Kimberly Sia, treasurer of the Denver Public Schools Board of Education. And we'll kick off our meeting today with a quick review of the minutes from our special meeting in May. Wanted to check and see if there are any questions or comments about the minutes. Seeing none, I will then toss it over to our CFO Chuck Carpenter to take us through the next few sections of our agenda. Uh, thank you Director Sia, and, um, you know, everybody, we're here on our last, uh,
finance and audit committee of the school year. And so, uh, a lot of things to go through today. The first thing is a summary of our, uh, long-term, um, obligations on the CFO and COO report. And, uh, this is a present, this is a presentation that we've done each of the last three years, and it's just, it's really an effort to just be really open, uh, about, uh, the district's obligations and, and publish it online and have it available for everyone to see if they're interested and, and follow up with questions. So, um, you know, what we're doing here is, is showing
what our, uh, obligations for our bonds are that have been passed over, uh, many years. Those are used to, to build school buildings and, and prepare maintenance, uh, in schools, provide technology and, and many other capital upgrades. And then also our certificates of participation, which is another, uh, term of, uh, another um, uh, financing tool that, um, Katie, our executive director of finance, is gonna walk through. And so with that, I'll hand it over to Katie to walk us through this presentation on our obligations. Thank you, Chuck. Good afternoon, everyone. As Chuck mentioned, uh, we have been
before you all for the last several years to come and just talk about the ways that the district uses financing to help support our capital needs. We also take this as an opportunity to just provide transparency and clarity related to the long-term financial obligations of the district. We'll also discuss some of the refinancing opportunities that are available to the district, uh, through June 30th, 2025. And we wanna provide transparency on the DPS credit ratings. So first up, we're gonna talk a little bit more in detail. Chuck, touch briefly on some of these of
how exactly does the district use our, along the funding that we receive through our long-term obligations. So our general obligation bonds are a way for us to raise funds for capital projects that benefit our students. And we use those items for things like air conditioning in every school building, as well as updating our heating systems, technology construction of new buildings, um, based on the strategic regional analysis that comes out and shows that we have, um, capacity needs in the district. These repayments of principal
and interest are guaranteed through property tax revenue after voters approve it, um, on a ballot that is put forth in a November election, um, with the board approving it to be put on that ballot in the August preceding. Certificates of participation are another way that we can raise funds. This is a sort of a lease financing structure that repays investors through installment lease payments over time. Uh, we use these things in the past for construction of buildings, the purchase of land, and most importantly, to fully fund our pension obligation
when the Denver Public School's Retirement system merged with Para. If we go to the next slide, the district has been receiving a lot of questions recently around what exactly is a certificate of participation. It is a complex financial instrument that can be used. So there are a lot of misconceptions out there around this. So we wanted to take a few minutes and talk about what is a COP or a certificate of participation. So it is a form of financing that's used by gov governments and do not require voter authorization in the state of Colorado because they're not multiple fiscal year
obligations or debt under Colorado law. In this process, buildings are identified that have a value that is approximately equal to the amount that is being financed. The buildings then act as collateral. The district will receive a lump sum payment from this, those COP proceeds and in return makes lease payments that the Board of Education will annually appropriate to pay to the trustee until the funds are paid back with interest. So how that works today in today's market,
we would enter into a lease with a trustee that would typically be a bank. The bank would then turn around and issue those certificates of participation. We receive the lump sum money, um, with, uh, the identified property as collateral. We turn around and make an annual lease payment to the trustee, and those are part of our annual budget appropriations that the Board of Education approves every June and or January at the amended budget. We maintain ownership of these properties and are able to continue to use the properties so long as the annual lease payments are made,
there is an agreed upon schedule of releasing properties as those annual payments are made and the property is removed from being collateral or unencumbered based on that predetermined release schedule. We also have the ability in each of our certificates of participation to substitute property if needed, while we are still making those lease payments. On the next slide. Another common question is, what is the source of funding for these annual lease payments? So that can vary, but they're always made from legally available sources.
So this can include revenue from the Denver Urban Renewal Authority or Dura. It could include our general fund property taxes. We just wanna call out that revenues that are received from our debt service mill levy paid by Denver. Taxpayers are held by a third party custodian and are legally restricted and are never used to pay these annual lease payments. Some specific examples we've talked about on the previous slide, so I won't go into those too much. Um, and is DPS the only governmental entity in Colorado
that issu certificates of participation? And that is a resounding no cop. PS are one of the most common f financing methods used by governments, not only in Colorado, but across the country to construct public facilities and to make capital improvements. So as we go on to the next slide, we're gonna just show briefly our outstanding general obligation bond profile. So this shows our annual debt service and outstanding debt by series with the series, uh, called out in principle outstanding as at April, 2020 25.
And you can see, um, the successful bond elections are typically paid back in over 20 to 25 years. And we are paying annually principal and interest on bonds that have been previously issued. We have that dedicated mill levy that we referenced in the last slide, which is raised through local Denver property taxes. We have intentionally structured our debt to allow future bond elections to maintain that level mill levy for tax payers. That means that future bond elections can happen that have no to very little tax increase
to our Denver taxpayers. So we have a maximum debt service amount, um, that is part of this voter authorization. And so the mil levy rate is set to raise up to that maximum amount, and our debt is structured to ensure that we always stay below that maximum amount. On the next slide, as we think about our COP portfolio schedules, uh, we've talked a little bit, we have our pension cs, which are the largest, and take up the bulk of what the district has issued in coops.
We have those that are funded through revenue received from Dura. We also have our coops that are funded by our District, district general fund, and then some that are funded through savings realized by the district through energy efficiencies and improvements. Um, and those are the four main reasons, and we've separated and called those out for transparency purposes. Um, in this slide, as you know, if we go to the next slide, we were before the committee last month to talk about defe or paying off those three, um, in the kind
of dark blue in the middle are 2013, 2000, um, CS 2017 a's, and then the one line in the green, the 2015 B coops. So those are eligible, um, to be paid off. The 2013 CS will be paid off this month in June, um, after the board approval. And our 2017 A's and 2015 Bs are callable and able to be paid off in December of 2025, which will reduce future interest, um, expense to the district.
So we're seeing that savings of $13 million in paying these funds off early. And this table here is showing what our future, uh, principal and interest payments will look like on those coops after we have paid off those three, which are the three largest after the pension COP obligations. If we can go to the next slide, please. Also, we know para, so because the c the largest C ps that were issued were done to fully fund our pension obligation as it existed back in 2009 prior to the merger with Para.
And this is a result of, of what happened with that is that DPS is among the best funded divisions within Para as a whole, um, at the end of their fiscal year two or calendar year 2023, we are 90% funded and only nine years away to full funding status. Even with the most recent para legislation that was passed through, um, the Colorado State Legislative process this past spring, uh, we were being told by the para actuarial folks, uh,
the estimate would be that we would move from nine years to only 11 years full funding, which is still the second best division across all of Para. On the next slide, we have a few refinancing opportunities. Um, as you know, three of those that you see on here, we are going to pay off and will not be acting upon any refinancing opportunities because we will be defeating those, uh, those coops that are outstanding. We do also have the 2016, uh, general obligation bonds that are callable in December, 2025, uh, with 86 million
of outstanding principal. Uh, the coupons on average are around 4%. So nothing that has really, um, been financially, um, advisable or favorable to the district to us at this point in time and looking at refunding those. But we will continue to keep an eye on that. And should an opportunity present itself, uh, to refund, um, that or any other issuances prior to their call dates, uh, we would bring it back to the Finance and Audit Committee, um, to present it if we feel it would be advantageous to the district for us to do so.
Uh, next slide please. And the last topic that we wanted to talk about is our, uh, credit ratings. So we are rated by the rating agencies anytime we wanna issue debt. And what the most recent issuances relating to the 2024 general obligation bonds passed by Denver voters this past December. Uh, our current ratings, we were upgraded from Moody's to AAA for our go with our underlying at AA one and Standard and pos. We were held steady at AA plus with an underlying aa.
And we've listed here some factors that could lead to positive rating, action or upgrade, which obviously would refer to Standard and pos. Since we are at the, um, likely one of the highest ratings we will receive from Moody's, um, we would need to have sustained moderation of leverage below 250% of operating revenue. We could look to get an upgrade of our issuer rating related to our coops. If the state of Colorado's issuer rating is upgraded, that would also help support our ratings, um,
and continued growth of our available fund balance. So one of the comments we heard from Standard and Poors is that our available fund balance is below higher rated peers, and they would like to see us have a larger fund balance. Keeping in mind the board has a target of 10% and we are well above that looking in the 13 to 15% range, um, factors that could lead to a downgrade, um, from these reading agencies. When we go to issue debt, again, if we can continue to see material enrollment declines
or other operational pressures that really see us utilizing that available fund balance and dropping that available fund balance ratio, um, below 25% of revenue, we could see if the state of Colorado is downgraded on their issuer rating, that could have a negative impact on Denver Public Schools as well, or if we saw a material increase in our leverage. And I will say one of the things that Moody's called out specifically in their report on Denver Public Schools is just the,
the strong financial management, both at the within, internally within the district, but also by our board of education and district leadership and sustained. So not just in the last three years or five years since COVID, but even preceding that. So, you know, the last 15 plus years, the district has a very strong track record of really monitoring and responding to the financial conditions and financial pressures that we face. And I think as long as we continue to do that, that will help us, um, mitigate any potential negative, um,
factors that might come into play. And with that, would like to open it up to any, uh, further comments from Chuck or any questions from folks. All right, well thank you all very much for your time today. Alright, thanks Katie. And so that is a, a report that we bring annually, like I mentioned earlier. So that's, uh, sort of informational. Uh, and now this, uh, section for the agenda are items that will be forwarded to the Board of Ed, board of Education's consent agenda, uh, in their June meeting. And so, uh, we'll start with, uh, the construction items.
And I think, uh, for this, uh, we'll have Troy and we've had a summary put together of this, uh, for all 10 of these. 'cause many of these are of a very similar nature. Uh, so Troy, if you don't mind, uh, just taking this and sort of explained the first 10 items on our consent agenda. Hey, Troy, I think, uh, I think you're muted And I'm telling you all such great things and you're not hearing at all. But hey, um, good afternoon for those of you who have not had a chance to meet, I'm Troy Garner, the executive director of the planning design and construction team. And before, uh, I go into the, um, construction summary
of this month's projects, I just wanted to pause and say thank you, um, to the finance and audit team. Uh, you guys have, uh, supported us, uh, during this past year, obviously as with years prior to as well, uh, and helping us deliver on the 2020 bond commitments. And, uh, definitely with your support, we were able to deliver the success there. And you've helped us, uh, lay a great foundation for 2024. And, uh, with today being the last day of school, construction begins tomorrow. And with this being the last FAC meeting of the school year
and another one not until August, we wanted to present, uh, 10 projects to you all to get approval, uh, to move forward, um, so that, uh, we can keep the process moving forward. Um, with that, as you can see here, we've got 10 projects. They are agenda items of items 4.01 through four point 10, um, 4.01 is a Bradley Elementary School, MEP and Hamilton Middle School Air Conditioning and Theater, uh, renovation. Uh, the value of that contract is 24 million 37 417.
Uh, we do have a 20% MWBE on that project. Uh, 4.02 is Brown Air Conditioning Laboratory replacement fire alarm, and Edison Air Conditioning. MEP project MEP is Mechanical, electrical and Plumbing. Uh, that project has a 20% MWBE, uh, lake Middle School, uh, this, uh, replacement of the HVAC Boilers and Electrical project, uh, that has a value of 7.877, uh, comma 4 7 1. Um, that project, uh, the MWB is
to be determined once we finalize our, uh, scope walks. Uh, additionally, 4.04 cheltonham Elementary School Life Safety Electrical Plumbing Project, uh, that has the value of 2 million 781 2 76. Again, the MWBE for that project is to be determined once we finalize our scope walks, um, 4.05 Park Hills EC Knight HVAC project, uh, that has the value of 17 million 7 83 5 29, uh, that has a 20% NW, excuse me,
a 20% MWBE, uh, participation rate, um, 4.06 Newland Elementary School, uh, mechanical electrical plumbing project that has a 25% MWBE goal, uh, 4.07 North High School auxiliary fields project that has a 25% MWBE, uh, goal 4.08 Smith Smiley project has a 15% MWBE, uh, goal. And that value is at 1 million 7 71 7 13, uh,
4.09 Sophomore elementary school slaves Elementary school irrigation project. Uh, that value is 1 million 5 0 1 4 70, that has a 15% MWBE goal and 4.0 10 George Washington renovations and upgrades project has a value of 11 million 746 5 98 with a 25%, uh, MWBE goal. And we're presenting all these today because, um, with the high number of bond programs that passed last November, uh, there is a lot
of competition, uh, for materials and resources. And our goal is to get these projects underway so that we can get ahead of the curve, uh, this summer prior to the next, uh, August FAC meeting. And so with your approval, we will be able to get designs and potentially some materials, uh, on order, because right now with some of our mechanical and electrical equipment, we are still looking at, um, long lead items such as 52 weeks, uh, in some instances. And again, with the approval today, um, by this committee,
uh, will be positioned, um, to deliver on these projects and continue to making that success happen. Um, so with that, I will pause to see if there's any questions related to any of these projects or this request. Um, and I'm sorry, the request is to, uh, have, uh, the FAC approved, this and the Board of Education approved the, um, CPAC approved, uh, budgets so that, uh, our COO can then, um, provide a, a signature authority on the projects, as with other projects, should we realize, uh,
inflationary measures on any of these projects, uh, of a million dollars will bring, uh, those documents back, uh, to this committee, uh, for collaboration and, um, uh, questions. Uh, so with that said, I'll pause and see if there's any questions related to this month's, uh, construction summary. I don't have any questions, Troy, but I did wanna thank you for putting it together in this format. This was great to have it in the deck like this and with everything listed altogether, so thank you for doing that. Well, I thank you, but I also have to thank Angelica, so kudos, Angelica, and, and,
and thank you for thank, thank you for thanking us. Director C Yes, Thank you for to you both. So if there are no more questions, the patience of the teacher will step away and, uh, turn it back over to Chuck. Thanks Troy, for the presentation and, uh, clear summary there. Alright, next is, uh, third party administrator. This has to do with our, uh, liability and workers' comp insurance, and I'll hand it over to, uh, Paul to discuss this RFP that we've just gone through. Thank you, Chuck. Uh, for those that I have not met, my name is Paul Lily.
I'm the RA risk Manager for the district. Uh, and this is a summary of the RFP process we did for our third party administrator. As you may know, due to large volumes of claims, DPS utilizes the third party administrator to handle administration of workman's compensations claims liability and auto claims for the district. Uh, currently the district has over 25, auto 49 general liability and over 450 open workers compensation claims. Uh, the district bid this service out in a best value competitive process.
Uh, five vendors submitted written responses. Uh, a committee of four reviewed those written responses, scored them, and narrowed 'em down to two finalists, Gallagher Bassett Services and CorVel Corporation. We invited those to give a live presentations in front of the committee of four. And based on the scoring, after the live, live presentations, Gallagher Bassett services would determine to be the best supplier to provide these services for the district. Uh, the term of the current contract with Gallagher Bassett will begin on July 1st, 2025,
and go through June 30th, 2026. And it has four one year options to renew. Uh, the ad annual administrative fee is based on our claim volumes in the district. Uh, the anticipated spend based on past years and bid pricing for these services is $270,525 per year for administration services. Plus, we do have a one-time additional cost for assuming the claims, uh, of the transfer, uh, for $148,835. Uh, the total anticipated contract cost
for the five years is just over $1.5 million at And if anyone have any questions regarding the process and the selection of the administrator new TPA and the total cost of the contract, Paul, you mentioned that we're switching vendors. I mean, what are you hoping for from Gallagher Bassett, um, as we sort of start with this new relationship? Yeah, I think, uh, one of the, we had a lot of our previous TPA, their, uh, data was, was very limited. They had archaic systems and platforms that did not allow us to get good data.
And, um, as we know, the better the data we have, the better we can project costs and expenses for the district, uh, and also be able to save, uh, the district money based on, uh, improving process improvement, um, efficiency and things like that. Uh, also on the work work comp side, um, they just, they were lacking in a lot of, um, areas that cost, uh, potentially cost the district extra money and, and really honestly, uh, cost us a, we were doing a lot more of the legwork for what we were paying them.
Um, we thought that they fell short and, uh, we hope that Gallagher Bassett will be much improved on that process. And through the transition process so far the last month, uh, we have been very pleased with what we're seeing and, uh, the information they're providing us and how they go through the process of navigating the claims process. So that's what we're hoping for, uh, and much better data going forward. Okay. Seeing, uh, no questions on this, uh, we can go on to the next one, which is the universal mental health screening, I believe, uh, Meredith,
um, be able to talk us through that. Hello? Um, good afternoon. My name is Meredith Vases. I'm the Director of Mental health and student Wellbeing, and appreciate your time this evening. Um, I'm here to request a multi-year financial award to support the existing implementation of our universal behavioral and mental health screening tool across our Denver Public Schools. Um, this tool is essential, uh, for proactively identifying and addressing our students' social, emotional, and behavioral, um, needs in a timely, equitable, and data informed way.
Uh, we're requesting a multi-year commitment to ensure long-term implementation and sustainability. And so the anticipated spend is 240,000 per year for five years, and this will, this will support the ongoing screening, uh, data infrastructure, professional development, and system integration. So, if there's any questions, Meredith, is this changing the current, um, uh, team we're working with for mental health screening? It's not. So this would maintain the, the same system that we've been using and ensure that we have access for,
for a a longer period of time. Okay. So this, this is sort of just like an RFP, we went out to bid this firm that we've been working with one, and now we have, we, we sort of can renew this for five years if we choose to. Correct. Okay. Okay. And please stop me if I'm going too fast, but I think we can sort of, uh, move on to as needed real estate appraisals. And we thought Heather was gonna be here to talk about this, but I think Andrew is gonna, uh, sub in for Heather who had, uh, who could not be here today. I sure am. Um,
and Heather's still here to answer questions, but I'll take the, I'll take the presentation here. Um, so bringing, um, you know, recommendation coming out of a another RFP process, um, for our real estate appraisals, um, we, you know, our, our appraisal vendor contract is expiring this month. Um, so we, we entered an RFP process here. Um, we, you know, based on new insurer requirements, um, we're required to appraise 100% of our properties every three years. Um, and, and went out to bid for, for, for those services,
um, and kind of as needed appraisals that, that, that may come up, um, and, and are not, um, scheduled or forecast in that, in that kind of same year, that same three year, um, time, you know, time renewal. Um, so we, you know, we considered an array of proposals, um, and ended up selecting, um, BBG as our, as our proposed, as our, as our recommended vendor. Um, we was far and away the, the, the highest scored, um, response that we received. Um, I think this is necessary, um, for kind of the life of our, of our, of our real estate, um,
world here within the context of the district. And I think we feel really strongly, um, feel really good about, about both, about both the value, um, and the, and the, and the nature of the services, um, that that will be provided as represented in the proposal. Um, so we'll take questions on this now if folks have them. Okay. Uh, seeing none. Thank you, Andrew. And then next up is body and paint, uh, repair. And, um, for that, I think we have Jason to present on that, is that right? Yes. Okay, thank you, Jason. So we're, we had to go out for RFP for, um,
all the body and paint for damages done to vehicles during the school year. Um, unfortunately at the hilltop in the Northeast location, we do not have the ability to, uh, paint and perform a lot of the large repairs. So we went out and chose three different vendors. The reason why we chose vendors is because of the size of our fleet. I wasn't sure that one or even two vendors could handle getting the repairs done in a timely manner, uh, to get the, the school buses back on the road to support the students.
And collectively, there's, it's kind of a moving, um, cost each year, depending on the amount of accidents and, and repairs. There's no way to really forecast that. But, uh, collectively, uh, over the, the next term we're asking for over the million dollar mark. Okay. So just to clarify, Jason, so we went out to bid and we selected a number of different vendors, and then as the work comes in, we'll basically go with the vendor that makes the most sense and has the capacity at that time. Yes. Three to be correct, three vendors. Okay. Very good.
Jason, I don't know if you're able to answer this question or if it's something that we could come back with, but just noting the estimated yearly spend of 2 62 and change, is that about how much is spent now? I I totally understand. You don't know how many, you know, incidents there might be or what might happen, but is that pretty standard About there? Yes. Okay, great. Thank you. Okay, thank you. Thank you, Jason. And then next, uh, we have, uh, rich
with the Park Hill Master Association, park Hill Campus Master Association. Thanks. Um, so what this is for is to renew our, our agreement with the Park Hill Master Association, which is a collaborative board between us and our two partners on the, uh, mosaic Campus. Those two partners are Denver Housing Authority and Urban Land Conservancy. Um, again, we're one of three partners that, uh, entered into agreement when we purchased our four buildings on the Mosaic Campus, one of which is DSA, uh, south in the academic building, which is the largest building. Um, we have many partners amongst the three,
but those are the three primary partners in the Park. Hill Master Association is the collective body that that supports the entire campus, um, that collective body, uh, and organization also, uh, oversees our shared vendor. We share, uh, a contract between Sodexo Incorporated who provides us custodial maintenance grounds, and, um, security, uh, for the campus. Um, we reached 1 million this past year with our expansion into, uh, DSA South, which is in the academic building, and again, also the largest building, but also our use of the Aspen building.
This contract is based on occupancy, and both of those buildings have reached the 51% or greater. Uh, so we're at full capacity in terms of what we're paying for those contracts. Um, the remainder of the agreement is two years, and we estimate about $3 million, roughly 2.9 and change. But that can change as we continue to expand in the campus. As well as, as we're expanding our, our use of the campus, we're finding that some services are better internal, uh, such as components of the security, uh, as well as some of the maintenance, uh, components
of the existing contracts. So, um, in order to renew for the next year, um, we're asking for, uh, extension, uh, 3 million for the next two years, as well as signature authority to the, uh, chief of operations, um, as we continue to adjust, uh, as we grow. And also not knowing, uh, where we'll be in two years. And I can open it for questions now. I, I had a quick question for you, Chuck. Uh, rich, I mean, I was just curious in terms of the estimated 3 million over the two years,
should that, um, would we get an update next year? To your point of these costs are constantly changing, would there be an update next year if it is more than 3 million total? I guess I'm, I'm just struggling a little bit with it being an estimate. Definitely understanding it's over a million now, and you want to be prepared for that, but just wanted to kind of know the process of when you all reassess the costs on an annual basis. Yeah, so if we were over 3 million estimated over the next two years, we would have to come back and give an update.
Um, right now, uh, we're not there. And again, some services we're, we're scaling back on. Uh, so when we purchase the buildings in the four buildings, we're empty. We work dependent on their security both internally and externally. Uh, we don't use their security anymore internally for DSA South. Uh, we provide that service ourself. Um, and again, as some of the maintenance changes, you know, we may decrease. So, um, you know, again, as we work through the future of the Whitley Chapel, um, depending on how that pans out, we may not reach occupancy. Uh, and right now for Whitley, uh, chapel, we're,
we're actually not paying anything but basic maintenance. Uh, but as an example for Wildcat, uh, we're paying one to 50%, and if we're not going to go above 50% in the next two years, our pricing, um, outside of the annual 3% that we, we pay and increases, wouldn't change. So as long as Wildcat, for instance, uh, which right now doesn't have any intended use for the next two years, doesn't change, we wouldn't, we wouldn't go over. But if we do go 3 million over, we'll come back. That's helpful. Thank you. Rich, what are the circumstances under which that,
you know, the, you know, maintenance or operations would be insourced on this campus? So in order to do that, um, we can do certain components of it. Um, the overall contract, um, is an agreement between us and the two partners. So if we were to try to leave the actual contract, um, two of our three partners would have to, uh, agree to, to leave the entire contract. So the grounds, you know, because we have maintenance areas that we share, um, and we've committed to, you know, we have our own spaces, but we have, like the common area spaces, uh, we need agreements amongst our three partners majority
to be able to, to deviate, uh, from that. But there's certain areas like inside our own buildings, uh, that we can adjust and change. Okay. Thank you. Problem. Okay. And then next we have, um, this is, this would be a real estate agreement. This is, uh, not surpassing the million dollars, um, but I'll hand it to Andrew to describe the, the, uh, the Watley Chapel. Thank you, Chuck. Um, so we are, um,
currently in active negotiations. If we can go back to the, um, to the, to the communication form real quick. Um, currently in negotiations, um, with Denver Presbyterian Church around the possible lease of the, of the Watley Chapel, um, Watley Chapel building at the Mosaic campus, um, to that organization, um, in, in exchange for kind of a, a, a complicated deal structure in which we would retain ownership, um, and they would renovate the space. So we'll share, um, a few presentation slides about this, um, in a moment. But I wanted to be really clear
before we get to that, about what, what exactly I'm here asking for today. Um, what I'm asking for here today is delegation of authority to, to chuck our CFO to finalize and sign, um, the lease of, of Watley Chapel to Denver Presbyterian Church, and assuming that the lease would be substantially similar to the draft that you see attached in board docs right now. Thank you Angelica, for getting that, getting that uploaded. Um, but I will say we are in the middle of these lease negoti negotiations. Had a conversation with Denver Presbyterian as recently as about an hour and a half ago.
Um, I feel good about where we're at, um, relative to our, our mutual understanding of where, you know, the, the current lease draft and, and what we need to get to for, for kind of a mutually agreeable finalization. Um, but I think given the, given the timing of, of, of board meetings this summer and, and kind of where we're at negotiations right now, um, again asking for delegation of approval, um, or delegation of authority to Chuck for, for finalizing this agreement. Um, should we, um, should we, should we reach that point in our negotiations? Um, so now if we can, if we can flip back to the,
to the presentation, um, I'll just share a few slides, um, so we can go to the next one. Um, and next one still. Um, I think, you know, important to go back one, um, I think important to, to, let's go to the one with the picture of the, of the campus. Um, there we go. Um, so I think we, we, you know, DPS acquired four buildings on the Mosaic campus in partnership with Urban Land Conservatory and Denver Housing Authority, um, about four years back. Um, and, and are, have been in the process of working to activate them since then.
Um, and I think we have, you know, we have, we have different plans around activation of each of these spaces right now, the, the most utilized spaces, the academic center, um, which is, which is being used for, for Denver School of the Arts programming. Um, and, and I think, um, we are, we are excited, um, to, to that Wally Chapel represents the first of what I hope will be, um, will be, will be several things that we bring that we bring forward, um, around recommendations for, for activation of all of these spaces, these spaces. Um, Watley Chapel is, is a, um,
so if we can go to the next slide. Now, wa Watley Chapel is, um, a historic, um, kind of a, a historic building, does not have a formal historic designation. Um, and is a, is is an, an important part of the fabric of, of, of kind of the, you know, of Denver and of the, and of this re of this neighborhood in particular. Um, the, the Chapel was built in 1962, um, designed to serve Colorado Women's College. Um, and, and kind of as, as that mosaic, you know, what's currently the Mosaic campus, um, changed hands over the years, both
through the Colorado Women's College merger with du, um, and then, and then the, you know, the Johnson and Wales taking over, taking over that campus. Um, Waley Chapel has, has changed hands accordingly. Um, was acquired in DP or acquired by DPS in 2021 has been vacant since because of the, the scope of the construction work, um, that would be needed in order to, in order to reoccupy the space. Um, and given the, the fact that we have four buildings on that on the campus, and, and I think Watley Chapel is, is, is arguably, um, you know,
uh, arguably the, the least suited based in its current, based on its current form. Um, for, for academic programming and use, I think it could be, you know, in the absence of an external partnership opportunity, like the one that we're exploring right here, um, could be a very long time before we make this, you know, make this historic building, um, available to, to our community and to, and to, um, and to the Denver community at large. Um, enter, enter Denver Presbyterian Church. So we have been engaged in, engaged in negotiations with, with DPC over the course of, over the course
of the last year, um, around a deal structure that would reactivate the space, um, but, um, and, and, and turn it into a kind of a working church again, but retain, retain usage rights and ownership, um, for the district. So if we can go to the next slide, um, I think this is next slide still. This is from our community engagement meeting last week. Um, but Ronnie is not here with us this afternoon. Um, so I will, um, I will speak on kind of behalf of the, of the deal structure and, and talk about exactly what we're the way that we're thinking about this. Um, so I think we have a, a good deal on the table, um,
in concept for, for everybody involved. Um, you know, right now DPS is sitting on a, on a, on a vacant asset, um, like I said, that would, you know, it would be quite some time before we could allocate, um, the money that would be needed to rehabilitate it. Um, and then, and then the, the deal here, we would continue to own that asset. And the, and the, and the building would be re you know, would be rehabilitated. Um, so Denver Presbyterian Church would, we would lease the building to them, um, for, you know, with some, you know, 10 years with tenure renewals on top of that because of kind of statutory limitations on,
on the length of time that we can lease buildings out. Um, but, um, you know, in exchange for us leasing that to them, um, they would, they would fund kind of the construction and, and remediation of, of what needs to happen in the, in the context of that building, um, and, and get it back up to, you know, back up to code, get it safe, safe for occupancy and, and turn it into a working church and, and a home for their congregation. Um, I think DPS would retain the ability to use the space for the chapel space and the, and the neighboring amphitheater for student performances events and things of that nature.
Um, and, and, and then we would amortize, you know, we would, we would provide DPC with free rent, um, for as long as it takes to amortize their initial investment amount. So we've gotten, and I think this is part of what's, you know, with part of the, the negotiation that we're in the middle of right now, is I think there is, uh, you know, there are, there are a range of construction opportunities available to Denver Presbyterian Church as they're, as they're deciding, um, exactly what, you know, exactly what kind of the dollar amount and the scope of construction is that they want to move forward with. Uh, but the way that we're really seeing that is that, um,
that, you know, that that construction amount, the, the, the, the, the value that they, um, the value that they provide, the, the money that the, the Denver Presbyterian puts out, um, in the, in the context of that construction would be their rent payment, um, until that amount is amortized. So at, you know, 4.3 million, I think, you know, on the amortization timeframe that we were talking about, that would be between 20 and 21 years of, of, of kind of prepaid rent. Um, which I think is ob you know, have, I has obvious advantages for, for Denver Presbyterian.
Um, and, you know, in terms of the long-term financial sustainability of, of, of their, of their service. Um, and, and real benefits for us in terms of the, in terms of the value of the assets, um, and the, and the ability to use it for, for kids right now, I think it's sitting there, it's, it's obviously app appealing and attractive to use for kids in, in some limited, in some li limited circumstances. Um, and this, and this I think represents our best, our, our, our best shot at, at activating the space on behalf of the community. Um, and, and, and for, for DSA students, um, and others.
Um, so with that, um, would love to open things up for, for questions or, or feedback from the group. Just, um, Andrew th thank you for that presentation. That was, uh, very, um, very thorough. The, the, maybe the one thing I might add here is I think what we're asking the board to do is to delegate to the superintendent or their designee to essentially execute a lease that has these basic deal deal terms that are highlighted on the screen here. I got, that's the action that's being asked. Um, and so just, I, you know, Andrew,
I think you basically said that, but I just wanted to sort of clarify like that's the action we're asking the board to take. Um, for, for it being here. I think the lease agreement that we have attached to the inboard docs, um, it roughly outlines this, I think there are probably seven or eight areas that we need to iron, iron out over the course of, you know, the end of the next month or two before we're, I think we reach a point of mutual agreeability, um, which is why we're not bringing forward the, the formal lease agreement at this point. Andrew, can you speak quickly to what are, uh, what are the potential risks for the district in entering into the agreement, if there are any?
Um, yes, I think I, I think I, I, I think that I, I wanna be really clear on the front end. I think this is a really good deal for, for the district and for the church. Um, I think that, I think that, you know, the, the major risk that, that I saw kind of entering the concept here was around yielding ownership of the, of the property for a variety of different reasons. Um, but I think retention of, of ownership of the property is, um, is really important. I mean, I, I, I think that there, I think that the risks that go along with, with any, with kind
of any long-term commitment, um, are probably, are probably carried into, are probably into carry, you know, carried into this space. Um, I, you know, I normally in the context of, of evaluating risk relative to our facility profile, would think, you know, in the future, would we need to, you know, are we, are we tying our hands if we need to use this as a school in the future? And I think, and I think what's what I, the reason why I'm not worried about that in this context is, is this building is a chapel, and it can be nothing other than a chapel. When you walk in there, you see the religious iconography on the stained glass and kind of see the cross built into the stone behind the altar, um,
I think it becomes very clear to me, um, that, that it's, it's, you know, it's designed to be, designed to be used as a church. And I think that, um, I think that I, I, you know, I could see some modest risk, and I think some of the reasons why we're, why we're negotiating in the way that we are around the lease are around, um, things as trivial as parking. You know, we have fairly limited parking at the Mosaic campus that's, that's owned by DPS and, and trying to be really intentional about how we don't kind of over schedule that parking lot, um, by activating all of these spaces. But I don't see that as a, I see that as something
that we can kind of overcome in the context of effective campus management, um, which falls into, into, into our department and, and into the way that we, into and into the way that we structure the lease. Um, I, I think, you know, risk around the construction, I could, I could see environmental remediation risk and, and around cost, um, and a of construction costs balloon. Um, then, then I think we have a, you know, we'll have some questions to answer about how we structure things in the long run based on kind of the 10 years with 10 rear renewals stacked on top of it,
and how long, uh, kind of how long we continue that structure structure for in the future. Um, but I I, I don't see a lot of opportunity cost here, um, around, around alternative uses of, of, of what is very clearly designed to be a, what is very clearly designed to be a religious space. Um, and, and I think, you know, a lot of the, a lot of kind of the granular level risk that we're, that, you know, that I, that I've started to allude to is, is being accounted for in the context of the lease. And, and, and one of the reasons why I think it's gonna take us some time to get it finalized, um,
as I think there's probably risk on both sides here. Um, but, um, Chuck, I don't know if you would add anything to that, um, summary. I, I think it's a really good summary. I think the one thing I would add is that the way, the way that the parties DPS and the church have sort of weighed each other's risk is that, is that the church is putting in a big capital outflow to revitalize the church. And that because it's unusable right now, you can't really do anything right now. We can't have classes in there. We can't have performances, basically an unusable asset, and then that is amortized over the years
as their rent payment. And so if at 10 years if a future board and a future intendant sort of terminate this lease and there is some amount unamortized, there might be a cash outflow, and I think we should just be clear about what these terms say. So that is a potential risk. I think there's risk that the constructions of costing more than is estimated right now. Um, those are the couple of things that I see there. Um, but I, I would echo what Andrew said that I think this is a very balanced arrangement that's fair for both sides and makes what is an unusable asset, a usable asset for the community.
Thank you. Thank you. Okay. Um, Andrew, you got a lot of airtime at this meeting. Next is the food bank of the Rockies, the current property known as the Food Bank of the Rockies. Yes. Thank you, Chuck. Um, so here, um, and I, I believe we have multiple members of our food services team on the call here with as well. Um, welcome Theresa and Dennis. I, I definitely saw the two of you. Um, and I think all of us will be available to answer questions, um, should they come up, but I'm gonna, I'm gonna share some presentation, you know,
a presentation here as well. Um, and then, and then we'll kick things over to the, to the group. Um, I think what we're asking for here is approval to, to acquire the current building of, uh, at the, of the Food Bank of the Rockies, um, and, and delegation, um, to superintendent and or designee, um, to, to execute, um, due diligence in closing, um, as I think we have a, we have a purchase and sale agreement in front of us that we've attached in board docs, um, that we have some feedback on. Again, that's a draft document, and I think we'll be ready for signing, um, within, within the next week or two.
Um, and I think, you know, asking for, asking for permission here, um, to, to, to sign that PSA, um, and to, and to move towards closing and then to close on the property, um, should, should everything check out. Um, so with that, if we can switch over to the presentation, I'm gonna share a few words, try to keep it brief, um, around what exactly we are, we are entertaining here. Um, so, um, and then if, you know, once we're on the presentation, if we can go to slide two, um, I think, you know,
it's important to frame around around, so next slide would be great. I think it's, it's, I think it's important to frame around, around the importance of the, of the services that are provided by food services. I think food services is DPS, um, I would argue is one of the most impactful day-to-day services that we provide. Um, I think every day a majority of our families trust us with nourishing their kids at 58% and over the course of the year, that means that we deliver 10 to 11 million meals, um, to d to DPS students across the district. Um, and I think that our, that our amazing enterprise management food services team
led by Theresa, um, does this amazing work, um, in a, in an extremely challenging facility and logistical context, I think facing daily headwind, headwinds, um, in, in the context of, of how they're forced to be complicated, you know, operate in a, in a complicated way operationally. Um, and in, and, and I think that's kind of the current real estate portfolio that we have allocated to, to, um, to, to our, to our food services. Um, carries a lot of risk, and we'll talk about that in just a moment. Um, so right now we are operating out of, you know, we are our primary operating facility for,
for food services is out of our, uh, is out of Yuma. Um, so our Yuma facility is, is around 25 and sixth. Um, and at the time that we acquired it, I think it made a lot of sense. Um, but I, I think that as, as the demographic demographics and kind of population centers of the, of the city of changed as development has happened in, in East Denver and northeast Denver, um, and as, as expectations from community and, and from and from ourselves have changed about what we, you know, kind of the type, the nature of food services and how we, and how we serve our kids in this way, um, our,
our older facility, um, at Yuma, um, has, has, has proven to be ex, uh, quite inadequate relative to the, to the, to the operations of the, uh, of kind of our existing structure. Um, and, and I think that, uh, to, to put that really clearly, um, we have almost no cold storage on, and you in the context of food that really matters. Um, and we have almost no cold storage at, at Yuma, and it's, and it's a very small facility serving a very large district. And as a result, we contract all of our frozen storage out to Americold Logistics, um,
which is located north of Denver City Limits. Um, so I think if you think about that, you know, north of Denver City limits off of 25 at 25 and sixth, um, and then the fact that you're distributing all across the city from there, um, you know, we're feeding communities and students all over Denver, creates an extremely operationally challenging set of logistics, um, for providing fresh food at the volume that we do. Um, and I think, and I think, uh, you know, at, at no fault of our, at no fault of our teams, our team does amazing work, um, given, given the constraints that they're, that they're working with.
Um, and, and I think that in the, in the, in the service of always doing better for kids and our communities, um, I think that, you know, any, any o option that we have to, to, to make our logistics, um, cleaner, um, and more efficient and to, and to increase the standard of service that we're providing to our kids is one that's worth, is one that's worth entertaining. Um, so if we go to the next slide, um, you'll see that the opportunity that's in front of us, and I think this, this kind of an opportunistic conversation, um, is the food bank of the Rockies. Um, so current facility for Food Bank of the Rockies,
which is, you know, a long time staple institution in Denver, um, went up for sale about a year ago. Um, the food bank is building, you know, there, there's nothing fundamentally wrong with their building, they're just building a new one. Um, I, you know, I, I think in a, you know, and, and good for them, I think that the concept art that they have for, for their new building is, is stunning. Um, but it means that their current facility in, in great condition is on the market. And I think presents a, or an a an intriguing and unique opportunity for us. Um, I think this, you know, the facility here has served them well, um, and was renovated, renovated in these recent years.
It got a new roof as recently as last year. Um, and, and I think that you, the kind of the nature of where the facility is located and the, and this facility itself means that it's a, uh, it's uniquely suited to address kind of the efficiency, efficiency, um, concerns are that, that, that the team has, um, around how we're forced to provide our food services. Um, so I think this makes sense on three levels. Um, one on a student experience level, um, which I think should be the, you know, a grounding, a grounding part of, uh, or a grounding, uh, kind of a value in everything that we do, um, around operational efficiency
and then around long-term financial security. I'll talk about all of those in just a moment. Um, on the next slide, you'll see a testimonial from, from Theresa, um, who has, has joined us here, has joined us here today, and leads our amazing food services team. Um, I will leave this up for a few moments and I'll let her perspective speak to herself. And, and, um, Theresa, if there's any, if you wanna hop off of, you know, hop off of mute and share anything else, feel free to do so. Um, but I think what really stands out to me is that acquiring this facility creates the conditions for our students to receive fresher food. Um, and I think the impact of that is real.
From a, from a student experience standpoint, I think being well fed at school, um, mean as a student means being better prepared to learn, and it means being more wholly supported in your development as a human being. Um, and I think that those are both things that we can all get behind as, as, as, as kind of core driving principles, um, for, for Denver Public Schools. Um, so, so really excited about the, about the possibilities. Um, and I, and I think the team is very excited about the possibilities for, for what we can do for, for our kids and communities as a result of, as a result of an acquisition here. Um, so going to the next slide, um, I think those conditions
for kind of better fresher food for kids. Um, not saying any, I I, I think the fruit food we put in front of kids right now is amazing. And I think, you know, in the, in the interest of can we always get better and can things get fresher? Um, that, that makes a lot of sense when you start to think about some of the, some of the core operations impacts that we're, that we're seeing here. Um, I think it, it, it is everything from pride of ownership that comes from working alongside our inventory, kind of the outsourcing of the inventory and, and how, and how that forces us to, to, to out also outsource kind of the, the receiving of that inventory, um, is,
is something that would be alleviated in this context. Um, I think that the simplified logistics and reduced travel times and travel times matter a lot for freshness of food and what you can offer, um, is a, is a huge opportunity and, and things as, as, as unique about this facility is they have kind of a, a, a beautiful test kitchen that, that would allow us to get in innovative about what we're in front of, what we're putting in front of kids. And I think for all of the ways that logistics are complicated elsewhere, I think that they're addressed in, in the context of this facility. Um, I think it's lo located really well, um, in the near northeast, you know, just north of 70, um, in
that near northeast kind of central park area, which provides good access to all of our regions. I mean, if you think about it, you can take 2 25 then to southeast and Southwest, um, and you're kind of in on, on 70 in between the far northeast and the northwest. Um, and obviously you're right there for the new Northeast. So I think that, you know, kind of the location of the building in the context of the city and, and, and its proximity without, you know, with, without being too far away from, from, from, you know, the west side of the city, um, proximity to our, our kind
of center of population growth means that it positions us well, both now in the context of our, of our, of our, you know, existing district and the district that we're expecting to have in the future. Um, I think that the, the facility is in is in really good shape. Um, I think we need to verify that during the due diligence process that I was just, that I was just naming. Um, and I think, you know, nature of the, the facility having been renovated in recent years, um, uh, you know, mechanical systems being in good shape and, and just being generally well maintained, um, puts us in a, in a position where we're, you know, right now we're carrying a bunch of risk in our,
in our portfolio, and I'll talk about that just in a mo in a moment. Um, but at, you know, at the Yuma facility that we're, that we're currently operating out of, I think we've identified, you know, up to $10 million of, of, of, of maintenance backlog. Um, and I think that, you know, moving here would, would give us the opportunity to kind of wipe that slate clean and, and move into a, move into an, in an, in an environment, um, where the, where, where, you know, maintenance is maintenance is up to date. Um, I think there's great cold storage space that gives us the ability to insource and enhance our cold storage. Um, which I think right now is limited in some way
because of the kind of patchwork logistics infrastructure that we're, that we're forced to, um, that we're, that we're forced to, to utilize. Um, and I think there, there is just a lot of space at the, at the food bank facility, and I think it gives us the, the chance to kind of expand and respond to changing storage needs across the, across the district in, in a variety of different ways. I think I could see food bank also, you know, being storage space for, for academic and curricular materials and for, and for, and for furniture that's currently located in the, in the Alcott warehouse because of how much space that there,
that there actually is there. I think the high ceilings and the, and the kind of high vertical stacking, um, and, and the fact that, you know, there's a whole bunch of dock space just makes, um, makes, makes logistics much more, um, much more appealing in this context. Going to the next slide, I think we, let's talk about the financial picture. 'cause it makes, you know, this, this may make sense for kids, this could be good for student experience. Um, this could make things more efficient from an operational lens. Um, but, but you know, especially in a, in an environment where it's, it's incumbent on us, um, to be prudent
and responsible with public resources and, and with district budget, why does it make sense to acquire, to acquire a real estate asset like this in this, in this, in this juncture? Um, I think the answer is multi-faceted, and in short, I think it's just a good business deal and it removes considerable financial risk from the portfolio, um, that we're, that we're currently operating in. Um, so, you know, what you're looking at here is a, is a, is a, a high initial investment, um, and then, and then an alleviation of, of kind of risk and cost that, that we, um,
that we are exp we would be expecting to, to incur over, over the upcoming years, um, as a result of, as a result of kind of our current portfolio. Um, so I, I believe you know, that it means that an upfront investment of 12.5 million on the purchase price, you know, for the purchase of the facility, and then 3.5 million in immediate needed improvements, um, that would make it kind of customized to our space. And I think that 3.5 million includes, um, includes kind of construction of freezer space. Um, it includes, you know, cosmetics, it includes, you know,
parking lot striping, um, it includes move costs and things of that nature. So really trying to see this, um, you know, we, we've kind of charged the team with saying we wanna understand what the all in costs are so that this is as predictable as possible. Um, I think that there are 3 million of dollars of additional costs that we can defer until later. Um, around, you know, the, the building is entirely occupiable right now, and there are certain standards that we have, um, for, for DPS, um, around, around elevators lifts, around around, um, fire panel and, you know, and things like that, um, that, that would need
to be addressed over the long run, um, and are not, not immediate investments needed. I think something that could be easily deferred to a future bond, um, or until, or until a a a a future time when, when financial picture looks different. Um, and I think the, the beauty of this is that, you know, that $16 million outlay, um, that we're, that we're, that we're recommending, um, can be offset, um, by, by a variety of factors. I think we can offset it by the sale of our Yuma facility. Um, right now, um, based on our kind of latest conversations with brokers, they believe that we can get somewhere
between 7.5 and $8.5 million for that facility. Um, so let's split the difference and call it eight here. Um, and I think we can save an additional 9 million through, through 2050, um, by reducing the Americold logistics contract that I was just talking about for freezer storage north of the north of the city and exiting our, the lease that we have on our, on the Alcott facility, which is kind of the storage facility managed by enterprise management, um, that, that hold, that holds a lot of kind of DPS excess furniture and things of that nature. Um, I think this is, I I think it's important to note this is a conservative estimate.
Um, I think that those, you know, the, the, the assumptions here are kind of based on present value of, of those leases and contracts, um, and that it kind of an inflationary environment like the one that we've been in could easily see, um, could easily see those costs, um, you know, those kind of uncontrolled costs, um, that we're, that we're currently planning on outlaying externally, um, to, in leases and contracts ballooning over time. And we, and we don't have a lot of contractual protection again, against, um, against unforeseen steep increases in those, in those, in those pictures.
Um, and I think, you know, a couple of last things that I'll share around the, around the financial, around the financial piece here, um, that I think the budget picture here balances in the long run, which is really exciting. Um, and there are, I think there are a couple of additional contexts, um, pieces of context that are important to mention. One is that deferred maintenance at Yuma, um, the fact that I, you know, in selling that building, um, and in getting that building off of our books, um, and we, we would, we would, we would no longer be expecting to incur those maintenance costs, which would be, which would be really exciting.
Um, and I think the value here is really important to note. And I think that that, um, you know, I I think the, the, the contrast here is we're looking at $16 million all in, in, in an initial cast investment into a legitimate bus legitimate business need. Um, and the alternatives to, to that, to solving that for that business need are exorbitantly more expensive. Um, so the latest quote that we've gotten from our, from our brokers around what building an, uh, you know, building a facility would look like, that would account for all of the things that we could account for, um, in the context of, um, in the context
of the food bank would be $33 million, um, or, or over double, um, what we're, what we're recommending, um, outlaying here and why this feels like a, a unique opportunity in this, in this individual space and time. Um, I think, you know, if we, if we don't, if we don't address this business need in this way, um, and you know, it, it only becomes, it only, I think the financial picture only gets more challenging from there, um, because of how much it would cost to how unique the facility is, um, and, and how much it would cost to, to construct, um, a a a similar facility.
So in some, um, we're looking, you know, next, next slide, we're recommending purchasing the building, um, and doing so at the latest negotiated price of 12.5 million. Um, I think this represents excellent value for the district. Um, and, and I think a unique opportunity to both solve a problem, um, and make our, and make our operations sturdier and, and, and, um, on, on stronger and more stable financial ground at the same time. Um, I think, you know, the, the picture painted on the previous slide, um, probably wouldn't make sense at a higher, at a higher price tag. And, and I think, you know, this property was listed
around a year ago for $15 million, um, and, and, and we have negotiated the price down to 12, 12 and a half million, um, which is kind of right in the sweet spot, sweet spot of where we, where our brokers believe the value is. Um, and, and I think while this, you know, transaction probably wouldn't have made sense in a $15 million purchase price. I think it does, I think it does at, at, at this. Um, I think as far as where we are pres, you know, proposing to, to get, um, to, to fund this, um, looking at using 2020 bond reserves for immediate cash flow
with the, with the, with the kind of caveat, um, that, that, you know, over the long run, um, that, that over the long run, we believe that this, that this, that this ends up paying for itself, um, and the financial efficiencies that we, that we gain as I said earlier. Um, next slide is, is real brief. Um, it's a tentative timeline. So if if we, if we move forward here, um, then, uh, then I think we, uh, and I think we, you know, would move, move towards a late summer closing, um, and then, you know, with construction, um, et cetera and,
and move logistics looking to get to occupancy, um, next summer for, for kind of activation of the facility in fall of 2026. And I know that was a lot of, of talking on my end and I apologize for that. Um, but want to open it up, um, to board members for questions. Kimberly, you got any? I do not. Do you? Yeah, I just wanted to follow up on a couple of things, Andrew, that, that I hadn't, uh, had an opportunity to ask before. One is, um, is there a comparison between or rough comparison or do you have some idea of
what it would cost us if we were gonna try and build our own facility from scratch in comparison to obtaining this? That's what I was, that's what I was getting at. That's the quote, the latest price tag that we have on that is $33 million, um, which is more than double what we're recommending, um, spending here. Um, which is probably financially prohibitive for the district. And, and frankly I don't think we would do it, So right. More than double, although there's gonna be some additional costs based on the, what we need to put into it once it's purchased. Correct.
I think the 16 million, um, is, is inclusive of, of purchase price and, and what we need to make it operational for, for our purposes. Um, I think, you know, additional costs that, you know, can, can be deferred because I think that they're, um, I think they're more elective, especially given that there aren't students, you know, it wouldn't be, we wouldn't be having students in this facility. Great. That was the only question I got. Okay, good. Thank you. Uh, thank you Andrew. Um, 4.18 benefits and I think Kim is gonna walk us through this one. Good afternoon. Uh, Kim Crouch, director
of benefits here at Denver Public Schools, um, asking for approval for next year's expenses that are over a million dollars in regards to our health benefits. Uh, for medical, we have life insurance. Uh, most of our plans are pass throughs with employee contributions such as para, um, our 4 0 3 Bs and our supplemental life insurances. But, uh, we're asking for approval for all the benefits that are over a million, such as Kaiser Motive,
UnitedHealthcare Vision VSP is not a million, but is getting close to there. Um, our stop loss, which is through Sun Life, uh, this covers majority of our high cost claims. Also, our long-term disability program through standard, and then our MetLife basic life insurance as employees. Um, salaries fluctuate, that amount gets bigger. Uh, 'cause we do pay two times the annual salary for our employees, uh, for their basic life insurance
and a d and d does. Is there any questions? No, thank you very much for your time. Okay, thank you Kim. Uh, next is the Sewell contract, I believe, uh, ion will talk us through that. Yes. Hello? Um, ion has a operations manager for Exceptional Student Services. Um, thank you for everyone's time today and I'll try to be quick. I know that we are getting towards the end. Um, so what we have today is just the renewal contract for our, um, services with Sewell Early Childhood Development.
Um, these, it's the $1.2 million renewal. This includes, um, IEP services, so those individual education plans, it does include related services, so speech, ot, pt, mental health, one-on-one support. Um, it also includes evaluation services for both kids that are in full DPS slots as well as kids that are partially in DPS or Denver. Uh, great kids Head Start slots. And finally, it also encompasses a extended school year. So this 1.2 is, um, for 12 months of services,
not a standard 10 month, um, school year. And it does account for, uh, 92 children across six sites that, um, Sewell has across the metro area there. Any questions? You, how long have we been working with this group? Um, we have been working with Sewell, uh, for my knowledge, um, like 50 years. Uh, I can double check that number, but it's definitely one that like extends way, way far back. Um, uh, we previously, uh, in FY 23, our spend with Sewell was actually at 1.4 million.
We did, uh, some cost analysis and realized that we, uh, were overpaying for some things, didn't need some of the things that were in preexisting contracts, and so we were able to scale it back, uh, like a hundred thousand basically over the past two fiscal years, um, and keeping it steady at the 1.2. Okay, thank you. So fair to say that roughly what we're paying for those 92 students is roughly about, um, what the per pupil expenditure is
for at, at the state level. Um, um, I don't have the like granular math on that, so I don't wanna say yes or no. Um, a hundred percent I would say that it's comparable. I think some of the additional costs that come in really are around those evaluations and kids that ha need like a medical one-on-one those higher And the, and the EC student cost is higher, isn't it, Chuck? Yes, that's right. Yeah. Right. So if we're looking at about 13,000 per student for those 92, it's, it's roughly within reason. That's right. Yeah, that's, that's right.
Okay, thanks. Just trying to do math. We know it's not my strength. Okay. Vian, thank you for being here. And then finally, uh, grant Proctor for, um, the apprenticeship program. Alright, uh, good afternoon everyone. Um, we finally made, finally made it to the last item here. So, uh, on behalf of Emily Griffith Tech College, uh, and in preparation for the 25 26 school year, um, we're here to seek approval to renew our partnership with IEC Rocky Mountain, which is one of our largest apprenticeship partners. Um, you know, this is something we do on an annual basis
and uh, this is a tremendous partnership we have and gives us the ability to serve more than 2,700 students annually. So if there's any questions, please lemme know. Grant, is this a contract for the school year 25, 26? Yes. Okay. And is this, uh, a one year contract or is that a multiple year contract? Uh, one year. Okay. Thank you. Grant, this is the coursework that the students are required to take in order to get their certifications, is that correct? For Yeah, nutritions, Exactly. Yeah. So it's, um, part of the registered apprenticeship program through the state.
So yeah, this is one of our largest partners. Um, and yeah, we've had a great, uh, track record, uh, history with them and yeah, like I said, I think we're only anticipating the growth of the number of students served on annual basis to continue to increase. That's wonderful, thank you. Okay, so that, um, takes us to the end of our consent agenda items. So those 20 items, uh, will be on the board's consent agenda item in j consent agenda for finance for June. And then the last couple items here are the grants report,
so we could present the, the grants that we brought in. Katie, do you have any, uh, comments about the grants? Um, I think the only thing I would say is we do have on here the Clean School Bus program, which is a new one and it's a large, uh, grant for $6 million to be spent over a year, a year and a half that will fund, uh, 25 type C electric school buses and also help support in the purchasing of, um, 10 dual port and two I, and be honest, it's all stuff beyond me, but charging stations basically 12 charging stations
for those buses, um, as well. So it's a pretty big deal to really help us electrify. Um, our fleet and our transportation department has been working closely with facilities and sustainability, um, and Excel Energy as well to really, uh, get all of that sort of lined up and ready to go to ensure that we have those charging stations and can install them so that we can actually utilize, um, those buses operationally. Katie, I did have a quick question about the funding source for that. Is that a Yes.
Company a is it a governmental entity? I, I was trying to figure out who the money was from. We're So we're a sub recipient on that grant. Okay. So Highland received the award from the federal government. It was through the EPA, um, and it was a always intentionally, it's not just us, there were, um, several others across the state that went in with this joint application, um, through Highland. And so it's a com. There's also some state funds that go along with it as well. Great.
Well, and that is partially why I was asking that grant when I saw the sustainability is there, has this money gone out the door? Is there possibility that EPA could try to pull back any of this money? Um, at this point, not that we're, we have not heard anything that this would be a grant that would be pulled back. Okay. Um, again, we are a subrecipient, so the award is not, uh, the federal government did not award two Denver public schools. They awarded to Highland. Right. But even as a Subrecipient, that's what I'm trying
to figure out because if they took the money back from Highland Yes. Which they have not. Okay, perfect. That's what I wanted to check. It's a big grant and so yes, it's a big investment to, to do what the grant is intended to do, which is fabulous. And there are just a few of the federal grants that I think, um, you know, there's been some questions about and so yes, just wanted to see our, uh, percentage of assuredness that this would still come through. Yeah, and I would say we received the notice on this,
so you'll see of as of March 10th. So I think there is more, a little more, um, comfort around, yes, this is happening for now and obviously things can change. Um, and we'll continue to monitor that. That's great. The other ones I felt very safe about, given that they're from the department of Ed or the city and county. So that yes, that was great. Okay. Okay. And then, uh, Katie, you also have the quarterly financials. Um, I do, um, Angelica, if you can pull up the, um, financial report itself
and like we do normally, we will really focus on our executive summary, which just calls out. Um, and then one, one page down please. Here we go. Um, this really just calls out some of the highlights for folks to pay attention to. So our property taxes and state equalization are more than 80% of the total revenue in our general fund. Um, we received the majority of our property taxes in the final four months, March, April, may, June. So a reminder, these are through the end of March, our third quarter actuals for the fiscal year. So revenue is trending higher than prior year,
but that's really just due to a change from the state and how they pay out the state equalization payments. Previously they would pay us 12 equal monthly payments and they introduced a new program to try to sort of level out those payments across nine equal months. And so we are seeing that, um, sort of even out as we go through April and May. And we, our revenue is trending in line to meet our amended revenue budget. Um, on the opposite expense side, we have our salary and benefits when you include the debt service costs related
to our pension coops that account for about 80% of our expense budget. And one of those major expenses is a payment that we receive first as revenue from the state and then pass on as expense to para, um, to helpfully fund pension obligations across the entire state of Colorado. So it's not just a DPS thing, um, it is through the legislative process that this was mandated and so that can skew the percentage just a little bit. But we are still forecasting to be materially in line with the amended budget as well that was adopted
by the board in our food services fund. We are targeting a balanced budget for this fiscal year, although that is after in our amended budget, we did add some additional financial support due to increasing wages of food service workers and our increasing cost of ingredients for the school year. And I just realized that the rest of that got cut off. So we will repost to ensure that that information is available, um, for the public to access at a later date. I apologize that we did not catch that ahead of time. And one other big change from our Q2 is
that our bond redemption fund and the bond fund do now reflect the issuances of our 2025 A and c uh, bond debt that were related to the 2024 bond that was approved in November. We also refunded our 2014 A and b general obligation bonds at that time. Um, and as a reminder to the public, most of the expenditures in our bond fund occur during the summer months when school is out so that we are having minimal impact on kids and any funds that are not spent during this current budget cycle do move on over
to the next budget year. And did folks have any other questions? Um, in reviewing the Q3 financials? So Katie, uh, materially, you know, we had a budget amended budget in January. Like what are you seeing in the quarterly financials? Like basically line with that better? Yeah, we, we think materially we're gonna be pretty on track. Um, revenues might be slightly a smidge behind, but also expenses in a corresponding way as well. Um, and so we do think from a materiality perspective
to be pretty much in line with our amended budget. Thank you. Okay. And then the last item we had for today, and the last item on the finance and audit committee for school year 24, 25 is the purchasing report. Uh, and he, if you can pull that up as a reminder, all things over a million dollars come to the board. And so anything that's under a million dollars and over $250,000 we sort of publish here. Um, you know, to be transparent and to, to show, you know, all the expenses. So that's, um, that's documented here.
With that, I'll pass it back to director C. Okay. Thank you to everyone who joined us to present this afternoon. Appreciate you sharing the information and answering our questions. I will see if Director Erman has any final comments or questions before we sign off. Thanks. Um, just wanted to, as the school year ends here, offer my appreciation for the immense work, um, that's gone in, not just to the finance and audit committee, but but from everybody on this call, um, for all
of the services they provide. But for a, a highly successful year, a lot of people on this team were involved with the entire bond process, um, for which of course we, we thank the, uh, the Denver voters, but, but there's a lot of thought and planning that went into that, uh, from a lot of people on this call. Um, and, and the fact that we continue to be in, in the fiscally strong position that we continue to be in and that we continue to be as transparent as we are in particular through this, this committee structure, I think is, is outstanding in the tremendous service of the community and appreciate all the people on the call
who, who show up either once a year or multiple times a year or every FAC, uh, and y'all know who you are. Um, and I'm not gonna try and call people out 'cause I'll miss people and that that would be tragic. Um, but, but you are, you are appreciated by us as a board. Thank you. Wonderful. Well, thank you all very much and I hope you all enjoy the summer for those that director Esterman and I won't have a chance to see at board meetings this month and then we'll be back together in August.
Thanks everyone. Alright, thank you. Bye everyone. I.