Detroit Financial Review Commission

SCHOOL DISTRICT REGULAR MEETING

Monday, October 26, 2020

Following the City’s Regular Meeting

(Begins no earlier than 1:05 p.m.)

Using Microsoft Teams

MINUTES

Approved: November 16, 2020

1. Call to Order
   1. Madame Chair, Rachael Eubanks called the meeting to order at 1:11 p.m.
2. Roll Call         

Members Present – 8

• Rachael Eubanks
• Stacy Fox
• Chris Kolb
• David Nicholson
• Ron Rose
• Iris Taylor
• Nicholai Vitti
• John Walsh

Members Absent – 2

• Brenda Jones – (non-voting on DPSCD matters)
• Dave Massaron – (non-voting on DPSCD matters)

Let the record show that Eight (8) Commission members eligible to vote were present. A quorum was present.

3. Approval of proposed Minutes from the FRC’s September 28, 2020 School District Monthly Meeting
   1. Motion made to approve the draft minutes of the Commission’s September 28, 2020 School District Meeting as presented. Motion moved and supported; the Commission approved the minutes of the September 28, 2020 meeting as presented.
4. Approval of proposed Minutes from the FRC’s September 28, 2020 Closed Session Meeting
   1. Motion made to approve the draft minutes of the Commission’s September 28, 2020 School District Closed Session Meeting as presented. Motion moved and supported; the Commission approved the minutes of the School District’s September 28, 2020 Closed Session meeting as presented.
5. Old Business
   1. None
6. New Business
   1. DPS Financial Report
      1. Chief Financial Officer Jeremy Vidito presented the Financial Report for DPS. He noted that in August the District received $21.6 million in 13 mills receipt, the current tax receipt reserves are $44.5 million, and the District received enough property tax receipts to make its fall debt service payments totaling $39.9 million.
      2. He also stated that the District received $18.8 million in 18 mills receipts, the ending account balances total $21.8M and the District received enough property tax receipts to make its fall debt service payments totaling $15.9 million.
      3. The meeting was further informed that DPS’s ending general fund cash balance for June,2020 was $3.0 million. He addressed questions from the Commission.
   2. Presentation of the Community District’s Monthly Financial Report
      1. Chief Financial Officer Jeremy Vidito presented the monthly financial report and stated that fiscal year 2021 revenues through August are running approximately 10% ahead of budget and local revenue continues to run ahead due to higher than expected private donations; federal revenue is higher due to increased workshop and staff reimbursements related to the start of school, and the year-to-date expenses are running $2.4 million slightly ahead of budget. He also noted that expenditures related to training and earlier staff start dates were higher than forecasted.
      2. Mr. Vidito reported that at the end of August 31, 2020, the District’s cash balance is $63.5 million and the projected year-end cash balance for FY 2021 is $37.0 million. He also stated that the rainy-day fund cash balance is $36.3 million; the capital projects fund is $38.1 million; the MILAF investment account cash balance is $56.1 million, and the other remaining funds is $38.0 million. He noted that the State Aid payment for August is higher than budgeted which contributed to the increase in the General Fund account balance and the District plans to maximize interest income by directing all excess funds into the MILAF Investment account. He further stated that the current General Fund balance is estimated to be equivalent to 9.2 weeks of average expenditures. He addressed questions from the Commission.
      3. Projected Student Enrollment Report
         1. Mr. Vidito presented DPSCD’s projected Student Enrollment report for FY 21 and stated that the District has enrolled 48,962 students on or before Count Day, of which the District has recorded 46,591.01 FTEs. Students who were absent on Count Day have up to 30 calendar days to attend for the District to receive funding. He also noted that due to COVID-19, Michigan implemented a new 75/25 weighting formula, with the emphasis on FY 19 enrollment, therefore, despite the drop in enrollment, the District anticipates an overall $30M increase in revenue based on the state fully funding schools for FY 21. He addressed questions from the commission.
   3. Consideration of the Community District’s October 26, 2020 Contract approval requests per MCL 141.1636 (6) (FRC School District Resolution 2020-21)
      1. Public Act 181 of 2014 requires the Financial Review Commission to review and approve contracts meeting any of the three criteria: 1) the contract exceeds $750,000; the contract has a term exceeding 2 years; and 3) multiple contracts within a single entity that exceed $750,000 in aggregate.
      2. Chief Financial Officer, Jeremy Vidito gave a brief overview of the Community District’s four (4) contract approval requests and addressed questions from the Commission. All contracts have been reviewed by the FRC Advisory subcommittee on Contracts and Procurement.
      3. Motion made to consider and approve the Community District’s October 2020 contract approval requests (FRC/School District Resolution 2020-21). Motion moved by Commissioner Kolb and supported by Commissioner Rose. The Commission approved FRC/School District Resolution 2020-21.
   4. Consideration of the Community District’s return to work letters of agreement with all unions
      1. (OSAS), local no. 28; (AFSCME) Council 25, Local no. 345; International Brotherhood of Teamsters, Local no. 214; (police officers and campus security police, police lien operators, security officers) and Organization of School Administrators and Supervisors; International Union of Operating Engineers – Non-Instructional Supervisory Personnel (NISP), Local no. 324; Detroit Federation of Teachers (DFT); Detroit Federation of Para-Professionals Local no. 2350; Detroit Association of Educational Office Employees (DAEOE), Local no. 4168; – Per MCL 141.1636 (9) (FRC Resolution 2020-22)
      2. Mr. Vidito gave an overview of the proposed letters of agreement and stated that as part of the reopening of schools, the District reached Letters of Agreement with all unions regarding working conditions in relation to providing Face to Face and remotely learning during COVID-19 School-based employees working Face to Face are eligible for Hazard pay. He stated that the total cost including salary and taxes is estimated to be $14,993,814. He addressed questions from the Commission.
      3. Motion made to consider and approve the Community District’s work Letters of Agreement with the above-mentioned unions (FRC School District Resolution 2020-22) as presented. Motion moved by Commissioner Taylor and supported by Commissioner Walsh. The Commission approved School District Resolution 2020-22 as presented
   5. DPS/DPSCD’s Overview of Financial Highlights
      1. Mr. Vidito presented an overview of the financial highlights for DPS and DPSCD. The presentation included: the District’s financial results from 2016 to present; DPS/DPSCD’s Financial Audit Results; the District’s accomplishments; financial accomplishments, and a 3-year projection, noting that the District adopted a balanced budget assuming a 10% reduction in per pupil funding in FY21 and FY22 due to COVID-19. He stated that given the state adopted budget for FY21, the District projects an additional $30 million in revenue based on projected student enrollment, and noted that the FY 2023 projections assumes the Enhancement Millage is renewed, and the per pupil funding is expected to return to pre-COVID 19 levels in FY 2023. Mr. Vidito also reviewed the conditions for a waiver for DPS and DPSCD and addressed questions from the Commission.
   6. Consideration of the School District of the City of Detroit (DPS) requests to approve (I) 3 deficit free budgets (II) compliance with the Michigan Financial Review Commission’s Act per MCL 141.1638 (g) and (III) granting a waiver per MCL 141.1638 (2) (FRC Resolution 2020-6)
      1. Motion made to consider and approve the School District of the City of Detroit’s (DPS) requests to approve (I) 3 deficit free budgets, (II) compliance with Michigan Financial Review Commission’s Act, and (III) to approve the waiver request for the School District of the City of Detroit. (DPS) (FRC/DPS Resolution 2020-6)
      2. Motion move by Commissioner Rose and seconded by Commissioner Taylor to approve the above-mentioned requests for the School District of the City of Detroit (DPS) The Commission unanimously approved FRC/DPS Resolution 2020-6 as presented.
      3. The meeting was informed that this waiver remains in effect through December 31, 2021.
   7. Review of CFO’s Certification with Public Act 181 Waiver Conditions in PA 181, Section 8(2) for the School District of the City of Detroit (DPS)
      1. Mr. Vidito gave a detailed overview of the CFO’s Certifications for DPS and stated that the certifications are required by statute for granting of the waiver.
   8. Consideration of Detroit Public Schools Community District requests to approve (I) 3 deficit free budgets (II) compliance with the Michigan Financial Review Commission’s Act per MCL 141.1638 (g) and (III) granting a waiver per MCL 141.1638 (2) (FRC Resolution 2020-23)
      1. Motion made to approve Detroit Public Schools Community District’s (DPSCD) requests to approve, (I) 3 deficit free budgets (II) compliance with Michigan Financial Review Commission’s Act, and (III) to approve the waiver request for Detroit Public Schools Community District. (DPSCD)
      2. Motion moved by Commissioner Kolb and supported by Commissioner Nicholson. The Commission unanimously approved FRC/DPSCD’s Resolution 2020-23 as presented.
      3. The meeting was informed that this waiver remains in effect through December 31, 2021.
   9. Review of CFO’s Certification with Public Act 181 Waiver Conditions in PA 181, Section 8(2) for Detroit Public Schools Community District (DPSCD)
      1. Mr. Vidito gave a detailed overview of the CFO’s Certifications and stated that it is a statutory requirement for granting of the waiver.
   10. Comments from the Commissioners
       1. The Commissioners all agreed that it is a monumental day for the state of Michigan, noting that the largest school district has shown leadership in having three consecutive balanced budgets with minimal oversight of day-to-day operations. They all congratulated Detroit residents, parents, families, students and district officials for this historic accomplishment, and further noted that the district’s work displayed a much deeper day-to day knowledge of what was going on behind the numbers shown.
7. Public Comment
   1. Helen Moore
   2. Michelle George
8. Next Meeting Date
   1. School District Regular Meeting: Monday, November 16, 2020, following the City Meeting, beginning no earlier than 1:05 pm, remotely using Microsoft Teams.
9. Adjournment
   1. Motion made to adjourn. Motion moved and supported; the Commission approved the motion to adjourn. There being no further business, the meeting adjourned at 1:55 p.m.

Signed by:            Beverly C. Greaves- Secretary

Date:  10-26-2020

*(Consideration of DPSCD’s October ,2020 Contracts approval requests).

**(Consideration of the Community District’s return to work letters of agreement with all unions approval requests).

***(Consideration of Detroit Public Schools Community District requests to approve (I) 3 deficit free budgets (II) compliance with the Michigan Financial Review Commission’s Act per MCL 141.1638 (g) and (III) granting a waiver per MCL 141.1638 (2)).

Signed by:            Beverly C. Greaves- Secretary

Date:  10-26-2020

*(Consideration of the School District of the City of Detroit (DPS) requests to approve (I) 3 deficit free budgets (II) compliance with the Michigan Financial Review Commission’s Act per MCL 141.1638 (g) and (III) granting a waiver per MCL 141.1638 (2))