean?
I can tell you
some of the other districts around us, you know, in four we receive about
18% of our revenue from the state
or one of our neighbors that we get compared to a lot is lowered.
Often they receive 34% of their revenues.
So when that school says that, are they saying that they are getting more
from the state next year?
That may be a portion of that.
I know for them the casino is a huge driver
that has year over year noted more
revenues, more as gambling gets expanded, all of those types of things.
That would be another natural growth item.
The other natural growth item is
is expansion of your your township or your school district.
However, for a school district, most of the time,
if that expansion includes homes,
that growth in revenue comes from the growth in cost,
because the more students we have, the more costly it would be.
So if they have other
they've expanded
businesses
that could expand their tax base naturally.
Some of that, though, being the state every year, gives at least a 2% increase.
If a third of your money is coming from that source
that's increasing by 2%, you have less of a need.
We don't have that.
We have we have 18% of ours that may increase by 2%.
So we're just it's apples and oranges,
you know, in terms of what other school districts are doing.
Thank you.
I do appreciate trying to figure that out, because when you sit with,
you know, there's
seven of us sitting there at a joint operating committee talking about a budget
for a school that we all contribute to and everyone different arguments and needs.
And I'm like,
I don't understand what they're talking about,
but you can't we can't compare ourselves to others.
Everyone's unique from the budget standpoint. Yes.
As well as
our expectations, I think are unique for us.
And we have to make sure we're both sides of the our business side
and coastal side meet each other instead of one getting out of whack.
All right. Thank you.
So, Mike, have you dipped into five B
or is that still to be covered?
That's we can go on to that now or no,
we can do that next time.
All I have in
there are a summary of salaries and benefits,
and the salaries have been increased based on our current contracts,
which at this point is the only growth that I have from a budget perspective.
So I'll
and you said as of now, there's
no no new staffing requests built into these numbers.
That's correct. Okay.
Yeah.
We're far away.
I don't have a mac
the I don't know where this is going.
This doesn't change any of your.
It does not.
Basically, what I would provide is that our salaries are up about 2.3%.
That's based on our contracts with with our staff
benefits
as of December 31st
are trending about and this is medical benefits only medical and our tax benefits
are trending about 10% below what we've budgeted.
So even if I add a 10% trend into that, I get to a zero increase for next year.
So as long as those numbers continue to hold true
from our
medical expense side, I don't anticipate
providing an increase for medical
costs for next year.
If you remember, in 2018,
2018, 19, we did, we had a blip.
What I'm hoping is a blip because it appears like it's coming back down.
But that was one of our highest years or the highest year
for our medical benefits since I've been here.
And we talked about last
year not knowing if that was a new trend or not.
So what I'm seeing now is it's it is dipping back down
so comfortable and not adjusting those.
So that's all information that has been
when we've been looking at our budget,
five year budget model, looking out into the next three years,
all of those things that were built in and assumptions of increases are are good.
I don't think we have to go any higher than what's in there.
Just remains to be seen as we get through the final request process.
What, if any, additional staffing requests
that we finally receive that would be included in the budget.
But I'm participate having all of that
information for you at our next March meeting.
You mentioned it's once built in is a 2.3%.
Salary, correct?
Correct.
Okay.
Does anybody have any questions about
the salaries and benefits 2020 once proposed,
salaries and benefits.
Okay.
You're here for the next meeting, right?
Okay.
So nobody from the public is here.
Listen, anybody has any final questions
and I have a motion to adjourn.
So moved Second,
I can't.
Second, Second.
Okay. All in favor. Hi.
Okay. Thank you.
Thank you all. Have a good rest of the night.