Detroit Financial Review Commission

SCHOOL DISTRICT REGULAR MEETING

Monday, September 28, 2020

Following the City’s Regular Meeting

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

Using Microsoft Teams

MINUTES

Approved: October 26, 2020

1. Call to Order

• Madame Chair, Rachael Eubanks called the meeting to order at 1:15 p.m.

2. Roll Call         

Members Present – 8

• Rachael Eubanks
• Stacy Fox
• Brenda Jones – (non-voting on DPSCD matters)
• Dave Massaron – (non-voting on DPSCD matters)
• Chris Kolb
• Iris Taylor
• Nicholai Vitti
• John Walsh

Members Absent – 2

• Ron Rose
• David Nicholson

Let the record show that Six (6) Commission members eligible to vote on matters relating to DPSCD were present. A quorum was present.

3. Approval of proposed Minutes from the FRC’s August 31, 2020 School District Monthly Meeting
   1. Motion made to approve the draft minutes of the Commission’s August 31, 2020 School District Meeting as presented. Motion moved and supported; the Commission approved the minutes of the August 31, 2020 meeting as presented.
4. Old Business
   1. None
5. New Business
   1. DPS Financial Report
      1. Chief Financial Officer Jeremy Vidito presented the Financial Report for DPS. He noted that in July the District received $1.1 million in 13 mills receipts and the current tax receipt reserves are $20.7 million. He also stated that the District received $1k in 18mills receipts and a total of $15.9 million in supplemental payments were made on the outstanding ORS debt. The meeting was further informed that the total balances on the 18 mills account were $2.0 million and the ending general fund cash balance for July was $14.1 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 July are running $2.9 million slightly ahead of budget and the increased revenue in local and state sources are due to higher than expected private donations. He further stated that year-to-date expenses are $0.3 million ahead of budget, and expenditures related to PPE and equipment for the safe return to the school plan were higher than forecast.
      2. Mr. Vidito reported that at the end of July 31, 2020, the District’s cash balance is $45.2 million and the projected year-end cash balance for FY 2021 is $30.0 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 District plans to maintain a monthly general fund cash balance of approximately $30 million while directing all excess funds into the MILAF investment account to maximize interest income. He addressed questions from the Commission.
   3. DPSCD Enrollment & Budget Projections
      1. Mr. Vidito presented the report and stated that it represented a student enrollment that is 10% below the targeted enrollment of 50,062 based on the State’s 75/25 count formula. He noted that despite the drop in enrollment, the District expects an increase in revenue as the recently approved budget maintains 2020 funding levels. He addressed questions from the commission.
   4. Consideration of Resolution 2020-5 certifying the School District of the City of Detroit (DPS) compliance with the Michigan Financial Review Commission Act per MCL 141.1636 (2)
      1. Mr. Vidito gave a brief overview of the resolution, which is an annual FRC certification required by statute. He noted that in accordance with PA 181 of 2014, the FRC requested the School District’s Chief Financial Officer (CFO) to verify compliance with certain statutory requirements as outlined in the CFO’s Administrative order.
      2. Motion made to approve FRC/DPS Resolution 2020-5 as presented. Motion moved and supported; the Commission approved FRC/DPS Resolution 2020-5 as presented.
   5. Consideration of Resolution 2020-19 certifying the Detroit Public Schools Community District’s (DPSCD) compliance with the Michigan Financial Review Commission Act per MCL 141.1636 (2)
      1. Mr. Vidito gave a brief overview of the resolution, which is an annual FRC certification required by statute. He noted that in accordance with PA 181 of 2014, the FRC requested the School District’s Chief Financial Officer (CFO) to verify compliance with certain statutory requirements as outlined in the CFO’s Administrative order.
      2. Motion made to approve FRC/DPSCD Resolution 2020-19 as presented. Motion moved and supported; the Commission approved FRC/DPSCD Resolution 2019-21 as presented.
   6. Consideration of the Community District’s September 28, 2020 Contract approval requests per MCL 141.1636 (6) (FRC School District Resolution 2020-20)
      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 Three (3) 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 September,2020 contract approval requests (FRC/School District Resolution 2020-20). Motion moved and supported. The Commission approved FRC/School District Resolution 2020-20.
   7.  DPS/DPSCD’s Waiver Request Presentation
      1. Mr. Vidito made a presentation to the Commission on the District’s request for a waiver from active oversight of the Financial Review commission. 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 projects a balanced budget (assuming steady enrollment) over the next two years even with a 10% reduction in per pupil funding in FY21 and then holding steady through FY22 due to COVID 19. The projection assumes the enhancement millage is renewed in FY 2023, and the per pupil funding is expected to return to pre-COVID 19 levels in FY 2023. He provided answers to supplemental questions from the commission and provided responses to the waiver requirements. In addition, Mr. Vidito made a presentation regarding the newly implemented contract requirements which included: a contract approval process; the District’ policies; purchase thresholds; travel processes; the procurement processes; contract management, and the vendor payment process. He addressed questions from the Commission.
6. Public Comment
   1. Michelle George
7. Next Meeting Date
   1. School District Regular Meeting: Monday, October 26, 2020, following the City Meeting, beginning no earlier than 1:05 pm, remotely using Microsoft Teams.
8. Closed Session
   1. Madame Chair, Rachael Eubanks informed the meeting that the Commission will now be going into closed session and according to the agenda, this is the last order of business except for a motion to adjourn, and noted that when the Commission comes back to open session, that is what will be done.
9. Adjournment
   1. Motion made to adjourn. Motion moved and supported; the Commission approved the motion to adjourn.
   2. There being no further business, the meeting adjourned at 2:40 p.m.