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HomeMy WebLinkAbout2024-04-24 Finance Committee Minutes Finance Committee Meeting Minutes of April 24, 2024 Present: Vice Chair Christine Allen, Brianna Stetson, Eva Pastor, Keith Chaney (remote), Dustin Silk, Regina Kean and Ken Gray Not Present: Nancy Sarro Present Non-Member: Finance Director Lyne Savage and Town Manager Melissa Rodrigues called the meeting to order at 7:04pm. The open session meeting took place at School Admin Room at School Administration Building on 566 Main Street. Mr. O'Connell explained a letter was received from the Superintendent on April 19, 2024 requesting the use of Finance Committee reserve for $1.5 million to be used for the School Operating Budget for Fiscal Year 2024. The Finance Committee was also sent a letter from the Town Manager to plan for the help of the Finance Committee to solve the FY24 School deficit. Public Comment None Discussion of FY24 School Deficit with Superintendent and Assistant Superintendent School Committee Chair David Brown and Deputy Superintendent James Mealey were present at the meeting. Dr. Mealey gave a presentation of the FY24 budget deficit. Mealey stated that the expenses occurred were not controllable and he has is taking full responsibility. Dr. Mealey also stated that Mr. Brown suggested a third-party auditor and Dr. Mealey did not agree but now realizes and apologizes. Dr. Mealey stated he is in support of a third-party auditor if it dismisses the the salaries had been increasing all along. Dr. Mealey stated he was sounding the alarm but not effective enough. Dr. Mealey also stated he was dealing with a health issue for the past few months. Mr. Brown mentioned the concern that there are no other checks and balances in place besides Dr. Mealey. Dr. Mealey agreed with monthly reviews to be held with the Town Manager and the Town staff. Finance Committee as well. Mr. Gray asked Mr. Brown who is responsible for the oversight of the school spending. Mr. Brown stated the superintendent. Mr. Gray asked if it is delegated to the School Committee. Mr. Brown stated the School Committee sets a budget to decide how it is spent. Mr. Gray asked if there is a Finance Subcommittee of the School Committee. Mr. Brown stated no, but the plan is to look into one. Mr. Gray asked if there will be an investigation. Mr. Brown stated yes. Mr. Gray asked if the superintendent was put on administrative leave. Mr. Brown stated yes. Mr. Gray asked if an investigation was done first before putting him on administrative leave. Mr. Brown stated no. Mr. Gray stated the concern for how it was done. Ms. Allen explained that personnel issues need to be done in an executive session. Dr. Mealey mentioned this is the first year of his 15 years in this role where there was an issue. Ms. Kean stated her understanding of how the expense side was unforeseen but does not understand how the salary side can be unforeseen. Ms. Kean mentioned there were a lot of a large adjustments had been made in salaries. Dr. Mealey stated there are many transfers done to pay bills and therefore other lines go into deficit. Ms. Kean mentioned there is about over $3 million deficit with salaries and to not count on offsets going forward. Dr. Mealey stated he needs to count on offsets to balance the budget. Ms. Kean asked if the funding is needed as soon as possible. Dr. Mealey stated yes, funding is required as soon as possible and the transfers can continue as necessary. Ms. Rodrigues stated there is a meeting on May 29th with the Bond Council and would want to show that the deficit is completely funded. Ms. Kean asked if there are any cuts or spending freezes that are being done. Dr. Mealey stated yes, as a result there has been $200,000 found in the purchase freeze and $106,000 in other areas. Ms. Allen asked when the freeze was implemented. Dr. Mealey stated most years there has been a soft freeze in December and now is a hard freeze is implemented in February/March as well as ahiring freeze. Ms.Allen asked about salaries and if additional teachers were hired after the freeze. Dr. Mealey stated no, there is need for a more efficient way to deliver services for more students that are in need of , so hiring did not happen. Ms. Kean asked how we know this is the full extent of the problem. Dr. Mealey stated he wished he could say, unfortunately there can be expenses that come their way at any time. Ms. Stetson asked if forecasting low/medium/high case scenario to understand deficits. Dr. Mealey stated for many years monthly checks were not put into place as it will be going forward. Ms. Allen asked how budgets are done and who is involved. Dr. Mealey stated himself and Traci Mickela . Ms. Allen stated the concern with the proposed budget not being very clear initially. Dr. Mealey stated he was presenting with the School Committee approved budget he school to use ClearGOV. Ms. Stetson asked about the 14% increase of the OSD; where what was because of new students versus what was because of the state increase. Dr. Mealey stated 1) North Andover Schools now has one less student than last year costing $1.2 million per student and 2) around $700,000 was OSD related and the rest was when North Andover became responsible for students that were at the rate of $200,000-$300,000 per student placement. Ms. Stetson asked why there are an increase of IEP students. Dr. Mealey stated there is no real definitive answers yet as to why there is an increase in IEP students. Ms. Stetson suggested to look at the trends and go one level deeper to figure out why they are happening and how to fix them. Ms. Stetson stated that Dr. Gilligan mentioned that North Andover was under the assumption that State would be providing assistance then he also stated that the State understood the magnitude of the cost. Ms. Stetson asked why the schools were banking on that support. Dr. Mealey stated the State indicated they would be some attempt to mitigate that increase. Dr. Mealey stated there is an emergency relief program this year but does not know how much it will be received. Pamela Lathrop, Assistant Superintendent for Teaching and Learning, was present at the meeting and explained the Dyslexia Law for all students from K-3 to have a screener and send home a parent report with a plan. The State put the law into place and are looking into the tier one, tier 2 and tier 3 support. Ms. Lathrop stated post Covid issues are still being seen in schools. Ms. Stetson asked Ms. Lathrop what date the Dyslexia Law went into effect. Ms. Lathrop stated August 2023. Ms. Lathrop stated K-5 are being tested this year. Ms. Stetson asked Ms. Lathrop if the budget considered this new law or was it a miss. Ms. Lathrop stated she was not here at budget time, but believes the district was prepared to address the students of the students who may have deficits in that area. Ms. Stetson asked if funding can be done with the other district transportation. Dr. Mealey stated it had been done in the past but not with homeless students. Dr. Mealey stated they were looking into getting their own transportation. Ms. Kean mentioned that the costshould be shared between the community that the child lives in and North Andover. Ms. Lathrop stated if the community the child lives in is a fixed and stable environment then an appeal can be made. Mr. Chaney asked for the steps moving forward to avoid this in the future. Dr. Mealey stated 1) to cover the deficit, (2) an external audit, 3) going forward adjust FY25 budget number and 4) monthly review of the burn report sending the reports to Finance Committee, Select Board and School Committee. Mr. Brown added to request to look at mechanisms and make sure it is not a systemic problem. Ms. Rodrigues stated that each year the Finance Committee Reserve Fund will be replenished with $1.5 million. Ms. Rodrigues stated it is a possibility that in FY26 to use revenue from Medicare to fund a Finance Committee Reserve for Special Education. Ms. Allen stated the concern that schools are not being funded properly. Ms. Rodrigues stated FY26 and FY27 may not be good revenue years and it is concerning. Ms. Kean asked about FY25 also going being a problem since the funding is still not enough. Dr. Mealey stated with inflation and student needs increasing is causing the increased funds needed. Ms. Kean asked about the increase of students that caused the hiring of extra teacher assistants without a plan of how to compensate them. Dr. Mealey stated they did not hire the teacher assistants; the staff was already on the payroll but the intent was to decrease payroll. Mr. Gray asked if there is a scrub through of the budget what can be characterized as one-time expenses so that it can be used as free cash. Ms. Rodrigues seated yes, any capital items that are $50,000 and below are in the operating budget. Vote the use of Finance Committee Reserve for FY24 School Deficit Ms. Stetson and it needed to be done before April 29. Ms. Stetson mentioned it does not give the public time to make public comment. Mr. Brown stated if this is not voted on tonight, another plan will need to come up with at the school committee side. MOTION: Ms. Allen made a MOTION, seconded by Ms. Kean to suspend Finance Committee policy to place a vote on the Finance Committee Reserve to be put toward the FY24 School Budget deficit. Roll call vote: Allen: yes; Kean: yes; Motion approved 8-0. MOTION: Ms. Kean made a MOTION, seconded by Mr. Gray to allocate the Finance Committee Reserve of $1,500,000 to be put toward the FY24 School Budget deficit. Roll call vote: Allen: yes; Kean: yes; Gray: yes; Chaney: yes; Stetson: yes; Pastor: yes; Silk: Motion approved 8-0. Discussion of Warrant Articles and Special Education Stabilization Account with Town Manager Ms. Rodrigues asked for an additional $530,000 instead of $220,000 which will leave $40,000 in the account. This will require the schools to make an additional $230,000 cut as they go into FY25. MOTION: Ms. Allen made a MOTION, seconded by Ms. Kean, to suspend the rules to vote to suspend policies for Special Education Stabilization account. Roll call vote: Allen: yes; Kean: yes; Gray: yes; Chaney: yes; Stetson: yes; Motion approved 8-0. MOTION: Ms. Allen made a MOTION, seconded by Ms. Pastor, to suspend the policy that will allow for $750,000 to go toward the Special Education Stabilization fund transfer for FY24. Roll call vote: Allen: yes; Kean: yes; Gray: yes; Motion approved 8-0. MOTION: Ms. Kean made a MOTION, seconded by Ms. Allen, to allocate $750,000 to go toward the Special Education Stabilization fund to FY24 School Budget. Roll call vote: Allen: yes; Kean: yes; Gray: yes; Chaney: yes; Stetson: yes; Motion approved 8-0. Approval of Open Session Minutes from April 8, 2024 MOTION: Ms. Allen made a MOTION, seconded by Ms. Stetson, approve the Open Session Minutes of April 8, 2024 as written. Roll call vote: Allen: yes; Kean: yes; Gray: yes; Chaney: yes; Stetson: yes; Pastor: abstain; Silk: yes; Motion approved 7-0-1. ADJOURNMENT MOTION: Ms. Allen made a MOTION, seconded by Ms. Stetson, to adjourn the Finance Committee meeting at 9:02PM. Motion approved 8-0. Respectfully submitted, Jillian A. Brothers Executive Assistant Documents used at meeting: School Presentation of FY24 Budget Deficit Open Session Minutes