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Katy ISD · Regular Board Meeting Agenda

Katy ISD Regular Board Meeting, July 23, 2018

0:00 of 1:06:41

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  1. 0:00 to 0:56 Item 3 Reconvene from Closed Meeting - The Board will reconvene from Closed Meeting. The presiding officer will verify that the meeting has been duly called and notice of the meeting has been posted for the time and manner required by law.
  2. 0:56 to 2:40 Item 4 Pledges of Allegiance
  3. 2:40 to 5:31 Item 5 Recognitions 5.1 New Katy Independent School District Administrators
  4. 5:31 to 41:08 Item 6.1 2018 - 2019 Budget Update
  5. 41:08 to 1:04:30 Item 6.2 2018 - 2019 Health Care Plan Update
  6. 1:04:30 to 1:05:16 Consent Agenda Consent Agenda 7.1 Consider Board approval of the minutes of the June Board meetings. 7.2 Consider Board approval of the May 2018 financial reports. 7.3 Consider Board approval of the July 2018 budget amendments. 7.4 Consider Board approval of the Notice of Public Meeting to Discuss the Budget and Proposed Tax Rate. 7.5 Consider Board approval of a contract for the collection of delinquent taxes. 7.6 Consider Board approval of the design associated with the renovations at Fielder Elementary School. 7.7 Consider Board approval of a blanket electrical easement to CenterPoint Energy Houston Electric, LLC associated with the construction of Elementary #42. 7.8 Consider Board approval of an Interlocal Governmental Agreement between Fort Bend County Municipal Utility District No. 57 and Katy Independent School District. 7.9 Consider Board approval for the installation of security fencing at multiple campuses. 7.10 Consider Board endorsement of a nominated individual for the Texas Association of School Boards (TASB) Director for Region 4, Positions A and C. 7.11 Consider Board approval of a delegate and alternate delegate to the 2018 Texas Association of School Boards (TASB) Delegate Assembly.
  7. 1:05:16 to 1:06:41 Items 8, 9, 2 & 10 8. Information Items 8.1 Quarterly Investment Report 8.2 Donated Items to Katy Independent School District 2. Closed Meeting - Closed Meeting will be held for the purposes authorized by the Texas Open Meetings Act, Texas Government Code Section 551.001 et seq. concerning any and all purposes permitted by the Act, including but not limited to the sections and purposes listed below. 2.1 Consultation with Board's attorney. (Texas Government Code 551.071: For the purpose of a private consultation with the Board's attorney on any or all subjects or matters authorized by law; and Texas Government Code 551.129: For the purpose of a private consultation with the Board's attorney by telephone conference call.) 2.2 Discuss personnel matters. (Texas Government Code 551.074: For the purpose of considering the appointment, employment, evaluation, reassignment, duties, discipline or dismissal of a public officer or employee or to hear complaints or charges against a public officer or employee.) 2.3 Discuss Board network security information. (Texas Government Code 551.089: for the purpose of deliberating security assessments or deployments relating to information resources technology; network security information as described by Section 2059.55(b); or the deployment, or specific occasions for implementation, of security personnel, critical infrastructure, or security devices.) 2.4 Discuss duties of Board and receive legal advice regarding Superintendent search. (Texas Government Code 551.074: For the purpose of considering the appointment, employment, evaluation, reassignment, duties, discipline or dismissal of a public officer or employee or to hear complaints or charges against a public officer or employee; Texas Government Code 551.071: For the purpose of a private consultation with the Board's attorney on any or all subjects or matters authorized by law; and Texas Government Code 551.129: For the purpose of a private consultation with the Board's attorney by telephone conference call.) 9. Future Meetings 9.1 Work Study Meeting - Monday, August 20, 2018 9.2 Regular Board Meeting - Monday, August 27, 2018 10. Adjournment

Full transcript

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Item 3

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The board will now reconvene an open meeting. Today is Monday, July 23, 2018, and the time is 6.41 p.m.

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Mr. Gregorski, will you verify that we are in compliance with the provisions of the Texas Open Meetings Act with regard to notice for this meeting?

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Madam President, I confirm we are in compliance with the provisions of the Texas Open Meeting Act in regard to the notice for this meeting tonight.

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On behalf of my colleagues, I welcome everyone to this evening's regular board meeting.

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Each board member received the agenda and documentation for this meeting Thursday, July 19th,

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and have had five days to study its contents and to receive clarification from administration.

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Additionally, the board met last week in a work-study meeting to receive information

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and recommendations from staff and administration on these agenda items.

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Board members were able to ask questions and receive answers

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and should be prepared with responses for action tonight.

Item 4

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First, we're going to start with our pledges of allegiance.

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We're going to have our scout come up.

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I pledge allegiance to the flag of the United States of America

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and to the republic for which it stands, one nation under God,

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Indivisible, with liberty and justice for all.

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Honor the Texas flag.

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I pledge allegiance to the state of Texas, one state under God, one and indivisible.

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Actually, if you could stay up and state your name and the badge that you're working on.

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My name is AJ Yocklin and I'm working on the communications and citizenship in the community.

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Thank you very much.

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Madam President, we have three more scouts in the back.

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Oh, okay. Yes, if you could stand up, please state your name and the badge that you're working on.

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Can you go up?

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Sure, please come up.

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Go ahead.

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I'm Sean Creighton. I'm working on the communications and citizenship in the community merit badges.

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I am Augusto Molina and I am working on the citizenship in the community merit badge.

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I am Joseph Troxler and I am working on the citizenship in the community merit badge.

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We're welcome, boys. Thank you for coming. Next, we have agenda item 5.1 and I will turn it over to Mr. Gregorski.

Item 5

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Thank you, Madam President. It gives me great pleasure to go ahead and introduce some of our new principals that we've hired this summer.

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This is the first opportunity we've had in this board meeting in July to recognize our new folks that have come on board.

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And I would just like to ask that those new principals, as I introduce you, if you would please stand up to be recognized.

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and if you have brought any special guests with you that you'd like to introduce, please so do so as well at that time.

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First up is Carrie Finneson, former principal of Raines High School in OAC and the new principal of Seven Lakes High School.

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Next up is Michelle Gaskamp, former assistant principal at Randolph Elementary and new principal of Randolph Elementary.

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Thank you so much, Michelle.

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show. Next one is Cheryl Glasser, former assistant principal at Morton Ranch Elementary, new principal

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of Rylander Elementary.

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Good evening, everyone, and thank you so much. I'm really enjoying my new leadership role. I'd like to introduce my family. This is my husband, Kevin. My daughter is Rachel, and Abby, who goes to Morton Ranch High School, Morton Ranch Junior High. And my parents, Dave and Barbara Durant.

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Thank you, Cheryl.

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Next up is Steve Gazzetta, former assistant or associate principal of Taylor High School,

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new principal of McMeans Junior High School.

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Thanks, Steve.

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Next up is Kristen Harper, former principal of Randolph Elementary,

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new principal of Seven Lakes Junior High.

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Thank you, Kristen.

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Next up is Anna Hinojosa, who comes to us as a former principal

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in another district and is the new principal of Wolfe Elementary.

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Good to meet you. Thank you. And our last new principal is Dr. Diego Linares who

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comes to us from a former school from another school district as a former

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school support officer and a high school principal and he is the new principal of

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Raines High School and OAC. Thank you, Diego. Welcome. Thank you, Mr. Gregorski, and welcome

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to all of you. Thank you for coming tonight to be recognized. Next, we have a reports budget update.

Item 6.1

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Mr. Smith.

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Good evening, President Doyle and Mr. Gregorski and board.

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This is month seven of this budget series.

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It's the big month, and I call it rounding third base there towards getting this budget developed or adopted next month.

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Just to give you an overview of what we're going to talk about tonight, I'm going to go over the assumptions and some state impact.

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Ms. Butterfield is going to go over our largest budgeted fund, our general fund, and the components that you see there.

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Ms. Feitinger is going to come up and go over our two other budgeted funds and the summary of all three funds that we have.

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and then I'm going to come back and talk about a couple of future considerations

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and what we're what we're going to be doing for the rest of between now and

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adoption in August again just to remind you we're looking at an enrollment

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increase of 2.9 percent that's just over 2,000 students taxable value increase of

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2.4 percent that would be just a 1 billion dollars in mostly new properties

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You see the porridge there. That is an estimate still. It'll be later this week.

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This is the week that we will get certified values, not certified estimates.

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We will get certified values from Harris and Waller County this week.

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We expect maybe next week or maybe even the following week to get those from Harris County there a couple of weeks later.

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And when Harris certifies, they're going to only certify 90 percent of the roll, not 100.

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So we're still working off of the certified estimates, and that is a variable that could change between now and next month.

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Staff growth, based on our enrollment projection and the fact that we're opening Campbell Elementary, you see our staff growth.

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And this budget that you have does have the 2% that was provided by this board a couple of months ago to our staff,

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and the 1% one-time to be delivered in December. Average new hire salary that we

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built the budget is with or those 283 positions or the majority of those 283

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positions was built on that average teacher salary of 55.5. As there's no

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secret, Katy ISD's long since been a growing district. There's the last 15

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years the orange line is our enrollment growth which is pretty substantial going

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going back from 20,000, I'm sorry, just under 40,000 students to almost 80,000.

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We'll hit 80,000 in this next budget, budget school year.

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And then our property value growth at just under $10 billion to just under $40 billion over that same amount of time.

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New students, new houses, new businesses that support houses.

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To set the stage from a state funding standpoint, I find this interesting because this is so important

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that I'm going to talk to you about that the Texas Education Agency is going to

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require through the school's first financial report card to report on

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formally they're in the process of developing a template for school

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districts that must cover this with their boards within 90 days of adoption

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of their budget and so I'm covering it I've been covering it with you guys for

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years but I'm going to cover it again because I think it's so important if

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you'll follow that purple line in the 13-14 school year we got appraised

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values of twenty four point three billion dollars this board levied a tax

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on that and we use that to as part of our budget the following year that same

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value is gonna is used in the state funding formulas so there's a year lag

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so every one of these years and I'm not going to talk about all of them you see

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it's the same thing it's the year lag so this time last year when we got our

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certified values our roles increase by six percent okay so in the 1819 school

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year the one that the budgeted numbers that you'll be seeing tonight shows that

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six percent there on the right that we're using however our property values

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are our certified estimate is growing at 2.4 percent that change the two arrows

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there represents the one-year property value lag and can also be referred to in

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In this case, the funding cliff, that 2.4% increase there on the left is our increase in our values,

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while the 6% increase in the comptroller's property value is being used to determine state funding.

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I know that's a lot, and I'm going to try to explain that here with real numbers.

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These are real numbers straight out of our summary finances or the tool that we use to calculate our state funds.

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And I've got three years three columns here. This column is the 17-18 school year. Those are pretty real

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Those are in fact, we know what those numbers are. Those are all student driven. So those are in the bank, so to speak

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Because the year's over

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These are estimates in this column for the 18-19 school year based off that 2.9 percent growth in enrollment

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But those three just to get down to the cut to the chase

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The difference between those is a 17.9

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million dollar increase in the cost of providing a basic education in our school district. That's

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because of student growth. So in theory, it's costing us 17.9 million more dollars to educate

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those new 2.9 percent more students. And what we're using here, as you can see on the far right,

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is the number of students times the basic allotment. You've heard me talk about that a lot.

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and those are what generate the numbers there that you see to the left. So

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numbers of students in these categories times the basic allotment in this case

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for a regular instructional program the students that fall into that generate

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11.2 million more dollars all the way down to the different types of students

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that that the state differentiates and there's that 17.9 million dollars

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highlighted in that row local fund assignment this is where that that six

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percent sketchiness the local taxpayers are required to pay again the 16 17 18

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school year three hundred fifty three point four million dollars and if you

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move and that's the column on the left if you move over one that 378 million

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that number jumps by $25 million to $378.4 million.

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That's a $25 million increase to fund education that is landing on me

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and on you as the board and on all the patrons, the taxpayers, more.

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And that's because of the 6% value growth that we had the year before.

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What does that do?

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Well, if you take the two rows up, this row minus this row, the difference is the state share.

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And you can see the state share of funding public education in KDISD is going to drop $7.1 million.

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You heard me right.

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It's going to drop $7.1 million.

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Now, we do, and that's the rotten apples that I've been talking about for seven months.

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and that our tax revenue or that we anticipate is going to increase by 2.6

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percent or about 8.8 I'm sorry 2.4 percent or about 8.8 million dollars but

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the net effect and what's causing this budget to be very a very arduous budget

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is there's only 1.7 million more dollars to educate 2.9 percent more students or

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17.9 million more in funding more in expense according to the funding

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formulas that's what's causing some of the problems and that's that your lag

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right before your eyes and that's that rotten apple that I've been talking

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about I've highlighted the basic allotment there on the right you've

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asked you've heard me say before one of the things that would there's many

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things that could help school districts across the state this in my opinion is

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the best that could help us is that basic allotment that's what is written

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under chapter 41 and chapter 42 of the education code at $55,140 currently.

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If that number were tied to an index that were tied to property value increases statewide,

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we would be okay in things when it comes to inflation.

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But as long as $5,140 is a static number or stays the same, districts, no matter where they're from in Texas,

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have trouble finding additional funds for inflationary costs.

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growth student growth not inflation so I won't spend a lot of time on this slide

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but basically it says that that school districts value our value funding is

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reduced by property value growth and the excess is used at the state level for

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things other in some cases other than education one of the things in this

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budget that I think is important to note is this time last year House bill at

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1081 was passed and that was a big win for KDISD or a fast growth any fast

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growth school district because it was going to increase the amount that school

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districts get for students in new schools and of course we're opening new

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schools and there was an expense associated with opening new schools that

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was going to go from 250 to a thousand dollars or three times as much however

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they only allotted twenty three point seven five million dollars and so this

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This time last year, I used this same slide and said, warning, I don't think it's going to be $1,000.

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There's not enough money to go around.

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Shortly thereafter, the estimate based on the ask or based on all the new students in new schools across the state,

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there was only $365 to go around per student.

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So not quite $1,000, but better than $250.

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But just earlier this month, we found out that the current estimate is down to $215.

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$15 so what's that to Katie ISD that's a two point seven million dollar loss in the 1718 school year and a

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1.4 million dollar loss in the monies in the budget that you're seeing for next year just because we didn't fund that

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To that thousand dollar level again. We've never had it

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Never got it

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But it is disheartening because of the fast growth school district those funds really help. I call it the

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spoonful of sugar that helps the medicine go down of opening new schools all right general

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fund I'm going to turn it over to miss Butterfield thank you Chris so it was begin with tax revenues

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here on this slide and this relates to that porridge that Chris was talking about its tax

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revenues are relational to the property values you see the 7.7 million and the

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thirteen and a half and the 12 million the highlights in yellow these are one

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time revenues in this budget for 2018-19 we won't have them again next year

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remember these are the section 2608 and then the additional third 12 is from the

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the comp ed funding as a results of Harvey, impact of Harvey.

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You see here also the state TRS contribution, 36.9.

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You'll see that again as an expenditure number when we get into the payroll pieces

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and federal revenues there at 12.7.

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We continue to be a labor-intensive industry with 88% of our budget involved in salary and benefits

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and then the remainder of the budget in non-payroll expenditures.

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So payroll involves the funding for salaries of current staff,

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the addition of new positions, those 283 units,

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and then the salary increases there delineated at the 2% and then the 1% lump sum.

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Aside from salary, you have non-salary payroll,

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which is comprised of other compensation and benefits and again that TRS on

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behalf as a expenditure line item other compensation is things like stipends and

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substitutes and overtime supplemental payroll benefits or are more of our

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health insurance and the TRS care local contribution Medicare all those

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variables. Non-payroll then is the remainder of the budget with campus and

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department allocations at 68.3 and then the non-allocations at 13.8.

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Non-allocations are everything that's not in a baseline so the special projects,

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the detention tutorial library rotation, all of those kinds of items that we

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build into our budget you see no money on the technology retrofit cycle that's in case there

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were to be a move in the property values and we would have funding that we could relieve some bond

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funds there like we have done in some prior years if you put it all together we have revenues at

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714 million expenditures at 701 transfers out this involves that 7.7 the two pennies

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that are going from general operating fund to the debt service fund

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as a transfer out of GOF and a transfer into debt service.

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This is also the $3 million in BABS that is transferred over to the debt service.

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It's a pass-through.

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It comes from the government into the operating account,

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gets moved over to the debt service account.

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And then additionally, the transfer out for the health insurance fund,

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for our self-funded health insurance fund.

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Okay, looking at the food service fund, this is very similar to what you saw last month.

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Again, local revenues represent payments from parents for student meals, interest, and a

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little bit of vending revenue.

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We get a very small amount from the state.

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Federal reimbursements are made up of reimbursements for free and reduced meals, also the value

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federal commodities we receive. Unlike the general fund expenditures are

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primarily in supplies and materials which is food and disposable items to

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serve that food. Payroll cost comes in right under that with includes the raises

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and the one one time one percent supplement as well as new positions for

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Campbell Elementary School. There are small amounts there for purchase and

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contracted services for repairs and a little bit for other operating costs. As

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As we stated last month, we do anticipate the beginning fund balance to be a little bit lower

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when we get finished with the 2017-18 school year.

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It's primarily due to some adjustments to the revenue that we're going to recognize

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due to the increased eligibility for free and reduced meals after Harvey.

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Now moving on to the debt service fund, first we see here is a graph that represents the growth

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in property value as it relates to the growth in the bonds that we've issued.

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This schedule indicates the revenue so that our estimated tax collections are at 37 cents

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for the interest in seeking fund, anticipated interest earnings, and additional state aid

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for the increased homestead exemption that happened a few years ago.

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You'll also see that the instructional facilities allotment

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and existing debt allotment are shown there with zeros,

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and that is because we no longer receive these payments from the state due to our growth

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in our local property values.

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Expenditures represent our principal and interest requirements for 18-19 and include a budgeted $5 million defeezance of additional principal.

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Transfers, as Sherri just talked about a little bit ago, include the transfer back from the general fund for the two-cent tax swap with the general fund under section 26.08 .

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Also, the BABs transfer for the federal subsidy that comes into the general fund is then transferred to the debt service fund.

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And finally, interest earnings are earned in the capital projects fund where the bond proceeds are originally deposited and that money is transferred back to the debt service fund to help make the debt payments.

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So to summarize all of those funds, there's the general fund, as Sherry mentioned earlier, the food service, which is our budgeted special revenue fund, and debt service, and then the total for all three of those budgeted funds.

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Thank you, Sherry and Ann. Appreciate it.

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Future considerations, enrollment growth.

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We're going to be holding our breath and biting our fingernails,

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or I'll be biting my fingernails when we open school

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and looking at enrollment numbers and see how we met.

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Historically, we've done an extremely good history

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of budgeting pretty darn close to the actual students that show up.

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and we're also going to be working next month well I guess in September on on

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the next year's enrollment anticipated enrollment increases economic

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uncertainty is obviously a consideration as we fine-tune this budget property

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value growth again the porridge we're going to find out in about 10 days

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whether that was hot and a hot estimate a cold estimate or a just-right

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estimate. Property value impact to the state funding is something that we are

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going to continue to work with as we finish this budget and work towards the

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next budget. In school finance we're going to have a legislative session that

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begins in January of 2019. We got good information or we heard good

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information from the comptroller's office about additional revenues. That's

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that's a positive sign but but only time will tell when we see what might be in

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short store for us or not as that session begins in January in the

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meantime we're going to be we always closely monitor expenditures we'll be

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doing that through the rest of the budget that were of the 1718 budget and

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we're going to be looking at expenditures already moving forward

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We're opening elementary school 42 and junior high 16 a year from now.

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Those will be on the plans.

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And so how does that look?

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The 19-20 school year, we showed this last month, it looks like a pretty big deficit, $23.1 million.

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That's a deficit.

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But that assumes that everything that is subject to inflation, such as employee salaries or health insurance, is inflated.

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okay meaning that's why it's that bad and it doesn't and it says this as we

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would as things are right now so if we get additional funds through the through

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the state funding formulas that's not going to be real we've seen this every

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year that I've been the CFO we've look out and that year after this one looks

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grim it's because it's conservative and management and the board does a good job

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of working with what they anticipate to get as we move forward so I don't expect

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that kind of deficit but if everything were just as is now and projected

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forward assuming there was things that there's inflationary it would be bad but

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we will manage between now and then 2018-19 budget calendar we're there on

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Monday July the 23rd we're gonna we're scheduled to work a day a full day this

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week and some next week to get a publication that we must run in the

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paper on August the 2nd. We'll have a public hearing in this room. I think y'all

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read that into the minutes last month or this statement into the minutes last

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month. So on August the 20th will be the last time, I hope for a while, that you

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have to hear from me and that we can have this budget prepared enough to be

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adopted. It's a prepared enough to be adopted now because we are definitely

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that far along we're just fine making fine tunes we received information from

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TEA just last week that we worked through these numbers just today so

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we're always working on it but unless unless that porridge is cold we expect

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there to be very very few changes between now and August and I appreciate

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your time very much thank you board do we have any questions mr. Scott mr.

George Scott not human verified

Mr. Smith, thank you very much for the help you and your team have given me.

George Scott not human verified

As you know and your team is aware, I am working on producing information that gets beyond Tier 1, Tier 2,

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copper pennies, golden pennies, hypothetical pennies,

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and brings it down to something that the average person can understand relative to what's happening in state finance.

George Scott not human verified

So I'd like to ask you a series of questions tonight that we've discussed personally, but it will keep me from asking you this when we get to the public hearing and when I try to outline tables that I have been working on.

George Scott not human verified

So as we look at state finance, question number one is, we get multiple aid from the state of Texas, State Foundation and Teacher Retirement Services.

Unknown speaker not human verified

Yes, sir.

George Scott not human verified

Is it true or false, correct or not correct, that when we're trying to establish an apples-to-apples comparison

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as to what has happened in state finance to educate children in the state of Texas,

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that the state aid component that we really need to stay focused on is the state foundation dollar numbers?

Unknown speaker not human verified

Yes, sir.

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teacher retirement system is sort of a

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important but it is a separate choo-choo

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train running on a parallel track

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yes sir by and large yes sir okay so if

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we subtract to maintain apples to apples

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historical comparison if we take TRS

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money out of what people would see in

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the financial audit in revenue we also

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have to take it out of the expenditure in the general fund the same amount yes

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and I give a tremendous salute to your team for helping me understand that so

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if my goal as a board member is to try to go back to say 2008 2009 and go

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through 2018 19 1920 and ask a very simple fundamental question what if what

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What if the state of Texas were funding public education at a level it had historically done in the six years prior to the last six years?

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Then we would look at general fund expenditures.

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We would look at official PEMS data.

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And we would look at the state foundation money.

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That's correct, right?

Unknown speaker not human verified

Yes, sir.

Unknown speaker not human verified

Yes, sir.

George Scott not human verified

All right.

George Scott not human verified

Now, the last two years, thanks to Dr. Hint and you, and Bill may be the only board member in the history of humanity who ever ran a school board.

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campaign on golden pennies so I'm going to include him in this okay but the

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reality is that if we look at trying to develop an apples-to-apples comparison

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to evaluate the state what we have to do is we have to back out the revenue from

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the tax swap that we did because of the national emergency the federal emergency

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correct? Yes sir. We did that last year and we're going to do it again this year. Yes sir. So if I'm

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producing tables and Captain Budget or Captain Kilowatt or somebody out there would be a legacy,

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a better legacy, wants to question that, then what they need to understand is that we are working

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very methodically to create an apples to apples comparison that looks from 2008-2009 to 2019-20.

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And so if they look at something and don't understand it and start quoting what they do not understand,

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they have to take into consideration the adjustments that we are making, correct?

Unknown speaker not human verified

Yes, sir.

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So is it a fundamentally fair analytical process to say that between 2008-9 and 2012-13,

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the state had a historical record of either funding on a per student basis or a percent of general fund expenditure,

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a certain amount of that general fund expenditure.

Unknown speaker not human verified

Yes, sir.

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Minus TRS income, minus TRS expenditure, minus the tax swap that we've done for last year and the impending year.

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So when I produce that number, the methodology that I will be using to communicate is something that an actual certified public accountant, an actual budget team, someone that actually understands public finance will have reviewed.

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Is that correct?

Unknown speaker not human verified

Yes, sir.

George Scott not human verified

All right.

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So when we look at that number, we're going to be able to assert that if the state of Texas had funded at a constant level or a historical level,

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13, 14, 14, 15, 15, 16, 16, 17, 17, 18, 18, 19, 19, 20, that that would be the impact to the property taxpayers, to the taxpayers of KDISD.

George Scott not human verified

That's fair?

George Scott not human verified

Yes, sir.

George Scott not human verified

Okay.

George Scott not human verified

I'm glad to get these questions out of the way today because when we get to the budget hearing, we're going to present the bottom line.

George Scott not human verified

and I don't want to have to spend time with this board or with the public or

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with people who look at budget numbers and don't know the hell what they're

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looking at to explain it I'm on page with you right I think so yes the

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analysis the analytical process that I am using has been vetted by our chief

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financial officer and our financial experts you would look me in the face

George Scott not human verified

You've done it before so why wouldn't you do it tonight? You would look me in the face and say Mr.

George Scott not human verified

Scott you're wrong. You're totally wrong. You've got your fall off track. You would do that tonight if I were wrong, correct?

Unknown speaker not human verified

Yes, sir

George Scott not human verified

Stay tuned

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Anyone else madam president miss Fox, mr. Smith on the page five with the purple and blue and yellow lines. Yes, sir. Yes, please

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We could go to that

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I'm going to get there faster than I've done in the past because I've learned how to do it.

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I think.

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Yes, there we go.

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So that's just good enough there.

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The change in value there, 10%, 17.8%, 15%, it just seems to really decrease.

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2.4% is a drastic shift downward.

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And what do you attribute that to?

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Is it does that have to do with the Harvey and the reduced property values of the homes and the and the prop of the?

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I won't know for another couple of weeks

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but I am

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No, I'm not a betting man because I'm too conservative, but if I had to bet a

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Order of french fries. I would bet that is a Harvey effect

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There are still tremendous amount of new value to add it to our roles

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but I think that is the Harvey effect that it has that number stagnant and

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it's just so much lower than we've seen yet we still continue to grow because I

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look at that and think but we're still building new schools people are still

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moving here KDSD is still extremely a popular school district for families

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with children but the numbers decreased and I just was curious if that had to do

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with the decreased property values some some of it does not all of it but am i missing we still

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grew a billion dollars or estimate to grow a billion dollars in value it's just a lesser

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percent than we have in the past so we're still seeing property value growth drive around and see

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it like crazy uh it's just not as much growth from a dollar standpoint if we in the percentage

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standpoint as we've seen historically I think over the last 10 years we've

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averaged nine or nine point nine percent average right and so that number really

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surprised me and there's still a great number of businesses who find our area

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attractive and they're coming in and they're of course not not adding

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children so the two point nine percent enrollment growth and the two point four

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percent value growth is was the thing that caught my eye and I just that's

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That's what I had the question about.

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Thank you very much.

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Thank you, Madam President.

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Is there anyone else?

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Madam President, I have a couple of questions.

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Yes, Ms. Champagne.

Unknown speaker not human verified

Okay, Mr. Smith, thank you very much for the presentation.

Unknown speaker not human verified

I know this had to be a lot of work for you and your staff.

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But on page six, I'm just curious about a couple of things.

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On the high school allotment, I educated myself to find out what that was.

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And I was wondering if you would please share what that is.

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and can you tell us why that went from 6.2 to 0.1?

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Yeah, let me get to page 6.

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I'm sorry.

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I went the wrong direction.

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I was too busy listening to you, and I went the wrong directions.

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On this page?

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Yeah.

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Yes.

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High school allotment?

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Yes.

Unknown speaker not human verified

I know I've read about it.

Unknown speaker not human verified

I know what it is, but I thought it would be interesting for everyone to find out what it is.

Unknown speaker not human verified

We expect, that's the numbers, I think that happened in the 2000 and I'm gonna guess 9 or for sure 7 legislative session where they set aside monies to spend on programs that KDISD was already doing at that time.

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They just separated from a funding standpoint and these are the number of students that are in our high schools.

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It's based off of the average daily attendance of students in our eight high schools plus

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Raines NOAC.

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But why is the, why has that number from high school allotment gone from 6.2 to 0.1?

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Because there's, it's not, it's the change.

Unknown speaker not human verified

So it's increased by $100,000 according to this.

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Now I think that's probably more than that.

Unknown speaker not human verified

It's probably some rounding that's not showing it. It's probably around a two hundred thousand dollar increase

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that's number of

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Additional a da we're going to have in our high school from one year to the next so it's part of that two point nine percent

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increase in students

Unknown speaker not human verified

Okay, and then I got you and then the other thing is on on the nifa

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Why has that gone down?

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Because this year in the 17-18 school year we opened Pato High School, Stockdick Junior High,

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Bryan Elementary, three schools and we had year two of Bethke Elementary and Jenks Elementary.

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So those were the three new schools we had we received $250 or $215 per ADA for all the

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students of average daily attendance in those three schools and then the two

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that we opened the prior year we received the incremental difference so

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if Bethke grew by a hundred students then we received two hundred

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fifteen dollars times those hundred student growth for those in that are in

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their second year and so next year we're only going to get the incremental growth

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in Pato and Stockdick and in Bryant just the incremental growth and then Campbell

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Elementary only so we're not having as many students in our new schools that

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are eligible for these funds and then one last question thank you so much for

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that on page 10 I'm just curious why the federal funding went down okay and one

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One other thing I'll say before I leave that thought on the NIFA, because I can tell you that in the year we just completed, we think we had 3,454 new students in those new campuses.

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3,454.

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Next year, with the incremental gain in the only one campus, we only expect 1,700 students.

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So it's just less students that are eligible.

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Okay, on page?

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I think it's page 10.

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Yes. The federal revenue went from 20.1 to 12.7.

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That is because we, in the 17-18 school year, we budgeted a double up of our SHARS revenue.

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SHARS is an acronym for something that I can't grab right now,

Unknown speaker not human verified

but it is basically a reimbursement for the Medicaid expenses that we provide

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throughout all of our work every day and we asked for a reimbursement for some of

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those expenses and from an accounting move only we normally those funds drag

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in we thought we think we've hurried up the the claim process and if we have

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we're going to be able to get that revenue twice in this 1718 budget if we

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can't it's going to happen in 1819 budget but there's going to be a year where we're account

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for that twice and you're seeing that accounted for in the 1718 revenue number all right thank you

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are there any other questions

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okay thank you again mr smith next we'll move on to report 6.2 healthcare plan update mr nauman

Item 6.2

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Good evening, Mr. Gregorski, President Doyle, Board of Trustees.

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Here this evening to present to you the update on the health plan and what we're looking forward to in 2019.

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And this is a follow-up from my meeting with you to discuss this topic this past April.

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What are we going to talk about this evening?

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First off, we're going to look at the current plan year of 2018, where we stand for an operating result,

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and visit back to what we projected to be the plan year operating gain loss in

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2018 we're going to review the preliminary Arthur J Gallagher

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projection for plan year 2019 we're going to look at strategies that we want

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to put in place for plan year 2019 and look at the projection with those

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strategies for plan year 2019 and look at what our projected monthly premiums

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will be for our staff for the plan in this time last year we we did a

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projection for plan year 2018 and it showed an operating loss of 2.7 million

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dollars as of June 13th through numbers through May we're 1.8 million dollars to

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the good however I would put a little footnote to that that the summer months

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is when everybody decides to get everything fixed and repaired so we kind

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of have a good lead into the summer months so we'll be able to look a little

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bit closer in the next quarter as to really where the plan is coming in

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We estimate in the coming year with the growth of the units expected based on current activities of about 68% of our staff participating in the plan,

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we will have 7,317 participants in the plan.

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We expect funding to be at $60.95 million.

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Again, our program costs, which are pharmacy, medical care, and administrative costs, to be at $64.78 million with a deficit of $3.83 million.

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Now, what this means is there's no plan design changes, no deductibles, no increase in deductibles, out-of-pocket maximums, or co-pays.

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And this assumes no premium increases.

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So this is if we just carried everything forward like we are today.

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Let's look at some strategies for 2019 with that deficit.

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We're going to look at the elimination of the health fund and grandfather the existing

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balances that employees have in those health funds.

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This is district funded money.

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In place of that, we're going to implement a premium support payment that will replace

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the HRA in an effort to support our employees with lower premiums on a

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monthly basis. This will allow our employees to make economic decisions

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based on their health care spend and be more consumer driven friendly to the

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plan and to them as well. The premium support payments will be evaluated

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annually on the results of the health plan whether we've had a gain or a loss.

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This plan will empower our staff to control their own spend and be more economic shoppers of that

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spend. We're also going to strengthen our step therapy program within the RX programming and

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step therapy is a is a fancy word to say we're going to manage the distribution of drugs to

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to closer amounts to the need with our pharmacy company

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to make sure that our employees are getting the right amount of drugs

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and the quality that they need as well.

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There will be no compromise on that.

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We are now, since moving with,

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we are part of the Texas School District Collaborative,

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which is about seven school districts that are self-insured,

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and we are seeing increased rebate activities with our contract

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with Express Scripts, which helps offset some of those plan expenses.

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Prescription management program with Save On for specialty medications.

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Specialty meds is the biggest cost driver in the pharmacy world today.

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You see them advertised on TV.

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Employees are being bombarded with that.

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So we've implemented a management program where our Express Scripts will reach out to those individuals

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and help guide them through those specialty meds and how they work one of

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the major cost savers that we've been implemented this year is we exited the

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THC P interlocal agreement with Houston ISD and Aldine ISD and we have been able

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to reduce our administrative costs to the plan significantly because of that

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and we have brought everything back in-house to Katie so that we can have

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have more control over our destiny and also lastly we'll be looking at an

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implementing a dependent verification program for open and ongoing enrollment

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and what that is is you must prove under our section 125 plan that you're

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eligible for our benefits so person will no longer be able to bring someone in

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the plan that is not eligible for this program.

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As I mentioned a few slides earlier, we have a projected deficit of $3.83 million.

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The impact of those strategies that I mentioned will bring back another $2.3 million, leaving

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a net projected deficit of $1.5 million.

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and with the footnote this will be covered by a general fund transfer

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here's the really good news let's talk about the premium monthly the premiums

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for employees you will see in this slide all of our tiers we have four for four

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plans and this is our existing premiums by month for those plans as I've

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mentioned to you earlier in the past I've used the term medical trend we must

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stay up with medical trend or inflation to our plan and in 2019 this is the

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dollar amount that those premiums will be increasing by okay

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The proposed premiums for 2019 are exhibited in this slide.

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So you have your 18 plus your developed or medical trend developed plan numbers.

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Now, as I mentioned a few moments ago, we're going to adjust those premiums.

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So the employees will actually, this will be their reduction.

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And I thought you would draw your attention to our most basic plan, the employee only,

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would be $95.

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But with our adjustment to the premiums, the premium support program, the monthly premium

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for employees will go to $72.

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So we'll be able to reduce the premiums charged to the employees.

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What changes have been made?

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That's it.

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That's it.

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Okay.

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I got it.

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You got it?

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Okay.

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I'm sorry if I moved too fast.

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So the last group block there is all four plans

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and what the employees will be charged for their premiums.

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Also, what's very important to note is there will be no increases in deductibles,

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no increases in out-of-pocket maximums, copays, or design changes,

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Planned doctors or anything like that.

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So the house will remain the same.

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And this exhibit just shows you what employees will be gaining per month on their premiums.

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And I would entertain questions if you have them at this time.

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Do we have any questions?

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Ms. Gessler.

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So, when you talked about getting rid of the health savings account and making these premium

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payments, you said it would give the employees more control over their consumer choices.

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Can you talk a little bit more about that?

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Sure.

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Let me clarify.

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It's not a health savings account.

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It's an HRA account.

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These are monies that the district gives the employee.

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And what you will see is employees over time, if they don't use that money, it builds up over time.

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So the thought process is, well, let's give our employees that money today so that they can make those wise decisions to get things done.

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They're well woman exams or well man exams so that they can take those steps and utilize those dollars today rather than wait for some catastrophic event at some later date.

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So you're giving it to them today in the form of a reduced premium, so more money in their pocket.

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it in the the is its health plans change we have to become better consumers of

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our health spend to help reduce cost thank you yes sir

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miss champagne did you raise your hand okay miss champagne and then I'll go to

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mr. Scott okay just thank you for the presentation I have a couple of things

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I'd like to say and these are more just statements rather than questions but I

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I had reviewed this, and I see that if you look at the A, the consumer basic unlimited for the employee plus family is $652.

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And then you add the $23, but then right now, which would be $675, but they're going to actually only spend $622 because of the adjusted rate.

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But I just wanted to blanketly say I know a lot of people that work in the district and some a lot of them are paras and they don't make that much money and there's they're spending if they're involved in this half of their income on the health care and a lot of people are telling me to that they can't the deductibles are so high that they usually they spend a lot of money on it and then don't really get to.

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use their insurance much so i know that you spend a lot of time trying to make the best

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deals for the employees but i just wanted to say that i don't know if anything can be done

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about that in the future um let me try to put an analogy together uh for you um three years

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ago when we went to the grocery store to buy a gallon of milk it's not the same price as that

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gallon of milk today inflation inflation inflation it is very we are very

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fortunate here in Katy because we have the support of the board to give a

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quality health plan to our employees if you look at what's going on in Austin

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these are the TRS and the premiums they're seeing five and ten percent

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increases and ten percent increases in deductibles so health care is something

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that is going up is going up is going up and it's we try to manage it the best we

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can so thank you I know that there's I know that this is a national problem so

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I don't expect you know us to fix the national problem I just wanted to make

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make that statement. But I appreciate all that you do. Thank you so much. Mr. Scott.

George Scott not human verified

These are genuine questions because I really don't understand. On the HRAs,

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first, can you give me sort of a stratification of who has in the four

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plans the the primary dollar distribution of the balance? In effect, is

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Is that for consumer basic, consumer limited, consumer basic, consumer plus, consumer plus choice?

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Who has most of that balance that the district has contributed?

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Primarily it would be in your consumer plus choice.

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Consumer plus choice.

George Scott not human verified

Your most rich plan, I guess you would call it, the gold plan.

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So do we have a contractual?

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does the district have a contractual obligation because it chose to put money into a fund

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that the employee chose not to use?

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Do we have a contractual obligation to maintain those funds in that?

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And what's the dollar amount of those funds?

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To answer your question, typically the way an HRA works is you make that commitment

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in those funds if the HRA and the HRA is really a sort of a dinosaur that's going

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away with a lot of health plans and that's a trailer that balance begins to

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fall over time are what we were planning to do here is grandfather those balances

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that employees have so if for instance Lance Salmon has $100 in his account and

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in in 20 and Lance Salmon doesn't use it until February of 2019 that hundred

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dollars will still be there. I understand that but would we agree that there is a

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and you don't have to agree I'm just asking would we agree there is a

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fundamental difference between what a government puts into an escrow account

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and what an employee puts into a de facto escrow. Is there a legal difference

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in that? Yes there is because. So typically you can have a typical policy the

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The question I'm asking is, is there a contractual legal obligation to maintain those funds,

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and how much funds are in the HRA that we're grandfathering?

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What's the dollar amount of the grandfathering?

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To answer your question, we need to continue those based on the Section 125 plans that fall under.

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the the estimate that looking forward could be in 2019 a balance for all

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across all plans would be 1.8 so maybe two so there's 1.8 million there the

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majority of which is in the top tier consumer plus choice yes and we do not

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have a contractual obligation to use that money when but when employees

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voluntarily chose not to use it? Correct. Okay. Correct. I'm just taking this linear.

George Scott not human verified

Yes, yes, sir. I'm making sure I understood your question. I just want to understand.

George Scott not human verified

All right. I'm having difficulty collating page, excuse me, page 8 with page 9.

George Scott not human verified

Could you walk me through page 8 and page 9 again? Because what I see on page

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8 is a proposed monthly dollar increase which seems to be fairly significant but

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when I get to page 9 I see something different and I'm just trying to figure

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out what am I missing. Okay let me explain to you as I mentioned earlier

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our medical trend for the last two years we have not developed or increased

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premiums right we must we must do that now our medical trend was 3% this past

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year right so we have to we have to grow that number we can't have to catch up so

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you add last year's plus the growth to get your new premiums your premium

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dollar that we would charge if we didn't have the premium adjustment so we're

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taking the premium adjustment off that developed amount to lower employees

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premiums and give them some more give that money to them to spend as they see

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fit regarding their health care did that answer your question basically so I'll

George Scott not human verified

have my final set of questions is this how many individual employees by strata

George Scott not human verified

strata I mean basic limited basic choice plus limited plus choice how many

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different employees per that strata do we have who have balances in their HRA

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what is the dollar amount in each strata and what is the average amount in each

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strata I would kind of like to look at that before I vote well this is a report

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at this time and I can I can give you that information but I would hate to

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spec I wouldn't expect you to do it off the top of your head that would be pure

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speculation but i would like to see that number and by asking for that number that doesn't mean

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that i'm taking a position on anything but i really do feel an obligation when i see

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when i see the phrase grandfather i never met my grandfather but i would kind of like to meet this

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grandfather i would like to know what this grandfather means sure that's all that's it

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it. Mr. Scott, I'll add to that

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that I'll ask Mr. Smith and Mr. Nelman to get those

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figures and we'll get them to the entire board. Great. Thank you.

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Madam President. Ms. Fox.

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So my computer just reset itself for whatever reason and it's probably

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user error or something. But I have the

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questions written down here. So it appears that the numbers will

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So our

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employees will get a little bit of a better deal next year for their premiums

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how will you communicate that to our employees that all the changes how this

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benefits them and that they can't possibly expect it to go down every year

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because mine at home are going up every year prior to open enrollment every year

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we send out a series of communications to staff who are on the plan we

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publicize to all participants and all employees to let them know what is

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going on. We'll probably do a series of minimum of two, possibly three series of

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communications. It will be publicized on our website and through the open

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enrollment website as to the changes. We do it every year like here's what we

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have now, here are the expected changes and communicate that accordingly like we

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do annually on an ongoing basis.

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And the support premiums, if I'm not looking at it now that you've talked about, we'll

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continue to have that going forward so we'll be able to keep our premiums as competitive

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as possible going forward.

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Is that what you're rather than the HRA?

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That is what we're proposing.

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And let me be very clear.

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The proposed premium adjustment is based on the health of the plan.

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So we will look at that on an annual basis.

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Based on how many people enroll and how many people actually use the services, the claims you have.

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Our dollar impact, pharmacy cost, what's going on in the market.

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But we've taken some significant steps this year to try to keep things at bay with reducing a lot of administrative costs to the plan.

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Having watched this for many, many years, this is very impressive that we're able to give some savings to our people.

Unknown speaker not human verified

The costs are skyrocketing for everyone, which, you know, my husband's company and ours, it's just, you're right, Mrs. Champagne, throughout the nation, this is absolutely way too much money to spend on health care.

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But for us to be able to give our employees even a small reduction, $30, reduction is impressive.

Unknown speaker not human verified

Thank you for the renewed for the new ideas and for bringing, you know, figuring out that we have money that's sitting waiting.

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And you're right. People will hold on to it waiting for a need instead of actually go and get the preventive care or the early care for things.

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So I think this is a great move. I appreciate the report.

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It's a little complicated. And as I'm understanding by other people's questions,

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I think this is a good move and I think our employees will appreciate it.

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And I was at a TASB conference this, an annual meeting this past weekend, speaking with other

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school board members from around the state.

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Not very many are self-funded the way we are and they just were asking lots of questions

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about how do you do that?

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How do you keep your cost?

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And you know, a lot of questions about that.

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that so we continue to be an industry leader and and oh I did have one more

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question room backing out of the thing with HISD and Aldine at the time we did

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that that was going to be a cost savings everybody come together share some of

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the cost but over time that changed 15 years ago 13 years ago when I was that

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that was starting Teddy was a much smaller we were much smaller district

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and we needed to be a part of the wagon so to speak so that we could garnish

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those those savings so it's time as we have grown we're now able to leverage

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our size in the marketplace and be able to determine our own needs and what was

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going on with our district and in quite frankly as I was telling a group one

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one time there's a reason we have independent in our title and our name

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correct and so it gives us the opportunity to be independent to be

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creative and look at things in a different light that's you answered the

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question as we grow we're able to take care of ourselves and thank you so much

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for your reports always any other questions thank you so much

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Yes, ma'am. All right board. I will turn your attention to agenda item number seven

Consent Agenda

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consent agenda

George Scott not human verified

Madam excuse me. Go ahead George

George Scott not human verified

Madam president, I would move that the Board of Trustees approves the consent agenda is recommended in item 7.1 through 7.11

George Scott not human verified

second I

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Have a motion made by mr. Scott a second by mr.

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Mr. Lacy, that the Board of Trustees approves the consent agenda as recommended in items 7.1 through 7.11.

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We will now proceed to vote.

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All those in favor, please raise your right hand.

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Aye.

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All those opposed?

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Motion passes 6-0.

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I'd like to point out that Ms. Vann is out today on vacation.

Items 8, 9, 2 & 10

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Next on the agenda is information items.

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We have item 8.1 our quarterly investment report for you to review as well as 8.2 donated items to the Katy

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Independent School District

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Next we have our future meetings our work-study meeting will be Monday August 20th 2018

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Regular meeting will be Monday August 27th

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2018

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This will be after the beginning of our school years

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So for the record, I would like to welcome everybody back to school on the 15th.

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I hope that our staff and students have a wonderful first day back to school.

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I know that everybody's working very hard preparing for that.

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So I'd like to say that as well.

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At this time, the board will now reconvene in closed meeting to complete the unfinished discussions from earlier this evening.

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As authorized under Section 551.001 of the Texas Government Code for the following purposes.

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Texas Government Code 551.071, 551.129, 551.074, and 551.089.

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At this time, it is 747.

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The Board will now reconvene in open meeting.

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Today is Monday, July 23, 2018, and the time is 942 p.m.

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There being no further business before the Board, this meeting is adjourned,

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and the time is 942 p.m.

Official documents

Agenda

The district's own agenda file, as published on its video page. 3 pages.

Official agenda, Regular Board Meeting, 23 July 2018 →

This speaker is named from the district’s own record of who was present and from the presiding officer naming them on the recording. The question mark means the block of speech may not be only theirs: the recording was divided by machine, and a long stretch can run two voices together.

If this is wrong, please tell us and it will be corrected on the record. Contact us.

Motions and votes

Recorded actions

Each motion has a permanent anchor. Copy the URL to cite a specific motion.

MOTION 001 · AGENDA 7.1

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 002 · AGENDA 7.2

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 003 · AGENDA 7.3

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 004 · AGENDA 7.4

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 005 · AGENDA 7.5

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 006 · AGENDA 7.6

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 007 · AGENDA 7.7

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 008 · AGENDA 7.8

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 009 · AGENDA 7.9

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 010 · AGENDA 7.10

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes

MOTION 011 · AGENDA 7.11

Passed

It is recommended that the Board of Trustees approves the Consent Agenda as recommended in items 7.1 through 7.11.

Moved by
george-scott
Seconded by
bill-lacy

6 Yes · 0 No

TrusteeVote
bill-lacy Yes
courtney-doyle Yes
dawn-champagne Yes
george-scott Yes
rebecca-fox Yes
susan-gesoff Yes