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DTSD Webinars: Good evening and welcome to the January 13, th 2025 Finance Committee meeting for dairy Towns, township school district. This meeting is going to be live stream videotaped for reference later on for the public.

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DTSD Webinars: I do want a reminder before we get started to make sure that you identify yourself, whilst prior to speaking, so that Miss Ag. Can complete the meeting minutes. So appreciate that. So I'm going to announce the name and position and go around the room first, st and then we'll go to anyone online. So Mike Rizzo, School Board, Director.

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DTSD Webinars: Stacey Winslow, Superintendent Jennifer Wren School Board, Stuart Mccarver, School Board.

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DTSD Webinars: Carol. Pitts, business manager, Michelle Ag. Board, secretary, Mindy Bell, assistant business manager.

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DTSD Webinars: Is there anyone online.

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Parker Davis: Parker Davis, citizen advisor.

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Michael Bunn: And Mike Bunn, Citizen advisor.

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DTSD Webinars: Thank you very much. I'm having some.

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DTSD Webinars: Oh, go ahead. I'm sorry. Last one.

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Brian Ostella: Ryan will tell us as soon as.

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DTSD Webinars: Okay.

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DTSD Webinars: and entering the room, is Lindsey Drew School Board director as well. For the meeting, so we can get started. So

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DTSD Webinars: So item number 3, then, is approval of summary minutes, and this would be from our last meeting back in December, and that would are actually from November 18, th so could I get a motion to approve those committee meeting minutes so moved Stuart Mcgover, second Jennifer Renz. Is there any discussion

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DTSD Webinars: all in favor? Say, aye, aye, proposed motion carries.

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DTSD Webinars: There is no unfinished business today, so we will move on to new business and item 5 A is the November Finance report and, Miss Pitts, I'll hand it over to you.

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DTSD Webinars: All right. That's coming through right?

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DTSD Webinars: Yes, it is okay. Okay. Great. So I do want to start with the the bills for November and December. You see those amounts there, and the details are attached.

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DTSD Webinars: and I did want to point out something. If you take a look at November, you see that we have 7.3 million dollars in bills and only 2.1 or 2.2 million dollars of bills in December, and that is because we had one of our 2 semi annual debt service payments in the month of November, and I do want to point out something in the detail. I don't know if this has ever been pointed out to the to the board of the committee before

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DTSD Webinars: 4, but we do pay bills in 2 manners. We do pay by check, which is where we actually write our checks, and we have transferred to writing checks twice a month.

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DTSD Webinars: But we also pay bills through. Ach!

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DTSD Webinars: And we do record those as well. So when you look through that detail, you will see them in there, you will not see a regular check number. You'll see something that looks a little bit different, and that's what you see. When you see the debt service payments, or any of anything else we pay by ech, such as the

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DTSD Webinars: the payroll taxes. So that's another reason why the bills are higher in November is because we did have 3 payrolls in November as well. So that's why there's a big difference between those 2 months.

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DTSD Webinars: So now we can look at the November financial statements. I want to point out a couple of things when, as we've been going through and refining, refining and finding things, we did discover that the real estate tax discount, instead of being recorded as a net revenue, had been recorded as an expense. So we wanted to fix that you'll see that in the prior period adjustment.

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DTSD Webinars: We wanted to do it that way, because I do next year want to be able to have a year to year comparison.

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DTSD Webinars: So we did put them in the prior period. So that next year, when we're looking at September revenues compared to September of the prior year to the current year that they are recorded in a similar manner. So that's why we did it as a prior period adjustment, instead of being doing a big journal entry in the month of December. So I just wanted to point that out.

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DTSD Webinars: So the highlights here is that you see that we have

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DTSD Webinars: 2 million dollars in local revenues, and the largest portion of that is our local real estate taxes. This is the end of the penalty period. So a lot of people do pay. At the end of that period we also got approximately. Did I say it was 800, approximately 800,000. We also got approximately 702,000 in earned income taxes in the month.

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DTSD Webinars: In state revenues we have approximately $661,000, and the majority of that is in the ready to learn. Grant that that's approximately $286,000. We also got our special Ed subsidy for approximately $248,000, and we do receive the special Ed subsidy in odd number months.

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DTSD Webinars: and we also received $246,000 in social security subsidy, which we received quarterly.

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DTSD Webinars: and you will see that we have approximately $80,000 in Federal revenues. We have started to get those now. It took a little while for our title grants to be approved, but they have started coming in so 60,000 of that is in title one subsidy or title, one Grant.

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DTSD Webinars: and for the highlights in November for the expenditures you do see. If you compared this statement to the October statement, you would see that salaries this month are about almost 4 million dollars, and last month they would have been about 2.6 million dollars, and that does go back to the fact that we did have 3 payrolls in the month of November.

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DTSD Webinars: So that is the highlights for November with the also, the December bills. Does anybody have any questions about any of that?

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DTSD Webinars: Okay.

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DTSD Webinars: so we're going to move on. This is just a quick, informational item. This is the 2526 piecers rate, which, of course, is going to affect our 2526 budget. And there's the attachment of the announcement of that next year it is going to go back to 34%

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DTSD Webinars: this year. It is 33.9% in the previous year. It was 34%. It's not a huge increase, just a small one, which is good news. It also that announcement that I have in there does show their projections for the further out years, and it does still show that it will be increasing based on their assumptions. I think historically, we found that it tends not to increase as much as they project.

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DTSD Webinars: But that is the rate we will be using for the budget

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DTSD Webinars: any questions about the pisers rate.

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DTSD Webinars: Okay.

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DTSD Webinars: now, this normally is not a night that we do have the Finance Committee meeting. I believe there was an opening for committee meeting, and I did ask specifically, for this reason here is that I do want to look at our preliminary 2324 results. We did have the auditors. In early in December we continue to work with them, and even today we just received a couple of journal entries about

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DTSD Webinars: 10 min before we walked into the room they will not affect, and I'll talk about a little bit further on. They will not affect the surplus that we have, but I do have an item that I do know will affect what we're seeing here. So this I just do want to point out. This is very preliminary. I just want to share it so that we can see what we can expect with the final audit result. It won't be a surprise.

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DTSD Webinars: So we'll start with that preliminary financial statement.

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DTSD Webinars: and you'll see that overall. In revenues we did exceed the budget.

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DTSD Webinars: and in local resources or local revenues. We are about $850,000 more than what was budgeted, and a large portion of that was in delinquent occupational tax. Now, since I wasn't here during the year, I did have

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DTSD Webinars: a discussion with the superintendent, and she did inform me that there was a big push by Keystone to collect some delinquent occupational taxes. And that's probably what we're seeing in there. We also had 616,000

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DTSD Webinars: more collected in interest than was budgeted, and as well. We had about 508 and earned income over what was budgeted. We did have a few items that were under budget as well. Occupational tax was about 236,000 under budget and real estate tax was also 316,000 under budget. So we had a little of both, but obviously more in what was greater than the budget

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DTSD Webinars: in state sources. You see that we have about 419,000 more than what was budgeted, and the majority of that, in fact, even more than what that is is represented by the basic Ed funding, which was about 507,000 more than what was budgeted, and my understanding on that is that the that State budget was passed late last year, so that we would not have had that number during the budgeting time.

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DTSD Webinars: We have about 114,000 more in Federal than what was budgeted and

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DTSD Webinars: which isn't too far off from what we had, and other financing sources pretty close to what was budgeted. Mike Rizzo. Here, that's actually showing a negative right? Yes, I should have pointed that out. Thank you very much. If you see a remaining balance on revenues of negative, that means we have more.

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DTSD Webinars: We took in more than what we budgeted. If you see a remaining balance on revenues. That's positive. That means that we took in less. Thank you. Right? No. But I was just saying on yeah, in the Federal. Okay.

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DTSD Webinars: got it? Yeah, thanks. Okay. So

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DTSD Webinars: And then, just looking at the expenditures, we see that we've got about

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DTSD Webinars: 880,000. Now here, if you see a positive remaining, that means that we were on what the final results were under budget. So. And I'll just point out a couple of real highlights here, the salaries themselves, and I think this was projected back.

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DTSD Webinars: At the end of the fiscal year. We're about 880,000 under what was budgeted. And there's a large amount that in benefits that is, under what was budgeted, and that is primarily in retirement of that

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DTSD Webinars: 1 point almost 5, not quite 5 million. That's underspent in benefits. 1.5 of that was actually for retirement. So I did take a real quick look at what was budgeted for salaries versus what was budgeted for retirement. And with the retirement rate of 34%.

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DTSD Webinars: I'm sorry. Yeah, 34%. That year the budgeted amount was actually 36.6% of salaries. So that kind of explains what was going on there.

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DTSD Webinars: So I do want to talk a little bit about some of the things that we found. As I said, we had a couple of journal entries come in right before we came into the room. I am very, very close to being done with the

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DTSD Webinars: Pde. 2057, which is the annual financial report that goes to the State. I have 2 validations that I have to clear before I can submit it.

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DTSD Webinars: And those are related to technology leases that we do. There was a difference between what we put on one of the schedules and what we had in in our

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DTSD Webinars: in our books, and that is not an entry that I generally make. That's a schedule that's maintained by the auditors. So I sent that off to our auditor earlier today. And I said, Hey, I'm having a little trouble with this, and he did find that an adjusting entry had been missed. So those are the ones he sent to us. So one of them increases the revenue.

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DTSD Webinars: and also increases expenditures by the exact same amount. So you will see revenues go up in one place. I think it's in the 900 series, and you will see expenditures go up in 700 s.

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DTSD Webinars: And that has to do with that entry. But they are exactly the same amount, they will not affect the surplus, they will not affect the fund balance as well as there's another journal entry that has to reclassify some lease payments that are in the 400 series purchase property services and moves them

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DTSD Webinars: to the 700 series the property. So there'll be a little bit of a reclass. You'll see some changes. Not it won't. It won't affect the surplus at all, but it will affect some of those numbers exactly where you see them in the categories.

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DTSD Webinars: And then I did find I was actually looking.

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DTSD Webinars: doing some research on something else. And Mrs. Ag. Helped me find something, a transfer. Actually, several transfers that were approved on May 20th of last year, and

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DTSD Webinars: 3 of those I did not. I don't think we ever saw any cash actually moving, so we didn't have a trigger to record them, and until we found this that the board had approved them, I was unaware that they had been approved.

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DTSD Webinars: So one is $150,000 to the cafeteria fund, and 2 others are to the capital reserve. Those are smaller. So I do have

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DTSD Webinars: also an email out to the auditor. On that, I said, I'm going to prepare those journal entries, and I will send them off to him tomorrow, so I will, I would anticipate. At the very least. We will actually see the surplus going down, probably by a couple $100,000. Based on these these entries. It is possible that the auditors could find something else as we're finalizing. But I think

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DTSD Webinars: we talk about $200,000, and that is a lot. But when you look at what the surplus is, it's not going to change what's going on directionally, if that makes sense.

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DTSD Webinars: So I do want to move on to the fund balance history.

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DTSD Webinars: Just to get, can I? This is Lindsey Drew. Could I just ask a couple questions before we move on?

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DTSD Webinars: Thanks, looking at the

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DTSD Webinars: where you were discussing the benefits in the 200 line. Item, can you just restate what?

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DTSD Webinars: So

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DTSD Webinars: the budgeted percentage for Pcrs was higher than what the actual piecers was. Yes, when I did the 2%. Yeah, when I did the calculation, that's what it looked like. So it wasn't attributed to the lower health care costs no health care was. I thought it was going to be healthcare, and I looked at healthcare because I wanted to be able to explain this to to you tonight, and health care was pretty close to budget

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DTSD Webinars: pretty close to Budget. It was off a little bit. But, thank you. It's not how

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DTSD Webinars: the initial projections were.

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DTSD Webinars: This is Jennifer Renz. I have a question also about that. Piecers amount. So if we know ahead of time what the rate is going to be. And we knew it wasn't 36%. Do we have any idea why, that amount was high? I don't. That's a 2324 budget that would have been done back in in 23. So.

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DTSD Webinars: and I will say I am looking at, and I don't know if there were any budget transfers or anything. I was looking at the amount that's in there now, that would not have been the necessarily the original budget. So it is possible there may have been some movement in or out that I'm not aware of, but that was what I saw.

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DTSD Webinars: and that to me. That was the explanation for for the variance.

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DTSD Webinars: because I even did a well. Here's what our wages are. Generally. There's not everything that we pay in wages is subject to pisers. Some people are not eligible, some payments are not eligible. And I, it generally runs about 97% of salaries. So I just did a really quick back of the envelope calculation on what our actual salaries were. Time multiplied by 97% multiplied it by the pisers rate. And it was really close to what our actual was.

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DTSD Webinars: So

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DTSD Webinars: so when we're budgeting for 2526, will we put in 34%. Or do we have that amount for 2526?

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DTSD Webinars: You mean the one we're going to do correct. I will be using that 34% that you you showed me. So. One of the things we have the ability to do. And of course I want to make sure I check things for reasonableness is, we have a module that Mrs. Wagner in

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DTSD Webinars: and the Hr. Office does, and she puts it, every person based on what their current assignment is based on what steps and and

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DTSD Webinars: and based on the contracts and everything, what their salary should be a good guess for next year, and then we're able to say, we think that we should have a good estimate of what our health care rates will be.

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DTSD Webinars: which is not necessarily our final. We can talk about that, and also the pisers and the social security and everything else. And this budget, this personnel budgeting module calculates everything, and should, we should be able to take those numbers from personnel budgeting and put them right into the budget preparation module that we have. And like, I said.

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DTSD Webinars: it's great. It's a really really good start. But you also want to go through there and make sure that everything is reasonable before you, because

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DTSD Webinars: things happen, and you want to make sure everything's reasonable. So it is a really really good start. It's a really great tool. But you still have to do those reasonable checks afterwards.

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DTSD Webinars: Thank you, Mrs. Pitts. Sure this is Lindsay Drew again. I just have a few more questions.

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DTSD Webinars: The number in the 800 line of the 329,000.

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DTSD Webinars: That's where you're thinking it had to do with the fund transfers that weren't actually done

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DTSD Webinars: because I guess I thought that would have been the unbudgeted debt service. I have not, I know which function those transfers should be in the 5,000

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DTSD Webinars: function, which is that

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DTSD Webinars: I don't talk about that too often. That's the by program. I tend to focus a lot more on object. And I

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DTSD Webinars: think that the the budget, the 150 that we're talking about. I think that is a 900 other use.

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DTSD Webinars: But I'm going by memory, not by. I haven't thought about the the actual entry itself yet, but for a couple points that

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DTSD Webinars: there's so with the 800 line item.

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DTSD Webinars: be debt service, because we had the unbudgeted debt service. The 1st payment from the 15 million dollars bond. Yeah. A big portion of 800 is 8 30, and that is interest. Yes.

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DTSD Webinars: and I didn't look that one up, because I guess those those top 2 numbers just really caught my attention. And that was where I kind of focused my attention, but I can definitely

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DTSD Webinars: look at that.

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DTSD Webinars: And then those inner fund transfers, the 150,000, the 25,000 that was

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DTSD Webinars: that was approved for fiscal year 23, the 2223 that was for prior to closing out the 2223 audit.

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DTSD Webinars: So I'm just trying to track where that would have gone. Okay. So that was for the that audit purpose. Maybe I misunderstood what I saw and what was approved on May 20th so there was a hundred 50

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DTSD Webinars: budgeted as a transfer to food service.

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DTSD Webinars: and nothing had been transferred. And I'm talking 2324. So when I read that board action.

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DTSD Webinars: I assumed it was for 2324. Okay? Because I guess what I'm looking at from that date that we approved was the the interfund transfer recorded for year End, June 30, th 23,

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DTSD Webinars: and that was the 1 million dollar capital reserve as budgeted 150,000 to food services, 34 to capital reserve for the propane bus purchase, and the 25,008 18 from the reimbursement from the county grant. Yes.

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DTSD Webinars: So those should have been recorded as part of the 2223 year end audit.

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DTSD Webinars: Okay? So I guess I misunderstood because I assumed

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DTSD Webinars: and if we need to do it differently, this will be good. That when I read that that was for the 2324 year. No, it was because in May we were still trying to wrap up 2223 audit. Okay, and

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DTSD Webinars: approve those interfund transfers. Then, so that the final audit could be completed and issued to the board for June approval. Okay, so I'm going to then, because there was, I believe I have to double check this.

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DTSD Webinars: 2223. There was a transfer recorded

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DTSD Webinars: in up to food service. Pretty sure I will have to double check, though.

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DTSD Webinars: And I guess if we're going to go with that budgeted 150 from the 2324, then that probably needs to come to the board for action before we finalize.

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DTSD Webinars: before we finalize 2324. If I'm recalling correctly that 150,000 was because previously 2 business managers ago

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DTSD Webinars: we moved the food, the director of food services salary out of the food services budget and put it into the salary. Item, okay. Mrs. Purcell

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DTSD Webinars: felt that it should be moved back into food services and counted as an expense under the food service item, not as the personnel. So that's why that interfund transfer was recorded for the 2223 year. Okay, so that makes me think that then we don't want to do it for the 2324, because we did move Mr. Hummel into food service.

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DTSD Webinars: or we do want to do I

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DTSD Webinars: I cannot say for certain. If from a budget perspective. It was accounted for under food services, but food services

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DTSD Webinars: prior to the pandemic food services had been showing significant loss. And so one of the reasons it was the salary was pulled out was because it was Mr. Frentz and the auditors at the time. You know their opinion that the salary shouldn't be reflective of that, and that it was overstating the loss in food service operations. And then during the pandemic, when we were receiving reimbursement.

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DTSD Webinars: the waivers, you know. Basically, lunch was and breakfast were free.

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DTSD Webinars: We weren't seeing those losses. We had rejoined the Usda program at the High School. So we were getting all of the reimbursements.

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DTSD Webinars: So the offset was to bring back

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DTSD Webinars: the Food Service Director Opposition, because that was one of the questions, and I honestly can't remember at what point in time it came up. But

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DTSD Webinars: I can recall saying to you know, Mrs. Purcell, well.

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DTSD Webinars: previously we were told it should come out. Then she want she was moving it back in. And so that's why that was done. Okay for that purpose. Okay, so

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DTSD Webinars: Then my understanding is that won't be an adjustment then, and I will let the auditors know that that we had this discussion, and that will not be one of the things that we're going to do. Okay? And I believe the auditors should have record of that, because that was one of the things that they worked with Mrs. Purcell on to get these final numbers for journal entries and adjustments in order to bring forward the final okay audit. Thank you very much. Because,

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DTSD Webinars: I still don't know what. I don't know all the time. So thank you very much. Okay. Then we that I take back my comment about the adjustment. I would say, it's still possible that something could be found. But I think, directionally, we're very close to where we're going to finally end up.

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DTSD Webinars: And then my only other question is, where in the revenues would the esser money be showing? It's under federal?

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DTSD Webinars: Okay? So so yeah, if you see that 2.9 million dollars 2.2 2 5. I happen to know that number pretty well, and you'll see it in the next. On. The next thing we look at was for the arbasser.

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DTSD Webinars: Okay? Because I think that's an important part of the conversation was with the local sources, being $850,000 higher. It was because we realized a pretty large increase in earned income tax.

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DTSD Webinars: We had the Esser funds there, and a lot of districts are seeing deficits because of that. For us our revenue numbers were almost inflated by that 2.5, because we had to realize those esser funds in that budget.

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DTSD Webinars: But our

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DTSD Webinars: expenses were managed in a way that the esser funds would not create a fiscal cliff for us. Correct. Yes, and I'm actually going to talk about that when we talk about. Sorry to steal your thunder.

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DTSD Webinars: Anything else on this portion?

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DTSD Webinars: Okay, so we're going to do a fund balance history

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DTSD Webinars: just to kind of see where we've been and we're going to focus if you have any questions on the other years. But we're going to focus, of course, on 2324. So we see our surplus. There is 4.3 million dollars.

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DTSD Webinars: Now, I do want to point out 2 things. One of those is that

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DTSD Webinars: in the budget was 1.7 5 million dollars for capital projects, and my understanding is the intent that 1 million is to be transferred to capital reserve, and that is recorded.

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DTSD Webinars: The additional 750, I understand, was the intent that it would be committed

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DTSD Webinars: for capital projects. That means less money that we have to borrow in the future when we're.

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DTSD Webinars: I would say, pretty likely going to be doing our elementary project.

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DTSD Webinars: And the other item I wanted to point out is that Arp esser, and that is that 2.2 2 5 million dollars

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DTSD Webinars: and that 2324 is the last year for that revenue source.

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DTSD Webinars: So again, things that I'm having to learn and ask people as I go through this, my understanding was that we chose to use that for salaries and benefits

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DTSD Webinars: with the understanding.

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DTSD Webinars: A. That was the. It's a little operationally easier to go, and, as you said, it helps prevent that financial cliff, and that we do have the ability

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DTSD Webinars: to, probably, and we should commit a portion of that to something. And at this point we're going to probably have to review and make a recommendation for what that should be. But if you take that out because that does go away in 2425, you'll see a surplus of 1.3 million dollars, which is a little bit more. I'll call it reasonable.

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DTSD Webinars: So what I'm going to be doing is, you know, I am just sort of getting through this. Now I am just sort of starting to digest it. We will need to make some recommendations about committing or transferring for those excess funds, because we don't want to be over 8% of our expenditures in uncommitted fund balance.

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DTSD Webinars: One of the things I do want to. I'm sure you've heard it before is anything that is transferred to capital reserve is in capital reserve forever. It may not come back ever.

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DTSD Webinars: If you commit funds for capital, it can go to capital reserve, or it can go toward one of the projects. So it is a much more flexible way of handling the surplus.

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DTSD Webinars: so we'll probably be taking a look at that, and then we will be taking a look at that, and then making some recommendations.

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DTSD Webinars: So that is where we stand. It's since you've explained that to me, we probably won't have

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DTSD Webinars: the surplus won't change. We will still have some changes in those categories, as I mentioned for those 2 journal entries that we got for tech leases. But it won't affect this surplus

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DTSD Webinars: any questions.

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DTSD Webinars: This is Lindsay Drew. I also believe, maybe looking at the numbers a little deeper, would kind of show the path, but with the increased debt service from the bond issued in late 23 we were estimating that the ultimate.

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DTSD Webinars: the ultimate increase to debt service was going to be around 750,000 total in the 2324 year it was going to be about 350,000. So we knew, based on the tax increase that had been done in the 2324 budget that we would be increasing revenue by about 750,000.

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DTSD Webinars: That's what was planned, committed.

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DTSD Webinars: About 3 months after that budget was passed we issued that bond and so

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DTSD Webinars: that portion was going to move

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DTSD Webinars: in perpetuity into the general Fund budget for debt service purposes. Now, perhaps interest income, because that was so much higher than anticipated, offset it in the revenue expense line

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DTSD Webinars: and wash there, but I do think that that portion of it was

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DTSD Webinars: long term, you know, in case as interest drops off. And suddenly, there's not enough revenue

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DTSD Webinars: they're supporting that debt service line item, because debt service has increased. But there's not interest coming in in the same way. That may be where we see you know those funds that should have moved into general fund ongoing

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DTSD Webinars: revenue because it was part of the millage increase for debt service.

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DTSD Webinars: Any other questions on the preliminary numbers.

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DTSD Webinars: Okay.

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DTSD Webinars: I really hope that actually, I'm almost positive that we have to enter some journal entries tomorrow morning. Once I enter those and reflect the annual financial report that everything will there. All the validations will be cleared, and that will be submitted

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DTSD Webinars: tomorrow.

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DTSD Webinars: So that's

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DTSD Webinars: going to make me happy. So the next item is contracts that has not transferred to me yet. So, Dr. Winslow, I don't know if you have any highlights for those.

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DTSD Webinars: These are both things that Board members have seen for the last 2 board briefs. Just are there any questions?

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DTSD Webinars: Not for me?

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DTSD Webinars: No, I'm good, thank you. Great! Thank you.

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DTSD Webinars: And then we'll be on the board agenda then this evening for approval.

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DTSD Webinars: Thank you.

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DTSD Webinars: Okay.

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DTSD Webinars: So we come back to the agenda.

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DTSD Webinars: we will go to item 6 public comment. Are there anyone in the audience that would like to comment on today's proceedings?

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DTSD Webinars: I will take that as a No. Item 7. Then could I get a motion for adjournment?

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DTSD Webinars: So moved? Lindsey drew second Jennifer Renz. Is there any discussion.

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DTSD Webinars: if not all, in favor? Say, aye, aye, aye, opposed.

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DTSD Webinars: Ayes, carry meeting has ended at 5, 34 pm. Thank you.