##VIDEO ID:PjcbXl67wPA## I'd like to call the meeting to order at 604 we please rise for the flag salute I pledge aliance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all um the opening statement of according to the agenda Mr halach can you please call a roll Mr Falcone present Mr Deano is absent Dr Pella present citr is absent Mr Gan is absent Mr chaffy is absent Mr Francis yep M Paul Chana yes and Miss Falcone Scher here can I please have a motion to go into executive session I'll make it second Mr Falcone yes Mr Stefano is absent Dr capella yes Mr citr is absent Mr gulan is absent m chaffy is absent Mr Francis yes Miss paa yes Miss Falcone schuer yes e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e all right and we are back live can I please have a motion to reconvene second sorry no you are good Mr Falcone yes presid uh Mr stano on the motion to reconvene yes Dr Capello yes Mr citr is absent Miss gulan yes Mr chaffy is absent Mr Francis yes Miss paulaa yes and Miss Falcone schuber yes can I please have a a motion to approve the minutes for the November 25th executive and regular session I'll move it second on the motion by Mr Falone seconded by Dr Capell any questions Mr Falcone yes Mr Stefano yes Dr Capello yes Mr citr is absent Miss gulan yes Mr chaffy is absent Mr Francis yes Miss Paula chaina yes and Miss Falcone schuber yes next we move on to the superintendent and hi report uh let me go just a little out of order uh Lilian um why don't you give the student report for the month of December here heading into the new year I know Natalya couldn't be with you tonight but why don't we do that and then we're going to turn it over to our auditor for presentation as well all right um I have a couple things to say um the high school had a great last week of school showing a lot of spirit it was a Spirit Week um we ended the week with the pep rally teacher superlatives and choosing Mrs taow Sky's door as the best decorated um the drama club's production of Puffs was a huge success I was a part of that thank you to everyone who came it was a whole lot of fun um our athletic teams have been successful as well our varsity basketball team won against ktim um Jessica lagunes representing her P Kong on our girls wrestling team came in first place in a recent tournament the holiday Ensemble for band has been very busying all of theas County and can be heard Christmas Eve on wsus that's at 8: a.m. um and the drama club held auditions for the spring musical The Lightning Thief and um we're all very excited for that um we would love it if everyone who can make it came it's very fun um also congratulations to Dom Amela Natalia doesn't have the last name but Natalia Jena Roman uh and then Natalie Sophia and Ashlin who were accepted into the north Jersey area band this is a great accomplishment and the high school is very proud of them lastly six of the high school's female ninth graders Talia parate Kylie AES Annie maler Lily Tomkins Adriana KUSI and Reagan graat were awarded the Girl Scout silver award kudos to them and their accomplishments okay very good thank you so not only did the high school have a busy week and a busy month of of December um but Lily had a busy month of December as well from Puffs to cheerleading um kicking off the season to being here tonight so um we're thankful to have you as one of our student Representatives proud of our students at the high school and throughout the district for all of their efforts so thank you for your report this evening and best wishes to you for a happy New Year um and then with that let me turn it over to Mr Ray sarinelli uh our auditor from Nish shavash Ray is going to present the 2324 audit uh for last school year good evening everybody most of you I are remember so right s in case I haven't met you yet um I'm from the audit perm Bo so the audit book is obviously a very cumbersome book it has a lot of information in it um a lot of high level accounting information schedules and things like that what I TR to do is give you the information that I think is most important to you which uh we always start with schedule C1 which is basically uh it is an income statement but it's basically your board secretary's report that you see every month so it's your your regular operating budget uh it's the closest represent ation uh in the audit of what actually happened during the year there's a few things on here that are a little bit made up that would have to follow from the state of New Jersey but for the most part this is what happened in the district during the year um so that's what I always like to talk about uh it is a I said income statement there's revenues there's expenses and then your fund balance your fund balance is much like uh retained earnings would be in uh in a uh a business so it's your indicator of how financially well the district is doing so just looking at the first page um you have revenues uh from three different places you have local revenues revenues from State sources and federal sources uh so what we're seeing here is the original budget which is what you voted on uh the final budget so any adjustments that were made during the year would go in that b budget transfer column then you have your final budget and then actual which is what you actually in this case collected on the expense side what you actually spent so what we're seeing here is on the revenues from local sources anything in that far right column that is uh variance final to actual if you see a negative there not so great that means you didn't collect quite what you budgeted for so we'll see uh on the local sources uh your unrestricted miscellaneous revenues some of your rents and royalties and other restricted miscellaneous revenues have shortfalls of of Revenue uh over the past several years and trying to combat the losses in your state sources is very resourceful in getting a lot of local revenues uh this year came up a little bit short of that because uh there really is no new revenues for a school district there's not a lot going on over the years we've been able to sell some assets and do some different things look at different ways to make some money which has been very nice unfortunately 23 24 not so much so uh you know a little bit uh of a a shortfall on the local revenues on the state revenues we also a little bit of a shortfall on extraordinary aid but we also got some stabilization sorry I'm sorry I have to interrupt you you have to give me a little bit more information about unrestricted miscellaneous revenues what does that mean so for the most part that the biggest part of that number is interest interest on accounts interest on investments you have cash cash is in the bank you're making interest on on uh on that money that's the the majority of that number the when you say majority more than 50% more than 50% the rest of it prior year refunds would be the other big number which would be maybe like 15% and then you're talking miscellaneous Revenue could be any little thing that comes Library funds could go all these little tiny pieces of things that we would make up miscellaneous Revenue but the biggest would be um interest and the prior year shouldn't we have planned for that I mean should we have known that it would not be as much um so you try and base it on previous years your previous years your unrestricted miscellaneous Revenue was close to the number budgeted so yeah but that's historical historical isn't always accurate you know that right uh I mean you should know in advance that I'm not going to have this you know I'm no long going to have this piece of property therefore I'm not going to right get the interest from it or the income from it yes that is correct but you're also trying to create a balanced budget so you have to have enough revenue on your Revenue side to offset some of your expenses and sometimes it doesn't quite make it so yes I I AG I 100% agree with what you're saying and that's part of the goal for the future is to be less reliant on Revenue especially especially these we're always reliant on Revenue car on we're working on that it's it is a delicate balance uh especially for you because of what's happened on the state side over the over the last six years of course I mean losing $12 million you have to really as you're building your budget put pressure on yourself to to try and make as much revenue as possible a million basically a million dollars in the hole here is not a fun thing to do no uh I but it's not necessarily shocking or surprising because of the loss of state aid we knew there was going to be some shortfalls in revenue and we knew there was going to be a decline in fund balance until we could get back to a balanced budget and I think we're close back to a balanced budget because of the initiative you all took several months ago right with with a larger than normal tax increase well so yes well we had a 4% increase and then we had a 5.9% increase but the 5.9% increase is strictly going to be for Capital Improvements not the first year not the first year let him go through it phel there there's a little bit of a lag the thex come in and and the payments go out on the debt because it's not like you just snap your fingers the debt immediately so by the time all the wheels turn uh we should do I we should do well with interest for the first year for sure do well on interest and um I I think we're going to continue to try and look at expenses to keep them low okay I've had enough go ahead carry on okay thr with this guy so then there's the state side so you did get the stabilization um and and fortunately um the the state the reduction of state aid is done so has your state a been decimated yes do we have to deal with a million dollar losses going forward no so that is a good thing um and then you have a small amount of medic Keepers reimbursement which is which is a federal aid so yes the local sources of revenue did take a hit to your fund balance um I think in trying to make up for state aid there's hit the fund balance for those local revenue losses um on the expense side there's about nine pages or so of expenses I don't like to spend all the time going to each individual expense um but what I do see is in offsetting some of the revenue losses um as I said we're trying to look at expenses to not have uh such ancree in expenses year over-year which means there's more expenses lapsing so two ways to grow your fund balance is either having revenues more than what you budgeted or expenses less than what you budgeted and so what I see is there there are a decent amount of expenses that are lapsing which we haven't had in previous years the budget was getting Tighter and Tighter and Tighter and uh you know the you couldn't budget for as much Appropriations as you could expenses if that makes sense so we're seeing some good uh um Appropriations lapsing because expenses weren't as high as it could be so if we fli down to page n of nine you'll see your so a little further then halfway down the page you see your fund balance July 1st was 6, 36802 and the ending fund balance is 4,218 226 so we're on page 9 of n the actual column and we're on the fund so a reduction of $1.8 million because of the revenue issue not totally unexpected because we're trying to keep the district running with the expenses that we have given that our state AIDS have been decreasing over the years I am hopeful now that we're at a point where we can be sto being so reliant on fund balance and the fund balance will level off part of the fund balance leveling off will have to be less Reliance on those local revenues as well because they're not where they were for the past several years so did we take a big hit this year yes absolutely am I hopeful for the future that with the tax increase and the balancing of the budget that our fund balance will probably hopefully level off we might have one more year of a decrease but we're going to try and level off 3.75 million which is not a bad place to be so I think that's the goal I mean there's a lot a lot of variables especially with the state aid especially with interest rates and the things that do help us generate fund balance but I think trying to uh cut expenses increase taxes which is unfortunate but we're we're at a place where hopefully the budget is much more balanced than it has been over the past 3 or four years so that's kind of the story you know we kind of got into some detail on the revenue I can I'm going to talk about the uh the different statutory categories that your fund balances is in is there any other questions on revenues and expenses and the fun ask about the revenue I'm not I'm not going to take it as deep as Phil 500 Grand is a big number yeah you like was there something in particular that you guys know of that really hit us hard this year like was where was was the bulk of that coming from that we didn't that we weren't able to anticipate like for example if we were pulling money in from a from a building right a rental which we never had but like we were right and then you know that that rental is going away you can plan for that the next year and say okay this money is going away but $560,000 is a lot um you know take the little chopping piece but was there anything large and I'm not going to I'm not going to have a followup but I'm just curious if there was anything large that that that happened in there I would say the biggest part of it is anticipated revenues from interest on investments um the other part of the fund balance that I'm sure Ray is going to go into in a minute is you spend a bunch of money on capital for the roof project next door as well at the high school for the roof Renovations but we're we are under on um anticipated revenues whether it be alphab best outside use of facilities um we don't have any other long-term um projects in terms of revenues that might be coming in um and our interest now that we've had two interest rate Cuts this year from the Federal Reserve our interest returns are going to be lower as well keep in mind that when our fund balance is larger you generate more interest on a balance but as your balance fund balance gets smaller there's less money in the savings account to generate interest as well so um with all of that Federal money gone the Esser fund spent down um you were looking at over multiple years there was over $2.2 million in federal extra money all of that money has gone to no longer generate interest as well so as that spends down the interest that could be earned from it is gone do this base on to that the fact that we had sold assets other years and we anticipated doing that or no um we don't have anything left to to to sell you know I mean like we took Hudson Maxim we took that over two years the cell tower we took the revenues over for that over two years um so you kind of spread some of those revenues out again those revenues went into your account they yield interest but now that they've been gone and paid for one time things they're not there to generate those revenues as well um Ry mentioned extraordinary Aid came in a little bit lower right there's a plus and a minus when you have bless year when you have fewer outof District resident students uh placed in outof District placements that are expensive um you get less extraordinary Aid back from the state two years ago the state reimbursed um statutorily they reimburse 100% of certain costs but because of the state budget they've only actually budgeted and paid us 85% of of what we are entitled to two years ago they actually paid it 100% And The Assumption was hey they're going to pay it 100% well last year guess what they paid at 85% right so um some of that is that is that long-term U you want to guess you want to balance the budget you hope that your revenue is hit um and this year as we go through this year we already have a spending freeze in place we have since October um uh only essential um expenditures we're not replacing certain staff members that may retire or may go out on leaves of absence we're trying to find other ways to fill those slots um to try and save that Revenue um but that's going to be a challenge for next year and as I've said to the board and I'll say it to the public um if you haven't read the news the state's budget is in a prec position for the next fiscal year they anticipate being about 2 b b billion short um that will have an impact on state operations ultimately it will trickle the public Ed um you know we continue to have conversations about Hope for flat funding um but plan for a 5 to 10% state aid cut and so um all of those things and trying to make those hurdles will result in you know additional cuts to public education not just here but across the state the only saving grace if there is one um our state aid number has gotten much much smaller so a 10% cut to 3 million or 2 million isn't as much as it was years ago when our state aid might have been nine or 10 million um if there's a silver lining that might be it okay we're going to lose less money because we don't have correct quick just I need explanation on page eight the first group of numbers I understand these are non-budgeted items uh and these These are expenses right yeah yeah yeah yeah so so how where does the money come from then it's not budgeted remember at the beginning when I said this is the most accurate it's not the accurate okay so the state at some point in time makes a billion dollar multiple billion dollar contribution to the teacher's pension in the new then they have an actuary calculate which portion of that was just broke p on the for every District in the state and then they assign you an amount that they are saying it was a contribution on your behalf so in your financial statements I have to show it on page one as a revenue and on page eight as an expense none of that money came through here you didn't spend $7.6 million on pension state did for you but none of that money happened here okay but they still Force us to show it on the schedule I got it because they want credit for the $7.6 million contribution for cl nice of them CL so yes it does look like so it doesn't look so it doesn't look like it's on their books it's on our books instead yep bastards yep okay got it all right thank you so we we'll go through the the categories quickly on what the uh different categories of fund balance you can have so kind of towards the the middle of that grouping towards the bottom you have capital reserve maintenance reserve and unemployment compensation Reserve so capital reserve is used for Capital type items you can utilize that through the budget or you can utilize it um by resolution during the year you make withdrawal that actually happened last year you did a withdrawal from capital reserve sent that money over to be spent on Ro maintenance Reserve is very similar to capital reserve it can be withdrawn through the budget or withdrawn by resolution that is for M maintenance type needs not big Capital type items and then unemployment is a reserve held for future unemployment claims you know hopefully you don't need it but it's there for a reason then below that you have your assigned fund balance which you have year and incumbrances and then you have assigned fund balance designated for subsequent years's expenditures the year end encumbrances are very similar to accounts payable their expenses that happened uh towards the end of the year that haven't been paid for yet you're still holding that money which is why uh we set aside the fund balance to pay for those items in the current fiscal year that you're in uh the 2425 year and then the designated subsequent years um assigned fund balance and and the numbers above that the excess Surplus that's your fund balance that you Ed to balance the budget and over the years uh which is kind of why we're seeing the draw down of these funds we've been utilizing that fund balance it got much bigger during co co uh you know school didn't really operate normally so fund balance grew because there wasn't a lot of expenses and that school's back in session and your state aid is about half of what it was before covid we were kind of relying on that money and allowing time for the budget to get back to balance so $732,000 was used from this budget and then um from the from last year's budget there was 711 $ 71,2 122 the $128,000 will be used in the 25 26 year that was generated this year so excess Surplus is kind of on a two-year rolling cycle designated for subsequent years's expenditures is money that you have from the end of this year any question on those things that's kind of like the most complicated part of a Schoolboard audit seven years I haven't been able to understand it one one is a one-ear cycle one is on a two-year cycle but it's basically like a savings account you're using your own money to to pay for your expense then the last thing is your unassigned fund balance you're allowed 2% of your operation with some some minor adjustments um is what's allowed to be held as unassigned fund balance um that's you know held for cash flow purposes um you know you can't withdraw from that money but it's there as cash flow um you know hopefully generating interest uh and creating more Revenue so you know overall I think you guys understand where we're at the revenues were a little too over reliant on revenues this year we need to come down on that balance the budget a little bit better along with that we're going to have to try and reduce expenses to meet that reduction of Revenue um you know hopefully the the fund balance is kind of stabilizing here as we get closer to a more balanced budget that's general fund any other questions on that so then the next thing I I uh I usually go through is um schedule G2 that is an income statement also but that's an Inc statement for your uh Co-op service program is on there too but usually $6 million fund you know catches people's eyes before the so your Co-op generated 60 mil $441,000 worth of Revenue and spent 59790 um also there you see the interest income really took off there's almost there's $450,000 of Interest earning in the co-op now the most important thing to remember about the co-op is we're not the owners of the co-op the co-op is the owner of the co Co-op so you cannot use use that money for the hopac on board of education so even though it does have a robust fund balance of $3.8 million those funds need to be reinvested back in into the co-op my understanding is that you're hiring some people in accounting there which has always been my recommendation um if a business were running with this type of uh Revenue they would have a lot of people in the accounting department so I'm pleased to see that you're hiring people there investing in the co-op to make sure that the finances are handled correctly I think if you could hire 100 more bus drivers you probably would but there's just not a lot of bus drivers out there so I'm glad to see uh the reinvestment in the co-op it's doing very well it's financially stable um and that's a very good thing any questions on Co-op the next schedule that we're going to look at is schedule F1 um this is the analysis of the capital project so the reason I included this is It's new this year haven't done Capital project in a while uh I think it's important to note that you're getting uh money from state aid on this in the form of a rot Grant or SBA Grant um so that project uh obviously ongoing maybe finished at this point but as of 6:30 ongoing um so just just give you an idea what's going on with with with that project then the last schedule we're going to look at um is you schedule of your recommendations there's one recommendation uh fixed assets it's been there for a couple of years uh je and I have talked about it how to remediate that there's already a plan in place to remediate that issue um a little bit of confusion from this asset appraisal company um they don't always necessarily pay close attention to the accounting standard because they feel that it's not important they always look at the insurance values and things of that nature which are very important sometimes the accounting standard isn't very important to them they don't always update their information timely so I think there's some corrective action there um that's going to be taken um you know when I look at this schedule when I started uh with you guys in 2019 you had 22 recommendations on this page and now there's one and I'm fairly certain there will be zero next year uh unless something changes so um a lot of improvement in the finance office unfortunately that's not exactly correlating into your fund balance Health kind of out of your control because of the state aid loss but things are running smoothly in the finance department in the finance department of the co-op uh you know things are good there um which is a very good thing if you had the money it would be handled very well hopefully we're getting back more to a more balc budget Less relyant on some of those revenues cut some costs and uh in a couple of years I'll only have good news for you instead some so the the only gig we have from from this from this particular order is just this fixed fix fixed asset issue right that's we talked about this great thank you that is my report best I think to your point less relying on revenues is going to be very important the future but for this year thank you thank you thank you re thank you R I appreciate it uh with that before we uh approve the superintendent report I do need to give you the Hib report for the month uh real quick for the month of November uh on second reading we had uh three reported Hib incidents one of those was a conf confed hi two of those were code of conduct um we discussed those in exec session again and uh uh sustained all three of those for the month of December we have again three reported allegations of Hib uh two were deemed to be hibs one was deemed to be a code of conduct violation uh we will review those hibs again at our January regular board meeting um for approval on second reading as well uh that concludes the superintendent report for the month of December um any questions on that before we get a motion in a second to approve hey can I please have a motion to approve number seven move it second the motion by Mr Falcone second by Miss Pacha uh Mr Falcone yes Mr DeStefano Dr Capello yes Mr citr is absent m yes Mr chaffie is absent Mr Francis yes Miss pachena yes and Miss Falcone Schubert yes moving on to acknowledgement and correspondence a couple of awards one uh we do uh congratulations to our uh students of the month at hopong middle school for their outstanding performance in November as well as a congratulations to Lila Gonzalez on receiving the suset County Superintendent Roundtable award um for the uh school year um Miss Martinez High School principal Lea and her family uh will be attending a reception with the Sussex County Superintendent group um later in the spring uh for her recognition so congratulations to Lila on her outstanding achievements great um and is there anyone from a parent teacher organization who would like to give a report at this time open to public comment no one has signed in is anyone in the public like to speak okay all right um can I have a motion to move the rest of the agenda please 11 through a second fils move 15 15 you you second you pH moved at I second any discussion on the rest of the agenda all right so 11 through 15 on the motion by Mr Deano seconded by Mr Falcone Mr Falcone yes Mr Deano uh yes uh Dr cello Yes except stain to 13B yes with an exension 13B thank you Mr citr is absent Miss kulan yes uh Mr chaffie is absent Mr Francis yes Miss paa yes and Miss Falcone schuber yes okay um is anyone like to make a board member comment besides that it nobody saying me Flor is yours it's you all yours buddy I'll be brief but it's my last meeting so say something um farewell to right I guess couple the last meeting for the what time no for real this time for real I guess just couple of quick things to to to you guys to my peers um number one I think when you when you listen to what Ray just said going from 22 problems to one which is essentially some technicality that we just have to put on a spreadsheet that's that's tremendous that is tremendous so I think that there's a lot of good momentum here I remember when when I got on the board for the first time uh the guy that was one of the biges for me to to get on the board was Rob Nicholson and uh I remember his last meeting he said I'm really glad that I'm leaving hop pakong in a better place than I found it so I'm not going to steal his line but I'm going to I will say that there has been tremendous improvement from the time that I got here I don't think I had anything to do with it right but I think that there's some great people in this district and things are really progressing in the right direction and that's that's exciting um the other thing I'll say is after seven years um you know this is a there's a good group up here so keep doing what you're doing keep the momentum going and stay invested in this and when you get burnt out you know Recruit new people to do it that will spend the time and energy then the last thing um I've been through four four four superintendents um in seven years and I think that each one of them had their own style each one of them had their own characteristics I have not seen anyone have a command of a district the way Jeff has and that includes art who's who I loved if you listened to me last year I can't say enough good things about art but but Jeff I mean you can ask you could ask Jeff how Mars affects the H pakong school district and he'll have some kind of answer for you that makes a lot of sense so I think um that's exciting too and um I give you a lot of credit for that and you know guy's been you know blood and guts to this district for a long time and uh and we have good leadership here so thank you guys and uh good luck to everybody going forward and have a great night thank you Scot thanks Scott from all of us you really um have been a driving force on the board and even though you won't be here you'll be on the sidelines and in the audience that's right right make a smile um I just want to close with we've have a couple goals for this year and I feel like we um it's good to revisit them especially going into the new year and you know we've already made progress but our first goal was to implement a comprehensive data-driven instructional model throughout the whole schools and I know um Matt has been working on that with the staff um to Target Chron chronic absenteeism um which you know is really important if kids aren't here they aren't learning and lastly is to strategically allocate funds for ongoing maintenance and improve um our school facilities which we've been making progress um Mr henb shared that our bonds have been what's the right term yeah we just sold and closed on those fonds Friday right so um looking forward to a lot of momentum in 2025 all right with that said guess we can adjourn thank you all for coming happy holidays enjoy your break I need a motion to adjourn let me make it okay motion to adjourn motion by Scott seconded by Phil all in favor you all have a wonderful evening thanks you happy h