Okay. Good afternoon, everyone.
We are expecting one more board member.
Hopefully he'll join us momentarily.
Welcome to the October 28th Finance Committee meeting
called Order at 4:01 p.m..
First order of business.
If we can have a roll call and just indicate your name
and whether you're with the administration
of a school board member or a citizen advisor.
And if I'd if you could tell us a little bit about yourself
when we get to you, that would be appreciated as well.
Regis, could we start with you?
Regis Foreign Administration.
I'm just in the business office as an accountant.
Darby Vallejo Citizen Advisor.
Terry Singer School Board.
Cathy Sticker School Board.
John McFarlane Superintendent.
Lindsay Drew School Board.
I'd started, Bernanke said as an adviser.
And I'm a my professional daily life.
I'm a professor of public finance.
I teach governmental accounting, public budgeting, and public economics.
I'm at Penn State. Harrisburg.
Welcome.
It sounds like a great package of skills.
Thanks for joining us.
Todd Schaefer, Citizen.
Mike France, business manager.
Okay. Thank you.
Also, I want to announce that this meeting is being recorded.
Could I do one, get the minutes, have a chance to look at them?
Any revisions, changes? Additions?
If not, if I could get a motion to approve it.
So moved.
Second motion by Cathy.
Seconded by Lindsay. All in favor.
I thank you.
Moving on to old business.
I did include and I did not commit at our last meeting,
which was to take a look at our goals from 20 1819
and very briefly go over what we were able
to accomplish.
Welcome kept.
If you could just let us know that you're here.
I'm here.
Thank you.
Okay.
If you click on that agenda item,
you'll see there were four
priorities from last year.
The first one is one we have every year.
We went through the process of identifying
having board members identify and share their priorities
with with everyone.
We had to make a decision about whether we're
going to operate within the index, which we did
contract review.
We did start looking at contracts.
I think then we kind of morphed
into a discussion about
offering a vendor fair, which would familiarize
more folks and in town with
the kind of purchasing we do
and how they would qualify to become eligible and so forth.
So we did not, to my recollection, of go
any further might, I know, provided us with quite a bit of information
and we didn't go any further that I can recall anyway
in identifying any
particular contracts that we might want to review more closely or suggest
they re competed or bid again.
So if anyone has any comments
or suggestions, we didn't include that as a goal for this year.
It doesn't mean that we can't consult with Mike and look at that kind of thing.
Perhaps, but we didn't include it as a goal for this year.
Last item is examine the Milton Hershey Trust
to determine whether we would open it for bid or not.
We're taking an intervening
step, which is to
hire an outside
expert and to take a look at the trust,
the returns and the fees and so on and so forth.
Before we do anything along those lines.
So that's where our.
Those are our goals.
Last year,
I just gave a brief overview of what I thought
we were able to accomplish in these areas.
And whenever any comments or suggestions.
Okay.
Thank you.
All business.
I'm sorry.
Just an old business. Unfinished business.
I will start with the monthly reports.
I hope everyone had a chance to look at them.
They were included in the board brief,
I think.
Laid out very well.
I mean,
comprehensible, comprehensive, digestible.
Does anyone have any the thought that we'll go through some of those
or just see if people have questions
about about them?
I thought you were going to do a review of them each meeting.
Okay. That's what we. Did. Yes.
Yeah.
Was a discussion last meeting about giving members time.
That was very about it.
Okay.
I looked through that and we're just going to go
into the
questions.
Well, why don't you start Regis and then we'll go
from there to
is the just
the board brief of the revenue and expenses
as of the year to date,
total revenue the district has collected year
to date is close to $41 million.
It's about 62 and a half percent of our total
budgeted revenue.
The average revenue collected through September 30th
over the last three fiscal years is a little bit higher
at 67%.
We're still anticipating
I mean, early October, we received a little bit more
real estate revenue
as well as we're waiting on
one of our pilot payments to come through.
So that should boost us back up to
a normal percentage.
Real estate taxes collected
so far as of September 30th,
around 94%.
We anticipate 96% on the year.
So doing fairly well there.
Total expenditures
through September 30th
come in about 19% of the budgeted expenses.
Over the last three years, we've been close to 21%
at this time.
So on track
so far.
It's early
in the fiscal year, so
we're more confident that,
you know, the budget figures are
where we think we'll end up
right now.
So any anomalies or concerns that
you see any flags
right now at this point? No.
One I have to expand on.
Regis noted that we're still waiting for a pilot payment to come in
and one of the one of the reasons that the local or
the revenue is down from comparison from the prior year,
we receive a payment in lieu of taxes
is what pilot stands for from the giant center.
The giant center when it was refurbished well, when it was built
was the property of Derry Township.
Derry Township floated the bond to to pay
for the construction, and thus Derry Township is the owner
because Derry Township doesn't pay real estate taxes.
There was an agreement put in place so that the district wouldn't lose
and all the taxing bodies, but obviously we're most concerned with us
would lose that ability to to lose that revenue.
Usually we do collect that pilot payment
very end of August, early September
received an email at the beginning of October
that the payment was being processed so that it was coming our way.
But no real indication of why it why it was later than it was.
We know we're we're assuming collecting the same amount.
We get about 650 to $670000 per year out of that pilot payment.
So looking forward to that, that money coming through.
And that'll really bolster the local revenue up to where we
we had noted
and Regis just brought this up as we were discussing some of these items
and what to talk about today, really until we get through December.
You know, we obviously look through the expenditures to look for
anomalies or things that are out of whack from where we think they are.
It's really hard to judge any of those things
through the end of September just because we're really getting started,
just really purchasing a lot of of things.
And we spend some time sorting out what's left
in the budget that we haven't ordered that we're not going to need
versus what's in the budget that hasn't been ordered that we do need.
It just hasn't been ordered yet.
So like I said, as we get closer to December, those these numbers
and these comparisons make a lot more
or have a lot more to do.
Now it's just kind of really keeping track
and making sure things are on course as they have been in past years.
Anybody have any questions or
comments observations.
With that pilot payment?
Don't they have the standard due date?
No, I mean, there isn't because it is.
It's the information is communicated
from Dauphin County to
the tax attorney in this case each year
to do the calculations and divvy up those funds.
While it is what you said, looking back in our history, it's it's
consistently been the the end of August, beginning of September,
there isn't anything in the document that says the money is due
this date.
So we'd
one of the I get my information, Lou Ridley,
who is with RBC, who is on our financing team, also sits on the board
and is part of the financing team of the IQVIA,
which is responsible for the bond that was floated for for the giant center.
And actually, the information I've been receiving has been coming from Lou
in terms of updates of where he knows that it's been.
But we received nothing official from H&R or Dauphin County.
It's all been information that has been been updated through one of our citizens.
Any other
questions or.
Okay.
Let's move on to
the 2021 budget development process.
Now, you just asked. I'm sorry.
So the in the reference of this board brief, this letter
you reference to go to the board agenda to see all the attachments.
I know some of the citizen advisors don't have access to agenda manager right
now, but that when they do
it's is it listed under meetings for them to see.
That's a public attachment.
That's not just something only board members can see.
It has a public attachment and they would have access to it.
Right now any any citizen has access to the information.
They just wouldn't gain access to it until Friday
when it's released versus the Thursday when we would actually post it.
That would be the only difference.
But it is public information.
That's that's out there for anybody to to view.
Okay.
So just in the future at every monthly finance meeting
will be reviewing the finance reports and it's under the consent agenda.
And you have to click on
that item and then look on the left and there's a bunch of attachment.
It's kind of buried, so you have to dig for it.
Okay.
And I'll add a note in the orientation for the Citizen Advisors reference.
Because you actually have to scroll the joy to the bottom to see the attachments.
So I want to just
thank you again, Mike and readers, for I mean,
to me, the level of transparency and openness with which you're, you know,
willing and able to share this information is I don't think we could ask for more.
So thank you.
And I know if people want to see it, you know, sliced
and diced a different way, you're open to to those types of requests as well.
Sure. Thank you very much. Yeah.
Okay.
If there's no further questions or move on to the 2021
budget development process.
And I know just from looking at stuff you've shared already, Mike,
it seems like because of when the primary election is next year,
when kind of like a full month,
we have to go a little faster than usual.
That's correct, Terry.
Because of the I think next year's
primary is sometime at the end of April.
Instead of May.
Our whole timeline has been moved back a month.
So normally we would have two meetings
to review
the information that will go over here today
and then for the committee to make a recommendation to the full board,
usually by the end of January is the deadline
for us to either determine whether or not we are going to stay within the index
or apply for exceptions above the index
if we determine we are going to stay within the index.
Our board of directors needs to pass a resolution stating that
and we send that on to PD
for their information.
If we feel like we have to go above the index,
the business office would actually be required to develop
the entire budget, preliminary budget
that would have to be submitted then before normally the process has been
before the end of January, because the timeline has moved up.
Our full board will not meet before the death.
Our last board meeting before the deadline is December the 16th.
So the full board at that December the 16th will have to determine
whether we stay within the index or go above the index.
We'll be making, as we I talked about last time, the administration
will be making the recommendation that we stay within the index.
We'll go over some information here today.
And I do apologize to the committee members that this information was just
that information.
I'm going to go over was just posted here this afternoon
as we get into our
hour in between cycle that we're in now, our figures are almost changing
daily because of the audit process we're going through.
And the the that auditor in me doesn't like to show information
that isn't the most accurate, but that doesn't lead to giving it out
in time for people to review.
So what I what I review today and what I'm going to go over
is last year's actual information once again unaudited.
But very close.
So you can see where we've been.
And then we'll look at the five year budget projection model
to show you where we think we're going in one of those years.
Most notably would be the next year's 2021
budget year.
And in past, we've used the five year budget model to determine whether or not
we're going to stay within the index and then thus pass that resolution.
The district has only approved going above the index
one time since 2007 when it was
available.
And that was during after 2011, when we had the economic downturn
and had some of our local revenues that were really struggling
and thus a need to go above the index.
So as Regis noted, we look to make sure
that our costs are consistent, which which they are.
Our revenues appear to be consistent, which we'll review in a little bit.
And we don't have any of those
weird or
items coming up next year that we haven't planned for.
So all those
go into the administration recommending to stay within the in the index.
But of course, we'll review all of that
and make sure everybody is on the same page here going forward. So
what I'm actually going to pull up first is
that this is
last year's the 1819 school year,
last year's information.
And I always like to start here
because the budget is is a process
and it tells us where we're going to be going
and what we're planning for for the future.
But it has a lot to do with what
we've done in the past and where where we are in the past.
So from
this is a summary of the budget to actuals broken down
mainly in the salary and benefits category and details.
And as we've shared with you before,
but 75% of the dollars that we spend
go towards salaries and benefits.
We had a better year than anticipated
with our group health insurance plan.
20 1718 was the worst year
in at least five years in terms of unplanned expenses.
And so
we were we were above budget or just that budget last year,
increased it by about 10% to get to the 6.2 number that is noted there.
And as noted, we came in about 5.1.
Now this does include group insurance, includes,
of course, the medical and prescription drug, the dental vision,
life insurance and all those things that go into the extra packages.
Essentially for for individuals,
we are self-insured, so we pay our claims as they come.
Part of that is the ability when the claims are better,
we reap those rewards.
Obviously, we're also taking that risk that when they're worse,
we also pay that amount.
So it was good to see those numbers down.
And as you can see, that really contributed to where we ended up.
Budget wise.
We were about $1,000,000 under where we thought we'd be,
and we were about $1,000,000 under where we thought we'd be for health insurance.
Other things in there.
The payment for our graduate studies has continued to increase.
It's a smaller line item, but something that will be adjusting for
in the current year's budget or looking for for the 2021, I should say.
Happy that the source for teachers,
the substitute that they're
in, it's been a hard item to to essentially budget for
because we don't come in to the process saying to the schools here's
how much money you have to spend on substitutes.
It's exactly the opposite of that.
Whatever they need they get and whatever the bill is,
at the end of the day, that's, you know, that's what we're left with.
So we were budgeting for that forward
looking, looking at how much we've spent up to a certain date,
assuming a certain dollar amount per day and calculating that forward
and can now look back
at some history of data to look at actual expenses,
since it appears we're kind of at the top or at that peak of where
we'd be with the substitute teacher services.
The building in department budgets
close to, you know, about nine and a half million dollars.
And we were over budget by about $100,000.
Most, if not all of that is due to special education and some placements.
When we go through our special ed budget, we we budget for those students
that we know where they are and about how much they'll cost.
But we don't plan for any
contingencies in there.
We know that students will always be coming to us.
However, sometimes you get with the students
coming and going, it becomes a wash.
This last year, we we received more students than than we sent out.
And so this spent a little bit more funds There.
That's really all I
have on the the expense side.
We're really close.
I'm actually going to go back to salaries.
The I can I just ask the
so we as you say, we did really well on
the expenses related to insurance were considerably
less than what we planned for.
Never mind.
I'm sorry.
I was looking at the.
Well, then why did we spend just in general,
we spent $1,000,000 more because we transferred a million
into our capital reserve fund.
I mean, is that would that explain why we spent $1,000,000 more than we know?
Because that happened.
So if you look down the budget in actual that, you know, the million dollars
was supposed to be transferred and the $2 million was it really goes
back to I mean, all of these terrier, you know, there's plus and minuses.
All over the budget.
But when you have that kind of swing in in the in the group health insurance,
you know if if we were right on budget
for growth health insurance, we would have been right on budget
for the entire for the entire district budget.
Yeah.
What I was going to point out is salaries has gotten to the point
where it's a bit close for comfort.
We had been historically kind of over budgeting in salaries
for quite a few years and so took a different method
of calculating that.
And with some of the things that went on last year,
I would have anticipated to have about
$200,000
in expenses less than than actually budgeted.
And so to see that at about 75,000,
that's, you know, on $28 million, that's
that's essentially guessing at it very, very accurately.
So it's a good thing to see, but also doesn't provide any wiggle room
that when we when we find ourselves
needing dollars, that's in the back of my mind where I knew
I had some leftover, that we could spend that now that being gone
pretty much kind of tightens the belt as we get to
the end of a fiscal year thinking if we have dollars left over or not,
I'm going to go into the fiscal year, a lot more conservative
and probably not
not tell certain departments or things that we have money left over that
we may be able to get some things done like we do at the end of a school year.
I have my cards mixed up, so sorry about that.
Okay, go ahead.
So any other questions on the expense side.
Mike, if I can add to that with the salaries.
And I know we've talked about how.
Close that is,
if we get.
Students that have needs where we have to add.
Staff and add a teacher, that really doesn't leave us.
Any wiggle room.
No, that that's where we would have to look to to hopefully have a better,
you know, as as we did this year in group health insurance.
But if not, that's why we have a very strong fund balance
so that those exact needs that you're noting as we get our budget tighter,
knowing that's where we'll
have to pull those dollars from.
But make the tuition to Ali,
a CTC charter school all at I know charter school.
And I'll add what CTC. The biotech.
That's Dauphin County. Yeah. Yeah.
And the overage there was due to the charter schools we had
we had been pushing that budget number down
for the for four years prior to this each year
budgeting about 50 to $60000 less than the year
before because we were seeing that ratcheted down.
And I think we kind of found where our were
the minimum is at this point for for that budget.
We were actually a little bit above where we thought we'd be this year for
for the cyber school kids.
And so the revenue.
Revenue was was
just by the skin of our teeth,
which was an earnings expectation.
We've been looking at,
you know, from from a local revenue standpoint, things
like real estate transfer tax and earned income tax.
In years prior, we had been budgeting much lower
than than the amounts we had been receiving.
Part of that is because of an income tax and real estate transfer tax
aren't 100% We it's based on the economy and how the economy is working.
We have no guarantees looking a year from today
what those might be in terms of growth
we did this year, take more of those numbers into account.
And so look back at what the three previous year's
collection rates were and based our budget off of those collection rates.
So that that is why those are so much closer,
because we've been looking at some of those revenue areas when
cautiously whether or not to recognize that additional revenue in the budget
which I appreciate being able to do
the the amount of money under other
has a mix of
sale of busses
as well as some revenue that we get from Harrisburg.
We still get about 70,000, $65,000 a year from Harrisburg City
schools for their buy in to the the Dauphin County Evotec
so that 270,000 in there has to do with that.
And then the state and the state revenue,
the reason that that's under the budgeted amount,
if we go up to our Social Security and retirement,
those were a little lower
than we expect and we get direct
reimbursement from the state for Social Security and retirement cost.
So if our costs are lower, our reimbursement, of course is lower.
If our costs are higher, the reimbursement follows that.
So you
see it's about a about $1,000,000 swing.
We were budgeting about a three quarters of $1,000,000 loss
and ended up right around $300,000 to the positive.
Once again, these numbers have not been fully vetted or or audited.
So there will be these will change from the numbers I have,
but I know they won't change materially from what I'm showing you here.
Mike, why did we get $95,000
more from federal the federal government?
We've been increasing
our Title one and total to revenues.
And those look, those are actually.
So we would have had money in 1718
that we didn't expand, so we carried it over to 1819.
We didn't lose it.
We just carried it over to expand it there.
And that's the additional dollars you see would have been money carried
over from the prior year.
Mike As we've been
applying and looking at various grants and
different things like that for capital initiatives,
does that fall in under other or do you include
that under the appropriate revenue line for state or local?
That would be under the state or local or federal, depending
on where that comes from.
And make the the money from the CTC, the buy in,
Was that going to be directed into the capital fund for some specific.
Yeah, we they made a balloon payment
last year, approximately 500,000 in that area
and we transferred that oh all over to capital
the additional $60,000 payments really are going to depend
like in this year we'll have about $350,000 to move over.
So that makes sense in those years.
I'm actually accounting for it, though, in the budgeted revenue
for the next couple of years because of the the smaller amount.
Okay. All right.
Any questions?
And there's I just can.
Assume now as we look to
to next year's budget to the 2021
year historically this point in the year that's
this is we're reviewing the five year budget projections.
And just to refresh everybody's memory,
16 717 is the 1617 year,
the actuals, 17, 17, 18,
18, 19 is the last year.
It's still put in there as budget because we haven't updated these figures
because they're not audited.
These are still the budget numbers.
Our budget for the current year, 2020.
And then the system
uses the information and certain
information that we put in to then calculate out
what that would look like in future years.
Now, this is a tool tool that I've always used,
and so I know there's there's certain
this tool is not to be used as, Oh my, it looks like
we're going to have a $1.4 million deficit in 2023.
There are certain adjustments here that this is about $800,000 off
when we get to the end of the year.
But it's been a good model to come back and use.
It's consistent.
And so while we know that we'll make certain adjustments
during the year that will make up for some of these things,
it helps to see that we're on the right track
and staying on the right track in terms of our budgeting process.
So if we look at 2021, the projected 21,
it shows $976,000 loss
in that year.
Now, this does not include any tax increase
at all in this calculation.
We know that the tax increase provides us just a little over
about 850,000 or no, close to $900,000.
So this is one more of my my comfort level that I say how, you know,
what are we going to need to do with with tax increase next year?
I look at this and it doesn't throw any red flags to me
that we couldn't live within the index if we had to go that high.
This I'm not communicating at this point that we even need to go up to the index
because I think
we have certain adjustments that we can make through the budget process
that will get this very close to to a balanced budget
that is assuming once again, and we haven't gone through that process.
So when we do this, this will change that.
But as I noted, this assumes no tax increase,
but it also assumes no new employees.
So as that changes throughout the year, as the budget process,
you know that that will change some of this information as we sit here.
But when I ran through this today,
once again got back to the point that I believe we can live within the index.
And so any questions or anything else anybody wants to know.
When do we want to start talking about?
You say within the index, which is 2.3.
Is 2.6.
So when are we going to start talking about no tax increase
1% to like when are we going to get to this?
The really come for me, it comes down to staffing.
And so the staffing requests from the schools
are due to December 1st.
Okay. So that's really
what it comes down to
the rest of the budget information we'll get February, early February,
but that the request for
for staff is really what's going to drive
the possibility of a tax increase or no tax increase.
I'm not guaranteeing we couldn't we won't have a tax increase
if we don't add new people.
But I just I think we'll be able to do this year's budget without that.
If we're adding staff.
One reason showing you that we don't have any additional moneys
built in the current or prior year budget for salaries, that that has to
now be really, truly recognized when we're adding those people.
And I'm always, always going to recommend that when you add additional expense
that is tied to personnel, you ensure that the tax structure is in place.
We can do all kinds of cuts and creative things in the short term,
but all that is doing is leaving that to future administrations
and boards to deal with because nothing we are going to do.
It will be consistent for the lifetime of those new employees,
like real estate taxes will be.
I know that
a lot of us on the board feels very sensitive to the fact that,
you know, the township and the school tax the same people with property taxes
and with the rec center right now and the possible increase at the township
level there, it feels like what's the school board going to do?
So there's you know, because we have increased two years in a row.
But that was before the kindergarten.
That was a major staffing increase.
I mean, we committed to that.
So I guess we'll just have to wait
till December 1st to see what the district needs.
I appreciate those comments, Kathy, because it really comes down to what
what our students need and what our staff needs.
You know, we we said we were last year we were going to go to the index
and because the information at the end of the year
said we didn't need that, we decided not to do that.
And so I hope our taxpayers would would remember that, that we're going
through the information to determine what our our students and our staff need.
And we've shown if they don't need it or we believe we don't need the money,
we haven't asked for it.
So hopefully when we get to the places when we do, people can remember that.
I would love it to be in concert with what the township is doing and how they tax.
But as you know, the reality is we provide two completely different services
to the community and have to plan, you know, accordingly,
because what we're doing for the community doesn't always line up.
But we're we are providing those different services.
It's just an important conversation to get out there because
we're kind of
just preparing and it is a process and we need
to, you know, maintain
our excellent school system and and we go through
a fine tooth comb to see what we need and what we don't need.
So we'll just have to wait to see what staffing needs arise.
I mean, we've added some phenomenal staffing that we did really need
over the last few years and Board backed that as well.
So we'll see where it goes.
Yeah, I think it's important to note too, that
a lot of those additions were multi-year planning
and conversations in place and that you know, we had looked
over two different budget years at staffing increases.
And while there was the want for some of the additional staff
last year, it didn't work from a budget perspective, knowing that
we had those increases to account for with the full day kindergarten
expansion.
So we were able to incorporate them for this past year's budget.
So it's certainly something that we're going through the process
and planning out and looking at all areas
of the district in the long term.
You know, not just making quick reactions.
We have some, you know, pretty
big items, I guess, on the table going going forward
with safe and secure schools and expenditures and
looking at the I guess, the
the physical structure at the.
Elementary.
School, at the elementary school,
I don't know if there'll be any financial ramifications of changing start times.
But with all that mixed into the part, you still feel over the next
and there's probably other things I didn't mention,
you still feel in the next 3 to 5 years we're still
there, still feel comfortable with where we're at.
But absolutely, as long as we continue to have these these great conversations
and the realization that we we have to put resources in place
for all those great those great programs and those good things we're doing,
I really enjoy
the process we have here because I think it goes
through and addresses everything and allows
that situation also to be transparent, that we don't get to a certain point
in time and say, Well, we already decided we're going up this much.
So that's what we're doing.
It always comes back to that need,
which is, I think, the best way for us to continue to plan
and so, you know, I think the only thing for me, Terry, is,
is the local economy or the or the, you know, the economy as a as a whole.
We see
unfortunately, in my professional career,
I've seen it dip two or three times.
And so I begin to wonder, when's the next time?
Not if
those may have a dramatic
effect on us going out, but I don't think we can plan
for that.
And well, to the extent we're always within our resources,
we're planning for that.
So as long as we're continuing that process, I think we'll be fine.
Got about 20 minutes left.
I want to make sure we save enough time to
go through the trust proposal.
The proposal? Were you going to cover that?
When we get to that item, the proposal that we have or.
I can I can speak a little bit
to it, I mean.
All right. Yeah.
Yeah. But that's all I had for
for the budget development.
So nothing more on 2021 budget than.
Yeah. Yeah.
Anyone have any additional questions.
I will be bringing back to our November meeting.
I will be asking
this committee to recommend to the full board
that we, we stay within the index essentially.
So our work here is not, is not done in this committee,
but there will be a hand-off for that portion.
The full board would have to pass that requirement
at their December 16th meeting.
So if we have a recommendation coming out of the committee here,
feel that, then that's more than enough time for the full board
to or the other board members to
to address any comments or questions they may have.
So the second meeting in November we would have to recommend
to the full board for.
Step two, stay within the index.
Yes. Yeah.
What made it what what there is that.
The 28th I think 28th. 28th
or so.
I'm sorry. November 25th. Thank you.
Sir. It would be recommended to the full board
that we stay within the index, but they wouldn't.
We wouldn't be approved until the December 12th meeting.
Is that my plan then would be to report that out
at the committee meeting, on the board meeting on the 25th.
Allow a couple of minutes for questions,
but then kind of prime everybody that if you have any concerns to bring them
to the December 16th meeting when that they that comes up.
Okay.
If that if we have any if there's any concerns or questions
about not approving the to stay within the index
that will have to be communicated to me because I'll have to be prepared
to have a budget or the index will have to to approve one of those.
At the December 16th meeting.
So my thought is after November
of we've communicated to the full board and given them three weeks,
if there's any concerns or heartburn that that's causing the other five members
that are on the committee, we could
if that could be communicated to me
mostly, once again, not saying anything crazy coming out of the works,
I wouldn't anticipate that any of that would happen,
but that would just have to be how that that moves forward because a decision
has to be made at the December 16th board meeting.
Can I just ask one more question about this report here
from looking at the other information, the under debt service
and transfer is the projections on those amounts
in the years in the future
round about $1,000,000 higher than what we've seen?
Does that account for transfers that are needed for the capital fund?
Correct. That's $1,000,000.
Just make. Sure that that's where the breakdown was.
Like last year, the index was what.
Two, three, 2.3?
And what did we wind up approving?
1.1.41 somewhere and three.
I think everyone understands, but just, you know, saying we're
going to live with the index doesn't mean we'll go up to up to it.
Thank you.
Okay.
How about the Hershey Trust then move on to that.
So this is actually the contract for
this is on the full board agenda tonight for approval.
Went back to PFM after our discussion.
They did reduce the fee from 18000 to 15000.
And basically
we're going to go through the review of the years, noted
and come back with benchmarking information.
Here's how here's the benchmarks that were used.
Here's how this these funds
compared against that
I didn't get information or didn't get into the detail about what
what I would call the source or the benchmark that would be used.
But very much trust PFM in their professional judgment,
that they're going to come up with something that is useful and relevant
to the board members here
and provide that easy comparison.
If if Faulkner's doing as well as we think they should be doing.
The We got a chance to see the proposal.
Mm hmm. Okay.
One, one thing that jumped in my mind and just may be the way it's worded,
it seemed like they mentioned looking at our investment,
I guess, statement or I'm not sure what it's called, where
we decide what types of
things we're willing to invest in.
What is it referred to as?
I don't know the name portfolio.
No investment.
Yes. Industrial policy.
It seemed like they talked about the investment policy
two or three different times, like how much would be
are we?
That's going to be part of the investing
in accordance with our policy mean our policy is a few words, right.
Well.
So Fulton
has an investment policy that for this particular fund
and how that's happening now the district had a say in
the I think they
explained no tobacco products or.
No gambling and tobacco.
Yeah, yeah, yeah. Right.
So what they'll get is that full investment policy
from Fulton Financial and that'll be part of the benchmarking areas
if, if it was in their plan to say, well we're not,
we're not investing in this item right.
Maybe this item had a high return.
Well, we're not going to benchmark because you
you didn't have the ability to back your policy set.
You can't even invest in that.
So that review of that's going to help them set where that
or part of that, you know, where the benchmark is in terms of what
what could the money even be invested in
as part of that?
And then the other thing that
jumped out at me is it just said that the
they would provide a detailed PowerPoint that would be their their product,
their word product is that I was thinking more of a report,
but I guess.
Yet not my understanding
that was the public facing deliverable there.
There would be something
that would not be necessarily something we shared with the public
in terms of more comprehensive report that would say that
that would be shared with me. Okay.
And then it'd be my determination of how that gets shared out past that.
But yes, it will get more than just a summary,
although, you know, for that public presentation.
Right. That probably is all that you'll see.
It says we anticipate delivery in our final analysis and recommendations
by November 15th.
Our final report will be in the form of a detailed PowerPoint document, if desired.
We would be happy to provide
additional interim progress reports as we move through the project.
That's what I that's what I was asking about.
I just wondered.
So you're saying there'll be another something they give to you?
That's just the public facing report?
My, my understanding is that, yes,
that probably is just going to summarize what's in
because we're talking some very finite things we're looking at here. So.
And do you anticipate that they'll bring a more detailed report
to the Finance Committee level than what would be presented to the full board?
I don't know that.
TIME Did you get a chance to look at it?
I don't know that. I just.
Oh, I'm sorry. Okay.
Don't you have access to agenda manager?
I, I've. Got.
This client.
Oh, wait. Time of.
There wasn't a reference to it, so I don't know if we can just.
It's not a private 7:00 meeting.
It's attached. It's not, it's not attached.
On finances.
It's on the full board agenda.
But I wonder, like, even with the finance reports, I mean, we can show
citizen advisors how to get to the 7:00 meeting,
but if we're able to just upload those to the to the Finance Committee report for
the ease of everyone being able to access the information ahead of time.
Yeah, this wasn't something this committee approved it to the full board.
So I actually wasn't planning on circling back, but the questions came up so.
But what if you go to the dashboard and
and drill into the 7:00 meeting, you'll see that item under new business
and the attachment and proposal are there if you want to look at it.
Yeah.
If you could take a look at it and be helpful time.
But it's being voted on tonight.
But that's true.
Well, it's getting over to what's on the agenda.
It's a rather simple. Yeah.
You saw the the one prior to that.
I shared that one with you
all the change.
What's the price. And this one and the dates.
Yeah.
Okay. Thank you.
And any questions on the
Milton Hershey Trust?
So why did they lower the price,
do you know?
Oh, he just asked.
Thank you.
I told them their pencils had to be sharper than it was the first time around.
All right.
They took them.
It never hurts to ask.
No. So should always ask.
All right.
Last item is, I don't know if there's any update on
the things you're thinking about
and working on relative to introducing healthier food options.
It impacts on whether we opt in
or out of the program going forward, that type of thing.
I just have a couple of things that
that Greg actually provided to me,
but one was just wanting to note that he had he's met with Mr.
Smith High School principal to make sure he's updated on
the what's going on here and the progress moving forward.
He's also set up
times and met with his high school
head and assistant cooks
to develop a step by step plan for goals for this year.
Some of the additional things that they were going to change.
One of the first things that he has made a change on
is beverages being offered.
Prior.
We didn't
we really just offered water in some juices.
He's brought in Pepsi products which are all vetted.
Pepsi has a whole just as Coke does a whole side of their business for
developing or putting the drinks that they make that are also
in compliance with the school lunch program.
So he's Greg has started to offer those drinks and looking
What are the first comparisons to look at as we talked about is
will he see an increased amount of say or not an increased will
he will say, I'll stay constant as we move from one product to the other.
So drinks is one of the first ways that offering something
that is part of the program.
He has noted that
those that are on the program or those items something like this
are a lot more expensive than what we had been offering currently.
And he is still looking to make the same profit
margins on the new items as he wants the old items.
So as people may talk to you about costs of some of the new items,
that that would be the new normal moving forward.
And he's also set up a meeting with
our premier edge,
which is the software company that we use for various things for the school lunch.
They provide
information on nutrition models or model menus that Greg
may be able to use with his current staff to review other places.
That could be changed.
But that's kind of the first thing that he's noted.
And that update actually is, is as of the end of September.
So what Greg and I talked about
is by the end of November, looking at some drink sale information
and seeing what the information is starting to tell us
if students are moving towards that or are they just not
are they buying what they already have or they're not buying anything at all,
just seeing what kind of a change had in terms of the sales effect.
And you put your mike on time.
How much, how much a week,
how much are we.
Foregoing in subsidies?
Again, around $90,000.
And it's just for the high school.
Correct.
He did want to note, as
some of this is is going to be retraining of staff,
because the people that have been working in the high school
for the past four or five years that have not been on the program
will need to be trained a little bit differently.
So we know those are some of the things that are going on right now
is is getting his staff a little bit more updated,
especially those that are essentially his,
you know, group of employees that have not work under the program
and so need to be trained on what that means.
I missed the last meeting.
Did we finalize the decision to move forward with that program
in high school or no.
In Sweden finalized a decision to opt in.
Okay.
But we decided to the the the risk is if we stop selling the
all the other carts we're afraid the budget's going to the revenue was lop.
So I guess Greg is going to start doing some experiments
to see if he can maintain the budget and if we would transition
over in the next, I don't know, two years maybe.
Looking work for for.
Yeah, well if we started from where we started this discussion earlier
this year
that we essentially need about two years to gather the information
that we were talking about
to see those effects.
And then what we heard the school board wanting
is, is to eventually transition back on that plan,
assuming it doesn't have drastic financial impact.
And so that's what
we're trying to figure out right now is what that financial impact.
So there are.
All healthier options for the most part.
No, no.
They're just within the program.
I don't think what we're offering right now is not healthy.
It just doesn't meet the doesn't meet requirements.
That's correct.
For ingredients that are used in the portion sizes
and that type of thing that make it make those meals non-compliant
to fit within the reimbursement of the the lunch program.
And so that's, you know, what?
It started the conversation.
And when several of us went and talked and had a conversation with Mike
and Greg at length about it, we were
I went into it more because I
was one of the ones saying like, why aren't we why are we foregoing this?
It doesn't seem to make sense to me.
And then after going through and understanding the differences
and the way that the high school provides different options to meet for that,
the the standout thing for me more was
are we offering things
that are sourced differently and prepared differently
because of student choice based on historical data?
And, you know,
would they notice the difference if we were providing healthier options?
And what does that look like financially?
And I think that that's where it ties into the end goal
of looking at being part of the program again.
But I really don't think that that's the driver of it.
I think it's more about just looking at the overall sourcing at food costs
and providing the healthier options in general.
I guess
I don't understand why
opt in. Yes.
So Mr.
Humboldt identified
at about $300,000 worth of things that we wouldn't be able to sell off the program.
And that's his concern, is to give up $300,000 to get back 90.
And so that's what we're going through now and seeing what effect
some of his concerns
and deferring to his his knowledge.
He's been here for a very long time running this program.
So the kids are going. To buy food now.
I mean, they're going to be able to offer tons you microphone.
They're going to buy what we're offering, I would imagine.
Well, that's what
historically the data doesn't support that because like on its face
and that's where I was coming from in the conversations when we were
voting to opt in or out.
You know, as I looked at, I was like, well, this doesn't make sense.
If we provide it and they're going to buy it, what time has
shown and during the transition, with the changes in the program,
maybe five or six years ago,
there was you did see an attrition of purchasing.
And so right now it's helping the foodservice program to stay
mostly self-sufficient
inside of its own budget is the purchase of the our cart.
And if we were to move into
being straight on the program, the buying habits
don't align with making it self-sufficient
and it would end up causing food services today to need more,
more of a dependance on the general operating fund budget.
But it works.
For the elementary school and middle school.
It does, and that's where I think the sophistication of the students
as they're making their own choices and ah, have a bit more independence
inside of packing versus
purchasing a hot meal changes and drives it.
But I was completely where you are
on that same thing.
And having gone through the tours and and walked through the entire program
with Greg, I understood then, you know, a bit more where it came from.
Mike Would it be possible to
give us a, even if it was
just an estimate of what
what types of things you would do when to,
to continue the experimentation
like over the next, you know, over a certain period of time.
So we,
we can put some time parameters around.
Yeah.
So that's what we kind of talked about this
first year being was, was Greg and I going through and identifying
some of those things and that's why I said it kind of a two year process
because year one is just here's the changes we made and time has to pass.
I don't think it would behoove us to say we have a month or two years
worth of data, and so we're going to make this decision based on that.
No, no.
So we are trying build on that and that's what we want to continue
to update you with. But I won't have
I won't have it the next meeting or the meeting after that.
Here is what our plan is.
It's more of building it month by month as we're going forward.
I also think that one of the pieces around the looking at like,
say four years in the process is because we were identifying
the fact that there are changes to various parts of the program
and the food that's offered that
if there are changes that are being made and it's done incrementally,
it won't have as drastic of an effect on the buying habits
of the students and the impact to the bottom line.
And understanding that kids who are coming up through elementary
and middle school right now over four years,
by the time those are the student that's the student population of the high school,
they would not have known the difference or seen, you know, what was being changed.
So it would allow us to take that time to
to get back to being all buildings on the program
without taking the risk of having the swing in the budget process.
All right.
We've trespassed one minute into general services meeting here.
So good discussion.
Thank you all very much. Welcome.
It's good to have you here.
Welcome back, Darby.
It's good to have you here. And
Todd continues, Can I have a motion to
adjourn, please?
So moved. Second.
Moved by Mrs.
Secker, seconded by Mrs.
Drew. On favor. Hi.
Thank you. Meeting adjourned at 5:02 p.m..