Good afternoon and welcome to the May 19th, 2026 meeting of the Fiscal Management Committee. I would like to start by giving my colleague a moment to introduce herself. Good afternoon everyone. Julie Yang, district three. Good to see all of you. And I'm Carla Silvestre.
I will wait, we'll wait for Miss Zimmerman to get here so we can approve today's agenda and the informational summary for the March 23rd, 2026 meeting is posted on board docs. Any questions about the summary
before we move forward? Nope. Okay. We will begin with agenda item 3.1 Operating Budget update. As staff come to the table, please introduce
yourself for the record. Good afternoon. Yvonne Alfonso Windsor Chief Financial Officer Good afternoon, Miss Silvestre and Miss Yang. Good afternoon.
We can get started so I can go straight into it. It is a short update. The county Council held a straw vote last week for the M.C.P.S. operating budget. The M.C.P.S. budget. We had
requested the board. The board tentatively adopted budget included an increase of $170 million from the FY 26 budget. That increase was mainly for compensation for the M.c.p.s. Employees. The County Council
voted to approve an increase of $118,000,000.60 $1 millions than the requested budget, $61 million also include 25 million from the Opep fund is going to
be offset by the Up and Open fund as a one time contribution to help with the to to be able to balance the budget and support M.C.P.S. as much as possible. The $61 million also
included funding included. The $118 million included 55,000,000 in 1 time funding for M.c.p.s. So next year, we're going to have to figure out how we're going to make up the $55 million. So that's just
looking forward. Additionally, we are going to have to look into contributions for the employee benefit plan because again, we're getting the budget includes a 20 we had requested 40 million. And the approved budget includes 25 million,
that is from the OPEC fund. The reductions total, like I mentioned, $61 million, 126,000 of that is from our enterprise TV special fund, and which has been decreasing over the years due to less revenue that the
county has received from the cable fund. Like I said, the county council did the straw vote last Thursday, and then this Thursday they will have the final vote on the FY 27 budget and including the appropriation of the M.c.p.s.
Budget. Any questions? Okay. So you said our request was was 170 million and we received 118179 and we received 118, 118 plus 25 million from the OPEC
fund. So why don't you include that in the 118? Why is that a because that is one time funding that actually doesn't go into our budget is separate from the budget. So the budget has to decrease by $60 million. Okay. Okay. But then you also
said that 51 million is one time. So what else is included? So the 25 million from the OPEC fund and about 36 million or 30 million from the I talk tax that was supposed to be to
support the capital improvement budget, which now has been routed for the operating budget to to support M.C.P.S. Could you explain that for me? Because I talked just came up all of a sudden. So how was the CIP budget going to get funded
if it had not come up? So the CIP budget was going to be funded, 40 million of the CIP budget was going to be funded by. I talk one time revenue. That was a one time revenues. The plan. That was the plan over the last couple of weeks when they were trying to figure
out how to fund our budget. Yes, both. So both both budgets. So because it was one time funding, they were going to use it for the capital improvement plan for some of the Hvac infrastructures. And I know that my colleague Adnan Mahmoud
can speak a little bit more on this, but they were able to use that one time funding for M.C.P.S. Keep some of the items on the CIP and just deferring some of the items for future years, or not funding some of the items in future years. So
they rerouted that funding for the M.C.P.S. operating budget. So that is right now that fund is going to be used in FY 27, and that's it. It's no longer going to be available afterwards. Okay, I understand now. So they're just trying to find money to fund both. I talk
came up as a possible one time solution, which would have made sense for capital, but then it was moved to operating. Correct. Okay, Miss Yang, I just want to get all the numbers straight.
I'm a visual learner, so let's do our pyramid. The reverse pyramid. So what is our total asset of increase this year?
$179 million 179. That's the biggest. Okay. Edge. Okay. Line. Now eventually, how much will we fund it at the end? How much will we are we funded by the straw vote. So that was going that is going to go into our
operating budget 118 million. Okay. 178 118 so there are 61 million short. Correct. Okay. But in the end we are not 61 million short. What go into
this reduce this shortage. So out of the 61 million, 25 million is going to be for the we are eliminating we're cutting from the budget 25 million of. The request for the employee benefit plan. And that
is those 25 million is going to be funded through the 25 million from Opeb. Okay. Okay. So I know I is separate. So, so so this was going to fill the hole for us before, but we are
not getting the hole fixed. And that is what bring it down to the 36 million the school system now are facing is facing to make up. That is correct. Okay, so I got my reverse, I
think in that 118. There's also the I talk included in that 118, which is the structural deficit you are talking about for future years. Correct. That of the 118, there's approximately
36 million that is coming from the I talk that is part of the structural deficit for the future. Okay. So next year, the total structural deficit is approximately 60,000,036 plus
25. Yes. Plus, if you remember, when we do our budget and we look at our summer resources, table one a we have mapped out for the next three years the funding we will need to restore financial stability to the employee benefit plan. So that
means that if we were thinking that we were going to need about 60 to 80 million next year for the employee benefit plan, now you have to add another 25 million to that because the funding we're getting is one time funding. Thank you for for letting us getting the get the numbers
straight for our community. Mr. member, do you introduce yourself? Good evening, Natalie Zimmerman. Yeah, I. I appreciate the additional breakdown of all of this because I know it's a really
big community topic. And I also am really appreciative that these two colleagues of mine are so knowledgeable about it. Any other questions? No
questions, I do know, Madam Chair, that this will be a topic in our Thursday meeting as we look at how to cover the
$36 million shortfall from the board's proposed budget, and my goal, my philosophy, my wish is that we keep the cuts as far away from classrooms as
possible. Like you said, this will be a topic at the next meeting. We will bring all the information and a recommendation from the superintendent to the board. Okay. And that next meeting is in two days. So. All right.
Thank you. And now we are going to go back to approve the today's agenda. Miss Yang has to leave early. So we're going to modify the agenda to have our audit charter item 6.1
moved up. No I want to talk about capital budget. No please don't. We'll do we'll do it after capital. So that's fine. We'll do capital next. If we could have that presentation next so that we're modifying the agenda to move six before
five. Yes. Let's see. Yes. Thank you. Yes. So I would like a motion to move item six to follow the capital budget presentation. And then do enterprise funds instead of in
place of six. So moved. Second. All in favor raise your hands. That's unanimous miss Silvestre. Now with the amended agenda on the table, if you can vote to approve the agenda. Okay, could we get a motion to approve the revised agenda? So moved.
Second. All in favor, raise your hands. All right. Okay. Next item 4.1 fiscal year 2027 capital budget. I would ask our staff to introduce yourselves for the record, please. Good
afternoon. Adnan Mahmood, chief operations officer for M.c.p.s. I'm here tonight with our Director of Planning, Design and Construction, Mr. DJ Conolly. I'm going to pass it over to Mr. Conolly to give us a quick update on the capital budget for 2027. Sure. Good
evening, DJ Conolly, Director of Planning and Construction. So we did briefly cover the I talk transfer from capital to operating. And while that transfer happened, we. We did get a lot funded in this year's
CIP. We've been pretty vocal. This entire process that Damascus and Eastern were our top two major capital projects. And as it stands right now, fully funded on schedule, with planning to begin just in a couple months in FY 27, the
expected completion date for Damascus again August of 2031, and Eastern Middle School 2030. There. Looking at the addendum for the council packet on Friday. With that, I talk money
being transferred to the operating budget. We did lose some monies in Hvac and roofs and outdoor play space, but we did get the first two years fully funded. So I think there was maybe some misinformation said we are fully funded, fully
funded in the first two years of Hvac, roof replacement and the outdoor play space. So those monies are secured for the first two years before that, I talk money left. We were funded for the first four years in the CIP, so that was the key
difference. With that revenue switch, the funding switch, we did lose some anticipated state aid because we get a 5050 match. So that's why that number creeped up a little bit. So we are expecting we will get the final number on Thursday. But
we are expecting historic investments in Hvac roof replacements emergency replacement of building components which is going to help roofs and Hvac, fire alarm panels and things of that
nature. What came about with that shift and that reconciliation process is our elementary school, major capital projects that was brought up those The Burning Tree, Cold Spring, Highland
View and Piney Branch were all delayed three years with their planning from the board's request. So what that means is, as it stands right now, design funding starting in FY 31, so the fifth of the six year CIP
with estimated completion dates of 2034, August of 2034. Alternative education programs was also, during the reconciliation process, delayed another three years, which would be design funding
starting in FY 29. We were planning on starting that in FY 27 with a completion of 2032. While it is covered with operating budget, you know, cover current revenue, the part
of tech mod falls under the CIP. And as it stands right now, that is getting cut by 50%. So 16.9 million. And there was also a reduction in our facility planning PDF, our project that is to cover the
countywide elementary school boundary study. We were going to look into P3 alternative finance, finance models, other countywide initiative planning initiatives that we could look for Carver and, you know, different functions. So all of
those consultants would be paid out of current revenue, which is the same funding source as the operating budget. That was cut by $2.5 million. You said elementary boundary analysis, P three and one more just looking at overall programing, how to use our portfolio to the best
of our ability. We would like to hire someone to really a real estate professional to, to help us out with that. So just all encompassing under that project that was cut by $2.5 million in the first two years. So we will have to prioritize.
Correct. What's left? What what items? Yep, exactly. We'll have to we're going to prioritize the countywide boundary study consultant, obviously, and then we'll see what we can afford after that. Okay. For the public, could you say what tech
mod covers. Laptops? I mean it's kind of tricky with the CIP and and the operating, but more long term investments and infrastructure. I don't know if you want to. That I wish Kim fields was here, but she would.
I don't want to do it justice but justice. Yeah. I think it's in the PDF described as long term technology investment that could include, you know, replacing technology infrastructure that, you know, not just regular day to day
technology that we use, but more the technology infrastructure, what PDF do we have a PDF, we have a PDF in our CIP. Oh, not today. You mean from from the past. Is it
today's PDF or this PDF from the past? It's in the CIP. No, it's in our sip. SIP. It's a line item in our CIP, but it also, there's a large it's in the operating budget as well. Okay. Thank you. There are there are very few projects in
our CIP that compete with our operating budget, which very few consultants, tech mod and portables. So relocatable classrooms, anything that's in a leased type space. Which brings me to the next removal
is the materials management, the warehouse that was not funded, as well as the holding school improvements. And the transportation and regional support facilities were delayed three years, with design
funding to begin in FY 30. What is that last thing the the bus depots. Okay. I mean, transportation and regional support facilities. So we were planning on designing starting the design in FY 27. Those are delayed three years until FY 30.
Okay. So that's sort of where we stand right now. Again, we'll get the final number in the next few days to have the bottom, the bottom line. But that's where we stand right now. And so if again, the stock
solution was something that they came up with in the last couple of weeks. So if that had not been utilized, then these cuts would be even deeper. Yes. So originally was going to be 44 million put in this in our CIP and it dropped down to
eight. Okay. So 36 went over to the to our operating budget. And the biggest hits were Hvac, roof and outdoor play space. It went from fully funded in the first four years to fully funded in the first two years.
And just a reminder for everybody watching the first two years in CIP are the most poa biennial process. And when you say we're fully funded in the first two years, you mean the board's recommended budget, the board's request? Yes. Okay. Which is a historic I mean,
almost double what we've asked for in previous years. Great. Thank you. I know Miss Yang has a couple questions. Yes. I want to ask about the status of the two proposed bus depots that was in the CIP. And I'll be
honest, lately it has been difficult sometimes to keep track of of all the full community members to keep track of all the items that we discussed. Very often the
slides is uploaded. You know, the day of the meeting. Same for the board member. We get the slide the day of the meeting. And plus the system has been engaging in very big projects, right? Like the boundary study, like the
regional program redesign. And so that because there are other hot topics, right? Some items when they are introduced, we don't hear the community's feedback right away, including
this two proposed bus depot. But since then, after the boundary concluded, we have heard a lot more about these two bus proposed bus depot from our community members, and they
certainly also have elevated their feedback to the county council. So I want to understand a few things on the bus depot. First of all, where is it now in the CIP? What year
does this come online? So just for planning purposes, FY 30. So it was delayed three years. So now I am trying to understand the process. When we
talk about a school planning to rebuild take burning tree as an example. I recalled that we did a we did feasibility study. There were multiple community
meetings before we put it on as a planning stages for the for the school community to look at the building, tell me for the bus depot, what is the process?
How did it get on the CIP? Before we have a feasibility study? So the feasibility studies for those major capital projects. That's actually something we haven't done in over a decade. We just. This last year was our first round
that we've done. I've been in planning almost ten years and we had never done before. It's it's been quite some time since we did feasibility studies. But to answer your question, I mean, it is a proposed project and we
would engage the community if and when funding becomes available. My question respectively. Then if we were practicing this last year for conducting feasibility studies
for those projects, why did this one not get the feasibility study? So Damascus actually doesn't have a feasibility study either. So not every school. That's not the new planning, right.
Damascus was planned before. We are talking about new planning projects. So new planning, right? Yeah. So for this this particular projects, the one for the burning trees, those I
do believe did show up in our CIP in the past. The, the, some of the feasibility studies that we have done, I think they, they had some planning money associated with those projects before we, you know, eventually
did the feasibility study. And as Doctor Taylor had this discussion when we were at the council, we wanted to put the project in the CIP, because if we don't have any funding, we can't we don't typically, you know, start talking about these
projects and get, you know, the engagement and then, you know, actually figure out the feasibility of these projects. So these, you know, some of the depots, my understanding, obviously it predates my time here. There were a lot of talks about, you know, putting depots in different sections of the
county and it never materialized. So we wanted to get that into the CIP so that we would get the funding in order for us to start looking at it. Obviously, as as Mr. Conolly mentioned, we are going to go to the communities and have these discussions. And,
you know, before anything gets drawn up, there will be community engagement and conversations. And this was something that we did talk about at the council. So let me understand. So you are saying to summarize that elementary
school project, we are talking about cold spring burning tree, Highland View. There was money in previous sips dedicated allotted for the feasibility study. Correct? Correct. That's
under facility planning. Okay. But for this one, when we propose it, is it for for the full funding or just for the feasibility funding? What was
being requested? Yes, that would be design and construction. Then why did we not say first request feasibility funding, then go to design and implementation funding? Why did we combine
that, that make it seem like a foregone conclusion? Because you you skipped you didn't separate the two things. Why is that? I mean, again, we were looking at our portfolio and we
wanted, as you know, we've been talking about since last September, we do have a desperate need for us to look at our overall infrastructure needs and this on the supporting side. And we wanted to make sure that we, you know,
put that into the CIP again. And, you know, just just so that we could get the funds in place before we can move forward. And as we have, you know, talked about with the council as well, the, the, the
conversation with the community as well as, you know, with these projects are going to happen prior to us finalizing any design or feasibility study anyway. So okay, so this happened. Now we have heard from the community and this is
not funded for the first three years. So does that mean in this three years you cannot do any feasibility study. You cannot proceed with it. So does this mean what does that mean?
Yeah. No, I wanted to. Just because I think Mr. Conolly touched on that the planning money that he mentioned originally unfortunately some of it did get cut. We did talk about, you know, bringing in a consultant that was going to
look at our entire portfolio, including the properties associated with these bus depots. So we do have plans. It's cut, but that is already cut, right? The 2.5 million. It's reduced. So are you still planning to do the feasibility
study for the bus depot at proposed. Yeah. At some point. Yes. I don't think in 27 or maybe even 28 with that $2.5 million reduction, we're not going to be able to do it. Okay. So but to answer your question, I think I see where you're
going with this. We can pay for the feasibility out of facility planning. We don't need that FY30 design money to do a feasibility study. But do you plan to? Yes. So you plan to
use whatever planning money we have to do the feasibility study. Yes. Okay. I will share what my concern is. County these two, as we have heard
from the community, are neighborhoods. If you go I drove around it. People literally live across the street or their backyard bump into the into the property. Both locations because school
system we own residential land. That is that is what we are given, right? What we are given. County has other industrial land. Then if we keep it in our
CIP, does that mean it's not incentivized county to look for industrial land for. That's more suitable for bus depot? I think Mr. McGuire touched on
this. This has been ongoing for ten, 12 years to to get off Shady Grove. And I know our county partners have explored certain options, but with the amount of busses and the requirements that are needed for some of our, you know, the
headquarters and other other pieces of the depots, they haven't been suitable for M.C.P.S. So we can continue to explore, which I think Mr. Moon is touching on. We can hire a consultant to really dig even deeper and take another dive at
this. But yes, we can. We can do the feasibility study. I'm concerned hearing this whole conversation. My concern is we
did not separate the feasibility study with planning and implementation. It gives the impression that we are it has a foregone conclusion whether or not that is thee.
You give people that that impression. Second, now that you know this has elevated up. We under stand the community's concern. And since this is not
even funded by the county until three years later, I really wonder whether we should keep it in our CIP, because that does not incentivize our partners around the county to
help us identify other ways to do it, as these two pieces of land are residential land, I will see my colleagues has anything to say on this subject? Yeah, just to make sure I'm understanding it with it's not
in the first two years, it's three years and beyond. And that the the budget was reduced. So you will have to make decisions about what to prioritize. And this is a decision point, whether you will prioritize this and you're
saying you will prioritize it above other projects that have been reduced. So the reduction in facility planning. Yes. So countywide boundary study is going to be I don't want to speak out of turn, but I think
it's going to be our number one priority. Yeah, I guess that's the point I'm going to I'm making is we have reduced funding for the C I beyond year two. Right. And therefore all these things are on the chop. Well are on the table in terms of what we will fund and what we won't fund because we don't have enough to do it. All right.
And I agree, boundary study for elementary schools should be our number one priority. Correct. And we do with next year's CIP. It's an amendment year. So if we do want to request more funding in facility planning or any other project for that matter, we can we have that ability. Miss
Zimmerman, thank you. I also have kind of a planning related question, as I know some funding has been cut for that. I know in the past, in my short tenure so far, that we have been able to discover some areas in planning, particularly
with our boundary studies that we were able to do in-house. So I'm wondering if we've explored any of that so far, any ways that we could find savings there? Can you say that in another way? Like what kind of savings are we looking at? So
is there like, when it comes to that planning, especially when we're looking at boundary study that's in there? P three we're talking about portfolio planning. Is there any part of that that we as M.c.p.s can take on and find a way to
reduce our planning costs there, or have we not explored that yet? So we we do heavily work with our consultants and we the cost could be a lot more if we weren't so involved with the consultants. So the boundary
study, it wasn't just a consultant doing going rogue and doing their own thing. We. We help them. We provide data and files and just historical knowledge. And I mean, we do use our internal planning office with consultants. So it
could be a lot higher, more expensive if we didn't. So to, to add on to that a little bit, I, if I'm understanding your question correctly. So there were obviously a lot of the data for, you know, based on
GIS or our, you know, enrollment numbers, we do have in-house planners that do work on that. But as Mr. Conolly said, that we do have to lean on the expertise of the outside consultants because they're the ones, you know, on a daily
basis. They work with other jurisdictions on, you know, large, you know, large movements like, you know, trying to move 137 elementary schools. There were obviously there are places where we can. And we will obviously spell that out in the RFP. When we do
send it out like we did find some synergy and some benefits of, you know, doing some of the engagement in-house. So there could be obviously ways of, you know, cutting down that cost. But there are certain things specifically when we're talking about P3 and, you know, things
that the district hasn't taken on in the in the past, we would have to lean more heavily on, on the consultant to bring their expertise in. We will obviously work hand in hand with them in providing the information they need to do the analysis. So to answer your questions, yes, we're going to
be obviously looking for ways we can, you know, supplement their efforts in-house to, you know, keep the costs down as much as possible. Great. I think that's a positive thing to hear. If I can switch our subject a little bit, can I
follow finish the talking about planning. Okay, then we can jump to other given. That we have a limited money for planning, we want to prioritize
elementary school boundary study. And I do agree with you. We need to use outside consultant to have a. Unbiased or not foregone conclusion.
Analysis of the situation drawing from all different jurisdictions. Experiences. And my. Perception that we can our
partners will be more engaged if they also have to help us figure out this situation. Bus depot is a countywide issue, not just a school system issue. I would like to move for the
committee to move this project out of our current CIP and. And until next year, so that we don't have this project in our
CIP. So it's already been requested and it's been going through the reconciliation process. So I think the earliest we could do that is in the fall, this fall. So we have an opportunity to modify this in the fall. Absolutely. Since
it's not on the in the first two years. Okay. Which is very helpful at this point with this dialog. Okay. The superintendent can recommend in October to postpone or to delay, remove, accelerate. That would
be a part of Doctor Taylor's recommendation. Then it would go to your request in November. So you would be able to. Let's do the same exact thing. You can remove it completely. You can accelerate it or delay it. Right. So that is in October. It starts in October. So in the fall. CIP yes, ma'am. In the
fall. CIP because that's what I intend to do in the fall, because we have heard from the community at the time, we didn't when we were approving the spring CIP. Now we have heard from the community we
should have another wholesome discussion on the topic for the fall. Thank you. So it's the fall for the the mid-year of the what do you call it, the mid amendment year CIP. So it's created in the fall but not approved until the following
spring. Yes. You know that. Yeah, I do, I do. And once once this CIP is approved, the county executive and the county council will only look at projects that have amendments to it. So if there's a project that gets approved this year, say Hvac, take any project,
they will only review it next year if we make an amendment to it. So if this one is amended right, then they will review that and then they can change monies, accelerate, delay or remove. Thank you for that clarification. So I also want
our community out there. Okay. Pay attention because there's so many big issues in the school system that pay attention in the fall. This is not a foregone conclusion. In the fall, we have another
opportunity to look at this issue, and I hope we we do the full conversation on this topic. Thank you. Yeah. It's a it's a conversation that we need to have with our colleagues and
with the superintendent. Absolutely. Just a follow up clarification to that. It would be possible for us to then maybe amend the project into multiple parts, one being the feasibility study and the other being the funding for it.
Correct. So you could request as a part of the facility planning if you would like, we could take it if you want to prioritize that, we could take it out of that bucket of money. And what you could do is if we don't have enough money going into FY 28, we can amend the
amount in FY 28 and moving forward to increase those monies so that we can afford a feasibility study for the bus depots. That would be the process. That would be October and November of this calendar year. I understand what Miss
Zimmerman is trying to say. We shouldn't have foregone conclusion, should separate feasibility study with implementation and and planning. Right. But I'm not sure I agree with acceleration. But we can discuss in the fall. Of course.
Thank you. If I'm able to switch a little bit about Hvac, I know it's just very much top of mind with it being nearly triple digits today and school closings. Exactly. Failed Hvac
systems. Yes. And I really just want to clarify again that soon, within the next few months, that we will see that investment in Hvac, we'll start to see some relief on that front, correct? Yes, absolutely.
I mean, New Hampshire states, let's it it is happening this summer. So that I know that was said it wasn't happening. It is happening. And relief is coming for we have a lot of phased projects that will be receiving their second, third, some
fourth, fourth phases of Hvac because we've we've talked about it a lot, that high schools can take up to 4 or 5 summers. So yes, relief is on the way. It does take a while to design and permit. So we
don't want people thinking it's going to happen this summer. Some projects will happen this summer, some won't. So just bear with us while we design and get the full funding. Great. Just to follow up for that, speaking to Miss Sylvester's point that there are two
elementary schools closed today, that it will be faster for elementary schools to see that relief. So, yes, and if it doesn't come out of that Hvac bucket, we have that emergency replacement of building components, which is very
critical that we can tap into another bucket of money if we have certain projects that are that are locked in, if you will, with that Hvac replacement money, we can tap into these emergency funds that come through the CIP. So we will have those secured. And we made
historic investments in that fund. So we are we're going to need to use that to your point. Like tomorrow, July 1st type deal. So thank you. The strategy to use holding schools so that we can do Hvac projects
faster. That's still a big question mark because we don't have funding to renovate holding schools in order to do that. AM I understanding that correctly? That's not not entirely true. It's not a nice
to have. But if we are going to utilize our holding schools the way that we probably should be utilizing our holding schools, we really wanted to make some worthwhile investments, whether they're modular classrooms, which are nicer than portables and make some site upgrades,
bus loop upgrades, things like that. So we can get schools in and out with highly high impact and lower cost projects, Hvac, roof paint, restrooms, all in one school year. And it would be a more pleasant experience for those schools that are
swinging into those spaces. But we've had schools at our holding schools that, you know, without those monies. So we would we would. But in lieu of that, if we need a roof at whatever holding school, we would need to use the roof replacement or emergency
replacement of a major building component. We would have to tap into another bucket of money in order to do that. So those were sort of like line item budget for that, but we didn't get any of that. We were requesting, I believe, 44 million in that
fund right now. And again, I'm very pleased that we have invested heavily in the Hvac projects because, as Miss Zimmerman said, and we didn't really explain it, but two schools had to close today because their Hvac systems failed. And we with this
temperature, we obviously can't operate schools that way. So just exemplifies the need to accelerate these projects as soon as possible. Very good. Any other questions? No. Let's go to the next one. Okay. Thank
you so much. Appreciate it. All right. Our next item, we have moved on to six one internal audit unit charter. Today we will hear from supervisor of the Internal audit unit, Melvin
Phillips, who will talk us through the charters purpose as well as the direction and guiding principles it provides for the unit's work. For this presentation, I will ask for a motion to recommend the charter to the full board at the June
business meeting, Mr. Phillips. Good evening. AM I able to advance the slides here? Yes. All right. Great. Hi, I'm Melvin Phillips, the supervisor of the internal audit unit, and I'm going to introduce the charter to you this evening.
And just as you stated, with the anticipation that we can move it forward to the full board for approval. So this is a foundational document. It will establish the framework under which the internal audit unit or I, you will operate on
behalf of the board and the families of Montgomery County Public Schools. So as we get started here, let's talk about where we're headed. First, I'll start about explaining what the
charter is, why the internal audit unit needs one. From there, we'll kind of walk through the charter itself, and you have the full draft in your folders as well. The purpose, background and its authority
and the safeguards that protect independence, the scope of our work and how it how we report to the board, and then also the professional standards that govern IAU conduct. I think our
board Ms. Yang already have a good evening. Okay. Okay. So let's just talk about what it is, why it matters. There's two columns here. So the charter is essentially a constitution for
the internal audit function. It's not just good practice. It's a requirement. Under the Institute of Internal Auditors global Internal Audit standards, and also under GAGAS, which is the U.S. government auditing
standards without written board approval, the a written board approved charter, the U unit us I U. We cannot publish audit reports that state that we're meeting auditing standards, their standards, professional
standards. Next is the the why. So it's two two main principles here. And it's first it's going to be independence. We we audit the same people that we we work with every day. So with the board approved charter, it
insulates the unit from from pressure with, you know, among the people that we work with. Secondly, it's also authority. The charter formally grants you access to records, right, to inspect assets, interview privileges with all staff at
all levels. Without that grant of authority, the unit has no standing to compel cooperation. In short, this document is what makes the audit unit Credible.
So as you know, the internal audit unit exists to support the board in fulfilling its governance responsibilities. It does that by providing independent objective assurance and advisory services or across M.C.P.S. Our work is designed
to strengthen our internal controls, mitigate risks and mitigate risks before they become problems and continuously improve operations. So there's two distinguishing terms here. Assurance services,
which are independent examinations of financial operational compliance and performance audits. And then there's advisory services, consulting style engagements requested by management. Also the board that add value
without taking on management responsibilities. Both of these things fall within our mandate. We would also continue to support the external any and any external audit activities. Also facilitate broader
internal audit processes. And our work can also be directed by the board and with recommendations from the superintendent. And we can conduct special audits as they arise. So this slide is kind of
sums up the heart of the charter. So there's there's three components here. First is the reporting line. And that's me the the supervisor the supervisor of internal audit reports directly to the board or designee. Currently, the
supervisor reports to the Chief of staff of the board. Of course not the superintendent. So it's important that that that delineation between the board and reporting to the superintendent is, is as documented. Second, authorities.
So on behalf of the board, the I, IAU has complete access to M.C.P.S. records in any form for cooperation of personnel inspection privileges over owned, leased, owned and leased assets, interview privileges with management staff,
contractors at every level as a need to conduct our audits and with regard to audits or with respect to audits. And lastly, independence safeguards. I have no operational responsibility over activity. They audit the
unit, does not draft or implement procedures, nor maintain records that they will later review. Conflicts of interest are avoided as a matter of policy, not preference, and these limits protect the objective. The objectivity of our audit
findings. And so this is our kind of our scope of work. This slide sums up our scope of work. There's three broad categories. First, we evaluate operations programs information systems
and assess how they effectively how effectively M.C.P.S. objectives are being achieved. Secondly, verifying the reliability of financial and
operational information. Sorry. All right. The second, verifying the reliability of financial and operational information confirming
compliance compliance to policies, regulations, and the laws that apply to the public school system. Third, Safeguarding assets resources, investigating reports of fraud, waste or abuse received through hotlines, other channels, emails, phone calls. That
includes proactive evaluation of controls and reactive investigations of complaints. It's important that to note that the charter itself I, I a scope is unrestricted. The board may request special
audits investigations reviews that are beyond what we may propose in our annual work plan. And so the the reporting
process, how we finalize the reports is, is standardized here. So step one, there's a draft report. Step two, there's a management response. Step three, there's the final report. And then step four a critical
step. And that's the follow up. So in addition so this standardizes the reporting process for the audits that we conduct. In addition to this audit cycle, the Fiscal Management Committee provides ongoing annual oversight,
reviewing IOUs priorities and work plans, and also receives an annual report summarizing the year's work and any significant issues. And finally, the underpinning of the work we
do. Again, it's in accordance to three layers of standards the Institute of Internal Auditors, global Internal audit standards, as well as the Gagas Yellow Book, as well as laws,
regulations, M.C.P.S. policy. It's important to note that IAU is not above the rules. It audits others against. It follows them together. These three layers anchor the credibility of every finding
that the unit produces. Questions. Thank you. My first question is why are we doing this? I think it's a very good thing, but I just want the
public to understand why you are recommending this. Yes, absolutely. So like I said in my earlier remarks, it's it's to meet professional auditing standards. The internal audit organization should have a
board approved charter. So that's that's number one. And then number two, again, it, it, it documents, it documents the
foundation of the work. We do it without it, we can't we don't have anything documented that compels people to work with us when we conduct our audits. And we've had an audit office for many, many years with an M.C.P.S. That's
absolutely right. And now you're giving it more formality and structure to meet these the standards. That is correct, Mr. Chairman. Thank you. I also wanted to say that I'm very much missing your spiffy
jackets from the Distinguished Service Awards. It was a really great touch. I appreciate that, but I also wanted to confirm that part of this as well is that the internal audit unit
priorities annually, those are brought forward, brought forward to the Fiscal Management Committee to be. Yes. Reviewed. Okay. Absolutely. And I so a critical part of the charter is that the Financial Management Committee approves our work plan and is actually
involved in our work, our work throughout the year. Right. So continuous updates, also understanding our risk analysis, how we determine what areas of the district are of higher risk
than others as we because, you know, there's limited resources in my office. And I, you know, we can't audit everything, right? Of course. Right. But it's I think it's important that the board has a the board
has an important role in influencing the work we do. Great. And I'm sure myself and my colleagues look forward to having that additional piece of your work. Thank you. Could you give us and the public some examples of things that you
might audit. Maybe we've been operating audit office. Yeah, things that we've always audited. But what would be different now? So in recent years, I'd say 90, 90% of our work has been the school, the
school's independent activity funds, what we call the I f. And also there's been a lot of school support in the audit office as well, supporting the I F and those activities, policies and procedures. What
we are. The future of audit is to not only support the I f we will continue to do that, but also look at things like grants or. We just had an important discussion about the CIP right. And how those how how those
plans were developed. Right. And, you know, there might be a case where the board may say, well, let's have an independent look at the district's idea of, you know, how we move forward with CIP or. It could be, you
know, the DFNS where I think there's a discussion tonight about the, the, the, the, the food enterprise fund, right? So things like that. As the board says it, I like to have an independent. That's our, our, that's our superpower, right? I
use superpowers, we're independent, right. And objective. Right? So the board says, you know, I'd like to have an independent look at that without management's point of view. Right. And that's what our role, our role would be
great. Yeah. So this is using existing resources and staff. That's correct to do this function. That's correct. No one gets any false ideas that we're bringing on a lot of new staff here. That's correct. So I envision that we would have a
conversation and that would help you prioritize your work plan for the year. You would definitely make recommendations to the board, but the board would also talk with you in terms of what we would like to see in the yearly work plan. So our our work plan this year will be finalized generally in September, the September time
frame, but there will be a lot of preliminary work to get to that point of, you know, obviously, final approval in September. So, you know, there would be. My vision is where we would kind of offer up a menu
of things that are important that fall within our scope and also fall within M.C.P.S. strategy and areas that we think are kind of high risk areas or important to the community areas that we would look at, and we would propose
those things to the board for final approval and our work plan in September. Time frame. Great, great. And prioritizing will be important because I'm sure we'll want, like you said, we'll want a long list of things. That's right. And as you said, there's limited resources. Yes. We're not
hiring up. That's right. Great. Well thank you. I really appreciate it. And so now, Miss Zimmerman, if you can make a motion so that we can move this to the full board. Yes, I move that we bring item 6.1, 6.1
forward to the full board. Second, all in favor, raise your hands. Thank you so much for the presentation. Okay. Moving right along. Next item is Enterprise Funds 5.1. Under
our revised agenda, please come forward and introduce yourselves for the record. Good
afternoon again, Yvonne Alfonso Windsor Chief Financial Officer And good evening. Elizabeth Leach, director of Food and nutrition Services. Welcome. So I'm going to kick it off with an overview of our enterprise funds. And then Miss Leach is
going to talk specifically about the Food Services Enterprise Fund. So M.c.p.s holds several funds which are enterprise, the largest of which is the Food Services Fund. And the purpose of the enterprise funds is that they're really managed as a, as
a private or, or, or a business model where the revenue has to exceed or equal the expenditures in order to be financially stable, obviously, but also to be able to continue be being an enterprise fund.
And during the pandemic, we had some issues with our enterprise funds because business was not operating as usual. So a lot of our operating enterprise funds suffer, you know, a little decline during the pandemic. You know, mainly our food services because we were not,
you know, we're not in schools, but they have recovered somewhat, you know, from the pandemic. And but, you know, there's still we need to be able to be able to increase our revenue, an enterprise fund. The intent is that all the food
and services that are provided, the goods and services there are financed completely through charges to customers, users and other non tax revenues. The whole they are part of our operating budget, our $3.7
billion operating budget is includes all our enterprise funds, but they are non-tax supported. They are through fees or other other means. This are the four enterprise funds that the operating budget
currently includes the tentatively approved budget by the board. So the food services, as you can see, is a $75.8 million fund. And it's not just from from fees, obviously, there's reimbursements from the federal government, but that's part of of what comprises an
enterprise fund. The real estate management fund is $5.1 million. The Field Trip Fund is $3 million. And the Entrepreneurial Activities Fund, which is composed of the Taylor Science Center, those are the science kits that they sell
science kits not only to our schools, but to other, you know, local educational agencies, not just M.C.P.S. our printing services and some of our student online learning students that take the health class, which is one semester. And the technology we use, we
do offer those through e-learning, and that's an enterprise fund on itself. And then the bus camera, which is a pass through enterprise fund. We get the revenue in, we pass it through to the county. I do want to bring to your attention that all of this funds are
completely self-supporting in a way, and that includes our employees. The Food Services Fund is the biggest one by far. It has 632 full time equivalent positions and all the compensation included, including the increases, are
funded through the Enterprise Fund, the Real Estate Management Fund has 1010 FTEs, Field Trip five, and the other 12. So when we are looking at the enterprise funds and in
terms of compensation, they have to keep growing in order to be able to support, just like the rest of our budget, you know, the compensation. Additionally, one of the pros of the enterprise funds is it's funding that is not dependent on a state or county, and it's
outside of the maintenance of effort for M.C.P.S. So it's not part of the maintenance of effort. So if you don't have any questions on the overall enterprise fund, I'll pass it over to Miss Leach. All right. Thank you. And I'll take let me
take that. So I put this little picture of food up there because one day I will come back and we will talk more about the food that we serve to students. But we've been talking a lot about the fiscal part of our work lately, so I'll dive deeper into that. So I just did want to add that one
of the reasons why we're having this discussion today is because the board is deciding whether to increase the lunch, the breakfast and lunch prices. And so it was important for us to understand why we charge and how the money is spent and how
so we can make an informed decision. Thank you. And hopefully we're going to walk through that as we walk through the slides. Yeah. So I will show you in just a minute how what comprises our revenues in DFS in the DFS Enterprise Fund. But before I get to that it's
73% is comprised of federal reimbursements. And so that is through a meal reimbursement. When we serve a meal to a student, we are receiving a reimbursement for that. And so that makes up 73% of our revenues. Since we get so much federal reimbursement, we have
to follow federal regulation when it comes to our fiscal management. And so I put in here seven C.F.R. two 1014. That is the resource management section of school nutrition programs, and it really provides the regulations that we have to follow when
utilizing this enterprise fund. So a couple of examples to give you are we are required to have a nonprofit food service account, which we do. We operate that. We're also required to make sure that those revenues are used only for the operation or improvement of food and
nutrition services, as was stated, you know, the benefit is the service to students. We have the ability to make sure there's continuity to students because of the enterprise fund, as well as make sure that M.C.P.S. operating funds can be can be utilized for other
critical items. All right, so we're showing the last complete fiscal year here since we're still in FY 26. Valuable to show you what we can see as a whole closed fiscal year, which is FY 25. You can see that the Defense Enterprise Fund total
revenues were 78 million. About 73% of that comes from federal meal reimbursements. 13% comes from those paid meal reimbursements. So when a student is paying for a meal that's we in total receive about $10 million from that. And that makes up about 13% of
our revenues. Then state reimbursements make up about 5% of that. And then our other is comprised of a la carte sales, catering, sales, vending and interest income. And that is comprised of about 9% of our
revenues. In the same fiscal year. So if you look at FY 25, our total expenses were about $83 million. And we spoke about this recently, but about 50% of those expenses are for our labor, our staff. That goes to labor and benefits. About 40%
is spent on food. And then the remaining 10% on supplies, equipment and other small things to operate. So you've already done the math in your head. I'm sure that if we're bringing in 78 million in revenues and we have 83, 83
million in expenses in FY 25, we did operate at a loss of about five, a little over $5 million. Now, the reason we've been able to operate at a loss is because we have a positive fund balance. And so we've had that positive fund balance during the pandemic. We had
some increased funding later in the pandemic that provided that. And so we've been working that fund balance down. And what we're planning for now is to fully exhaust that fund balance and how we are going to approach fiscal stability while working down that fund balance.
And so you see what was concrete numbers in FY 25. And then we have our projections here in FY 26. We are close to ending FY 26. It's very similar to where we are in FY 25. And then next I'll show you two scenarios of where we could project going in the next three
fiscal years. So in our first scenario, without a meal price increase, you'll see that our projected revenues, our expenses are very similar to where we are now. And then our overall loss at the end of the year will maintain around $5
million and then grow towards 6 million as annually, our expenses increase with labor costs, food costs, our normal expenses. So that would be our projection. If we continue as is. With the proposed meal
price increase, knowing that we haven't raised that price in over 12 years, FY 27, we would reduce the loss by about 2 million because in FY 27, with a 30 cent meal price increase, it would bring in about $2 million in revenue. So it would
reduce the loss down to about 3 million. Then again, I know that this would be decided in future years, but if we were to have see increases in FY 28 and FY 29, you can see how that loss decreases over time so that by FY 29, we would be
approaching financial stability. And that's where we want to go. We're not you know, we're at the point where we still have a fund balance. And that's a good place to be when you're planning for future fiscal years. And we want to plan appropriately so that our enterprise fund is fiscally
stable. Okay, so this just shows a side by side comparison. So we could see if we were to implement the meal price increase or if we weren't, what our projections are for the next few fiscal years. And it would start to eat up our
operating dollars. It comes from our well, right now, MDF the Defense Enterprise Fund does not get any M.C.P.S. operating dollars, so we would have to figure out where to cover those costs from. And so that's some of the options we put forth. We could look at
none of that. None of the options are things we want to do. Right. But we could look at cutting breakfast programs. We could look at reducing staff in schools. We really have to look at cutting our expenses to meet the revenue we're bringing in. Right? Yeah. But you can also
pay for it out of operating if you if we wanted to if we wanted to, we could. I think there are other implications that that would then have. We're having to cut $36 million. But I also I want to emphasize we could do that for a year,
potentially. But once we start putting operating budget into the enterprise fund, it no longer is an enterprise fund. And if it comes out of the enterprise fund, then it becomes part of our tax supported, tax supported budget. And then it would have to be
part of the council, you know, appropriation. Does that impact our federal match if it's not an enterprise fund? No it doesn't. I think implications would be consistent services to students. You know, when we would look at potential cuts, you know, we would have to look
at cuts to staff that currently we are somewhat insulated from and looking at best practices around the country. Most all districts operate their food and nutrition as an enterprise fund as a best practice. Understood. Thank you. Yeah. Okay. So switching gears a
little bit from revenue, expenses, profit and loss. I know there's been a lot of questions around meal debt. And so wanting to talk through that a little bit. And first, just frame this as this is not solely a challenge for M.C.P.S. This is a challenge nationally that many school districts across the country are facing.
And you can see that USDA put out a guide on this almost ten years ago. It's been a challenge. And so while we are facing it, so are many of our our school districts around our neighboring school districts and around the country. And it's helpful to know where we've been to understand how we got to where we are now. And so
I'm going to take us back a little bit. If we remember from 2017 and prior students, if they weren't eligible for a free meal, and if they didn't have money on their meal account, they were provided an alternate meal. And at one point that was a cheese sandwich. And then at some point it elevated to a turkey
and cheese sandwich. But it wasn't the same meal that their peers were getting. And at the end of the school year, DFS would charge each school a nominal fee to cover those sandwiches. Many reasons why we've moved on from that approach. We don't have to dwell there, but in 2018, the board implemented policy GPH to
make sure that every student had access to the exact same meal that their peers had, regardless of their eligibility or how much money they have in their account. And that's how we operate. So that is really the first year that we accrued meal debt. And so in that first
year, it was $298,000. I think it's also valuable to know at the end of that year, we did at the end of the 20 1819 school year, and then at the start of the following school year, even
if someone held a debt in their account, they started the next school year at net zero. So we cleared out the accounts from the students. The students or parents were not aware that they that they had this debt. So then in 2019, you can see that debt grew. The annual
amount we accrued that year was 420,000. We then went into about two and a half years of universal free meals because of the pandemic. And so we didn't worry about it. We worried about many other things during that time, but we didn't have to worry about meals for about two and a half years. We had a
little break. When we came back in 2023, students and households got very accustomed to those free meals, and that meal debt really started to skyrocket. And so then you see it growing to a little over 700,000 in accrual just for that year alone. And so we knew
we had to slow the accrual of the meal debt. And so in 2025, we were projecting hitting $1 million in meal debt just in 2025 alone. And we implemented two things. First, we transitioned our communication methods from the old school,
send a paper home in a backpack to parent square, which is a text to voice and email. So parents had real time information about if they were falling into the negative on their meal balances. The second thing is that we stopped clearing out those balances at the end of the year. And so
this school year was the first year that if there was a meal debt last year and a student started this year, their parents were were receiving or sometimes still are receiving a notification to say they still owe from that meal debt. And this is the first year we've done that. And with those two
changes, we went from last year's projection of $1 million in meal debt to this year, we're projecting about $450,000 in debt. So we're reducing the accrual by half in one year. And so these strategies have really helped us slow the growth of that, which is great.
I think visually, sometimes it's helpful to see. So there's a lot of colors on here, but I'll point you to the orange line. That's last school year, 2526. And you can see in April when we switch to parent square, that trajectory that was going up and up and up, cut down. So
we can see that that was beneficial. And then if you look to the teal line, that's this year, you can see how much lower it is in general compared to last year, because those communication methods are really working for us. So I'm happy that we've made progress. That's a good thing. That said,
we still have work to do, so the things we need to continue doing are reinforcing those communication methods and making sure those end of year balances continue. So the communication is there to balance to parents that it doesn't just magically go away.
I think there's opportunity to enhance the communication methods and even build on them. Now that we have them strong, we also have some opportunities to dive deeper into case studies. So giving you an example of a school A and a school B here, school A and school B have very similar
enrollments, almost identical free and reduced rates. And one of them has almost a third of the meal debt of the other. So their school administration there that has buy in and are communicating with families in a way that we can do a case study and say, hey, this is really working. Let's outline
what you're doing here to work with families, and let's make sure all the other schools and administrators know how to do that and have the tools at their disposal to do that. So again, we can reduce the accrual and the growth of it, because that's really one of the best ways to tackle it is having it not grow. Can I just
add something really quickly? Because we've been working together, this doesn't impact our most vulnerable students, our free and reduced price meals students. So, you know, that's what we have other programs to support those students. This is just a meal
debt. That might be because, you know, the child didn't tell the parents, you know, that they owe funding, you know, funds and all of that. But so it does not impact our free and reduced meal students. Thank you for adding that. So there's also new things that are opportunities for us to look
into. So while we have policy GPH, we actually don't have a regulation associated with it. And so there are procedural things that I think are opportunities for us to explore. The first one is defining the period of time where a debt becomes unrecoverable and
becomes bad debt. And that would be the debt. Then we're looking for a funding source to then pay off that debt. But currently we don't have a defined time. So should a household accrue that for one year, three years until they graduate out of M.C.P.S. That's that's something we can define.
And we we should do that. Another thing I think we have an opportunity to do procedurally is define the amount of time where if someone transfers out of M.C.P.S. or graduates and they have a positive balance, they can ask to transfer it to another student or they can ask for a
refund. But if they don't, what's the period of time that if it's unclaimed, can we use that as a donation? So we have some unclaimed positive balances. But because we don't have a written procedure where we've communicated to families that after a certain amount of time that will be considered a donation, we're not able to use
that. So there are some things procedurally that we could do to help, you know, continue to reduce the accrual of debt and address procedures around it during this again, still continuing to work towards identifying funding to support it. But as you can see, if
we're projecting a $450,000 debt this year alone compared to our overall profit and loss of 5 million, it's not the same amount of funding we're looking for. Okay. So I think I've I've
walked us through a little bit of our revenues, our expenses, how that works into our total profit and loss and what our projections are. And touched a little bit about, you know, the direction we want to be moving in towards fiscal sustainability and addressing meal debt. And I'm happy to
answer any questions you may have and and open for discussion. Miss Zimmermann. Thank you. Sorry. I'm furiously writing all of my notes. So based on especially the charts
that we were looking at, federal dollars we're projecting are going to remain the same, right? That like, that's based on current law and current practices. So when we're talking about that increase, even if we are
charging an additional $0.30 for not expecting to be reimbursed, that additional $0.30 based on that federal. So I'll clarify that. So the meal, the federal meal reimbursement amount changes annually. It is
posted in July every year. And that amount traditionally increases every year based on consumer price index changes. So usually it does increase. And so the best practice is to also look at your meal price and look at that and increase annually, because your food
cost and your labor costs will increase annually. Now we haven't done that in 12 years. So we have some catch up work to do. But you will see our total revenues are projected to increase slightly year to year. Based on that, the federal meal reimbursement will increase slightly year to year. Okay. So
it sounds like even moving forward past this kind of crunch point, that that's something that we might want to look at annually and based on like federal recommendations and things that could be a guideline and what we
potentially use. Okay. Yep. There's actually a seven CFR federal regulation around it. It's called paid lunch equity, and it gives you a guide for how much you should be charging. Great. Is it possible that when this goes towards the whole board, that we could have a little bit more information on
that and kind of where we are in relation to like that federal guideline and things like that? I'm happy to we provided a rather a chart in the last presentation where we were talking about meal prices. So that has it outlined, I think, pretty well. Okay.
Yeah. And if there's anything in addition to that chart, happy to, to do that. I know that discussion is in two days. So if there's anything that we can get in between now and then. Happy to do that. Thank you. Kind of following that thread a
little bit too. I know talking about like community eligibility provision. And that has to do with Snap and related to Snap, there's the potential of federal dollars being
significantly reduced for Snap. But I know that schools, it's every three years that you recertify for community eligibility provision. Correct. The community eligibility provision is something we look at annually. So we look at
April 1st. This is all federally required, right? So we look at April 1st data every year and have to make elections by June 30th every year. If we elect a school into the community eligibility provision, they are able to stay in that provision for four years. So that's the cycle we think about when we say a four years. Okay.
But in DFS we're looking at those numbers every year. Okay. And the reason being we have we have 60 schools in CEP right now. Right. And every year we're looking. So if those numbers are increasing, we can restart their four year cycle. Fantastic each year. So just because it's a four year cycle,
we're looking at it every year and analyzing what the best opportunity is. Great. My question was about if we could recertify sooner, because that really helps protect us. If anything changes in some ways that we have that opportunity.
Yeah. So we are currently going over the analysis right now and likely will recertify any schools that we are able to that it makes the best decision to because we know we've already seen those snap numbers drop a bit, and we anticipate they may drop again in the
future. So if we want to be able to kind of solidify year 1 or 2 for a four year cycle, we're looking at that now. Wonderful. Thank you. You're welcome. Are you presenting this presentation on Thursday? It wasn't asked to present on
Thursday. If it would be helpful to you, I surely can we have the presentation all ready to go. But I'm not powerful enough to change the agenda. I don't think I am either, but if we could have, we'll connect. Yeah. No. All I want is for the staff to the board to receive
this presentation, maybe after this meeting so that they have it as well. We don't need to change the agenda. We'll get that out. Yeah. I wanted to understand slide five, which is the food services enterprise. The revenues for FY 25 to the
total. This whole operation revenues are 78 million. What percentage of our student populations eats food at school that the school is producing? That's a good question. We serve about 100,000 meals every
day. So if we break that down, because I don't have the percentage in my head. So we might have to do some math, but we're serving about 65,000 lunches a day. And so I can see we have a calculator going 100,000 meals, 100,000 meals per day, about 35,000
breakfasts, 65,000 lunches, and a little bit of snack and supper after school meals as well. Yes. And the other 62.5%. Thank you for the quick calculation. Okay. The other listed there was what again? The other is includes a la carte sales. Okay. Vending
sales, some small, very small catering and investment revenue. Yeah. I'm very interested in improving the quality of the food that we serve. And I'm assuming that that we need more revenue for that to happen. I am too. Can you say more about
that for our millions watching? Yeah, absolutely. We are very invested in improving the quality of food. And we've heard a lot from our students on what they're looking for in that food. And so in order to do that, if we think about our revenues now and the paid meal
price now, we're what we're bringing in from a paid meal price, can't purchase those, can't purchase the same food that we purchased 12 years ago because the food costs more. And so in order to bring in more diverse foods, more variety of foods and higher
quality foods, we need to bring in the revenue to, at minimum, meet our expenses. So we are similarly very invested. We've been working with students to hear from them on what they want. And we actually do have quite a big consent item, I believe, on the agenda for Thursday with some new items we
would very much like to bring into school and onto school menus. Okay, great. Thank you. Thank you for the presentation. No further questions, I appreciate it. Thank you, thank you. Okay. Our final two items
this evening regard procedural updates to M.c.p.s fiscal management practices. The first is an update on the M.c.p.s. Financial manual. Miss Alfonso Windsor thank you. We are going to if it's okay, we're combining both items because
they're very closely aligned, and I'll let my colleagues introduce themselves. But they will be presenting on this item. Good evening. My name is Carly Thompson. I'm the executive director for the Division of Financial Management. Good evening. Angela McIntosh-Davis,
director of procurement. Welcome. Thank you. So I'll take us through the slides here. So just wanted to open up. Like Yvonne said, we're going to kind of bring the two updates together. It was really kind of a parallel process, updating
both of our manuals. So we'll pop through through both here. So just to kind of get to the point in terms of the update, I'll go into some details about the actual content updates, but our updated financial manual was published on March 5th of
this year. If you had seen the manual before this update, quite a bit of the content was a little bit outdated and hadn't been updated in some years. So this was a full update of the entire manual. And this manual specifically is
internal facing for our M.c.p.s staff, and it's available through our M.c.p.s Business Center. And then the update to the procurement manual followed. We published that on May 1st of this year, and that is our
public facing manual that is available through the M.c.p.s web page. You go on there and search procurement manual. It should come right up for you for anyone to access. So to get into a little bit more about
the actual updates. So in terms of the financial manual, again, this is really our internal resource. That is our written to guide our staff and inform them of our processes. So getting into more specific workflows, it's 22 chapters, so
quite detailed going into specific content areas. Procurement obviously is one of them talking about how our schools manage their independent activity funds, their IAF funds, accounts payable, the, the centralized
investment funds, a whole range of obviously, our fiscal operations and the content within applies to both central services staff and school staff. So certainly very applicable to anyone in our financial base positions and our account
managers, anyone who's managing grant funds, activity sponsors, all of the content within is applicable to, to those folks in terms of the chapters. Just want to talk a little bit about the structure since again, this is an internal facing manual. So just to highlight a little
bit what that what the content looks like, each chapter has a consistent type of structure. It outlines roles and responsibilities for specific positions or certain teams in terms of the core focus of whatever that chapter is, sets
out the guiding principles. So again, kind of lays the foundation of what that content is about in the specific chapter, highlights any policies or regulations that we have, of course, provides information about who to reach out to. If you have any questions in terms of the
content in that chapter. And then one of my favorite parts is the frequently asked questions. That really gets into the more kind of practical real world. This has happened. What do I do? So each chapter outlines kind of that structure to bring that consistency in
how you go through the manual. So again, when I joined this team almost a year ago, one of the first things that Yvonne mentioned to me was we need to hop on this, the financial manual, knowing that it was so outdated. So this was again,
really critical to come through and start this modernization process and really bringing things up to date in making sure that it is truly an effective operational resource for our staff. And it was a large collaborative effort to
update this manual. I've had a lot of practice in working with M.c.p.s publications, supporting the operating budget publication when I worked in that space. But the difference is this manual is a lot of text. So a lot of reading, a lot of content to really go through
and making sure that we're bringing that consistency and addressing all of the places that we need to. So in terms of our team, the division of Financial management, all of our teams came together. We worked with other central services departments, materials management, our capital team to
make sure that all of the relevant content in terms of finances that apply to their areas was addressed as well. And I'll get into it in a little bit. I talked a lot about, obviously, the central office. Sorry, I'll go back one more slide. I talked a lot about the central office
engagement, but I'll talk a little bit about how we're going to kind of source some broader feedback as well. In terms of the procurement manual. Again, this is our public facing. And the review of this really came parallel to the review and update of the financial manual. So this one
is less day to day procedural guidance for our staff. And it's really more kind of what to expect out of our procurement processes. So again, the public, any interested vendors or current vendors can go there and kind of see, you
know, the guidance around our different procurement processes. And obviously, it elevates that level of transparency around procurement here in M.c.p.s, some of the focus areas in terms of updating that manual
was again, just going through the process expectations in the manual. It really goes into more details about the types of procurement, whether and what to expect from the process, whether it's an invitation for bid, a request for purchase. It gets into a little more
situational guidance. So if there's a Tie bid, what happens, what to expect out of the evaluation process for RFP. So really more information about how we engage with our vendors and also how we collaborate internally with M.c.p.s teams
who support that process. And then certainly it outlines how we're compliant with applicable laws, regulation, policy. And then certainly it highlights our core principles around our procurement practices, which is ensuring that the process is
fair, we're impartial and that we're consistent in how we apply our procurement practices. So again, just what is not included in that manual is that day to day informing our staff how to go about their their
tasks. That comes into the financial manual. So most importantly, what were the outcomes of doing all of this work to update the manual? So just one thing that I want to make clear is that we didn't do
this because we were changing any of our processes. That really wasn't the intent. It was more just focusing on wanting to make sure that we're clear in our guidance and that we're consistent around our existing processes. There was no really redesign of of how we
do our financial business in M.C.P.S. So in terms of addressing inconsistency, some of the things that we saw were you'd speak about the same content in two different chapters, but maybe the verbiage was a little different. So things like that just kind of create confusion. So we
really tried to be more direct in our language about what is expected and kind of also eliminate any of that, you know, kind of conversational type way of explaining things. You know, staff really want us to be clear about what we expect, especially if they're going to
be held to that in any sort of way. Then certainly we had some pretty big changes organizationally. So unfortunately, the manual had not yet been updated to that point to reflect our current organizational structure and our new divisions leadership.
So being able to do that to clarify expectations for leadership and who's expected to approve certain things, which is certainly important. And then also we had the transition of including our human capital management system
into M.C.P.S. into the business hub. So there were some significant updates in alignment with that technical change. So certainly our payroll chapter saw some quite a bit of updates, but ultimately updated those references throughout. We were able to strengthen our guidance
around core processes. So one thing that we're really happy about was in our procurement chapter, we were able to get really detailed and including appendices to really guide our staff from the point of initiating a request to procure
something, goods or services. The appendices will guide them from that point. What do they do? What form do they complete all the way through to ultimately obtaining board approval if required for the spending authority? So we're really hoping that that helps
our staff in terms of lead times, making sure that we're planning properly to, to execute those processes as we're expected to. And then also, we've heard several times now about the Office of Inspector General Report. I'm really excited to say we
received confirmation today that that is closed. So that is great news. Good to let you know, Angela. So we're really excited about that. And going through this update really addressed a lot of the items
that were brought forth in the recommendations. One of their recommendations was to do this, which we were glad we were already starting, but certainly address our concerns around unclear workflows and being stronger around our guidance for engaging with independent
contractors consultants and just overall strengthening, strengthening our documentation in our process guidance. And then lastly, the financial manual isn't the only place that our staff have to go to for guidance in the development
of the business hub. There's a lot of great resources there as well with, you know, how to guides and things of that nature. So making sure places for folks to go for additional
guidance in their work. So again, kind of hand in hand with updating these manuals, another priority for our division and in our chief financial officer is really implementing a strong financial
training plan. So unfortunately, that's something that we, you know, we have been lacking in prior years. So we've really taken, you know, along with updating the manuals, kind of taking that on the road, if you will, to really start identifying different ways that we can support our staff and
really implement something more consistent in terms of training and updating. So some of the things that we've done is participating in our ANS meetings, the administrative and supervisory meetings to talk to our leadership about some of the basics around
fiscal responsibility and, and what we expect folks to do, especially as we navigate very difficult financial conditions. We've certainly been emphasizing procurement expectations and bringing
clarity around how to execute the process as we need to, and required documentation and just making sure that we have that alignment throughout our leadership so that we can make sure that information is distributed across the top. And to help reinforce throughout
the district. Some of we've also had opportunities to meet with our school based financial staff back in April. So again, we're really pushing the manual. We're really pushing the update. People are probably sick of hearing me talk about it so
much and referring them to it, but we're really, you know, reinforcing, you know, go back and revisit it. We've made some great updates. We were able to talk to them about preparing for end of year responsibilities and things of that nature. So making sure
that our trainings are timely based on where we are in the fiscal year to support them. And then lastly, we've also we were able to have a training session with our central office staff. So again, focusing, targeting our training towards the fiscal staff, grant
managers, or really anyone who has more of a heavier hand in supporting financial processes or oversight there. So again, talking about the procurement consistency and addressing other specific topics that have come up as either pain points
or things that have kind of, you know, been hard to operate, just wanting to make clear those, those processes. So this first major update, you know,
we achieved a lot. So we made some really significant improvements to our baseline guidance. Again, we didn't change processes too much. We were really just enforcing our baseline and making sure that it was clear. We addressed major concerns that were
highlighted by the OIG or in terms of feedback that we heard. We strengthened our documentation. I am happy to say that some of the feedback we've heard in the trainings, folks are happy about some of the the changes that they have seen so far, but we know there's always room for
improvement. So we've got a few things up here to kind of highlight what we're planning to do over the next several months or so. So one thing that we're planning to put out is a feedback survey, and that would go to our school staff. Any
again, going out to those who have more of a hand really are end users of this content to really hear back from them, you know, test usability, clarity and just kind of hearing more about their real world
application, right? It's easy for me sitting in the division of Financial Management to look at this manual and advise on, you know, what I know processes to be, but my perspective lacks more. I have to take this guidance and use it. So really
making sure we hear that feedback to tailor our guidance even more. We have come up with a concept around interim notices. So one of our challenges is that obviously things change all the time, and
it's not abnormal to have fiscal guidance change throughout the fiscal year. So we need a way to really formalize and capture those changes in a way that is more accessible and easier for folks to access. So that's where this
interim notice idea came about. So this would really be kind of a way to formalize any changes that come about throughout the year, in addition to our other ways of communicating that to staff. But this way we can establish consistency. Everyone,
you know, we make sure that we reinforce these changes with everyone. And then that would be a way to kind of formalize and document those before we would incorporate them into the next round of updates to the entire manual. So this is still
in development, this concept. It's something we're still talking through and working through. But I really think that this could be a great way to face that challenge in terms of making sure folks are on the same page about changes mid-year, and not having to refer back to emails or memos and things like that. Certainly,
we're continuing or we're committed to doing the continued training for our staff. You know, we were just talking about our plans this morning in terms of, you know, frequency of having meetings with central office and fiscal based staff over the next few years, you know, having those
meetings in different formats and really just trying to reach people where they're at physically. But also, again, in terms of where they are in in the fiscal year and being responsive to what folks are experiencing and trying to tailor our guidance and support to that. We're going to
continue to look at our standard operating procedures, just evaluating ways that we can improve efficiency and how we operate in our areas, and just ensure that procedures are practical and make sense. And
then lastly, like I said, we are expecting that our updates to this manual be much more timely and that we don't have a year's worth of gaps between reviewing. Right. If nothing needs to change, that's fine. I highly doubt it. But, you know,
we just want to make sure that we're, you know, taking in what we're experiencing, you know, and just making sure that everything's still as applicable within the manuals. And then lastly, we are with that. Once we obtain the
feedback from the survey, you know, there's some items from the first round of the manual. You always go back and look at things after the fact and you're like, I would have tweaked that. So we have some things that we know that we want to update. So again, incorporating that feedback, we are targeting to have kind of
another round of an update in August to really kick us off for this next school year and then kind of implement the, the practice moving forward, if I may say just something really quickly about the interim notices. I do want to elevate
that because one of the issues sometimes is processes change, but we're not documenting them. So when there's an audit and there's nothing in writing that says we change this process, that's a problem. So for example, the P card, we have limits for P cards forever. We
are increasing that limit somewhat based on guidance. So we want to make sure that not only send a memo to the schools, but we, you know, put it in as an interim notice in the financial manual. So if we have an audit or anything happens or anybody that wasn't in the
system when the memo went out, they can go back and say, oh, that has been increased. So those are the kind of interim notices that we're looking at. So happy to open for discussion or questions. Zimmerman. Thank
you. It sounds like this was a very large undertaking, and really a lot of updates went into this new version. I really want to appreciate all the work that went into that. It sounds like then like perhaps next year we might be looking at like some technical amendments.
I just think it would be helpful for the body if we could bring those before the board again, like, hey, these are some of the technical updates I know you went through really thoroughly, like all of the things that we updated this time. We don't need to see like every single like this change to this, but some of those
little things that might be helpful to see in the future. That's all. Thank you. And we do have a question that we've gotten in the sessions is about redlining so that folks don't have to go and guess, like, what did you update? So we are going to take that, you know, again, this was a little more
substantial. So unfortunately, the whole thing would almost have been in red text. So we do hope to implement that practice so folks can target their attention. Perfect. Thank you. You're welcome. Is there an online version? Yes. So this is really mainly only online. It's
accessible through the business center. It used to be called my M.C.P.S. So folks might still be uncomfortable with that language. But it is in the business center. Okay, great, great. I look forward to reading it. Yes. Please let me know your feedback. Thank you,
thank you. I don't have any other questions. I appreciate the work. I'm sure it was incredibly hard but important work. So thank you, thank you, thank you. All right. Let's see.
Where are we? Okay. Well, that concludes today's fiscal management committee meeting. Is there a motion to adjourn? I move to adjourn. I'll second
that. We're adjourned.