Audit and Finance Committee Meeting

Audit and Finance Committee meeting today at 4:30 p.m..  Agenda

From the minutes of the last meeting, fyi:

- on the Employee Benefits Contract with Sprague Israel Giles

Directors asked about the District’s history with Sprague Israel Giles, Inc. and Ms. Byrd- Pina confirmed there has not before been a review of the contract. She noted that the Assistant Superintendent for Business & Finance discovered the contract had not been reviewed by the Board or even staff in over 20 years, but it is over $250,000 so this review is required by Board policy. Mr. Gotsch spoke about seven agreements that will come to the Board. 

Directors asked why the contract was not flagged sooner and Mr. Gotsch explained the initial amount for the brokerage fee was less than $250,000 but the commission Sprague Israel Giles, Inc. collects brings the amount much higher than the $250,000 threshold. Mr. Gotsch and Ms. Byrd-Pina spoke about nuances that had not before been discussed. 

From the Board meeting agenda action item on this topic of Jan. 12, 2015:

Pursuant to Policy No. 6220, Procurement, contracts in excess of $250,000 require Board approval. The contract for Sprague Israel Giles is for $53,000.04 annually. This amount does not normally require Board approval. However, industry practice is that firms providing benefits administration and related broker services earn a commission for its brokerage services directly from the health care insurance providers. These commissions range from approximately .75% to 1% of total costs (approximately $50 million), which means a commission in the range of $375,000 to $53500,000 annually. When the commissions are added to the benefit administration cost, staff is of the opinion that this arrangement should be day-lighted and the contract approved by the Board.

- on paying for JSCEEE

Kathie Technow spoke about the sales of multiple buildings to pay for the John Stanford Center for Educational Excellence (JSCEE) building, noting the Series B bonds have been paid off in full but there are outstanding payments due on the Series A bonds. Ms. Technow explained that when the plan was initially established, savings in the General Fund were to service the debt, later and currently money was transferred from the Capital Eligible Program (CEP) to the Debt Service Fund. She confirmed that while this transaction was legal and allowable, it was not in-line with the District’s initial plan to pay for the building. 

- on WSS - 

Mr. Gotsch noted that the Superintendent has reserved the right to make changes to the funding model and reprioritize its objectives as appropriate. 
 

He spoke about the extensive experience Dr. Nyland has with Washington State funding models.

Directors noted that Seattle is not included in the Washington State allocation model so compensation for Seattle teachers is not reflected. Directors spoke about how this negatively affects new teachers. Directors asked that conversations about this happen before labor negotiations do. 

Directors asked that there be nothing less than 1.0 FTE teachers in schools and that the “rules” be clear to school staff and the public. Ms. Sebring spoke about work her team is doing to develop a citizens’ guide in upcoming years so that the public is aware of the budget development process and the budget decision-making process. Mr. Gotsch spoke about ad hoc conversations that routinely happen with principals, parent groups, and other stakeholders in the meantime. 

Today's meeting agenda items include:

- Garfield/South Shore Property exchange with Parks.
- Conveyance by Deed of Public Land at Arbor Heights Elementary School (English) - no attachment available
- State and Federal Grants/Title 1 Annual Report - worthy, if less than clear, reading.

Executive Session at end of meeting.