The one.
Thing.
I think one.
Okay. Good afternoon.
I'd like to call the February 25th, 2019
Finance Committee meeting to order, please, at 4:01 p.m.
and begin with roll Call.
When introducing yourself, you can indicate you're repping
the school board, the administration or your services advisor.
That would be helpful.
And please turn on your microphones.
Terry.
Terry Singer Board Member.
Darby Blago Citizen Counsel.
Kip Shaw. Board Member.
Regis Berlin Administration.
Mike France Business Manager.
Jeff King Citizen.
Lindsay Jr. School Board.
Joe Macfarlane. Superintendent.
Kathy Seger School Board.
Todd, you're just in time
saver
and thank you.
First item
on the agenda is the approval of minutes from the last meeting.
If I could have a motion.
So moved.
The second.
All in favor I opposed.
Thank you.
New business
Lake is going to review
the updated 20 1920 revenue data with us.
Thank you, Terry.
One of the things I thought I'd do as we start
reviewing the budget information for for 1920
is just to provide
kind of the building blocks, if you will, that we go through
and how the budget is prepared.
And a lot of that is starting with what we have to spend.
So I thought I'd
spend some time today on on just the revenue side of the budget,
not the expenses from the expense side.
In early February, we received all of the requests from the department.
We've also reviewed some of the information for possible
additional additional staff that is needed for 1920.
That's been reviewed with the committee of the board.
And so we're still pulling together some of that that expense data,
which I'll have prepared for the end of March in terms of
what's been requested and as well as what some of that extra staffing will cost.
But while we worked through while they worked through
that information, the revenue portion is just as important
to how we and what we have to fund.
So what I've provided and this is I provided a copy
for everyone because it's a little hard to see.
So you should have a copy of this at your seat.
And what I've done is
broken the revenue down over a ten year period
from 2000 809 to 20 1718.
And those are the years
that we have actual information for the 1819 school year that we're in.
We have our budget and that becomes from a.
Revenue standpoint, becomes clearer and clearer as we get closer to June.
30th.
And then we look to what our budget revenue will be for 1920.
So what I've pulled together, though, is just the actual information.
So what is on this sheet is a ten year average by line item in the revenue,
a five year average, a ten year high and a low and five year high and a low.
And then in the the last column that I have highlighted is the 1920
budget information that was just based on the five year projection.
And that's the reason I gave you this.
This one sheet here for.
The five year projection is just that reminder
of that's where we're starting with the total revenue at this.
Point.
So what's noted here in the
the highlighted column does add up to the same amount
in total revenue, the 6493 and change that we've been modeling and.
Showing through some. Of the other things.
And I thought I'd walk you through a little bit of how
I then go and refine some of this budget information
for the revenue
because of course it won't be for a final budget.
This revenue number won't be the 64 903 that we've noted here.
But just so we're all starting from the same point
where we would go in next steps.
So the
the real estate tax revenue and I pulled this out
for usually I show you information
in local revenue, state revenue and federal revenue
and other those are the four large buckets that we have.
It in gone.
And with local revenue split that even further between real estate
tax revenue and then all other local revenue war, non-real.
Estate tax revenue.
Really to to point out some
of the things that we're dealing with in terms of increase in local revenue.
A large portion of our local revenue is our real estate taxes
and we have the ability
to increase that on a yearly basis as well as the assessed value.
That's part of that calculation for Derry Township
has historically also increased on a yearly basis.
So our tax rate is multiplied by the assessed value
to ultimately get the full dollar values that we're talking about here.
So the 37,000,003 91 number that's noted in
there is the information that we had
as of July 1st with our assessed value
as well as
assumption of a 2.3% tax increase.
So that number
from the millage standpoint is fairly stable.
That number will update as we
get closer to the end of June, essentially on a monthly basis.
Now, I received assessment, total information from the county,
so they'll send me what the assessment is as
of the end of March, as of the end of April as the end of May.
So that real estate number will move a little bit.
Mostly based on whatever that increase in an assessed.
Value is, assuming we stay on the trend that our assessed
value increases.
Couple other
small real estate tax items there, real estate, interim tax,
those road tax bills that are sent out after July
for maybe improvements that are done on a property
after their first tax or after their tax bill has gone out.
Maybe someone put on a garage or put on a pool
that creates additional
assessed value which would create additional taxes
instead of waiting till the next July to build their interims
in the year that are built for those taxes.
So you see the small amount, a relatively small.
Amount that we get through that.
And then the final is the public utilities.
They're
paid through a program, essentially
public utilities that are within our district boundaries.
We don't we're not able to assess them.
And tax them directly, but they are funded through this peer to peer program.
So we're looking at about 37,000,500
and change in real estate tax revenue for.
The 1920 fiscal year.
Next to that, I have some notes that that
that I've put next to each revenue stream.
And it's really a comparison of where the budget is
and looking at those five year average, ten year average, ten year high low.
Where is the budget in comparison to those numbers?
So I've made some notes on there
to note
some things that as we move through the budget process in the June,
those additional adjustments that we'll be making to these.
Revenue numbers.
The first one being if we look at the.
Occupational tax revenue for.
1920, we're budgeting.
About 1.8 or.
$1,836,000.
However, when you look across at the ten year
average, the five year average, the high and the low,
we've never reached that amount for occupational tax.
And this is a function of the program that I use
kind of attributes, growth, potential to all revenue.
And then you have to go in line by line to say, well, that really.
Doesn't make sense this time.
So that is an item that as I update, the revenue numbers.
Moving.
Forward will probably be adjusted down because our history says,
you know, our our largest year an occupational tax
over a ten year period, we've collected 1.8 million.
However, the averages and the rest of the high and lows are not over one.
Point 8 million.
So that would lead me to.
Believe that that is a little bit
over budget at this point and needs to be adjusted.
Conversely, if you go down to lines to the earned income tax,
you'll see that we have budgeted for 1920 a little over $4.7 million.
However, if you look at some of the high and low data and some of the average data,
we're above that in the most recent years.
And there's no no information that I would see that
that I should be concerned about ratcheting back earned income tax.
We're still. In strong financial times.
Locally as well as nationally.
And so that will probably be an item that we'll see.
We'll adjust up based on current collections,
but also what the information is telling us
that, you know, just last year we had about 4.9.
Million in earned income tax revenue that we recognized.
And if that continues to grow, I should assume
that we're somewhere in the $5 million neighborhood for that.
So like I said, when we update that, that.
Number, look at it again, that will probably be adjusted
adjusted up.
Some of these I wanted to to address
you can read through the notes that are that are there.
What my thinking is the ones that are noted.
Okay are just certain things that I feel the budget number is pretty representative
of all the information we have and probably won't get adjusted.
Too much, if at all.
Some of the other revenue streams that I want to pull your attention
to, as we look at the first one being it's.
The numbers six 832 in terms of the revenue code and its.
Idea.
Pass through federal funds.
These are our idea funds.
And idea.
Is a federal or
a federal grant.
That is specifically used to fund special education.
So students have to have individual education.
Plans to be considered special education students.
And if so, we can spend this money on those students.
You can see that
the number has fluctuated over time, and this will be one
that our intermediate unit handles the reporting of our federal funds.
We kind of tell them what we did and they report on to the federal government
what what happened there.
So we get information flowing through us to to let us know
what our IDR grant will be for 1920.
I should get that information sometime in early to mid April.
And so we'll update the revenue based on that actual information.
So that's a number that might change, but I can't tell you what it's going to be.
I won't even know what that is When we when we get that those that piece
of information that tells us, here's what you should anticipate.
Your idea Grant being for 1920
and moving from there.
The remaining local revenues are really kind of.
From from.
A material standpoint, kind of immaterial.
In terms of the amount of money that's coming through.
Have pulled together.
So you can see over
over the last five.
So this five year average here is 1470.
Nine. And we're looking. At a little over.
12 million as our budget for this is non local revenue.
That is not a tribute to real estate taxes.
You can see probably as we will adjust.
Some of those. Especially that number.
We'll get a little closer to our five year
average or ten year average.
I'm sorry for that.
The next line item
or group of funds are state revenues.
And for the most part, these are modeled
based on a very small two and a.
Half to 3% increase.
The governor just provided his budget proposal
about two weeks ago,
and we'll get some feedback whether or not.
It's a realistic budget from the standpoint of something
that would be able to be passed without a tax increase.
If we get that feeling that the current state budget will be
presented without a tax increase.
We will probably use the governor's information.
Because.
Historically, if there's no new no new taxes being proposed.
Normally, the governor's budget for education ends up being in the final budget.
That is not always the same.
If the governor's proposal requires any kind of increase in.
Taxes, albeit through
a sales tax under.
An income tax or even a tax through Marcellus Shale.
It was one of the newer ones
that have been included in some of the governor's proposals in the past.
If those are in there, then historically there's usually a fight in.
The legislature.
About not raising taxes, and so having to cut what
they want to spend, which sometimes does affect education.
So we'll play that one by ear as we work through the process and understand
where that's going.
We may I have historically, if there was going to be a battle
in Harrisburg, historically said, look, I'm just going to look at what we.
Got last year and assume we'll get it this year.
They're not going to take money away from us, but I don't.
Want to bank on them giving us more money.
Because of that process, if you want to call it that.
They do during budget time.
So for the entire state
amount kind of remains to be seen.
You will see an increase in our state subsidy.
A lot of that is tied directly to.
The increase in our teachers. Contribution.
As. Our increase as our cost for retirement increase.
The state reimburses us half of that.
So that's obviously. Been increasing.
Over time as well, and that's.
A large portion of the increases we.
Have in our state subsidy.
The final two areas are federal,
federal revenue and other.
We have
starting with 17, 18 last year.
Following through this year.
And we anticipate going into next year.
We received a.
Very substantial increase in our.
Federal subsidies over the last two years.
I say substantial in terms of the
the revenue that it is, it still totals less than $1,000,000,
but we're now budgeting just a little over 800.
Thousand dollars for federal revenue, where historically we were just budgeting.
Just under $500,000.
So that has.
Increased and we will continue to assume that that.
Will be revenue that will come to us.
We don't have any additional plans
we spend similar to special education, these total funds that.
Are spent on reading and some other.
Programs locally, we spend way more dollars than we get in
federal funds or IDA funds.
So we don't come up with new programs or anything like that.
When those increase, we just continue to offset the costs.
That we were already footing locally ourselves, and that's what we would.
Look to do here.
Not necessarily anything new with that money,
just taking the burden off of us locally.
Because that is a heavy burden.
Our district is expected to carry on a yearly basis.
And the final item down there is the transfer
that we get from our Milton Hershey Trust
that has been declining over the last four years.
However, that was a planned decline that we.
That.
Fulton helped us through so that they could change the
the calculation on how we get those dollars,
a little less dollars, go to us a little more, stays in the trust.
To help make sure that it is something that's going to be
around forever because it is a permanent trust.
It also gets into line with how most trusts
make their payout.
What we've gotten down to is the normal.
Average kind of what we started with was outside of that average because of how
we were used to being funded and what we what we received.
A couple of little just tidbits of information.
I run these numbers
kind of to make sure that I'm in the ballpark, if you will.
So looking at an average
increase in total revenue over a ten year period, we.
Look at about 2.75. Percent.
If we look over a five year period,
that doesn't change much still in that 2.7 range.
And if I look at what we're budgeted.
From 18, 19 to 1920 right. Now.
It has a 3%. Increase.
So what should I believe is.
Is in the ballpark of where we'll end up.
Similarly, look at a ten year average
of all that local non-real estate tax revenue.
And this is showing me that I'm probably budgeting a little low.
For those revenue streams, which is why we discussed.
Some of those will will come up
in. The next time you see it, but.
Just run those too. Once again,
a lot of the budget
is fairly consistent.
So you can look to.
Prior years, what did we. Do, how did we do.
And extrapolate that information forward.
So it's it's helpful to once again, for me to make sure that I haven't forgot
anything and that I'm not being outlandish with some of the
assumptions that I'm making.
So that's that's a review of the the.
The revenue and where we look to be.
Going for 1920.
Unfortunately, while we'll have a little bit of increase.
Here with the manipulation, as as I.
Noted,
it's not $1,000,000, it's not 100,000 that we're talking about.
So pretty much from the standpoint of where we're starting from,
this will be a pretty good number for us to move forward with
and questions.
Just for informational purposes.
Mike, the earnings from investments
is that the interest on our money that's just in saving check?
Correct. Correct.
Just from the general fund, it doesn't include the.
Capital or the the permanent fund from Pershing.
But yes,
and that's something fortunately, the rate environment has been.
Getting better from that side.
As you can see, the increase that we had in that line
item last year and therefore we anticipate budgeting for that.
Similarly, again, for 1920.
But assuming there aren't any
catastrophic things that would occur
that make us think that some of that's going to get pulled back.
Interest earnings are a double edged sword for us as a school district
because those are the same numbers that when we used to go borrow our bonds.
When we are.
Borrowing in a lower interest rate environment,
that's good for us when we're borrowing, but not good for us when we're investing.
Because based on.
School code
investments is kind of an.
Oxymoron for school districts.
It's essentially we can invest in ten year treasuries
or anything backed by the full faith and credit of the government.
But we can't play in the stock market.
We can't do other things with those dollars that someone
would consider, really consider investing.
The last
bit of information you gave us the average increased
revenue, ten year 2.75 and then average increase local non-real estate.
So basically
our total real estate
revenue is a little more than half of our budget.
So that ten year average, 2.75 is
because of the tax increases we've done, but we haven't done them consistently.
But also the non real estate has gone up as well, which is out of our control.
But things like occupational in earned income tax or money
the state gives us are other things.
So that's that's how you use to project forward.
Correct. Correct. Yeah.
And some of that not necessarily use the project, but after.
We go through the projection and then compare some of that back, does
it stay consistent with the information that we've we've seen?
And if so, it makes me feel like.
I'm in I'm in the right neighborhood
in terms of looking at that.
The one thing that I have to note
is that that if we look at local revenue
that is a 2% average or the
I'm sorry, the non real estate tax, local revenue,
however, from 13, 14.
The 1314 to 1516 school year.
We actually dropped one and a half percent.
We did an increase.
It went the other way.
So that is something that's in the back of my mind
when I look at
probably the last three years is more like a three and a half percent or the last.
Two years is more like a.
Three and a half percent increase.
So I could project that forward.
But there are a couple of bumps in there that has happened
very recently that I wouldn't want to take that that.
Leap forward and say, well, I'm going to.
To look at.
Revenue by this number increasing because that's what it.
Increased by last year,
because.
There's some of those,
as you noted, Kathy, some of those non real estate tax, local revenues,
real estate.
Transfer taxes, one that comes to mind that could drop drastically.
In one year.
If people just aren't buying and selling real estate or significant parcels
of real estate.
So you said
budget increase in revenue from last year to this year, 3%.
And that's what we find out eventually at end of this year,
what we have in excess or in deficit, Right.
Is that what you're projecting?
No, no.
That's just to provide that's a comparison of
if I compare the budget of 1819 that is stagnant to that
64 million 903 that we were at up right now.
That shows a three. Percent increase.
So once again, I think that's showing me that.
The revenue that I have in there, maybe even a little aggressive
in terms of what historically.
Has happened.
So we'll look at it in those ways.
But those numbers, Kathy.
Are not necessarily to drive.
This would it will be more or less of a check to say.
It's it's it's in the same neighborhood.
It's it's trending the same way that our information has been.
Trending over the last ten years or five years
from a revenue standpoint, which for us is luckily fairly consistent.
Okay, because I was jumping ahead and peaking at the next form.
Are you going to go over that one?
That one is that's really the basis.
We've we've reviewed that a couple of times.
And so that does continue to show
that our expenditures are not keeping or outpacing our revenue.
However,
Kathy, please remember that's the starting point.
So that's where we're going to move forward.
We're going to do better than. What's on there.
Historically, we have.
Been able to do that and that's what our process allows.
So I'm really providing that to.
Make sure we're all starting from the same talking points.
When what I'm referencing.
This, that will become important because there'll be a lot of different.
Iterations of the budget and information.
And if somebody.
Doesn't remember each of those steps, some of it's going to lose.
Lose sense from from that time and it won't click.
For you the same way.
So I'm going to try to do that every time.
As remind you, this is
this is where we were last time and this is where we're going.
So that we have that that commonality.
Mike, in your
circles, have you heard any rumblings about the state taking.
Over.
The collection of earned income tax.
Something that kind of I think comes up almost every year
in terms of if they would look at doing it differently.
Than the countywide. Level.
That they have now.
And I know actually our.
Dauphin County.
Tax collection, it talks. A lot about.
This in their meetings, making sure that it is something that stays.
At the countywide level because we feel it's it's
more advantageous to collect it that way.
One of the things, though, that come about with the state collecting it,
if we ever went to some of the things
that the state was looking at in terms of.
Reducing real estate or doing away with real estate.
Collection altogether, I think in some way has to pull together
that there is a part of that that's statewide.
If they.
Go there, but no necessity to do it from where we're at today.
I just I ask
because of the updates we've been receiving at the Dauphin County
Tax Collection Committee meetings
and what seems to
give greater concern about it at this time
is that on the 10th anniversary of the act,
which resulted in the privatization of the collection of items,
as there was a study commissioned
in the General Assembly, in the study,
without going into the details, is is
maybe being used as fuel by some people who would
would want to take over the collections.
And by all accounts, what we've been presented
by representatives and state senators which have attended our meetings
is that if this were to happen, it would be disastrous.
For REIT. Receipts.
And I just want to know if in your particular circles,
if you had caught
wind of anything more than than just that eyesore, keep everybody updated.
Right now, it's just sort of rumblings and and at our meetings were kept
abreast current of the current status of of it.
So thanks I would.
Appreciate because some of those things.
That that are talked about yearly sometimes it's hard for my.
Seat to not treat it as noise until.
Until we get more and more information.
So if you can keep us up to date on that would be great.
Mike The state contribution to pension
is that at the highest rate it will be and we can count on it to stay at that.
Within a couple percent.
So it'll, it'll, it'll increase by I think
from 33 to 35 next year
which is a normal rate of increase.
So I can't say that it's, it's totally flattened out, but we're definitely.
Over the hump where we were adding $1,000,000 a year to our expenses.
It's not going to be that that way moving forward.
It will. Be smaller increases, three.
$400,000 per year.
But some of that's also based on our.
As we increase our wages, of course, that line item will increase.
What's the there a formula for that,
the basis upon which they decide if is going to be three or 400
or is it just strictly the same formula applied to our wage base changing they.
Calculate a percentage each year and certify it.
The piece board certifies that rate for the next year.
I'm not up to date on all the things that go into that calculation.
Okay.
I know part of it has to do with the return
that they received over the last certain and if it's better than they thought,
well, maybe the rate will be a little lower.
If it's worse than they thought,
well, maybe the rate is going to be a little higher.
In terms of the calendar
related to the development of the 1920 budget.
Could you refresh us all as to where we are in that process
and what decisions the board will need to make sure in their future?
So we reviewed the revenue.
Information here today at our next Finance Committee meeting at the end of March.
We'll be going over expenditures in a lot of detail as well
because of what's been.
What's been requested
after we look
at the so the expenditures that we'll look at.
At the end of March will be what is. Requested.
That will not be I use a term called scrubbed
or it's exactly what I've received in terms of requests and.
That's what I'm going to pass on to the board.
Historically, we need to we do then meetings and go.
Through work to to reduce that number.
Some ways we find that dollars have been budgeted for twice.
So easy. Things like.
That to. Reduce them.
And then other discussions about really talking about need versus want.
And that seems to be where the discussions really hinge.
On on that.
And if we find that it's need, it makes its way into the budget.
If it's one.
That's where we kind of say, well, some of these wants may have to.
May have to wait a little while.
So we'll come back with that information
in April, kind of the scrubbed expenditures
with some updated revenue information.
And really then that's if there's anything.
People would.
Like to see more detail on.
I don't think this year normally we would say, well, this is what we're.
Recommending for a tax increase, and then that process would work us to a number.
That's something a little bit. Less than that.
At this point.
I don't that discussion obviously will occur.
But I don't.
See reducing the revenue
or reducing the tax increase below 2.3% is something that we should be.
Contemplating doing.
And I'm always from the standpoint a lot of that is because we're adding
staff, we add staff last year,
we're adding a little bit more this year and we need those funds to make sure
that that staffing is is something we can fund.
And by by the way, another reason to break down the revenue this way
real estate tax.
We to the best of our ability.
We can guarantee what that revenue is.
We issue.
A bill, we know what's coming back.
The rest of this really is dependent on
on the fiscal solvency of the community and things that are going on there.
And that is why when we add people, I always say you have to add.
Real estate taxes
because we always want to make sure we can afford the employees that we have.
And real estate taxes are really the.
Only way we. Can guarantee we're. Doing that.
If we're going to say, well, we're not going to raise taxes
a little bit this year because some of.
These other revenues are strong.
It's just kicking the can down the road is all it's doing.
And we don't want to do that when when we're adding staff.
So those will be essentially
discussions in in April.
By the end of April, that's when the the budget should.
Be make its way to.
The full board because by the
our second board meeting in May,
the board will have to pass a preliminary budget.
That preliminary budget is required to be on display for the public
for 30 days at which time then the board can act on a final budget.
Which is our last board meeting in June.
So I think that.
For this committee.
The committee meeting in April
would be what I would ask to kind of recommend or.
Recommend the budget as well as.
Any other information that you think
the rest of the board members may find pertinent.
And in making their determination on,
I really you know that that that tax increase that's
what's.
What's driving the.
Significant increase in real estate taxes
mostly are increasing them.
So when you see the larger jumps.
There,
it's because we've increased
the rate by 2%, 1% to cause that.
The reason the reason I'm asking you, he says.
Assumes two four 3% increase in real estate.
But the jump from the five year high is more like five now.
Oh, sure.
For I'm kind of trying to reconcile in my head.
So the.
There's a there's a budget year 1819 that's not reflected in.
There.
So we're looking at two years past what's there.
So that does make sense that it's.
Almost 4% higher or 5% higher because it would include two tax increases
in there.
Okay.
Any more questions for Mike?
Thank you for putting all this information together, Mike, and
going through with us.
I noticed from looking at the
board materials for today,
there's quite a bit of information in there for the full board
on finances and they're getting everything we're getting, correct?
Correct Okay.
Okay. Thank you.
Moving on to the next item on the agenda,
we have Tracy Landry and Dave Swaggart here
to talk about the renewal of our copy lease contract, which is up in June.
Yes. Thank you both.
Thank you both for coming.
Okay. Thank for having us.
All right.
David's bringing around a packet of information
which you also find attached an agenda. Man.
We're here to, as Mr.
Singer said, to talk about the higher information group Multi-functional Copier
Copier fleet renewal proposal.
Our lease for our existing multifunction printers
is expiring on as of August 31st, 2019.
So we definitely need to make a decision on something and we need to start now.
Considering what we're going to do.
What we are proposing for your consideration
this evening is the option of renewing a new five year lease
with higher information group, or we refer to as AIG
for the rent to an
ongoing maintenance of a brand new copier fleet.
The proposal that AIG has offered us represents a total cost savings
for more advanced machines with enhanced options in addition
to some substantial, substantial value adds that include some of the following.
So our new program would begin on July one and air
lease two months early, our existing lease and our existing fee structure.
It would save us some additional fees and color
printing overages because of that ending the lease early.
It would include 31 new amps
and all the service supplies toner and staples required for those machines.
And those machines are located all through the district,
including this building, transportation, a lot of the other
all the other buildings, the elementary, middle school and high school.
It also includes the removal
of the existing equipment in June and replacing it with new equipment.
Our color overage allotments
in new lease would be increased each year, basically
eliminating any color overage fees that we currently incur.
So each year of our lease, the number will increase,
which is something we didn't have in the existing lease that we are currently in.
Our current.
You get an idea of what those overages cost.
I would say it depends.
It varies month to month depending on on usage, but around $1,000.
Thank you.
Per month.
Per month. Yeah, correct.
Our new our current monthly investment is 7481 38.
Our new monthly payment would be 6471 52
A savings of, as you can see, a little over $1,000 per month.
Can I ask a quick question? Yes.
On our summary of contracts, it says that the current
contract is just under 74,000.
So with the current monthly investment, that puts it closer to 90,000.
What what accounts for that difference between the contract amount
and what's actually spent?
It is those overages.
So there's about $1,000.
Actually, it's a little more than thousand.
I think we had 13,000 was the last overage bill that we paid for the prior year.
So it just a little over a
but that's that number needs to be added to that variable fluctuation.
Correct. Current contract.
All right.
We negotiated with and sat with AIG.
They gave us for three proposals.
Because we. Kind of sent them back.
They provided an initial proposal knowing that this was going to be renewed.
We sent them back and said, well, that's if that's your best offer.
We're going through an RFP.
And so they came back and said, Well,
what can we do to maybe make this a little better?
And overages was what what we knew was.
Was killing us in terms of.
The copier.
So they provided some overages that they thought would work.
We went back and provided overages that we thought would work,
and they went with our overages, essentially increasing them
or making sure that we've noted them in a way.
That we don't we don't hit those or that we stay within the contract,
that we don't have any additional expenses.
Should also note that the current contract we're under, we.
Did go through an RFP process.
So it would have been five years ago
and AIG was the.
Least expensive.
Of those.
I looked and there was at least four.
Other companies that had submitted and each AIG was the least expensive.
Which is why I was in agreement with with Dave and Tracey to go back and
try to negotiate with the company because they're very.
Happy with the service that we receive
as well as there are some other things that are attached to the copiers.
That if we went for somebody else, we'd have to reinvest those dollars.
To get those again.
And this really becomes something, copiers or something for us as a school district
that if they are not working properly, they can shut us down.
And one of the reasons that we go through a lease
because it includes all of the work necessary for this.
At one point in time, the school district owned their own copiers
and it was a little bit of a nightmare.
Trying to make sure they were serviced properly and everything was was upkeep.
Because as you can imagine, as those copiers got older, our expenses
for caring for. Them increased every. Year.
Going about it this way provides us a.
Budget number we can count on for for the next five years.
So just wanted to give you a little bit of that work that is that also occurred.
This wasn't their initial proposal to us
to get there, but something that we felt and I felt.
Doing away with the overages was something that was important to us.
David Tracey
done a great job of monitoring that
and trying to change people
for making color copies,
which is okay in some sense.
But as we dug further into it, I got to the point where it becomes
a little bit of, of quality, where I can go to.
One teacher and say, well,
you can't make you make too many color copies, so you can't make anymore.
But somebody else can.
And ultimately they're copying things that the students are providing or two.
And one may look better than the other
and really didn't seem fair to be able to do it that way.
So that's why we turned it around and said,
how can we make the contract work for the way we work.
Versus the other way around?
So ultimately we're looking at the contract
total is going to increase by about $4,000,
but we're going to make that straight across the board
so that we know what we're dealing with from budget impact versus,
you know, having a $12,000 overage that we hadn't anticipated on.
Correct.
Okay.
So, Mike, you covered this, but just want to make sure I understand it.
So when we redid the RFP
five years ago that was competitive, we got several bids.
They won, correct.
And we reissued that or we just started
negotiating with them toward the end of the fifth year of this.
They.
Came forward knowing that their contract was ending and saying,
Here's our proposal if you'd like to renew. And so that's
when we started that discussion and discussed it internally as well.
I know that's something that.
David Tracey spent a lot of time in.
In my opinion, it's not good time.
Chasing people down with copiers.
So that's when we said, let's take a little bit
a different look at this, not necessarily something if we were going to do an.
RFP, I don't think I'd be able to do it that way because.
Of the standardization. And that needs to occur.
From from time to time.
But but yes, that's that they prompted us and then.
We started to negotiate.
That's when Dave and. Tracey brought me in
asking, you know,
is this something you think the board is going to want to see an RFP for?
And my initial answer was yes.
Then we sat down and started to discuss what was there, and it just.
Made more and more sense to me
that we were getting.
The best deal that we could.
We're dropping our costs.
For what we're actually incurring and giving us a budget certainty
as we move forward.
And there's there's no problems from the procurement
guidelines and regulations to just negotiate.
No, there are no there's no.
Requirement to go since this is a lease.
We're not required to do any bidding.
Or any RFP.
And that would just be our I guess, in our business practice when it calls for it.
Like last time.
We couldn't determine when the last time we did a of copyright fee.
So that's why we did one five.
Years ago to make sure that everything was on the up and up.
So I can imagine there's
too many variables to even count when you're trying to get an apples
to apples comparison from one copy.
Correct.
One copy correct company to another. Is that
correct, Terry?
And that's the most of these companies don't offer the same machines.
So somebody's offering a cannon.
That's the only person we're dealing with with the Cannon Company.
Some are offering a Toshiba is a totally different.
And so
we would it past we would go out and say this is the number of copies
we're making per year color black and white.
This is the number of machines we need kind of a breakdown.
Please price it.
We have to get to there so that we at least have
something to compare it back
to, because it's always almost impossible, because the machines are different.
It really comes down to a lot of.
Their. Comfortability with.
With dealing with them, although we don't service them.
Sending them out print servers, printing queues,
integrating with iPads for the students who are in the grade 6 to 12,
that's another huge consideration when bringing in a new model or new make
because there's a lot of background that we had to go through the first time
when we're rolling over machines or device models.
I battle with my home printers so much I can't even imagine for that.
I fight with mine every day. I can't even.
And this will be another five year contract, right?
Yes, that's what they're proposing.
So typically make would you think if we were looking at from the,
you know, bidding process and doing that that I think that it
it makes sense to me to look at
approaching this from a negotiation
and relationship continuation to renew here.
But maybe when the next five year contract would be coming up
because we'd be ten years down the road that then that would perhaps warrant
going out to bid again just to make sure that it's staying competitive
against that and determining whether or not to proceed with the relationship.
I would. Agree. And if things are working the way we.
Want them to, I, I feel there wouldn't be a way they could come back.
And offer us something that's even less than this.
Now, that would make us say, well, okay, if it's still another discount, maybe,
maybe we will be willing.
I think this was our opportunity to to
to adjust some of the things that after we had for first five years.
Of the contract to deal with.
Thanks.
Don't you think we're making less copies now with zip Slip
and we don't print ham books now?
We would hope not.
Not our not necessarily our trends is that we are still a little paper heavy.
And as Mike said, we do try to go and talk to the principals
and talk to individual users, but it's sometimes really hard to nail down.
But it is it is an ongoing, you know, sort of goal.
But we also know that there is a need for paper in in education.
So we're not going to permit
the middle schoolers to print ad lib from their iPads, are we?
No, thank you.
No, no,
you you all know
I've disclosed previously my the fourth is compete, compete, compete.
But my sense from my colleagues here is that we'll
we'll go with this and take a
look at competition the next time Am I getting that sense correctly that's.
What I am.
If we have the motion to move forward to the to
bring this agreement to the board, then I would move to recommend
this be moved to the full board for contract.
You know.
Second on favor, I, I posed.
Okay.
Thank you. No, thank you very much.
Thank you very much for putting this information together now.
We appreciate your time and thank you for your support.
So, Mike, I should report this out tonight. Yep.
And then we'll plan on putting that on the March 11th
board agenda.
Okay.
Discussion.
Okay.
The last item on today's agenda is
Vendor fair.
Myself and Mike have talked about this previously,
and I think one or more other board members may have heard this,
heard this discussion, and maybe even some of the citizens advisors.
But what we've talked about is and this sort of goes
along with the idea of competition and rebidding things and soliciting
bids here and there for different services
that we would work maybe with another committee of the board, Maria's committee.
What's the name.
Of the General Services?
General Services
to put on a vendor fair,
which basically my understanding of it is and I'd like other people's
views of it, is we would
call it together, we would think about the types
of goods and services that we need to procure
on a regular basis
from outside vendors and third parties.
And we would put together a program
that that that would seek to invite
companies from our community
as well as outside of our community
to come to this vendor fair for the purpose of learning what it is
we buy, how we do it,
what they would need to do to be qualified to either bid
through a one of the
sort of combined purchasing agreements that we have through
capital, intermediate union or otherwise,
and that they would leave that session with an understanding of.
So this is what the school district needs to buy year in and year out,
and how I, as a potential vendor,
need to qualify myself
and B, make myself eligible for
getting into the competition when and if
there are RFP or RFQ or whatever issued.
I don't know if we've ever done anything like this before.
My goodness.
I'm aware that that we have run into a fair of that.
I think.
One of the other things that we talked about sharing with
with potential vendors and specifically those that are in our.
Community, I know we had talked about possibly pulling together, mailing
and mailing.
To those within the community. So we're certain.
They're aware of what we're doing and when it's happening.
But for us, it's also to let them know when and how our process goes.
Because we are
under our budget.
Our purchasing definitely has a process throughout the year
and so we'll get people I'll get people calling me in September
for something I know I'm not going to be.
Buying until June. And so I let them know that.
But I'm not going to keep track of calling that back.
So I think providing.
To some of these people an understanding of how we purchase,
when we purchase and how.
We do it that may allow them to.
Jump in the pool or.
Solicit us at those times of the year.
When we are buying those types.
Of things and not waste their time kind of doing it
when that's not something I know that I'm thinking about
in working in different areas for the board.
Just so as I'm thinking through this,
you know, I think any time to interface and have face to face interaction
with community members and businesses and the district is always a good thing.
But in this particular case, this is something we're looking at ongoing.
So would there be benefit to maybe
putting something together that can be a living
have a living space on the website under purchasing that shows that so that
if someone's not able to attend a fair or whatever it would be called, you know
that that can be there as a resource instead of having a standalone event.
I think about it from the you know, we've had conversations and Communications
and Community Engagement Committee
that in the past there was an event done for how to run for school board.
But if you didn't participate in that one thing a couple of years ago,
then you're kind of on your own to be able to figure that out now.
So maybe instead of putting all the time into
having an event,
put the effort into creating an online resource
that can be there and maybe support it with emailing to businesses,
directing them there, and letting them know
that that schedule is available.
It would seem to me that it sounds like a great idea.
Lindsay And I think it would be very
complementary and supplementary.
Maybe to an event initially,
but then let it live
on a website and could possibly even include
upcoming opportunities to submit this or that.
It could be a living sort of resource for those who want to see what's coming up.
Opportunities they might have, I think want.
To look at what this or how this.
Morphs into existence.
Another part of the discussion you and I have had, Terry, is
I want to make sure this information is getting out there.
But At the end of the day, they're a business owner.
And they have to know how to do business
and that's not something we're going to help with.
So if if, you know.
After we give them information, this is who you should be contacting.
So not contacting those people.
Will you know. There has to be a certain point.
Where we're not we're not holding hands through this.
So I think they're all good ideas.
But as I'm kind of thinking about it,
I think that's part of the process that will.
Keep on top is how do we.
Do something that is.
Something that's updatable but also doesn't.
Become cumbersome to. Us.
Or become easily outdated? Right? Right.
My first thought would
because our purchasing habits are fairly constant that that would that would.
Be something that after we purchase or.
After we put it out there, that that could live that way, that, you know,
custodial supplies, if you sell that kind of thing, you should look to.
Contact us somewhere in March
for assuming we're going to buy all that stuff in July.
I think. Those are the. Types of things that we can.
Make very.
Very confident that something.
Is out there for that calendar of If custodial supplies is what you look
at in March, then having that out there so that you're not fielding,
you know, cold calls from sales folks on that and you're kind of
putting it in their hands, but not baby stepping.
I think the.
Fair initially is something that's good as well, too, because we were.
When Terry.
And I were talking about this, focusing just on Derry Township businesses.
And so I think having having them come.
Somebody, if they've never done business before or something like that.
Will help those individuals make the contact they need.
And that's a little.
Bit what this is about, that if there's a local business in there
that for whatever reason we're not doing business. With.
But not necessarily if they're not the cheapest
or the most efficient, that might be part of it.
But if we're just.
Not engaging for no other reason other than.
Lack of communication, if we could get that over that hump
and maybe, you know, give back to the community in that way.
So. That's right. I do, you know, probably.
More of that fair being for local.
Businesses.
And giving us the ability to judge.
We send out these mailings.
How many are interested if if it becomes zero, you know, it becomes very little
will then we know this isn't something the community is in need of.
And we don't know that we can
maybe put that item online and don't have to go forward,
you know, with some of the other in piece meetings.
But having never done it before, that's one place.
I don't know what the response will be.
Just to play
devil's advocate, we're not potentially making it
like it wouldn't potentially come across as looking at
any requirements or that type of thing.
Insurance amounts or, you know, the various things
that we would be making ourselves just look
like it's too cumbersome for a small business to be able to compete
with the large guys.
Some of that may be what they need.
To hear as well, though there are there are hoops you have to jump through
to do business with us.
And if you're not able to do that, maybe that's your answer as well.
And but at least we communicated that information sharing.
Yes. Okay.
When you when I think about vendors, I was thinking about
the larger like contract, the bidding of construction projects.
But you're talking about like toilet paper, paper towels.
Are you on the whole way up to engineering services if we have a sinkhole or
if we're renovating special education, is this just supplies.
The services becomes
a little more difficult in the aspect of we don't.
We usually if if.
Sinkhole arises, we're going to go back to a vendor that we've dealt with
before because the emergency itself is the sinkhole.
We're not going to waste.
Time, you know, finding.
But maybe that's providing an introduction.
Maybe that's spending a little more time in us learning about their business
and what they do so that I have somebody that maybe I would give a call.
If we had an open source type of thing where I wouldn't do it.
Now, just because.
Cold calls are one of the.
Worst things for me.
So when somebody calls and says, Hey, can you keep my information for what
you need next September?
No, I can't. That's not going to happen.
You can call me next
September when we might need to do it, but that's where I find myself.
A lot of people are reaching out and times when it's just like, Well, we're.
We're not interested in that type. Of thing right.
Now and we don't have a way to interact.
With you or call you back in 6 to 8 months when when we get there.
So I do provide them with the information.
And if they would like to.
Call us back and and talk about it at that time, we can.
I guess.
So my thought is maybe this gives able to build that and start those.
Relationships versus kind of the little pieces that I'm getting at this point.
Once again, they're just focusing.
On on those that are in Derry Township.
So it could be an engineering service or something like that.
They could come introduce themselves to you. Correct. Okay.
We got just a few minutes left
to further pursue the idea of this vendor
fair and related,
something on our website related to it.
What's the best way to do?
We want to use our next meeting to talk into the details of how this might work.
Should I?
You know, you and I might work to maybe
draft out what it might look like and then share it with the group?
That's what I'd like to do is is know this has been on our agenda for a while,
but this is really the first time we've been able to discuss it.
So I'd like to keep that on for the.
Next time for people to think about it and.
Talk about it in some more depth.
At our next meeting
and then probably look to set a date and then we can kind of work
with that in that way.
I think laying it out that way as well moving forward, Terry, is if
we get the idea of what the committee wants
and then you and I can come together and try to, you know,
pull something together that we think reflects that
and then bring it back to the committee to make sure everybody is
on the same page or we took their understanding
and they like the way that it's there, because that's.
For me, it's just. It's a big idea at this point.
I don't have a lot of of those details and everything else worked out.
All right.
Maybe you and I can get together in between meetings and have something
to start with in the March meeting.
People can can react to.
Okay, well, that brings us to 459.
Our next meeting
is scheduled for, I believe, March 25th.
Is that correct? Yes. Okay.
March 25th. Thank you, everyone, for coming.
And if I could have a motion to adjourn the meeting.
Some of.
Back and
all in favor. Hi.
Okay. Thank you. Meeting is convened.