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WE WILL CALL TO ORDER THE SPECIAL MEETING OF THE BOARD OF TRUSTEES OF THE LITTLE ELM ISD HERE AT 5:30 P.M.

[1. Call to Order Open Session in the Board Room at Little Elm ISD Administration Building on 400 Lobo Lane, Little Elm, Texas 75068.]

[00:00:05]

AT THE LITTLE ELM ISD ADMINISTRATION BUILDING.

WE WILL GO THROUGH THE FIRST ACTION ITEM, WHICH IS THE ANNUAL FINANCIAL MANAGEMENT REPORT OF YEAR ENDED AUGUST 31ST, 2022.

[2. Annual Financial Management Report for Year Ended August 31, 2022 Presenter: Shay Adams]

MS ADAMS. OR ACTUALLY, NO, JESSIE.

YE, SIR. TAKE IT AWAY, SIR.

THANK YOU. PRESIDENT OLSON, BOARD OF TRUSTEES.

MR. SUPERINTENDENT GALLAGHER.

WE HAVE OUR 2021 ANNUAL FINANCIAL MANAGEMENT REPORT FOR YOU TONIGHT.

AND REMEMBER, THIS IS WITH DATA AS OF 2021, WHICH IS THE FIRST YEAR WE CAME BACK AFTER THE COVID QUARANTINE.

SO NUMBERS ARE A LITTLE DIFFERENT THIS TIME.

HAPPY TO SAY THAT IT'S BEEN AROUND FOR A WHILE.

THEY KEEP TWEAKING IT. BUT THIS YEAR WE HAVE 20 FINANCIAL INDICATORS.

FIVE, 10 AND 15 AREN'T SCORED THIS YEAR BECAUSE THERE ARE THINGS LIKE WAS YOUR ADA FORECAST WITHIN A CERTAIN PARAMETER.

BUT BECAUSE OF THE QUARANTINE AND SHUTDOWN, THEY DECIDED NOT TO HOLD US ACCOUNTABLE FOR THAT THIS YEAR.

MOST OF THE INDICATORS ARE SCORED IN A 0-10, 0-5 BASIS.

THE FIRST FEW ARE PASS FAIL.

YOU DON'T PASS THOSE YOU DON'T PASS THE WHOLE RATING SYSTEM.

WE RECEIVED THE HIGHEST AWARD RATINGS THIS YEAR, 98 OUT OF A POSSIBLE 100 POINTS.

A. SUPER, SUPERIOR ACHIEVEMENT.

AND HERE'S A QUICK RUNDOWN OF ALL THE INDICATORS WE'RE GOING TO GO OVER TONIGHT.

WAS YOUR AUDIT SUBMITTED ON TIME? DID YOU HAVE AN UNMODIFIED OPINION? DID YOU PAY YOUR DEBT ON TIME? DID YOU MAKE TIMELY PAYMENTS LIKE THE IRS, OTHER GOVERNMENT AGENCIES? FIVE, THEY'RE NOT SCORING.

DID YOU HAVE A GOOD AVERAGE CHANGE IN FUND BALANCE? DID YOU HAVE SUFFICIENT CASH ON HAND? BASICALLY, THE FINANCIAL HEALTH OF THE DISTRICT.

WE'LL DIVE INTO EACH ONE OF THESE HERE SHORTLY.

FIRST INDICATOR.

WAS YOUR ANNUAL FINANCIAL REPORT SUBMITTED TO TEA WITHIN THE 30 DAYS FOR JANUARY 20 OR JANUARY 28 FOR A SCHOOL DISTRICT WITH A FISCAL YEAR END DATE OF AUGUST 31ST? THIS IS FOR 2021 DATA.

BACK WHEN WE WERE STILL ON AUGUST 31 DISTRICT AND YES, WE DID.

SO WE PASSED THAT INDICATOR.

WAS THERE AN UNMODIFIED OPINION OF OUR ANNUAL FINANCIAL REPORT? YES, THERE WAS.

WAS THE SCHOOL DISTRICT IN COMPLIANCE WITH ALL PAYMENT TERMS OF ALL DEBT AGREEMENTS AT FISCAL YEAR END? YES, WE WERE. DO WE MAKE TIMELY PAYMENTS TO TRS, TEXAS WORKFORCE COMMISSION AND THE IRS AND OTHER AGENCIES? YES, WE DID. AND FIVE, THEY'RE NOT SCORING BECAUSE OF PANDEMIC.

AND WAS THEIR AVERAGE CHANGE IN FUND BALANCE OVER THREE YEARS LESS THAN A 25% DECREASE? OR DID OUR CURRENT YEAR'S ASSIGNED AND UNASSIGNED FUND BALANCE EXCEED 75 DAYS OF OPERATIONAL EXPENDITURES? MOST OF THESE GET PRETTY WORDY.

THE ANSWER IS YES.

YES. WE DIDN'T HAVE LESS THAN A 25% DECREASE.

AND WE HAD 154 DAYS ON HAND.

WAS THE NUMBER OF DAYS OF CASH ON HAND AND CURRENT INVESTMENTS IN THE GENERAL FUND FOR THE SCHOOL DISTRICT SUFFICIENT TO COVER YOUR OPERATING EXPENDITURES? YES, IT WAS. WE GOT TEN POINTS IF WE WERE MORE THAN 90 AND WE WERE AT 174, DOWN JUST A LITTLE BIT FROM LAST YEAR.

WAS THE MEASURE OF CURRENT ASSETS TO CURRENT LIABILITIES FOR THE SCHOOL DISTRICT SUFFICIENT TO COVER SHORT TERM DEBT? YES, IT WAS. WE GET TEN POINTS IF WE'RE RATIO IS GREATER THAN THREE.

WE'RE AT 5.2, UP A LITTLE BIT FROM THE PRIOR YEAR.

DID THE SCHOOL DISTRICT'S GENERAL FUND REVENUES EQUAL OR EXCEED EXPENDITURES.

IF NOT, WAS THE SCHOOL DISTRICT'S NUMBER OF DAYS OF CASH ON HAND GREATER THAN OR EQUAL TO 60 DAYS? SO, BASICALLY, IF THAT RATIO IS POSITIVE, YOU PASS.

OURS WAS, AND WE ALSO HAD 174 DAYS OF CASH ON HAND.

TEN. THEY'RE NOT SCORING.

THAT WAS THE ADA FORECAST MATCH.

BUT BECAUSE OF THE PANDEMIC AND ALL THE ISSUES WE HAD WITH ENROLLMENT, THEY'RE NOT HOLDING US ACCOUNTABLE FOR THAT.

WAS THE RATIO OF LONG TERM LIABILITIES TO TOTAL ASSETS FOR THE SCHOOL DISTRICT SUFFICIENT TO SUPPORT LONG TERM SOLVENCY? OR IF THE SCHOOL DISTRICT'S INCREASE IN STUDENT MEMBERSHIP OVER FIVE YEARS WAS 7% OR MORE.

DO YOU PASS THIS INDICATOR? WE GOT TEN POINTS IF IT WAS GREATER THAN OR LESS THAN 60.

OURS WAS 82, BUT WE HAD A GROWTH OF 9.9%, WHICH CHANCES ARE IF YOU'RE GROWING FAST, YOU'RE GOING TO BE INCURRING MORE DEBT.

YOU NEED FACILITIES AND THINGS LIKE THAT TO EXPAND, FIT THE STUDENTS IN.

INDICATOR 12.

WAS THE DEBT PER $100 OF ASSESSED PROPERTY VALUE RATIO SUFFICIENT TO SUPPORT FUTURE DEBT PAYMENTS.

TEN POINTS, IF LESS THAN OR EQUAL TO 4.

[00:05:02]

OURS WAS 6.5.

IT'S THE ONLY ONE WE DIDN'T GET FULL CREDIT ON.

BUT AGAIN, GOING BACK TO THAT GROWING SCHOOL DISTRICT.

YOU'RE GOING TO HAVE A, COULD BE INCURRING A LITTLE MORE DEBT THAN THE SCHOOL THAT HAS A STABLE POPULATION.

WHAT IS THE SCHOOL DISTRICT'S ADMIN COST RATIO EQUAL TO OR LESS THAN THE THRESHOLD? TEN POINTS IF LESS THAN ONE.

WE ARE AT 0.085.

IT'S A LITTLE DIFFERENT, BUT YES, WE HAVE FULL MARKS FOR THAT.

NOT 85%.

THAT'D BE CHALLENGING.

FIRST TIME WE EVER GOT TEN POINTS ON THAT ONE.

DID THE SCHOOL DISTRICT'S NOT HAVE 10, 15%? THIS IS THE DOUBLE NEGATIVE ONE.

DID THE SCHOOL DISTRICT NOT HAVE A 15% DECLINE IN THE STUDENTS TO STAFF RATIO OVER THREE YEARS TOTAL ENROLLMENT STAFF AT SCHOOLS? IF THE STUDENT ENROLLMENT DID NOT DECREASE, THE SCHOOL DISTRICT WILL AUTOMATICALLY PASS THIS.

SO WE'RE GROWING.

WE'RE NOT HAVING A DECREASE IN THE RATIO.

SO WE PASS. THEY'RE NOT SCORING 15 THIS YEAR BECAUSE OF THE PANDEMIC.

DID THE COMPARISON OF PEIMS DATA TO INFORMATION IN THE SCHOOL DISTRICT'S ANNUAL FINANCIAL REPORT RESULT IN A VARIANCE OF LESS THAN 3% OF ALL EXPENDITURES PER FUNCTION? BASICALLY, IS THE DATA THAT YOU'RE REPORTING TO THE STATE GOOD? WE HAD TO BEAT 0.03 AND WE WERE ACTUALLY AT .0000092.

SO WE BARELY BEAT THAT ONE.

INDICATOR 17. DID OUR EXTERNAL INDEPENDENT AUDITORS REPORT THAT THE AFR WAS FREE OF ANY INSTANCE OF MATERIAL WEAKNESS IN INTERNAL CONTROLS OVER OUR FINANCIAL REPORTING AND COMPLIANCE FOR LOCAL, STATE AND FEDERAL LAWS? YES, IT WAS FREE OF THAT REPORT.

SO AGAIN, EVERYTHING'S A DOUBLE NEGATIVE WITH THIS REPORT.

SO IF WE PASS. YES, IF YOU PASS.

DID THE EXTERNAL INDEPENDENT AUDITOR INDICATE THAT WE WERE FREE OF ANY INSTANCE OF MATERIAL NONCOMPLIANCE FOR GRANTS, CONTRACTS, LAWS FOR LOCAL, STATE AND FEDERAL FUNDS? YES, WE WERE FREE OF ANY INSTANCE OF MATERIAL NONCOMPLIANCE.

PASSED THAT. GET FULL TEN POINTS FOR THAT.

INDICATOR 19.

DID THE SCHOOL DISTRICT POST THE REQUIRED INFORMATION TO ITS WEBSITE ACCORDING TO THE EDUCATION CODE AND GOVERNMENT CODE.

YES, WE DID.

SO YOU GET FIVE POINTS FOR THAT ONE.

DID THE SCHOOL BOARD MEMBERS DISCUSS PROPERTY VALUES AT A BOARD MEETING WITHIN 120 DAYS OF THE DISTRICT ADOPTING ITS BUDGET? YES. PROBABLY GOT TIRED OF US TALKING ABOUT PROPERTY VALUES THAT CLOSE TO THE BUDGET? YES, WE DID. WE DISCUSSED PROPERTY VALUES.

WE PASSED. SO WE ANSWERED YES TO 1-4 FIVE AND TEN WORD SCORE.

FIVE, TEN, 15 WEREN'T SCORED.

WE GOT 98 OUT OF 100 AND RECEIVED A SUPERIOR ACHIEVEMENT RATING OF A.

THE SUPERINTENDENT'S CONTRACT IS POSTED ONLINE IF YOU FOLLOW THAT LINK.

AND REIMBURSEMENTS RECEIVED BY SUPERINTENDENT AND BOARD MEMBERS ARE ALSO POSTED ON THE DISTRICT'S WEBSITE.

NO GIFTS WERE REPORTED FOR 2021.

NO TRANSACTIONS BETWEEN BOARD MEMBERS AND THE DISTRICT.

AND THIS IS THE REIMBURSEMENTS FOR TRAVEL, LODGING, THINGS LIKE THAT, MEMBERSHIPS THAT WE PAY ON YOUR BEHALF FOR THE DISTRICT.

BUT AGAIN, THIS WAS THE COVID YEAR WHERE THE ENTIRE WORLD WAS STILL SHUT DOWN.

SO THERE'S A FEW TRAININGS IN THERE AND SOME ONLINE THINGS THAT WE DID, A COUPLE OF MEMBERSHIPS, BUT FOR THE MOST PART THERE WAS NOT A LOT OF EXPENDITURE THIS YEAR BECAUSE THE WORLD WAS NOT OPEN.

THANK YOU VERY MUCH. I APPRECIATE IT.

LET ME GET BACK. IT'S.

YEAH. READ THE EXACT LANGUAGE.

WAS THE AVERAGE CHANGED IN FUND BALANCE OVER THREE YEARS, LESS THAN A 25% DECREASE OR.

SO IF YOU DID HAVE A DECLINING FUND BALANCE BUT YOU HAD ENOUGH CASH ON HAND, YOU PASSED.

WE HAVE BOTH.

WE HAVE, WE DON'T HAVE A DECLINING FUND BALANCE AND WE HAVE ENOUGH CASH ON HAND.

SO WE'RE FINE.

OKAY. THANK YOU. I JUST DIDN'T KNOW IF THERE WAS AN AND OR AN OR ON THERE.

YEAH, THEY DO A LOT OF EITHER, ORS, NORES AND DOUBLE POSITIVE NEGATIVES IN THERE.

JESSE, MOT TO BE PARTICULAR.

GO TO, I THINK IT'S 12.

12. WE'RE GOING TO NITPICK ON THE ONE WE DIDN'T GET A TEN OUT OF.

[00:10:06]

THAT'S NOT REALLY NIT PICKING. IT'S JUST ASKING A QUESTION.

I MEAN, I KNOW IT CAME DOWN.

WE WERE AT 6.66.

GO TO 12.

YES, WE WERE AT SIX POINT.

THAT WAS IT. YEAH, WE WERE AT 6.6.

WE WENT DOWN TO 6.5.

WE ACTUALLY WENT DOWN 1.5.

I DON'T THINK THERE'S ANY REAL WAY OF.

I GUESS THE QUESTION I HAVE, THERE'S NO REAL WAY FOR US TO GET THAT ANY CLOSER.

EVERYTHING'S PRETTY MUCH OUT OF OUR CONTROL IN THAT REGARD, RIGHT ON THAT QUESTION, BECAUSE IT'S TALKING ABOUT ASSESSED PROPERTY VALUE RATIO.

WE JUST PASSED THE BOND, WHICH THANK YOU COMMUNITY FOR THAT.

AND WE'VE GOT THE BONDS FROM THE PREVIOUS YEARS, JUST A COUPLE OF YEARS AGO.

SO I KNOW, FAR AS, I KNOW THERE'S A LOT OF DEBT OUT THERE.

AND WITH PROPERTY VALUES STILL GOING UP, JUST LIKE I SAID, ONCE AGAIN, NIT PICKING ON A 98 OF 100, IT'S REALLY GETTING NITPICKY.

SO I UNDERSTAND.

ANY OTHER QUESTIONS FROM THE BOARD MEMBERS? NO. THANK YOU VERY MUCH.

JESSE. APPRECIATE IT. AS FAR AS ANY INPUT, CITIZEN INPUT, NONE.

BOARD COMMENTS? I'M GOING TO JUST KIND OF LOOK, BOARD COMMENTS.

NO. DO I HAVE A MOTION TO ADJOURN THE SPECIAL MEETING? I MOVE.

MARY, DO I HAVE A SECOND? SECOND. ALL THOSE IN FAVOR? ALL AS OPPOSED.

MOTION PASSES. WE'LL OFFICIALLY ADJOURN AT 5:42 P.M.

* This transcript was compiled from uncorrected Closed Captioning.