APPRO-2023-36 : An Appropriation from free cash (account 01-324001) in the amount of $614,500 to various stabilization funds as set forth herein.

Transcript (~1 h 56 min @ 54:52)

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▶ 54:51 Leila Migliorelli: Okay. That, um, that passes, that passes committee and will be heard at our full council meeting, um, on the 20th. Okay. So next up is appropriation. Appropriation 2023 dash 36 and appropriation from free cash account zero one dash 3 24 0 0 1 in the amount of 614,500 to various stabilization funds as set forth herein. Um, tonight we have, uh, C F o Patrick LaRusso again with us to speak and joined by Ken Kelly, um, director of finance for the schools. Um, because as you can see in your packet, just wanna reference that the ma the mayor, had emailed the council on Tuesday, June 13th, requesting an amendment to this order. Attach that email as a memo also included in our packet from Mr. Kelly and Dr. Krockenberger dated June 12th stating, um, the following about one portion of this order, which is that the district is respectfully requesting that the original request for appropriation of two thousand two hundred thousand forty two dollars for the city special education stabilization fund 84 0 8, um, be amended and considered for appropriation to the district for FY 23. Um, and the memo contains a rationale for this request, but I think overall we will just discuss this order in its entirety in the school's portion, um, as part of it.

▶ 56:20 Speaker 9: Thank you. Um, I appreciate again, the opportunity to speak with you, you on, particularly on this order before us. The, um, request is for free cash appropriation of $614,500 or 8.58% on the certified free cash. I think my memo dated June 5th, 2023. Hope folks have it. If not, I'd be sure to get you a copy of it later. Um, what I I've done in this, um, area here is I, I outlined the each fund one by one and the purpose and the, the, um, targeted balances that we try to achieve over time. Um, what I'd like to do, if I do the chip, it's, if it's appropriate just to hit on the ones that, as an overview, what we actually have and then spend more time with the ones that we're actually seeking for an appropriation. Cause not all of them are seeking funding. Thank you. Mm-hmm. Um, the first one that, uh, we have is the foundation stabilization fund. I talked about that earlier. It's got just over 3.9 million. So way one understands the city's goal overall is to have that fund one day be 5% of the operating budget. Um, that's according to best practice of the, uh, mass Municipal Association. Um, this, we, what I'm asking previously was to fund it, the $50,000, which, um, was just recommended, um, from the budget. So I, I don't have any desire at this time to add more than that from pre-cash. So that, that one there is, is gonna be, um, not requested this evening for any additions. The second one is the contract stabilization fund number 84 0 4. Let's get a balance of over $723,000 right now. And I'm requesting that the add the sum of $300,000 to the fund in order that we can continue to fund negotiated collective bargain agreements when settled and any non-union compensation obligations that may arise, um, to date going into by 24. The fire union and the library are out of contract as of June 30th, 2023. And I do have a target balance of 1.3 million overall over time for this fund. Um, so again, this one we're asking 300,000 be added to the fund. The next one is these Capital Stabilization fund number 84 0 5. Um, it's got a balance right now of approximately $477,000. And we're requesting this evening, the amount of 72,500 be added to the fund as it mirrors our targeted amount of $550,000. I think everyone's aware this really helps us during the fiscal year when capital needs come up and we, um, have an opportunity to take advantage of some grants with a like, and we try to seek a funding source. This one is right there for that reason. Um, and again, the target of the fund would be $550,000. And that's why I'm asking if we could just, um, meet that by a contribution of 72,500 from free cash to achieve that. We also have the fourth one in suits and claims stabilization fund. Let's get a balance of over five. God bless you. Bless you. $502,000. Um, at this point we are not requesting any free cash appropriation as the target amount of $500,000 has been reached. The fifth one, which I think there'll be more conversation on, uh, there's, uh, brought up by the chair. We've established a special education stabilization fund number 84 0 8, which is used to fund special education costs realized by the school department that exceeded its budgeted funds. And at the writing of my memorandum, we were requesting $242,000 be added to the fund. At this time, we currently have just over $508,000 in the fund, uh, new target allocation as a standing balance of $750,000. Given the increases in costs, we are realizing, and I, I referenced the school department memo dated 5 11 23, which is attached. Um, and here I believe there was a request to make an amendment. And, um, obviously I'll answer any questions or provide any information or guidance I can in that area. And, uh, Ken Kelly's here, if you would like to speak to the, that particular amendment, um, through the board and the chair, he's here. Any questions?

▶ 1:01:10 Speaker 4: I, I just actually, I wonder if you wanna go through six, the 0.6 and seven first and then we'll circle back to questions on that. Thank you. Okay.

▶ 1:01:18 Speaker 9: And the six is the Opep Fund, 84 0 7. Um, just previously mentioned earlier on, um, other post-employment benefits. It has a balance of over $1,115,000. Again, we are not asking any free cash allocation. We have funded this $50,000 within the standard operating budget, so there's no re request for funding here. And the last one, the OSHA fund number 84 0 9, it's got a ca current balance of over $206,000. We're not requesting, um, any free cash appropriation at this time. A targeted amount for the fund is $250,000, but at year to date, we have not had any request for the use of the funds. So we've decided that this year would, um, we just let us stand at 206,000 in the event that we need future funds, we can address that. But there's been no request for any funds to date, so I don't, I didn't feel there was necessity to, to add to that particular stabilization fund at this time.

▶ 1:02:25 Leila Migliorelli: Thank you. Um, given that there's probably going to be a variety of questions, uh, Mr. Kelly, I dunno, if you want to, if you have a few words before we take questions, um,

▶ 1:02:35 Speaker 3: We can do that now. Excuse me. Thank you. Ken Kelly, director of Finance for the schools. Thank you for having me. Um, so, uh, just a as, as a background, um, looking at the, um, close of school books for FY 23, started doing that end of May, beginning of June. Um, looking at, uh, unfortunately another deficit with the school, uh, school system. Um, not to the level it's been, but, um, the school year's not over yet, but we are projecting a deficit. Um, and a contributor to that is, um, special education, transportation, um, that continues to be an escalating cost. Um, and so in consultation with Ha York from c um, CFO, dela Russo, um, it was decided that, um, uh, to request access to the special education stabilization fund, which is what that that fund is, um, its purpose. And, um, the request to move the 242,000 to the stabilization fund, we would then have to request, uh, access to that funding. And so the memo was just sort of to, um, expedite that, uh, um, that process.

▶ 1:03:46 Speaker 4: Okay. Um, counselors in Q for questions online and then in here.

▶ 1:03:53 Shawn M. MacMaster: Point of information. Yes. Yeah, yeah. Madam Chair. Um, I believe you had referenced an email from, um, from the mayor. I didn't, I didn't see that email and I don't see it attached to the agenda packet. Um, should Be in there. So I'm wondering if, um, Mr. LaRusso or Mr. Kelly had that and if,

▶ 1:04:12 Speaker 4: um, Yep. Let me just,

▶ 1:04:15 Speaker 3: I don't have any email.

▶ 1:04:17 Speaker 4: I can read it aloud if you don't have it. Um, and we can add it to the record.

▶ 1:04:21 Speaker 10: I would appreciate that. Madam Chair. Okay.

▶ 1:04:23 Speaker 4: Um, lemme just,

▶ 1:04:31 Leila Migliorelli: So on Tuesday, um, June 13th, the mayor sent an email to the council, um, at 11:45 AM Um, and it says, I'm writing to request that before a vote is taken on appropriation 2023 dash 36, and in appropriation from free cash in the amount of 614,500 to stabilization funds, a counselor make a motion to amend the order to reflect the request from the school department as outlined in the attached memo, school finance director Ken Kelly will present on Thursday night to explain the reason for this requested change. This topic will also be discussed at tonight's meeting Tuesday's School Committee should any counselors wish to watch.

▶ 1:05:17 Shawn M. MacMaster: Thank you, Madam Chair. At this time, I'd make a motion to attach that email to the, um, uh, to the agenda packet. Second

▶ 1:05:25 Leila Migliorelli: Motion to attach this email from Mayor Broder. Um, to the packet made by Counselor McMaster. Seconded by Counselor Eckles. Anyone on discussion? Seeing none, Mr. Clerk, will you please call the roll

▶ 1:05:42 Speaker 1: Vice chair Jam. Malden? Yes. Councilor McMaster? Yes. Councilor Eccles? Yes. Councilor Gepe? Yes. Councilor Stewart? Yes. Councilor Chetty? Yes. Councilor Broski. Yes. President S Yes. And chair Elli? Yes. Nine. Yes. Unanimous. Okay.

▶ 1:06:03 Speaker 4: That passes. Thank you. Um, questions on this order.

▶ 1:06:09 Speaker 4: Councilor Jamine. Thank you Madam Chair. And, um, through the chair, uh,

▶ 1:06:15 Maya Jamaleddine: and for the public and with full transparency, we were made aware of this issue or shortfall. At the same time the public found out. Have we discovered or have, have I discovered or not been notified before our budget hearing and many of the orders that were submitted to be budgeted by pre from pre-cash? My personal decision and vote will be definitely different

▶ 1:06:46 Speaker 4: tonight.

▶ 1:06:49 Maya Jamaleddine: I would like to ask the mayor and c f o and Mr. Kelly the following questions,

▶ 1:06:55 Maya Jamaleddine: with the way that we are leading this community, how much are we supporting our constituents, our students, and most importantly, our special ed students who I already heard from many parents and guardians that they plan on moving their children out of the Merose district. I also would like to ask the mayor who I am fully aware that he was not able to be with us today. What are we leaving the new mayor and the new superintendent with? I'm not going to doubt anyone who succeed, those two positions,

▶ 1:07:33 Speaker 4: um, doubt their skills,

▶ 1:07:35 Maya Jamaleddine: but even the best mayor and the best superintendent with those issues that are, have been left with,

▶ 1:07:43 Maya Jamaleddine: I hope that we are not setting them into failure.

▶ 1:07:51 Speaker 4: Thank You. Thank you. Vice Chair Jamal,

▶ 1:07:57 Speaker 4: um, councilor Caram Shady.

▶ 1:08:01 Manjula Karamcheti: Hi everyone. Greetings from Kansas. I apologize that I can't be with you in person. Um, but I am traveling for,

▶ 1:08:10 Manjula Karamcheti: for work. Um, I think my questions, and Mr. Kelly, they're address to you, but Mr. LaRusso, I think you could shed some light on this as, as well. I think what I'm interested in is how we got to another shortfall based on the previous free cash, the previous, um, changes that we've tried to make. If you could give us in more detail what the issues are this time, um, to start that would be really helpful.

▶ 1:08:47 Speaker 3: Sure. So, um, in our books aren't closed yet, so I I I wanna preface that we're still in FY 23, so June 30th closes our books, but, um, after what happened last year, and, and no one like surprises me included. That's why I started watching this, you know, end of May. And, and when I became concerned, and the, the city, the, um, the school system does have, um, our, our offset balances are healthy. Last year, that was not the case. We ran a deficit, whether our budgeted offsets, those are healthy, we have some surplus that we can contribute to the, uh, the deficit. So, um, while ending the year, uh, in the red is, is certainly not anything that is a goal of mine. Um, there has been some, uh, incremental progress towards healthy budgeting, but there are still overruns and the majority of them are in, in the special education realm.

▶ 1:09:42 Manjula Karamcheti: Um, I did have a little trouble hearing, uh, exactly what you said. Um, in the name of full transparency, the sound is challenging as counselor Jamal had pointed out. Um, but in terms of like the memos that I have been able to read before and the emails I find myself still grappling with and trying to understand, and Mr. Kelly, I, I, I do believe it's out of sort of the financial piece of which, you know, is your responsibility. But what I continue to wonder about and have growing, growing concern about is our historically marginalized students and the programs and services that are available to them, and who is paying attention to our special education students, their transportation needs, our homeless students needs. And these things shouldn't be a surprise. And while we are the city council, not the school committee or working in Melrose Public Schools, it concerns me that these things continue to be a surprise in that we should know how many homeless students we have. We should know what services and transportation our special education students need. And all of these things do impact the city budget. And so I, I truly am trying to understand how we find ourselves here. Again, it is a concern to me be for our kids and, and what we're doing to support them and provide for them. Um, it do is doesn't seem to be allowing for planned and purposeful services. And I would really like to get to the bottom of why this keeps happening. So again, it is a question for you and Mr. Dela Russo, but I I also recognize that it is beyond your purview, but all of this does impact our city budget, where we are forced to make really hard decisions about where to spend our money. And I'm just,

▶ 1:11:43 Speaker 4: I find myself very confused and very concerned.

▶ 1:11:47 Speaker 3: Sure, I can, and special education transportation is very expensive at this time, and we are trying to put measures in place to, um, uh, help reduce that cost. We have, um, we're working to sort of hire more drivers. Uh, hiring a Melrose District driver is a significant savings and having to outsource the route. Uh, we're working with vendors to try to consolidate and get efficiencies of scale where if we give them more route, they give us a better price. So we are doing all that. Um, and it's, it's a moving target. The special education transportation right now is, is, uh, is a very expensive business.

▶ 1:12:23 Manjula Karamcheti: Totally. And, and we've heard that before. I, I think I understand that the transportation is expensive, but we could have forecasted that by now. I thought, given what we've learned in the past, and then so does this mean there are more students who are needing more transportation? And I feel like we should be able to foresee that too, in terms of special education and numbers. We should know who's in the pipeline and be able to plan for that kind of

▶ 1:12:55 Speaker 4: spending. Or, or do I have that wrong? Which please feel free to tell me if I do. I

▶ 1:13:00 Speaker 3: Don't think you're wrong. It sometimes is unpredictable though. I, we, we, the, um, the third quarter this year was, um, we ended up with I think six new route. Um, we ended up with three homeless students, um, that were obligated to transport. So, um, we can forecast that it will be expensive, but sometimes we, we know we can't anticipate when a student is gonna need to change route or, um, have a monitor placed on their route. Some students we're seeing significant behaviors that we have to send two vans to the same destination with, um, two students that potentially could ride together, but are, but cannot cause of, of, of challenges. And there need to be monitors on the bus and that gets ex or the van, and that gets expensive. So it is predictable, but it's also, there is an element that is unpredictable as well. And it, it makes us react to it.

▶ 1:13:51 Manjula Karamcheti: No, thank you. I appreciate that. It does still, for me, seem like this is bigger than transportation. And so I hope that collectively between City Council School Committee and Melrose Public Schools, we can really start working together to figure out how to not be responding to finances in more of this emergency way last minute. It, it doesn't seem like a good way to do business.

▶ 1:14:21 Speaker 3: Sure. I would agree. And I think one final thought for me would be that that's, transportation is a category that's been historically under budgeted for Melrose. And the budget we put forth for FY 24 had an and a number that we feel like is a, a forecasted number of what it would cost for transportation for that year.

▶ 1:14:41 Speaker 4: I'm not sure I heard you correctly, so. Sure. I don't wanna, yeah. Sorry, counselor. Uh, Carm, like, I would just suggest everyone speak right into the microphone, as uncomfortable as that may feel, as close as you can get to your face. Um, that would be helpful. Thank you.

▶ 1:14:56 Speaker 3: Sure. One point to consider is that historically that transportation line in the budget has been under budgeted. There was one year where, um, cost escalated and the actual number was, was decreased the following year. And the number that we, um, projected for FY 24 is a number we feel like encompasses what it would cost to transport students for the year. And it was a significant increase for over the last year.

▶ 1:15:21 Manjula Karamcheti: Thank you. And that, so I think my general comment not directed to you is our pattern of under budgeting doesn't also seem to be serving as well when it comes to transportation or our schools in general. So I, I think that's a practice we need to change as well. Uh, easy for me to say in my seat in Kansas, but, uh, I appreciate you taking my questions and trying to answer them Anytime. Thank you. No

▶ 1:15:48 Speaker 4: Further Questions. Thank you. Um, next I have Councilor McMaster.

▶ 1:15:53 Speaker 10: Thank you, Madam Chair. Good evening. Mr. Kelly.

▶ 1:15:59 Shawn M. MacMaster: Have, as you've have worked over the last three months to close out the books on the school year, have you been having routine meetings with Mr. Dela Russo and or members of his staff?

▶ 1:16:11 Speaker 3: Yes. We're in close communication with the auditor's office. Um, and, um, collaboration with Hannah York from C who we had mentioned earlier. Um, yes. Consistent communication with with those offices.

▶ 1:16:23 Shawn M. MacMaster: Have those been in person meetings and how often have they been?

▶ 1:16:26 Speaker 3: Um, generally the, um, cfo, Dela Russo has a Wednesday, um, uh, finance meeting, um, that has been interrupted with some of the budget, but typically it's a once a week meeting that I, I do my best to attend here in person. Um, and I'm in, uh, pretty constant communication with, um, Carrie Golden at the, the auditor's office. Uh, CFO Del Ruso was fantastic about taking my phone calls and, um, I routinely consult with Hannah York

▶ 1:16:55 Shawn M. MacMaster: In light of the structural deficit and the issues that have been brought to the council's attention in the past. Have there not been standing meetings with Mr. LaRusso or his department since many of these issues came to light and were brought to the, the council's attention last year?

▶ 1:17:10 Speaker 3: We have that Wednesday standing meeting. Yep. Wednesday mornings.

▶ 1:17:14 Shawn M. MacMaster: But that's, uh, that, that's multi departments that doesn't just involve the school department. Is that fair to say? Correct,

▶ 1:17:18 Speaker 3: Yes. Correct.

▶ 1:17:25 Shawn M. MacMaster: The memo that you submitted Mr. Kelly to, uh, mayor Broder and the city council dated June 12th is just seven days after the memo that Mr. Della Russo submitted to us requesting the

▶ 1:17:46 Shawn M. MacMaster: appropriation into the special education and stabilization fund. When was it known by the school department that this money was needed for special ed transportation costs or

▶ 1:17:59 Speaker 3: About June 8th? I, I spent the day with Hannah York on June 8th looking specifically at what it would look like to close out FY 23.

▶ 1:18:07 Shawn M. MacMaster: So how did that, how did that come to light on June 8th? What, what information was made available to you on June 8th that wasn't available to the CFO on June 5th?

▶ 1:18:19 Speaker 3: Uh, we were looking at the, so the end of the year, in case you're not familiar, the end of the year, um, the teachers in the school system get their final paychecks in June. That's six rounds of paychecks over the span of a week. And that's, um, that's a significant amount of money. So we were watching and looking at what that was gonna do to the end of the year, um, the bottom line and, uh, seeing that that was, um, you know, making sure we had the funds to cover that. And then looking at, uh, closing out the rest of, of the budget.

▶ 1:18:48 Shawn M. MacMaster: But those are two different funding sources to fund salaries and transportation. Correct. So how did, how did they, just so I'm clear, how did they get,

▶ 1:18:56 Speaker 3: Just looking at all the different departments and categories, um, about, you know, uh, where they were gonna finish out based on what we had budgeted.

▶ 1:19:06 Shawn M. MacMaster: Okay. And Mr. Kelly, you had mentioned, I, I believe just two weeks ago, uh, or I, I had asked you just about two weeks ago when you and superintendent Cooken Berger came before the council, what the balance of the circuit breaker was. And at that point, two, two weeks ago, you said you believed it was 2.9 million for special education. Why would we not be tapping into that balance in the circuit breaker rather than trying to reappropriate money that the administration is asking us to put in the special education stabilization fund?

▶ 1:19:38 Speaker 3: There's, there's not 2.9 million in circuit breaker. We don't have that.

▶ 1:19:42 Speaker 10: Okay. You, you did say 2.9.

▶ 1:19:45 Speaker 3: Okay.

▶ 1:19:47 Shawn M. MacMaster: Um, what is the balance of the circuit breaker right now? I

▶ 1:19:49 Speaker 3: Believe it's 1.5,

▶ 1:19:51 Shawn M. MacMaster: 1.5 million. So why would we not use 1.5 million out of the special education circuit breaker that you already have at the school department to fund $242,000?

▶ 1:20:05 Speaker 3: We will be using all of our circuit breaker money to help close out FY 23.

▶ 1:20:09 Shawn M. MacMaster: But you'll be carrying some of that over into next fiscal year, correct?

▶ 1:20:13 Speaker 3: We probably will not be now to, to close out FY 23.

▶ 1:20:17 Speaker 10: So, I'm sorry, can you tell me the number one more time? 1.9 million?

▶ 1:20:20 Speaker 3: We about right now, our circuit breaker is about 1.5.

▶ 1:20:23 Shawn M. MacMaster: 1.5. So are you saying that the, the 328,215, I know the request for reappropriation is 242,000 is above and beyond that our costs are going to exceed at this point, June 15th, 1.5 million plus 328,215, those are gonna be our special education costs?

▶ 1:20:49 Speaker 3: No, we used our offsets to, to, as, um, budget offsets to bring into the budget at the end of the year. So that circuit breaker will be part of that.

▶ 1:21:03 Shawn M. MacMaster: It, and this might be more of a question for Mr. Mr. LaRusso, um, or Ms. Phillips, uh, whoever thinks it's appropriate, is there any, we've set the tax rate for 2024. Is there anything, anything legally preventing us from carrying over what Mr. Um, Kelly is saying is needed here? This, what's being requested of $242,000 into the next fiscal year? Are we, do we have some legal obligation to close out the books at the school department or is that just a best practice? Is there anything saying that we can't pay this next fiscal year from somewhere else? Any legal prohibition to doing that?

▶ 1:21:48 Speaker 9: Um, great point. Um, couple of points. First of all, the, um, free cash will disappear on June 30th if we don't utilize it. The 2 42,

▶ 1:21:56 Speaker 10: Not free cash, but I'll

▶ 1:21:58 Speaker 9: No, I meant right. And, and, and, um, as we move forward into, um, setting the tax rate, um, for the fiscal year, which will happen November, December, typically for 24,

▶ 1:22:09 Speaker 10: But that will be for the following

▶ 1:22:11 Speaker 9: Fiscal No, we have until November to make adjustments to the FFY 24 budget. Because any time prior to setting the tax rate, if you have to have an additional appropriation, if there's a funding source that you won't appropriate, you really have until, um, you set the tax rate to do that. Once you set the tax rate, all bets are off. So we set the tax rate for 23. We can't change 20 threes budget. The rate's been set for 24 would be an, an opportunity in your scenario, um, to, to, uh, adjust the budget right up until the date you set the tax rate, Right. When Yeah. This should becomes, I'm sorry. Where would the funding would be to make that adjustment? In other words, is it additional state that came in, let's make, you know, at the end of the year, which can happen, it has happened. That should say, by the way, now we can appropriate another a hundred thousand dollars for this purpose. That's fine. So, but it's just, the key would be where will the funding sources be coming from to make that adjustment? But you can do it right until he set the tax rate.

▶ 1:23:10 Shawn M. MacMaster: Right. The the, the budget has to be balanced at the under state law Yep. Prior to the tax rate being set, right?

▶ 1:23:17 Speaker 9: Correct. Like, exactly.

▶ 1:23:19 Shawn M. MacMaster: So is there, and I know you don't like the practice of, of taking money out of the foundation stabilization fund, but that's our large stabilization fund, that's our rainy day fund. Is there some reason after June 30th mm-hmm. The administration couldn't send down in order to the council to fund the $242,000 at that point out of the foundation stabilization fund?

▶ 1:23:48 Speaker 9: Well, the issue would become, again, through the chair, you can hear me. The issue becomes, if it's not a recurring revenue, all you've done is create the whole even deeper, then you win when you start it because, but

▶ 1:23:59 Speaker 10: You're paying the bill. Yeah,

▶ 1:24:01 Speaker 9: But exactly. But there is no provision for the following year to, to close that gap. What I'm concerned about is that, um, we're still in 23 and this request is for 23. Um, obviously if the exposure is this high already, the year has just is ending. How do we accommodate this additional cost in 24? Agreed. I think That's, I would assume go right over 10 fiscal year. Unless someone tells me that's not gonna happen.

▶ 1:24:29 Shawn M. MacMaster: That's the, that's I think the question, we're all struggling with this. Exactly. Correct. We we're already in a structural deficit. So the question is why pay it now out of, out of what the mayor just asked us seven days ago to fund? I, I, that's what I'm struggling with.

▶ 1:24:43 Speaker 9: The, the difference is after the fact doesn't help me close the books, I need to close the books for the city for the end of this fiscal year, the end of June. So I need to have that balanced on the school side. I can't have it as a deficit. And that's would cause, um, a not good situation financially. We don't, that's something we, we don't do. We always cover our costs in I know we don't.

▶ 1:25:06 Speaker 10: Yeah.

▶ 1:25:08 Speaker 9: I'm just wondering if it's, and I would never start that trend because I, I think it's, um, it would be really fiscally irresponsible because we do have the resources to prevent that from happening. Sometimes given the timeframe in this wild municipal world, you don't have that luxury and, and you have to go with what you have here. We have an opportunity to close that deficit. And respectfully, I, I would ask that that be done, but I take all your points to heart. What are we doing in 24? Because this isn't going away. This new obligation is not gonna go away. My opinion,

▶ 1:25:40 Shawn M. MacMaster: And to, uh, consulate Jamal's point, I think the, the issue is, had we known about this earlier, we would've voted differently perhaps on some of the free cash allocations that came before us. Again, it's we're, yeah.

▶ 1:25:54 Speaker 10: These issues are being brought to us at a time where it,

▶ 1:25:59 Shawn M. MacMaster: it again, and I I hate to sound like a broken record, but they, they, they're these impossible decisions right. To correct for the council to make. And I understand we were elected to make the tough decisions, but the school department is not making it easy on us at all.

▶ 1:26:15 Speaker 3: And I candid, I, I do appreciate your points as well. And I guess I would, just Knowing that we found out about last year's issue, mid to end July, trying to bring this to everyone's attention and make people aware, and the maybe beginning of June is trying to be proactive and not, you know, I don't like surprises either. And I, I, I agree with you on that. And I think we, you know, we are making strides. It's, it's not gonna happen overnight, but we are trying to make strides to, um, improve our practices so that there is a day in the, you know, in the near future when we do not have to, um, talk about deficits at the school system.

▶ 1:26:50 Speaker 10: Thank you, Madam Chair.

▶ 1:26:56 Speaker 8: Um, councilor Repe. Thank you, Madam Chair. Um,

▶ 1:27:00 Mark Garipay: I had a lot of questions. I'm, I'm like, I'm, I'm struggling. Um,

▶ 1:27:06 Speaker 8: more around what counselor, um, shady was, uh, mentioning when

▶ 1:27:13 Mark Garipay: you found out June 8th on this, you were in front of us, I believe it was mid-March, third week in March for a 2.7 million free cash allocation in order to, um, balance the budget at that time. You did say that I, I believe you said that everything was trending good, and you reserved the right to use the, um, sped stabilization account. Um,

▶ 1:27:45 Mark Garipay: you mentioned we had six individuals or students that we had to provide transportation. What month did they start? They were they, April were they May,

▶ 1:27:54 Speaker 3: It was in that range of like, early spring,

▶ 1:27:56 Mark Garipay: And you did not know any of that at that time.

▶ 1:28:00 Speaker 3: Tho those are things that, you know, we, we are, um, we get noticed that, um, and these are, these are team decisions. It's not my decision. It's, it's, it's, uh, a team's decision that this would, uh, a student would benefit accessing their school system, accessing their, their academics through transportation. That's not a decision. That's not my purview. I'm not part of those teams. So I don't have, um, you know, I don't have any kind of influence on that decision. They let us know when that's been decided.

▶ 1:28:27 Mark Garipay: And, and by no means am I saying we should not be providing that. I understand. I just, I struggle with, so if you knew in April, wouldn't you have carried that expense forward for the next three months? And why all of a sudden, three weeks before the close of the, the year we're just finding out about a 342,000 debt dollar deficit? Um,

▶ 1:28:52 Mark Garipay: Mr. LaRusso, when with your weekly meetings, did you have any indication prior to June 8th that we were running, running a deficit in the school department?

▶ 1:29:02 Speaker 9: No. Um, I actually, I, I sent a request, uh, to the school department on May 30th, Tuesday. Um, we had a meeting. I wanted to be assured that, um, the books were in order, that there would not be a deficit. And, um, and then we, we had the next meeting. So we had the first meeting on May 30th, then the second meeting with C on, uh, June 12th. And that's when it was, the number was actually ascertained as to what the deficit was from the school department. But I had, um, first, my first reach out on it, first notification. I was just as surprised, probably more than probably, uh, others, that that was the case.

▶ 1:29:52 Speaker 8: Who knew within the, um, school department on June 8th,

▶ 1:29:53 Speaker 3: That was myself and Hannah working in the ninth,

▶ 1:29:56 Speaker 8: Notified Did the superintendent or the school committee? No,

▶ 1:29:59 Speaker 3: I called superintendent on Friday morning called, um, Mr. Del Russo Friday morning, and I talked to the, um, school committee chair as well.

▶ 1:30:08 Mark Garipay: Okay. Just wanna make sure that we're communicating with the city, especially where it's coming out of our, um, it's all 1, 1, 1 part, but it's, it's gotta be approved by us. Now you mentioned on Tuesday when I was watching the meeting, and I could totally be wrong, um, I think it was the mayor that asked the question, um, about grants. It seemed like the, did I hear a $900,000 deficit? Correct. And you're using grants and offsets in order to get that down to 342?

▶ 1:30:39 Speaker 3: That's the 3 42 is, is like, is the cost overrun for transportation? That's what is in the memo. Yeah. So we do have about between five and 600,000 in offset reserves that we have, which is that, that, that's helpful, but it won't get to the, the 900.

▶ 1:30:56 Speaker 8: Okay. Because we had that extra money.

▶ 1:30:58 Speaker 3: Say again, I'm sorry. We had

▶ 1:31:00 Mark Garipay: That extra reserve offsets. The reason why we're not, so my question is

▶ 1:31:06 Mark Garipay: 942,000, that's, if we didn't have that money, that's the real deficit, correct? That's correct. So we gave you 2.7 million in March to balance the budget, and now we're $942,000 off. Yes. So next year, if that, all those offsets are not there, and I'm sorry, I'm got a little excited, but if those offsets are not there, our deficit is not 2.7 million. It's gonna be 3.6 million. Am I understanding that correctly?

▶ 1:31:33 Speaker 3: Yeah, that's correct.

▶ 1:31:37 Mark Garipay: Okay. I I, I don't know where we're gonna come up with this money. It's all, it's all one time money. Um,

▶ 1:31:49 Mark Garipay: I was all prepared to, to support both orders as they are.

▶ 1:31:54 Speaker 8: I will not support an amendment.

▶ 1:31:56 Mark Garipay: I will support it to go to stabilization for next year, but I would recommend the other free cash order that is in front of us to pre-buy, which is just a general order from the mayor that says 500,000 to free cash. I would recommend using that to offset this year's budget, because I, I cannot cont I'll be honest with you, I'm losing, I understand there's a lot going on, but here we are with, you had mentioned earlier, we're not as bad as we were last year. Last year we were How much of a deficit? 2.8 million I believe. Yes. Now we're on pace next year to be three six. So I don't understand how we're better than we were last year. We had, we we're lucky we had the money, or you could be in front of us for 942,000. So I, I, I don't understand your end of it, but it's just,

▶ 1:32:49 Speaker 3: Yeah. And I think that there have been lots of categories historically under budgeted that we're trying to say, this is what it costs to run. So I, I understand exactly what you're saying, but I think part of that is, is historic under budgeting. That's what's leading to that, that deficit. And we are trying to correct that.

▶ 1:33:10 Speaker 8: Mr. Dela Russo, where

▶ 1:33:14 Mark Garipay: do you have major concerns for next year's free cash orders that are gonna be coming in? Right now, we're, we're working on a school budget that is gonna be in a deficit quite a bit. And we're, it's a, it's a budget based on hope that we hope we have all the money, all the free cash comes in. Are you nervous at all that we, we got a thin margin here,

▶ 1:33:37 Speaker 9: Um, through the chair to the counselor? It's always a great question. Um, of course, I'm always nervous and I'm always concerned. Um, I, I look to structural changes as being the only way to, for the remedy here. And that's beyond the scope of this, um, of my capacity, um, on school matters. But I really believe it no different than on the city side where we've had to face such challenges. We had to change destruction, how we did things. Whether that meant bring in an enterprise funding for the fire department, for the eight, for the ambulance, for it to save the salaries of eight people was the shifting of D P W to take responsibility for school buildings and maintenance. Those types of structural changes, the way you conduct your business, you have to really start, in my opinion, in my opinion, from the ground up and say something's not in order here. An action is necess is gonna be necessitated, um, outside of new revenue to, to accomplish that. But I think either, either case with revenue, without revenue, I don't know how you don't do some internal restructuring or reconsideration of how, um, obligations are being handled. That's my opinion.

▶ 1:34:55 Mark Garipay: If we don't have the offsets in grants and, uh, deficit for the schools next year is 3.6, 3.7 million, do you think we're gonna have enough one-time money without tapping stabilization funds in order to balance that?

▶ 1:35:14 Speaker 9: I mean, we respectfully, it's a loaded question because I have no concept of what I'm gonna receive from the Commonwealth for chapter 70 or other funds. I, I will say that, um, it should be on everyone's radar that, and I said this before, that outside of a stable recurring revenue, we can't, um, produce more than we can produce, and therefore we have to live within our margins. We're required by a lot to have a balanced budget. Um, we've been very fortunate that things are managed in such a way that we haven't seen, um, uh, layoffs in that sense on the city and or the school. Um, that can't not be a guarantee for the future, obviously, as nothing is. However, I, I mean, those types of requirements or considerations are not off the table when you're dealing with this kind of, um, volume. Again, addressing issues with one time revenue, as been talked about in the past, is not outta the question, they're uncommon, but you cannot rely on one time for long term, no different than your own house. You have to say, okay, this, for whatever reason, you know, in my own home, I'm thousand dollars a month short every year. So what, what can I do as a ram? What can I do to change that? What am I doing that I can alter that? And you have to take those kind of positions. It's healthy, it's a healthy thing to do. There's nothing wrong with that. And I continue to do it on my side of the city. We try to do things that we reduce cost of outside consultants, including my own office, try to take on certain things that we can produce that may be ultimate to pay something outside to do. But I think all, all the above are gonna be necessary. The numbers are significant, and I don't see at this point in time how those numbers are gonna be, um, funded in a permanent way. And that is, should be a concern based on what I note today.

▶ 1:37:10 Mark Garipay: Thank you. Thank you. Um, I'm prepared to, um, vote for the next appropriation for half a million, but for, to use it within, within your budget, um,

▶ 1:37:22 Speaker 8: and to if, if, and to fund the stabilization. Um, I think, um,

▶ 1:37:26 Mark Garipay: that's showing, showing the commitment. Um, so I really don't, I just want to, I do get excited. I apologize Mr. Kelly, I appreciate being here. I appreciate you. You are here. The only one answering the questions and I really do appreciate it. But, um, the numbers are, are mind boggling, mind boggling to me. It's not 300,000, it's really 900,000. Um, and I just happened to catch that on the school committee meeting. So, um, thank you

▶ 1:37:58 Speaker 4: President

▶ 1:38:00 Jen Grigoraitis: Grigoraitis. Thank you, Madam Chair. Thank you both for being here. Oh, the mics are on, huh? I just, I wanna echo many of the concerns raised by my colleagues, um, but also just wanna ask some pragmatic questions because it feels like we are yet again, out of money and quite frankly, out of time. I mean, this body just motioned before you got up here to move the bottom line on a budget that is largely based next year on a promise for money, that the number has now just grown by $900,000 in order to close a deficit in the schools. Part of which we were told was gonna be putting money in sped stabilization, and now we're not gonna, now there's a request to not do that. So it feels like mm-hmm. There was the budget that came down to us that we've been working toward has now at the 11th hour shifted, which is very unsettling as we head toward, um, next week. And legally we have to pass a budget by Friday. Um, and the fiscal year closes on the 30th. So it, you know, it feels like we yet again have our backs to a wall in terms of timing. And, and so that's my first question is, Mr. Kelly, you mentioned that, um, you know, you're, we're not done with the fiscal year. I know school ended today, but technically correct, the year goes till June 30th. Um, when do you administratively close the books on this current fiscal year, and when is the latest that we can pay, um, cost incurred in this fiscal year? Like I know for example, at the state, it's August 30th is when we administratively close the books. Mm-hmm. What is it for the school department and for the city?

▶ 1:39:31 Speaker 3: Our goal is to try to close the books by July 15, July 15, so we can get all that information over to the, the city hall side for their audit. Um, so that, that's our goal.

▶ 1:39:39 Jen Grigoraitis: So that's a goal. But is there a hard, I mean, it's great to meet goals, but is there a hard deadline at which we lose, we lose the ability to do something? Just, you know, recognizing what Councilor Gupa just said, there was a request before us to put money in stabilization. Mm-hmm. There can be a request before us to take money out of stabilization. I know that comes with the risk of needing the votes to get that money out, but it also feels like we're, we're doing it this way because of June 30th, and I just wanna understand how important June 30th actually is or July 15th.

▶ 1:40:09 Speaker 3: Sure. So for, um, you know, our, we we're not, our, our bills are done June 30th. We're not allowed to use anything FY 24 to pay F FY 23 bills. So our, that, that June 30th is pretty, is a pretty hard date for us.

▶ 1:40:20 Jen Grigoraitis: But you said you, your goal is to close the books by July. I recognize you can't pay out of a different funding source. Sure. But if money is taken out of stabilization, it can be used to pay bills that are still outstanding from previous fiscal year. Mm-hmm. Or can it not mm-hmm.

▶ 1:40:35 Speaker 3: Stabilization. Yes. Okay.

▶ 1:40:36 Jen Grigoraitis: Um, and then just going back to the costs that were incurred, and I, I think this is what's a little baffling for me. I, I mean, being in the business of any, any human business is incredibly expensive and volatile. I think we all understand that that is particularly true in schools where you were dealing with complex children. Um, but we get a request or a decision is made to put a student on a bus or we get a call that we have a student who, you know, we need to provide transportation to cuz they're homeless. How does that translate to your department knowing that there's gonna be a bill that we have to pay for that? Um, and then how are we budgeting for that if we've known that these students are gonna be ours starting in April? I guess I'm a little, I'm a little confused about how it is that we're sort of shocked that we owe this much money in June when we've obviously been incurring that service. Mm-hmm.

▶ 1:41:28 Speaker 3: Sure. So we, our, our transportation line has been over consistently probably for most of this year on our, our year to date budget. So, um, we do monitor that. And again, that's, that's past practice to under budget, transportation, the transportation line. And this year it, it even went further over. Um, and when we do get a new rider, we forecast out what it's gonna cost that route for the remainder of the year. Um, so, you know, we do know that, um, based on, and, you know, comparatively, uh, uh, an in-district route is much less expensive than, than having to contract that out.

▶ 1:42:01 Jen Grigoraitis: So were we forecasting these costs and we were just completely under in our forecasting for what it was gonna, the total bill was gonna be? Yeah,

▶ 1:42:08 Speaker 3: A little bit of both. Um, you know, we're, uh, always hopeful that, you know, that to get that many riders in that short of time is, is, is unprecedented. Um, and, um, you know, always hopeful that, uh, ridership will stay consistent. And

▶ 1:42:21 Jen Grigoraitis: And then going back to the fact that we haven't yet closed out the fiscal year, are, how confident are we that it's, it's just $942,000 that we're over?

▶ 1:42:32 Speaker 3: Uh, I'll know more probably that last week of June. Uh, once we really start to, uh, we still have purchase orders we need to go through and see if we need to close them out, if there's any reserves there, anything that we can scrub. So that's the process we're going through right now.

▶ 1:42:43 Jen Grigoraitis: Okay. And, and what happens, this is a question I guess for both of you. If we need more,

▶ 1:42:49 Speaker 3: Um, I would, if it's special education related, I would have to come and request access to the stabilization fund. Okay.

▶ 1:42:55 Speaker 7: All right. Thank you both. Thank you Madam Chair. Councilor

▶ 1:42:58 Speaker 4: Eccles. Thank

▶ 1:42:59 Speaker 6: You, Madam Chair. Uh, thank you both for being here.

▶ 1:43:03 Jack Eccles: I think councilor President Greg just asked this, but I, I'm still really just curious, um, on a kind of more clear answer, just going back to like getting these new riders in the third quarter and like how we're reconciling this. Cause I think it's really important that, you know, we're staying on top of this with, with how many people are, you know, interested in this and how important it is. Um, so we had a bunch of students in the third quarter that was two and a half months ago. I, I just, how does it take that long to work its way through knowing that, you know, you're gonna have six pay periods paid out in June? Yeah. People start taking roots in April.

▶ 1:43:42 Speaker 3: Sure. I, I, I guess the, the answer would be, um,

▶ 1:43:50 Speaker 3: we always look for efficiencies. Like, we're always looking for, you know, are there ways to combine route, things like that. Our district, our, um, transportation coordinator, always, always looking for ways to, um, minimize reduce costs. Um, so I think that, um, combination of, you know, not anticipating that many would, would arrive and constantly looking for ways to, um, uh, reduce costs there. And, you know, hoping there would be something that would, um, uh, drop that down a little bit.

▶ 1:44:18 Jack Eccles: Got it. Um, Mr. LaRusso, do you know by any chance what our anticipated free cash would be next year? I know it's hard to predict, but like, more than this year, less than this year.

▶ 1:44:31 Speaker 9: Always a fine question. I, I enjoy that. Um, just as a point of reference, um, the five year average for us now is 5 million 2 27, 1 75. That's over the last five years. Um, again, uh,

▶ 1:44:50 Speaker 9: I I would expect that, I'd like, I'd like to see that, however, we have lost si a lot of money, sick of money with the, um, cannabis. Um, and that has an impact.

▶ 1:45:06 Jack Eccles: We lost revenue this year on cannabis. Yes. Yes.

▶ 1:45:09 Speaker 9: And that's was is typically unbudgeted revenue in that sense. Mm-hmm. But it also would allows you to have free cash at the end of the year because you hadn't budgeted that revenue coming in, which is what you, you typically, um, you makes up the majority of if free cash to begin with.

▶ 1:45:27 Jack Eccles: So did we receive less than we had anticipated in the cannabis stabilization from,

▶ 1:45:34 Speaker 9: Um, no. My understanding is that the large change on the recognition of that revenue and what's owed and what cities and towns are allowed to receive, and I believe that we had $955,000 last fiscal year, which is in, um, this year we're, I mean, probably, uh, 20% of that perhaps, um, is, so that's, that's a real large difference. And at this point, I, uh, don't anticipate any revenue coming in in the budget for 24 for that at all. So it's, we already discounted that from happening completely. And the 24 budget that was voted by the council, it will be voted by the council.

▶ 1:46:21 Speaker 6: Got it.

▶ 1:46:24 Jack Eccles: And that's different than what's contributing to that stabilization account we're drawing on.

▶ 1:46:30 Speaker 9: Right. That's exactly, that's, those are one of those, um, factors that can assist you in having amount of for cash. We've had the last, uh, you know, last year in particular, um, the revenue source dries up or the conditions get poor on the economy, in particular for communities like our size. And, uh, people hesitate to, you know, do the, um, building, you know, projects that they anticipated and that cuts down on permits and right down the line. And then, um, people hold onto their cars longer, cuts down on excise tax and just has a mushroom effect. But it just, um, something that we're aware and we, that's why we always stress that, um, actuals from the prior year and not to be considered actuals for the current year because of all the changes that happened.

▶ 1:47:23 Speaker 6: Yep. And so do we anticipate

▶ 1:47:27 Jack Eccles: less revenue going into that stabilization account, the, the marijuana public safety education stabilization account going forward?

▶ 1:47:33 Speaker 9: That's a great question. No, that's different. And I'm glad you brought that up because there's two separate funds funded, one's funded, um, by tip should have been a payment to the city basically every, every quarter. The one I just talked about earlier, the 955,000, the other fund that we talk about is based on a tax, an excise tax, 3%. Um, and then we split that. So let's make, I'll just say the number's, $300,000 that goes from excise tax from that, that's in the local receipts. And three hundreds would go into the special fund that was set up by the community, um, that we, the marijuana access fund that we set up specially for, uh, police school department, that kind of thing. So that's a separate one, separate funding source. That's the, that's the occurring revenue. And as of today, unless someone, um, can lead me elsewhere, my understanding is they have, they're not going to, um, alter that. So that's gonna stay in place, which is fine. Which I hopefully that, that maintains that.

▶ 1:48:34 Jack Eccles: So as we draw on that, we can count on that as recurring. Yeah. Correct. Correct. Consistent.

▶ 1:48:39 Speaker 9: And that's the difference. That's why it was introduced this year, because that's not gonna be changing from what we've been told.

▶ 1:48:45 Jack Eccles: Got it. Um, how do we come up with the goals for the stabilization accounts for what's supposed to be in there?

▶ 1:48:53 Speaker 9: Great question. There's several ways. Um, typically, um, we have divisional local services put out, um, uh, recommendations. They look to have, uh, certain amounts, community separate cash. At least three to 5% of your budget should be your target. If we're here a hundred million now, we wanna be three to 5 million in that range of free cash to be healthy. Same as stabilization. They look to have, uh, the, once you had a stabilization fund of 5% of your budget, again, 5 million, we're not there yet. We got about 3.9 and, um, right now. But we try to, to borrow best practice. And, um, and, and the other funds that we use are funds that are necessary contract stabilization fund, because of the necessity to pay retroactive payments for your collective bargaining units. Um, communities that don't have that fund or have access to that kind of fund, um, find themselves oftentimes in distress when a settlement occurs for a contract because they haven't set aside the money to pay the prior years, or it might be two or three year contract that they're obligated to pay retro. That's really huge. And that's why we take, um, I look at literally, I look at cost, I look at cost of contract, and I, I make a determination as to what I think is reasonable for that fund based on activity, what I've seen in the past and projecting the future. Um, so it's a judgment call that I make. And, um, so far I, I feel I've been pretty good with that. History has shown.

▶ 1:50:30 Jack Eccles: Got it. Thanks. Um, question for Mr. Kelly. How do we, um, accumulate offset reserves? That was the first I had heard of those. And how do we accumulate them and can we count on having some next year? Sure.

▶ 1:50:42 Speaker 3: So different sources. We, um, some of them are fee based, like our athletics department, our music lessons, um, our facility rentals, our tuition programming are fee based. We get circuit breaker reimbursement from the state for, um, uh, it's a a year lag. There's a year, uh, delay in reimbursement for, um, special education tuitions. Um, so those are the, those are the majority of, uh, uh, funds that we bring in for our offsets.

▶ 1:51:09 Jack Eccles: And so what you were talking about earlier, using that to close the deficit, do you anticipate having that kind of money available at this time next year as well?

▶ 1:51:19 Speaker 3: So it's, yes. They're, they're budgeted, uh, each fiscal year. Um, and so, and that's another thing that we did this year that hadn't been done in the past. A year ago, the ECC ran a deficit around, I think it was around 180,000, i I think it was around that ballpark. Um, this year the ECC now is coming in to be able to make that, um, uh, they're budgeted offset goal. Uh, so that's, that's progress. Um, but yes, we anticipate based on, um, we forecasted those revenues based on what it costs to run the program, not based on comparables from the area because it, it's not, it's not daycare, it's, it's actual education going on even at the pre-K level. Um, so we, um, design the fees based on a budget so that the program pays for itself, the, the tuition program pays for itself, and then the, um, it also provides that, uh, targeted offset and our enrollment projects to, to fulfill that next year.

▶ 1:52:16 Jack Eccles: Got it. Um, I guess the question is, for whichever one of you feels like answering, um, if we pass this order without amending it tonight and passed it through the council on Monday, what would be your next step?

▶ 1:52:30 Speaker 3: I would have to request access to the special ed stabilization fund, which, if that's, that's the will of the committee. That's, yeah. Yeah. That was the, the, the, the, um, intent of the memo was to, you know, say that this is something we were going to need and that just as A consideration.

▶ 1:52:49 Jack Eccles: Okay. Um, yeah, I appreciate that. I think that, you know, it's been said a lot, but between, you know, making transfers increasing anticipated local receipts, not meeting stabilization goals, dipping into offset reserves, drawing on marijuana stabilization pre-purchasing for next year as Councilor Gar. I said, we're borrowing from a lot of places to try and keep the lights on. And I think, I guess right now we're just hoping that everything is gonna be there next year.

▶ 1:53:18 Speaker 6: Thanks. Thank you.

▶ 1:53:20 Speaker 4: Councilor Broski.

▶ 1:53:22 Speaker 2: Um, Mr. LaRusso? Yes. Oh, thanks for being here tonight. Good. Oh, you're welcome. Thank you. And, uh, Mr. Kelly, thanks for being here tonight. Thank you for having me. The lone representative of the school department. Um, you know, uh, I appreciate you being here because for the most part, you know, the kids can't speak for themselves. And I imagine that for many parents, you know, today was the last day of school, there were a lot of celebrations and balloon notches and all that nonsense. And,

▶ 1:53:53 Speaker 3: uh, few water balloons set out my window. Yeah. Um,

▶ 1:53:55 Speaker 2: many of the parents probably don't even realize that this is happening. Um, but, you know, we're all here tonight and we're looking at the school department budget again. But, uh, you know, I feel as though, you know, for the most part, these conversations go a lot deeper than the budget. Um, you know, I look back at the community a couple of years ago and everyone was rallying around the school department in the override. And, um, it was a, it was great to be part of that and to be part of that momentum. And, but as, um, you know, over the past couple of years, I've, I I I wanna say that we've, I lot better words. I, I think we've sort of squandered that momentum in a sense and, um, sort of lost trust, uh, within, uh, the community at how we, uh, function as a school department sort of. And I think, uh, when we look at it, you know, when you're really looking at the school department, the focus is the number one focus is student achievement. And I can look at, you can look at that in many different ways and, um, imagine it in many different ways, but the student achievement is, you know, driven by the budget. And, um, you know, I think a lot of the conversations have been, you know, outside of that realm. And I think that's really where the focus has to, uh, begin again and really focus on, you know, what we're doing with the kids in terms of student achievement in the schools. And, you know, that's driven by the budget. And, um, you know, right now, I think, you know, people would be surprised if, if, uh, and I know this is a public meeting, but I, I'm from the understanding that a lot of people would be shocked to hear that we are up here again talking about the school department budget. So I think that's why, uh, my colleagues are having trouble with this tonight. And I'm not surprised by it because I think I, majority of the community would be having trouble with this. Um, so, you know, I am, you know,

▶ 1:56:06 Speaker 2: I am one who really does understand that, you know, you are running at a deficit all the time and, you know, and there has to be a mechanism in place for that problem to be solved. And, you know, that's con that's a bigger conversation for the community. And, you know, I hope at some point that we do see, um, you know, that momentum again. And, um, you know, I, I don't have a question, but I do appreciate you being here. Sure. And, um, thank you. Thank you.

▶ 1:56:33 Speaker 9: Thank you very much.

▶ 1:56:36 Speaker 4: Thank you very much. Councilor Stewart? Thank you, Madam Chair.

▶ 1:56:40 Speaker 8: Madam Chair. You know,

▶ 1:56:44 Robb Stewart: this whole process that you've been overseeing the last like four or five weeks,

▶ 1:56:52 Robb Stewart: that involves all of the budgeting process, not just the school and, and so forth, but everything,

▶ 1:56:58 Speaker 1: we have this impending storm that's coming.

▶ 1:57:02 Robb Stewart: It's clear and it's business as usual right now. And that to me is the most concerning part of this whole budget process, is I think Mr. Lar Russo was clear in saying, you know, we would need to do some restructuring to be able to deal with this.

▶ 1:57:25 Robb Stewart: And if you look at each one of the, you know, you go through this, all the, the line items, right? Each one of the departments, nothing has changed. It's as if there's this false sense of security. And I think what's exacerbating some of the issues tonight is some of the promulgation that does not happen when there's certain information, like an increase in transportation budget, you know, which should be easier to manage than what we're seeing. It's not hard to do actual the plan and put it together. When I hear that it's $342,000 off, that's a big number. That's a really big number. So it's very concerning, Madam Chair. And it, it concerns me on the overall budget, not necessarily what we're talking about here, and whether we're making the right decision to support this kind of a budget when nothing is being done. So that's, that's my concern. I wanted to express to you as the chair of this committee. Um, the question that I have, uh, for you, for you is, um, if, if the amend, so this amendment that we have attached to the order,

▶ 1:58:43 Robb Stewart: is this just a way to circumvent you having to go back to us and, and speed the process? Ultimately?

▶ 1:58:51 Speaker 3: I guess I wouldn't wanna circumvent the, to answer your question respectfully, I wouldn't wanna circumvent the process. It was more just like, uh, councilor Greg, uh, Grigoraitis Rice was saying is that it's a timing issue now where if, um, the fund funds are, it's decided the will the committee to appropriate to the, the, um, stabilization fund, I would have to come back and ask for, um, access to that to help support the budget.

▶ 1:59:15 Robb Stewart: And Well, what I mean, circumvent is, in other words, you don't have to do the two steps, you just have to do the one step.

▶ 1:59:22 Speaker 3: Sure.

▶ 1:59:23 Robb Stewart: And it happens quicker. That's, that's what you

▶ 1:59:25 Speaker 3: About. Yes. And I don't mind doing the two steps. I just, I guess want everyone to know that that, right. We would need to do both steps.

▶ 1:59:30 Robb Stewart: But it's basically the same outcomes the money has. The money is if they're gonna get it attached or it's gonna go into stabilization, then you're gonna pull it right back.

▶ 1:59:37 Speaker 3: That's my

▶ 1:59:37 Robb Stewart: Understanding is that that's, that's okay. I just wanna make sure I understand.

▶ 1:59:39 Speaker 3: Yes. That's my understanding.

▶ 1:59:41 Robb Stewart: So I mean, our hands are kind of tied, uh, uh, right at this point.

▶ 1:59:48 Speaker 3: My hands are tied as well.

▶ 1:59:49 Robb Stewart: And, and I do want to echo, uh, counsel Rems key's comment regarding the fact that you're here as the sole representative. And I thank you for that. Sure. Appreciate that. I would've expected more, but you're here, so thank you for that. Um, so no more questions, Madam Chair.

▶ 2:00:08 Speaker 4: Um, for the second time, since we're now all spoken, once, I have Councilor Repe, um, councilor Karin Shady, and Councilor Eccles and Q again, so Councilor Repe.

▶ 2:00:23 Mark Garipay: Thank you, Madam Chair. Um,

▶ 2:00:26 Speaker 8: so why can't we use

▶ 2:00:31 Mark Garipay: the free cash appropriation, the next order, 500,000 to balance, balance this year's budget? I know it was for, for prepaying, um, a number of items, but we have a new superintendent starting in two weeks. Maybe he has new ideas, maybe he can find some efficiencies, right? And then we can purchase those. If we find some savings,

▶ 2:00:59 Speaker 8: we have this free cash we're giving you, or I shouldn't say if it passes,

▶ 2:01:03 Mark Garipay: you're gonna have $500,000. We have to change some things. I know it's prepaying, but on the city side we use 2.7 million. That is not going to, to other departments. So I guess, why can't we hold off on that prepay? And we're already running, we already know it's been public, a 2.7 million deficit next year. Why can't we hold off on those purchases and wait for a new superintendent and see if, have him take a look at things? Maybe he can find some efficiencies in from, in some savings. Mm-hmm. I understand The schools need it. We, to everyone's point, we have a, we have a major issue and we are almost to the cliff, which I believe will be next year. And there has to be, there's only two ways to do it. Right. And the pain is, is not, is not gonna be good if we don't have an influx of revenue. I think we all all understand that. Sure. But in the meantime, we all have to make changes where we can, and I'm just struggling with this next order that would give you enough to balance your budget and then we reset. Mm-hmm. And take a look next year.

▶ 2:02:16 Speaker 3: And thank you for that. Yeah. I, I, you, you're right. The numbers Yes, that would do that. That the, the order before you, I believe was the, was the school committee driven. We were, we were directed to propose that, um, and use that for FY 24. So I, I can't modify that. That's not something that I can change. It would have to be a school committee vote to do that. So, you know, I I, I don't, you know, dispute what you're saying numbers wise, you know, and I think that that would have to be a decision the school committee makes. I can't make that decision to change the order

▶ 2:02:46 Mark Garipay: In, in, in for the public where if they, if they goes through, you're gonna get $500,000 in free cash, which you could change, they could vote to change what they want to use it for. Correct.

▶ 2:03:00 Speaker 3: I would've to consult with them on that. I, I, I'm not sure

▶ 2:03:03 Mark Garipay: I would, I would think, because to us it's a general, I believe the order says free cash in the amount of 500,000 to the school department, other funding sources. So we're giving them appropriation. It's no different than 2.7 million when it came in front of us. And we asked the question back in March, I think I did. Or maybe Councilman McMasters. Why are we giving you all this money now? Right. If, if, if you come in with a surplus, that's just extra money that you can spend anywhere. I, why is that different than where we are today?

▶ 2:03:36 Speaker 3: I think cuz it was requested specifically to use for FY 24. I think that's the,

▶ 2:03:41 Mark Garipay: But the stable, the, the 2.7 million free cash was to balance the budget. Right. For FY in stabilization, in stable, uh, for a spec. Three, three categories.

▶ 2:03:55 Speaker 8: But if we had given it to you, you could have used it elsewhere.

▶ 2:03:59 Speaker 3: I would, yeah. I guess I would always intend to use what they're, what they were appropriated for and I wouldn't want to go against that. I understand what you're saying, but I think that I just can't change what was requested and, and what it was intended for. That would

▶ 2:04:12 Mark Garipay: Be it. I think what's requested to us is to provide a half a million dollars in, in, in free cash to the, to the school general fund. I see it as that's what the order that came down from the mayor. Mm-hmm. I would see that the school department can adjust, would be able to go back and, and, and re-vote how they wanted to allocate that money.

▶ 2:04:32 Speaker 3: Yes. And I'll, I'll let, um,

▶ 2:04:35 Speaker 4: Through the chair, may I, may I be Heard on that? Yes. Just on the legal aspect of this. This is a point of order.

▶ 2:04:38 Jen Grigoraitis: Yeah. Just right. Make sure you're talking right into the microphone. Apologize.

▶ 2:04:42 Speaker 4: Thank you. Um, every appropriation and transfer order that becomes before council by city ordinance, I think I identified in the memo before tonight's meeting. I think it's section four, seven and 48, has to also have a memo attached to it that identifies the purpose for which the money's gonna be spent. Um, if it's the school department, it also requires a school committee vote, identifying the purpose and the dollar amount prior to the mayor submitting a request to city council that was done. The request of the mayor is what the council is being asked to vote on or act on tonight. Um, and the request of the mayor for appropriation 22, 20 23, 37, for example, um, it says 500,000 of the school department, other funding sources. It includes the memos that are attached plus the previous school committee, um, vote. And this is, this is the same for other transfer orders, other appropriation orders that have come before council, before the purpose. Um, you are also voting on the purpose that's being rec recommended or requested by the mayor, not just the actual dollar amount. And that can't be changed at the will of council. Council is council's authority is to vote on what the recommendation is of the mayor that is before you. And my understanding for this order, and Ken correct, correct me if I'm wrong, is that it's 500,000 to 500,000 from free cash for use for fiscal 24.

▶ 2:06:01 Speaker 3: Yes, that's correct.

▶ 2:06:02 Speaker 4: So that is what council's being requested to vote on. It's not just simply $500,000 to the school department. So I just wanted to provide a point of clarity on that.

▶ 2:06:18 Speaker 8: Okay. I I questioned that, but that's fine. Thank you.

▶ 2:06:23 Speaker 4: Okay. Um, counselor Carm Shady.

▶ 2:06:29 Speaker 4: Hi again. Um, chair Elli,

▶ 2:06:32 Manjula Karamcheti: I think just wanted to note a couple of things. I think we're all feeling the weight of the city budget, the school budget, the shortfalls, and being really worried about next year. I just also wanted to name that regarding McKinney Bento. We have a responsibility and the right thing to, and it's the right thing to do to make sure our homeless students have transportation and get to the schools where they feel like, uh, families feel like those students can learn best in a community that's important to them, as well as with FAPE in special education, making sure our students have the appropriate programs and services to support their academic success. Um, and in these conversations that we're having, two things, I want to make sure that we recognize that the, some of the funds that are being put forth for us are to make sure that students, that we pay for those services that students need. And I think that's really important. And I also wanna make sure that we are not blaming our homeless students or our special education students for the situation that we're in. Um, but that the issues that I've heard are around communication, around proactive planning and having the right programs and services to support kids. Um, so I just felt like it was important to name that, um, because again, it is our responsibility to make sure that all of our students have the supports they need to be successful.

▶ 2:08:25 Speaker 4: So thank you for allowing me that point of privilege and to say that. Thank you Councilor Eccles.

▶ 2:08:33 Jack Eccles: Thank you, Madam Chair. Just two, two questions. One thing that kind of makes me think that later could be better, and that's what I just want some clarity here. Mr. Kelly, you mentioned, you know, you, you have till later in June to kind of fully know where we're at. Is it possible we end up talking about a smaller number from special ed stabilization anyway, even if we do this tonight?

▶ 2:09:03 Speaker 3: Yes, it's possible. It is possible. We could get a little bigger too. Like I said, I, we won't know the number until, uh, the, the very end of June, but yes, yes, you're correct.

▶ 2:09:11 Jack Eccles: Got it. So we could do it tonight and it wouldn't even be, could, could not be the end of this particular discussion on closing at fiscal 23. That's correct. And there's no operational difference to you between coming back with the final number

▶ 2:09:31 Speaker 6: and, you know, getting it right now?

▶ 2:09:33 Speaker 3: Uh, no.

▶ 2:09:36 Speaker 6: Uh, thank you. And then

▶ 2:09:38 Speaker 3: Just if I clarify, I guess my point in, in sending the memo was to let people know in advance of closing so that people were not surprised on June 30th when this would come. So again, like I said earlier, um, you know, trying to make people aware now as opposed to the end of July, which was happening last year, trying to make people, you know, be transparent and let people know this is the current state of affairs

▶ 2:09:59 Jack Eccles: For sure. Yeah. I think that's definitely a preferable outcome. Um, Mr. Del, I think one thing we talked about is that we would've treated free cash differently had we known this. Um, I, I still, you know, see that we're in a position where we could, um, I, if we were in full counsel to r not pass free cash orders, those just close to next year's free cash. Right. They become unavailable until we certify free cash next year. Yeah. If,

▶ 2:10:32 Speaker 9: If you don't appropriate, it's considered unappropriate if free cash to close out and go towards next year's free cash. Got it. But that's it.

▶ 2:10:41 Jack Eccles: And just as a comment, if we did that, we likely wouldn't without a special meeting be able to appropriate that free cash this year.

▶ 2:10:50 Speaker 9: Yeah. Yeah. That's the other issue. Literally by June 30th, it's gone. Mm-hmm. And, um, they probably won't have free cash certified next fiscal year till January, February. They, they seem to be moving the compass on us further out, um, and for a lot of reasons on, on their part. But I mean, that's when I would expect the next certification to happen.

▶ 2:11:11 Jack Eccles: But if, but, but that would then become available to deal with whatever issues we

▶ 2:11:16 Speaker 9: Correct at that time fiscal year end up next year. Yeah.

▶ 2:11:21 Speaker 6: Thank you.

▶ 2:11:25 Speaker 4: Um, consular, Jamal, Dean, vice Chair, Jamal today.

▶ 2:11:31 Speaker 4: Thank you, Madam Chair. Um, I'm,

▶ 2:11:35 Maya Jamaleddine: I'm sharing, um, the same sentiment as many of my colleagues, uh, today shared. I, I feel that I am in a very bad situation where I have no options or no choices. Uh, and whatever the decision is gonna be made today, I don't think it's gonna be the best decision that we are gonna make. And I don't trust anything, uh, anymore. I honestly, I did lose a lot of trust, um, over and over.

▶ 2:12:09 Speaker 4: But with that said, uh, Mr. LaRusso, if today order was not passed, what would you, how would you resolve this shortfall?

▶ 2:12:20 Speaker 9: Um, the chair would probably, my, um, initial feeling would be that this did not pass as amended. That I would seek my friend, um, next to me, Mr. Kelly, to see what we could do on his part to initiate closing purchase orders that have not been belief fulfilled yet. And if in fact there are any options of, um, additional, um, special ed, uh, money that may be available, um, the circuit breaker or not. And if there's anything else that could be looked upon as being realistic to close the year in a positive way for me, um, it's a little bit more black and white on the fact that I need to close without a deficit. And if it means that expenditures that the school is anticipating making, that they just don't make them and we close the books in a balanced way, that's more important to me than, um, probably any other consideration. Right now. I need to have assurance that we're not gonna have a deficit in the school

▶ 2:13:31 Speaker 9: department. And I would defer to Mr. Um, my friend, uh, Mr. Kelly to see if he had any other comments. But I know he's looked at pos, we've talked about it. I don't know if there's an opportunity there in, in a particular situation if this does not pass.

▶ 2:13:44 Speaker 3: So we, we've looked at our purchase orders, um, and we are scrubbing some of them. It would not cover the entire deficit. Um, a lot of our remaining purchase orders are for tuitions, which are, um, that's nothing we have a, a choice in, in, um, spending. Those are costs that have to, that must be paid.

▶ 2:14:03 Maya Jamaleddine: I'm sorry, I didn't, uh, hear clearly your comment, Mr. Kelly.

▶ 2:14:07 Speaker 3: So we would be able to close some purchase orders, but it would not cover the entire deficit.

▶ 2:14:17 Speaker 4: Okay. Um,

▶ 2:14:22 Speaker 4: Madam Chair, do you mind, um, and I don't wanna ask Mr. Kelly to repeat it, but just to be clear, um,

▶ 2:14:29 Leila Migliorelli: do you mind to just repeat what Mr. Kelly? Sure. I think Mr. Kelly was saying that they have looked at open purchase orders and, um, canceled those that they can, but it still, those that they canceled is not gonna make up the difference. Um, did I get that right? Yes, correct. In, in the deficit. So they have looked internally to see what they could do to stop the, the shortfall or to bridge the gap. And it, it's not close enough.

▶ 2:15:02 Speaker 4: Okay. Thank you. Mm-hmm.

▶ 2:15:09 Speaker 4: I have questions too, but just wanted to check and see if anyone else has questions. Councilor Gupa, do you have one more question?

▶ 2:15:15 Mark Garipay: Just one more? Yep. So to, I think it was, we've gone around Counsel Eccles point. If, um,

▶ 2:15:26 Speaker 8: if we put this, if we vote,

▶ 2:15:29 Mark Garipay: if we don't vote on the amendment and put this in stabilization, you go back, you close out po uh, purchase orders and there is a savings, the benefit of that is we're gonna have, still have extra money in stabilization available next year that we can access. Correct.

▶ 2:15:46 Speaker 3: You're talking about the special education stabilization, correct? Yes.

▶ 2:15:48 Mark Garipay: Correct. If we were to vote that in tonight and you came back and there wasn't, um, came back at the end of the year and we didn't need 242,000 today, we needed a hundred, we're still increasing the stabilization fund close closer to Mr. Lar Russo's recommendation of 750,000, which we know will need that extra money next year. So, um,

▶ 2:16:12 Speaker 3: Yes. Thinking about That correctly, You are, we just, we, there aren't, I can tell you there are not enough purchase order, um, you know, uh, open purchase orders that we can clean up that would, that would cover that deficit. Like I said, our largest purchase orders right now are, are tuition based. And those are, those are definitely getting spent.

▶ 2:16:30 Mark Garipay: I'm not saying it's gonna cover all of it. Anything we can do to give us extra next year. And that fund is what is what I'm looking, looking for. We're all, we're all struggling as, as Council Stewart said, um, need to make some, some adjustments and, and this may be one, even if it's two weeks, three weeks.

▶ 2:16:51 Speaker 4: Uh, counselor Ec Counselor Eccles.

▶ 2:16:53 Jack Eccles: Yeah. Just one, just one clarifying question cuz I've heard cleaning up, I've heard canceled. What is, what is this actual process doing that you're describing right now? Sure.

▶ 2:17:04 Speaker 3: And the school system, when we're gonna make a purchase, we create a purchase order and sometimes, like, it can encompass a couple different things. And if say one of those items you were gonna buy came in at a lower price, that money is still encumbered. So what would be, like if something you anticipated was gonna cost $10 and it came in at seven, that $3 can be freed up and put back into the budget. So we're in the process of doing that right now with our purchase orders. We've done it actually quite a bit. Um, a lot of our remaining purchase orders are, are tuition based.

▶ 2:17:33 Jack Eccles: Got it. So you don't, you don't anticipate much of a delta there, a significant one, but you're not, that process doesn't include canceling or cutting anything, it's just reconciling. Correct. Got it. Thanks.

▶ 2:17:48 Speaker 4: Thank you. I guess I'm, I'm just gonna pick my question up from right there. When you were talking about there's the purchase orders and then you

▶ 2:17:55 Leila Migliorelli: also made reference to, um, that by the end of the year after, are there other things at play too that could either make this deficit larger or smaller? Like it's not just purchase orders, right? Correct. Okay. Yep. Okay.

▶ 2:18:13 Speaker 4: Correct. Um, I, so first off, uh, Mr.

▶ 2:18:16 Leila Migliorelli: Dela Russo, uh, I just wanna clarify, unappropriated free cash goes right into free cash for next year, or does it hit the bottom line of the general funding could get eaten up along the way, if that makes any

▶ 2:18:30 Speaker 9: Sense? It's always a great question. I always, um, say it's really not a dollar for dollar resolution mm-hmm. Every year as a brand new lookout by the doi, every day you have a whole different set of, um, open liabilities encumbrances that you didn't have the year before that. But what happens literally is that it goes towards free cash. They say phase 500,000 that would be turned over in a positive way in a general fund. So that would apply, that would enable us to have a bit that money, assuming dollar for dollar available next free cash certification. So it'll carry over into the next year, whatever you don't appropriate.

▶ 2:19:08 Leila Migliorelli: So if you Were tocause, we haven't spent it. Okay. What if you were to, as it seems like may happen, like what if you were to go over budget next year or exceed in certain areas, does that leftover free cash come in at that point and then makes it smaller? Or is it literally hitting a different account? Just waiting there and then when you do the other free cash at the end of the year of the, um, certification process?

▶ 2:19:31 Speaker 9: If, if I understand it right, in the event, it, it, it, um, you end up with a deficit on mm-hmm. You're asking me that that's gonna either away at the city's fund balance itself, the core. Okay. And then you'll see a negative against your fund balance. And that's what raises literally questions, um, from outside agencies. What's, what's going on here. And um, one of the things that I, again, I have to restate because it really matters, is that if you have the resources to address it, and you didn't take that action, why mm-hmm. And it's not always a good answer oftentimes, and it has happened very and frequently in the past, I'll say snow and ice for the sake of a conversation. Um, that is, you can explain that in a different way. The, the invoices didn't come until after X certain date. That's explainable and, and snow and ice is what it is. So when they reflect that on the balance sheet and they look at it says that's, that's, you can explain that other things. They say, well, you had the resources, why didn't you apply it? How do you literally address that? How do you respond to that? And it becomes more challenging to do that. Um, for whatever reason, the community decided not to do that and they had the resources. It doesn't feel well for the commun is what I'm saying. Mm-hmm. And they'd rather you cover your, your costs and address it than not cover it and have it go into deficit and have a negative deficit on your fund balance. They don't like to see that. Okay.

▶ 2:20:55 Speaker 4: So there's, there, there is consequences always consequences to having unappropriated free cash?

▶ 2:21:01 Speaker 9: No, it's not that or no, no. The consequence to not to, to ending a year in a, in a deficit position. Oh, deficit. Okay. That's what I'm saying. Yeah. Yeah. It's a consequence because, you know, again, they'll turn around and say you have the resources to cover it, you chose not to. Okay. Is that reasonable management? Is that good management? And that answer, no, it's not. Okay.

▶ 2:21:19 Speaker 4: So if we weren't in a deficit and had unappropriated free cash, that would not be a problem.

▶ 2:21:24 Speaker 9: Correct. If we were not in deficit and we had unappropriated free cash, that's fine. A lot of communities, candidly, I, I know, uh, I have heard in the past, sometimes they don't appropriate the entire amount because perhaps they don't have, um, a sense that, um, they're gonna have good for cash. Maybe some event's gonna happen, it's gonna cause them to have less free cash. And like what we've seen here ourselves with the, with the cannabis, we, we see that ourselves here. Mm-hmm. That loss of about a million dollars. That's huge. So sometimes they don't appropriate all of the free cash, so they have something to carry over to begin the process to, you know, to bill free cash at the end of the year so they have something instead of nothing. Mm-hmm. Because, um, as everyone knows, that's really the only resource you have once you set the tax rate to address any cost, um, during the year that occurs unless you haven't set up other reserve funds. So it really plays a huge role in, um, in so many ways. We, it's, we really, um, don't wanna lose that. Um, again, I've said, I'll just say one last time is you can have negative free cash. We had 2.9 million negative free cash in this community before and digging out of that hole, it's just incredibly difficult and we never wanna put ourselves there again. And it's not, and it can happen, um, for those that take the eye off the ball and we can't let that happen.

▶ 2:22:48 Speaker 4: Okay. Um, Mr. Del Russo, you made a comment about not wanting to end the year in a deficit. Yeah. So if,

▶ 2:22:57 Leila Migliorelli: if we pass the orders, um, as they are today, and Mr. Kelly finds out that it's actually like a larger delta and

▶ 2:23:09 Leila Migliorelli: there also seems like an option on the table, that that delta could be bridged by taking money out of stabilization in July. But is there a negative like financial accounting consequence to doing that way? Cuz you made a comment, you don't wanna end the year in deficit. I just wanna know if that's a preference or if there is some type of auditing reason for why not?

▶ 2:23:31 Speaker 9: Um, we never wanna end in deficit just period mm-hmm. Black and white. Um, the other aspect is given the time, the timing here, we're so close to the end of the year. I believe last time we had this similar issue last year, we had missed the opportunity. I think it was July 15th was the date that was put out there by, um, cla that was would've been our last chance to address any deficit. Mm-hmm. And I think I remember I specifically said if we had known earlier we could have done something earlier because we knew so late we lost the opportunity to do that. I don't wanna do that here. So I would have to have some certainty that, um, the the amount that was necessary would not cause us to miss the clock again and be unable then to put that towards it because it's too late in the, in the, um, year it comes in too late. The knowledge of what the deficit is, it might come in too late and we can't appropriate it for it to cover f y 23 because it, the clock's gone back.

▶ 2:24:28 Speaker 4: But there's a possibility that we would,

▶ 2:24:31 Leila Migliorelli: by not taking action tonight, there's still a period of time before it would be too late. Like,

▶ 2:24:38 Speaker 9: Yeah. And again, I, I would, um, have to defer to, um, council to confirm the date as to the actual last date that we can have action by the city council that would, uh, allow us to bring a new order before you, for you to review it and get through the process and then make it applicable to 23 just at the time is just, um, not on our side right now.

▶ 2:25:00 Leila Migliorelli: Right. Okay. I understand that. And then for my colleagues to understand that we've making that, um, suggestion that we could do that, that also requires all of our own availability to be available to make those decisions, to call special meetings. So it's, it's very,

▶ 2:25:16 Speaker 4: Yeah, there's a lot to it Complicated. Right? Sure. Is. Um, I think

▶ 2:25:26 Leila Migliorelli: I just wanna, I guess, echo what everyone else has said, and I think it's notable when all of us are saying the same things as we all have different opinions a lot of the time that, um,

▶ 2:25:41 Leila Migliorelli: you know, finding out, I think a little bit in drips and drabs about over the last whatever, 72 hours about this problem. Um, this issue is not ideal. Um, you know, when a memo is presented to the council to ch an amend an order last minute, which is not something we've, I think we've had done maybe once in the last three years. Um, and to then find out additional information after the course of that memo, you know, in the school committee meeting, hearing that it is a $900,000 gap and that's not being written down in, in, in the memo. Um, and I think perhaps there's an assumption that I, I can see on one end it looks, you know, sort of like a simple decision. Oh, okay. Well we're just, instead of putting the money in stabilization, we're just gonna stop that and then just take it now. But I think as you can see from this meeting and hear from this meeting tonight, it's a little bit more complicated than that. Um,

▶ 2:26:41 Speaker 4: and also what I wanna just talk Mr. Kelly again, and, and I know you're the only representative from the school com school to talk about this, um, I've just listening to the conversation, you said that this overage is mostly special education transportation.

▶ 2:27:00 Leila Migliorelli: I'm just wondering if at some point, i i, I don't know if I'm alone in this, seeing an actual accounting of what it is that is going into that would be helpful. Sure. I think talking in generalities at this point, given all that we've gone through is, is not sufficient. Um, because I think that, as, I think it was Councilor Cheney that stated, there's obviously some programmatic issues that are impacting this. And like the vast majority of the time the city council tries not to get involved in the business of the, the schools and the school, um, committee. But in this situation where the impact has gotten so great on, on the rest of the budget, um, it's hard to ignore. Mm-hmm. And if I may ask a question, the other thing I was hearing, Mr. Kelly, and please correct me if I'm wrong on the timing of this.

▶ 2:27:55 Speaker 4: You know, you said you,

▶ 2:27:58 Leila Migliorelli: you mentioned something about decisions are made about spec, special education, transportation on individual student decisions, that information and decisions are made, you know, within a department, then that information makes its way to you. Could there be some improvements in that level of communication? Again, I know this is not the purview of the council, but it is seemingly relevant. Is is that at all a point that could be tightened up? Because I think you're sitting from what I'm hearing here is that you are finding out, you are hearing perhaps there is some over perhaps, and you are then having to dig into numbers to, to think about, to find out what that delta is. Am I getting that correct? That there's some things, decisions being made, you are then told about it and then you are then waiting for either bills to come in, invoices or something to see the amount? Like what does that process look like when,

▶ 2:28:54 Speaker 3: When a new student is referred that they that, you know, we price out the root based on, it's a number of factors. It's a which vendor can help. You know, we always look to see if it's something we could do inhouse, we only have five drivers. That's a very limiting capacity. Um, and then we have to go to our vendors, which is, um, you know, sometimes tenfold more expensive, um, to do that. Um, we also don't have choice in that matter. When a student is referred for transportation, that's our obligation to, to transport the student. Um, so I feel like there's decent communication other than that we, you know, we don't have input on that the business office doesn't have input on Right. On whether a student is gonna be offered transportation or not. So. Right.

▶ 2:29:33 Leila Migliorelli: And I guess, yeah, as we've stated, I don't think, I mean, I like, I'm not saying that we, we don't offer the transportation. I guess what I'm trying to figure out is, is there, is there like a lag between when decisions are made about or when they, you know, is it you that's finding out, oh, we can't do this route, we have to do another route, that route or whatever is something is more costly? Like are you a part of those conversations? Yes,

▶ 2:29:57 Speaker 3: Our, okay. We have a transportation coordinator and he's in constant contact with me about what's going on and, um, you know, he's, he's exasperated with the pricing and the, the, um, you know, uh, the, the cost escalations as, as we all are.

▶ 2:30:13 Leila Migliorelli: Okay. I guess I'm, I'm still trying to figure out the, the other thing I'm, I'm learning about and hearing about is that at least in the situations of special education, that it's a long process to get some of, to get some of these, um, accommodations at. While you may not know the total cost of what that acco, like, how much that accommodation will be and we'll just, I, I don't know if I'm using using the right terminology, but the, you know, whatever the transportation is, you know, they need transportation. You don't know how much it's going to cost. When you talk about under budgeting, are you saying that traditionally we are not, is it to that level of granularity where we are not budgeting for

▶ 2:30:55 Speaker 4: what it could possibly be to toran to transport? Is that part of the inconsistent?

▶ 2:31:01 Speaker 3: That's correct. For a series of years, the, the budgeted amount for transportation was less than what the prior year was. And that's what we always look at is the prior year, the prior few years for FY 24, our, our number that we put in the budget was based on, on FY 20 threes costs. And then we tried to increase that modestly because these costs increase, uh, you know, faster than we can keep pace with. So the number we put in FY 24 was accurate as far as what was cost last year and then a little bit of an increase.

▶ 2:31:33 Speaker 4: Okay. So then I guess to back to councilor Repays point, which is what I was assuming too. Are you,

▶ 2:31:44 Leila Migliorelli: if the 2.7, um, that was in the memo for FY 24, is that taking into account this $900,000 extra or is it taking account like a portion of that? Um, or No, not at all.

▶ 2:32:01 Speaker 3: So the 2.7 is part of FY 24? Yes. That's, that's more what the, the gap is between what the, the school committee voted and what is is appropriated after we taken our offsets, after we look at our, our, the grants that we use, the 900,000 is, is for f y 23.

▶ 2:32:17 Leila Migliorelli: No, I understand that. I guess what I'm saying is that was the 2.7 factored in knowing that you had this third quarter increase in costs. Like at the, at what point did you decide come to the 2.7 number? Was it taking account to this third quarter, which would then conceivably carry over to f y 24? Like carry over in that these students will need those services in f y 24? Not the number, like not the money itself, but the, the need carries

▶ 2:32:44 Speaker 3: Over. Sure. We based the f y 24 number off of what we were looking at at transportation at year to date at that point, which was, you know, marches. So yeah, it, it probably had some of those, those riders figured in

▶ 2:32:53 Speaker 4: Some of it. Okay. But we don't know. All right. Um,

▶ 2:33:01 Leila Migliorelli: I mean maybe there's a point in time at which we need to have like a whole conversation about how this is, but if this cost is, so, I mean we're talking like over plus 3 million and it maybe could go up. Um, it is, it's a huge impact. I think if, you know, for me, like hundreds of tens of thousands, even hundreds of thousands of dollars is a shift that we can deal with. But, um, perhaps we need to have a separate conversation about what this might look like. Um,

▶ 2:33:33 Speaker 4: that's it for me now. I know that there's somebody else in queue, so we're just gonna keep going until we answer these questions. Uh, president Greg,

▶ 2:33:40 Jen Grigoraitis: Thank you Madam Chair. I'll be brief. Um, Mr. Kelly, I understand why, um, this is the option that works best for the, OR is the option or only option for the schools, but Mr. Deus, I just wanna hear directly from you that given your purview over the totality of the city's finances, you think the best option for this community right now would be this amendment?

▶ 2:34:03 Speaker 7: Yes. Okay. Thank you. Thank you Madam Chair.

▶ 2:34:11 Speaker 4: Um, any other questions? Sorry, I'm looking in two different spots, counsel.

▶ 2:34:15 Mark Garipay: I just have a point of clarification On the transportation, um, to what, um, president, um, chairwoman, uh, Elli was saying the 2.7 million deficit next year that you have, um, that we believe is gonna be, that's not all transportation, correct?

▶ 2:34:31 Speaker 3: The 2.7 million, is that what you're saying?

▶ 2:34:32 Mark Garipay: Point seven deficit next year, we're looking at for FY 24, that's not all transportation, correct? No. Okay. Um,

▶ 2:34:41 Speaker 11: What,

▶ 2:34:45 Mark Garipay: What is our spend year to date? Because you said you went off of FY 23 for the FY 24 budget. What is the spend year to date in FY 23 in transportation?

▶ 2:34:55 Speaker 3: I don't have that budget in front of me. I can get that number for you.

▶ 2:34:57 Mark Garipay: Okay. Cuz as of the budget in May, we had spent over $2,080 with another 433 encumbered under transportation. And then under the, um, spreadsheet you had given, you had sent me out, we have a proposed budget of 1.8. Mm-hmm. So that seems like a huge gap. We're not even close to, to where we, where we need to be.

▶ 2:35:24 Speaker 3: Right. I think the prior year it was, they had budgeted 1.2 million,

▶ 2:35:30 Speaker 8: Probably year was

▶ 2:35:34 Mark Garipay: 1.227. Correct. So it has has gone up, but we're still not even close to where we, where we need to be. Okay, thank you

▶ 2:35:47 Speaker 4: Mr. De Ruso. Just, just

▶ 2:35:49 Speaker 9: As your thought, um, um, if the question again is just a thought is that perhaps if it 2 42, perhaps if he goes back and chops the pencil and gets it down to 1 1 42, there's, you know, there's a hundred thousand dollars there. Um, given the, um, magnitude of the issue that we're talking about through, uh, it's been brought up here this evening, that additional money, if it's not expended in 23 will, can be applied to the 2.5 plus issue that we face in 24. So it's going to be go to the same effort in fiscal 24, which we already know we need. So, um, it's not that 24 is in balance with the stable, with the special ed and transportation cost. This would be it if they ended up being that way, an additional Honda that thank, thank goodness we didn't have to use, but now we can apply it to 24 deficit, which we know we're gonna have. So it does go towards that effort. It doesn't go away and it can be used and we know it's gonna address special ed in, in the next year anyway. So it's not, you're not harm, you're not doing harm in my my opinion, to either, either, either side by doing that.

▶ 2:37:09 Speaker 4: Can you say that again? Not by doing what? By,

▶ 2:37:12 Speaker 9: Sorry. Pardon? Pardon? No, you wouldn't be doing harm. Um, in the event that we actually, they didn't use the full 2 42, they were able to use less. But this year, because they can use those resources for the next year for those same purposes, but for transportation and special ed, cuz they would carry that money over is what I'm saying, into, into 24.

▶ 2:37:36 Speaker 4: Okay. Okay. I, council s has a question. I might have a follow-up Question on that. Yes, definitely.

▶ 2:37:40 Jack Eccles: Thank you. Yeah, I think that, you know, that sometimes what you just described is like, I think like the, the tactical information that we sometimes don't have insight into. So I think whatever ends up happening with this $242,000 whenever you get it, it'd be very good for the council to understand how that worked out. You know, ask for 2 42, got it down to 1 42, used a hundred thousand for that. Like that's some, some, some sometimes missing when, you know, we send money places, we, we don't know exactly what happens. So if it seems like there's a lot of flexibility with what you can do, um, so that'd be helpful for I think the council to understand, um,

▶ 2:38:22 Speaker 9: That be your intent.

▶ 2:38:23 Jack Eccles: I think we're moving in a direction to do something tonight. I'm a little torn, I think maybe some other people wanna speak, so speak to it. Just where I'm at. Um, I have a concern about not doing the amendment tonight, which is that we're going into the summer, um, where we're gonna have to call special meetings and I'm, you know, concerned about attendance and having a quorum to actually do what's required to get this through ENC close the year. On the other side of that, um, I, I don't feel entirely confident in this $242,000 number. The this number came from, it was, it's what was being requested to put into the stabilization account, not necessarily what the school needs. Like the origin of this 2 42 was we're putting that into the special ed stabilization, not the school needs this amount of money. Um, it seems like there's some reconciliation needs to go on to get to an actual number. Um, so that's a little bit of my hesitation of doing that tonight. But then I also, going into the summer, I'm concerned about having a quorum to actually get something done to close the books. So I'll wait to hear what other counselors have to say about that.

▶ 2:39:41 Speaker 3: Respectfully, if I could just echo what CFO de la Ruscio just said too, that if that, that, you know, the 242,000, um, if, you know, from stabilization is for special education purposes, that's the only thing we would be, um, you know, uh right. Appropriate to spend that money on. So if there were a surplus, it would apply to the FY 24.

▶ 2:40:01 Jack Eccles: Right. Which would if help us in the long run with the 2.7 anyway. Correct.

▶ 2:40:06 Speaker 6: Exactly. Thanks

▶ 2:40:09 Speaker 4: Councilor McMaster. Thank you. Mad chair.

▶ 2:40:16 Speaker 10: Based on the, the special Education costs of which you're aware tonight,

▶ 2:40:22 Shawn M. MacMaster: what do you anticipate the special education circuit breaker balance of 1.9 million being come July 15th?

▶ 2:40:33 Speaker 3: It's 1.5 right now, and it would be zero. We will use, we use that as part of our offset revenue to help.

▶ 2:40:39 Speaker 10: So between now and ju and between now and then

▶ 2:40:43 Shawn M. MacMaster: you're going to spend $1.5 million now and July 15th now and June 30th seems like a lot of money to spend between now and the next few weeks. So Circuit breaker is, And cost of which we're aware

▶ 2:40:59 Speaker 3: Circuit breaker is part of our offsets. So some of that is already part of our budgeted amount. And then there's a little bit of surplus that we will also apply to help with the deficit.

▶ 2:41:09 Shawn M. MacMaster: How much of the 1.5 is an offset as opposed to what was carried over from the prior fiscal year? Uh,

▶ 2:41:15 Speaker 3: I have to look at it. It's, um, it, it's in the ballpark I believe of around around a million. I believe.

▶ 2:41:22 Speaker 10: So. So a a million is the offset.

▶ 2:41:25 Speaker 3: I don't have the chart in front of me. I can get you the exact number.

▶ 2:41:27 Shawn M. MacMaster: So about 500,000 would would've been carried over, Uh, Participating carrying over more, probably more than 242,000.

▶ 2:41:36 Speaker 3: Yeah. And like we, we'd originally looked at that as a surplus to help us with FY 24, but we'll, we'll clearly now need it for FY 23,

▶ 2:41:44 Shawn M. MacMaster: But we'll, we'll also be getting circuit breaker next year. Correct. Based on increased costs. That's correct. At the statewide, statewide average of 65 to 75% Correct. Of of the per pupil cost for special education. So presumably more money next year than, than prior?

▶ 2:42:00 Speaker 3: Yeah. We're, we're, um, about the same or a little more Correct.

▶ 2:42:05 Speaker 10: Thank you.

▶ 2:42:10 Speaker 4: I have a question, but sorry. Okay. Um, sorry, just a quick No, I'll getting late question and I know, and I just forgot it because I, uh, actually, council,

▶ 2:42:26 Speaker 8: go ahead. Sorry about that. That's okay. Um,

▶ 2:42:29 Mark Garipay: 1 million in, in circuit break that you thought you were gonna carry over to f y 24. Um, I just heard the answer to council McMaster's question, do you thought there was gonna be a surplus of roughly 1 million that would be carried over to 2024?

▶ 2:42:44 Speaker 3: I don't think it was a million. And again, I don't have my, I don't have that, that chart in front of me, so I, I don't have exact numbers, but it, it wasn't a million, but there was a surplus that would've been there. Yes.

▶ 2:42:53 Mark Garipay: That was included in the budget that was voted on by the school committee. And I'm assuming that was revenue that was gonna be used.

▶ 2:43:04 Speaker 3: Yes, for the FY 23 budget, they budget a, a set 'em out for offsets, but whether it's from athletics or facility use, and yeah,

▶ 2:43:12 Mark Garipay: circuit breaker is one of those, but I'm just, and it gets a little confusing. I'm sorry, with the school, I, I'm still trying to learn it, but the circuit breaker's gonna get carried over to 24. That balance that you had left over that you are now using to offset the deficit this year, correct? That's Correct. So that half a million dollars that you were carrying over, I'm assuming was included in your FY 24 budget?

▶ 2:43:35 Speaker 3: Some of it modestly, yes. Some of it was not, not all of it. Yes.

▶ 2:43:39 Mark Garipay: Which will now not be available for FY 24. So as I'm saying is this deficit is just continuing to grow,

▶ 2:43:48 Speaker 3: Right? We're trying to interrupt it. We are trying to interrupt it, but yeah, you're correct. Some of those, some of that surplus was, was, um, uh, part of FY 24.

▶ 2:43:58 Mark Garipay: Mm-hmm. And just to, uh, councilor Eccles point earlier on, on, on voting on this 100% support, putting it in stabilization, I know it's probably, um,

▶ 2:44:13 Mark Garipay: helps everyone to get this in now, devoted in now, but I personally, it makes probably the, the crunch is gonna be, the pressure's gonna be on you to close the books, but we're also the stewards of the taxpayer's money. And if, if we can come back with less money and come and we have to have a special meeting, we work remote, I I, I'll make myself available. If we can get that 2 42 down and still keep money in stabilization, I understand you. We, you say we can, it'll still be in the budget, but at least if it's, I know where it is, it's in the stabilization font as to, as the Councilor Eccles point, you know, we don't know where the math is when it's, when it's getting divided out right at the end of it. So that's just, that's just my 2 cents. I would support going into stabilization now and come back with, um, after everything's balanced and hopefully, and if it's up balanced, you may have to come back anyways, right? Mm-hmm. So,

▶ 2:45:16 Speaker 3: Yes, that's correct.

▶ 2:45:19 Leila Migliorelli: I remember my question, which, sorry, tails onto your question. I think I, Mr. Kelly, I appreciate how you wanted to let us know earlier than last year. Um, and just trying to pull this all together, it seems like, um,

▶ 2:45:37 Leila Migliorelli: perhaps like letting us know that, hey, there's a trend going here and, and now that we know this, this year, maybe we'll recognize it next year, that there is a process by which, okay, we're gonna find out first week of June where we are. And I think you did hint at that, but I don't think we understood the magnitude of that delta. Um, so part of me thinks that maybe like you, honestly, were trying to do the, the right thing, and maybe we're not expecting the reaction from all of us in terms of thinking that though this isn't making sense. Um, based on that, I know I think President Greg asked this of Mr. LaRusso, but asking this, do you, do you have, listening to this conversation, are you still steadfast in the, the best thing is to, to make this amendment? Is there in your mind another reasonable alternative? Like how detrimental is it if we were to just put the money in sta stabilization, let it sit there, wait till the reconciliation happens. Uh, like, I just wanna understand that risk from you.

▶ 2:46:46 Speaker 3: The will of the committee is, is the will of the committee and we, I I would support that. I, you know, I just want it to be clear that, um, moving it to stabilization, um, it's, it's the reality that I will be back to ask for access to that. And I fully understand if the will of the committee is to move that to stabilization. I understand the rationale and, and I'd support that too. Um, my goal is to be transparent and that have people information that they can make decisions on, um, and that, um, you know, we are, uh, working at the school system to try to build in, uh, supports and structures that we're, we're not having this conversation every year.

▶ 2:47:22 Speaker 4: Thank you. Counselor Ackles, uh, counselor, uh, caram. Chab, did you make a movement to be heard? No. Okay. Councilor Eccles, uh,

▶ 2:47:28 Speaker 6: I'll make a motion to recommend

▶ 2:47:32 Leila Migliorelli: Mo. So this is motion to recommend, just so we can all go all the way back here. The, the entire order, um, of, um, order 20, the, sorry, appropriation from free cash in the amount of 614,500 to various stabilization funds as set forth herein. That's the motion that you're recommending? Yes. Okay. Or the, yeah.

▶ 2:47:56 Speaker 8: Second,

▶ 2:47:59 Leila Migliorelli: Motion to recommend, um, for passage appropriation 2023 dash 36, made by Councilor Eccles, seconded by Councilor Repe on discussion

▶ 2:48:11 Speaker 4: Councilor McMaster,

▶ 2:48:12 Shawn M. MacMaster: Just for the public who may be watching, if anyone's still watching, or who may watch it at some point in the future. Thi this is as a, as a, this amount of money, $614,500, uh, does not include the amendment that we've discussed and debated tonight that the, that the school, um, department is requesting Correct?

▶ 2:48:34 Speaker 4: Un amended order.

▶ 2:48:36 Shawn M. MacMaster: Un amended order. So this is the actual order that's before us, correct?

▶ 2:48:40 Leila Migliorelli: Thank you. Which is inclusive of other things. Not, not only the 242. Correct. Thank you. As in Counselor Repe, then President Greg.

▶ 2:48:48 Mark Garipay: Just, um, to counselor. Um, McMaster's point, this is still available to the schools prior to the end of the year. I don't want people to think that this has been voted down. It's this money's still available for them to come back in front of us after they've reconciled the books.

▶ 2:49:06 Speaker 4: Yes. Nothing is being voted down present. Greg greatest. Thank

▶ 2:49:10 Jen Grigoraitis: You. I just, if, um, to the point about obviously if money is put into stabilization tonight through this vote, um, and then obviously through a final vote on Tuesday, I recognize that we could be looking to have special meetings between now and June 30th. The mayor has the ability to call those. I have some ability to call those in my role as president. I just want to publicly state that I, I commit to working with both my colleagues and the school committee to make sure that we make ourselves available in person remotely, however we make it happen to, so that we're not, I don't want procedure to be what leaves the schools high and dry. So I just wanted to put that on the record. Thank you.

▶ 2:49:46 Speaker 4: I guess just also a clarification in President Greg, I just, if you wanna state how many people you would need to have a special,

▶ 2:49:52 Jen Grigoraitis: We need eight, uh, people to, to address any financial order we need. I mean, um, without a quorum of eight people, we cannot take a vote on anything related to money. Okay?

▶ 2:50:01 Speaker 4: Thank you for

▶ 2:50:02 Speaker 7: Those with summer plans.

▶ 2:50:04 Speaker 4: So this motion's on the table on discussion. Anyone else on discussion? Right? Seeing? No. None. Mr. Clerk, will you please call the roll

▶ 2:50:14 Speaker 1: Vice chair Jamal Dean? Yes.

▶ 2:50:19 Speaker 1: Councilor McMaster? Yes. Councilor Eccles? Yes. Councilor gpe? Yes. Councilor Stewart? Yes. Councilor Chetty? Yes. Councilor Bruski? Yes. President Ggo? Yes. And chair Meg? Yes. Unanimous nine? Yes.