Mike Breller of Beacon Pointe was also in attendance as an invited guest and presenter.

John Arndt of Icon School Management was also in attendance as an invited guest and presenter.

Mr. Hussey led the meeting members and guests in the Pledge of Allegiance.

Dr. Lowry reported no requests for verbal and/or written Public Comment had been received. 

Finance Committee Members discussed and agreed to switch the agenda to address Item IV. January 2022 Financial Update prior to Item III. Investment Update.

Mr. Wood, ECRCHS CBO, and Mr. Breller of Beacon Pointe presented an update on ECR's Investments, a summary of which follows:

* Mr. Wood reviewed OPEB and General Investment Portfolios as listed on the attachment. 6.6% Total Change in OPEB Account over 7 months (end of January).

Mr. Breller discussed the following Regarding OPEB:

* Reviewed Market Performance Summary

* Discussed current investment themes and catalysts that impact portfolio management/policy.

* Unprecedented fiscal stimulus during COVID; plus core inflation.  6% plus. 

* Investment policy statement was created strategically, and we make nuanced changes within the policy.  Neutral position on risk today.  

* Reviewed Summary of Cash Flows $854,000 net cash flows. 

* Reviewed Asset Allocation and performance, per policy.  Reviewed on a quarterly basis. Reviewed Total Composite portfolio funds and performance as of December 31st, 2021. 

* Reviewed Fixed income = high grade bonds; to safeguard assets; alternatives = less correlated; real estate; infrastructure; ETF hedges equity risk. Buy a put to ensure that if market falls, we're at a slightly negative return due to cost of the put, but like an insurance policy, you're protected from further loss in value.

* Reviewed Gen. Account Performance Report: Change in Market Value of 30%/70% portfolio (stocks/bonds, in general).  OPEB 60%/40% Stock to Bond.   Reviewed policy, portfolio, and performance/balances.

* Reviewed Asset Allocation - Risk/Return Scenarios of alternative portfolios.  Goal is to optimally diversify assets. 

* Analysis - Years 1 and 5 - What's expected after 1 year based on alternatives/scenarios, etc., and what's expected after 5 years, etc.  

* Mr. Wood noted that for the parameters for a $5Million, we will need to see from our own capital needs what we want to do to create a cashflow situation, and consider annual contributions, possibly, etc.  We need to figure this out as to when this money will be needed for capitalization projects, per Ms. Malconian.

* Mr. Wood noted that we will need to look at our immediate and long-term needs. 

Finance Committee Members discussed and agreed to switch the agenda to address Item IV. January 2022 Financial Update prior to Item III. Investment Update.

Mr. Wood, ECRCHS CBO, and Mr. Arndt of Icon School Management presented the January 2022 Financial Update, a summary of which follows:

* Cash Analysis - Cash on hand 193 (Recommended 90 days)

* PPP Account will be closed at the Regular Feb. Board Meeting on Feb. 24th. (closed out to general account).

* Profit and Loss Summary - 1. PPP Loan Forgiveness funds have been moved into the income for "last year;" 2. Loss in YTD 801,000 on fair market value adjustment due to losses in OPEB account.

* Budget Comparison - Will be reducing federal revenue; net income will be reduced; negotiations, tax rates changing; 2nd interim will be different than 1st interim; Mr. Wood noted that YTD January reflect retro-active payroll increases for both certificated and classified.  What we agreed to will be reflected in full year budget; 

* Department Budget - textbooks and IMA; will be adjusted for 2nd interim.  Mr. Wood noted that we will recognize revenue offsets for expenses.  Ms. Malconian inquired about administrative expenses and Mr. Wood noted that those are schoolwide supplies, etc.

NOTE: 

Upon Mr. Wood's and Mr. Arndt's presenting concluding, Mr. Breller of Beacon Pointe entered the meeting and the Finance and Investment Committee opted to have him present the Investment Update before returning to the remainder of the Finance Agenda Items. 

Mr. Wood provided an overview of the ECRA Audit Report that had been prepared by Christy White, Incorporated, CPAs.  

Deadline of Jan. 31st, 2022, met.

Auditor will be provided to the Board during the Regular February Board Meeting on 2/24/22.

Mr. Wood's review included the following topics:

*Statement of financial position, assets, liabilities and total/net assets and liabilities.

* Our auditor uses comparative YTD figures. 

* Christy White & Associates is under contract for a third year.

* Reviewed Expenses between 2021 to prior year 2020.

Ms. Malconian asked if this auditor looked at covid-related funds and how used, such as CARES, and/or PPP, etc.  Mr. Wood affirmed that they are aware of these funds and how we are reporting, and how these might align with their audit reporting needs. 

* Mr. Wood provided a brief overview of Cash Flow and footnotes, referring to these by definition as defined/outlined in the pages of the report. 

* Mr. Wood reviewed our cash assets in the County Treasury.

* Reviewed two annuities we had; accounts receivable; capital assets and related categories; Mr. Wood noted the details in liabilities, and net assets from page 7 (net investment in capital assets).  

* Liquid assets in Note 8; 

* STRS and PERS; Retirement eligibility for pre-charter and post-charter guidelines; actuarial liability. 

* Reviewed board members at the time and terms of office, programs (categorical); ADA, and minutes of instruction, etc. 

* Unaudited actuals 

* P. 31 - Highlights findings, modified opinion, a "clean opinion," no weaknesses or material issues going on; if we did have any findings, they would be listed so nothing had been reported to the State. 

Mr. Wood presented the ADA, noting that month 5 was the worst of the year, impacted by COVID-19 Omicron variant.  

Ms. Malconian noted a 75% ADA in LAUSD, and we are well above that as we are in the 93+% ADA range. 

Mr. Wood expects that we'll lower our LCFF revenue projections. 

Ms. Malconian inquired about the possibility of the State looking into alternative ADA funding models.  Mr. Wood acknowledged the possibility but is unclear about whether or not charter school districts will need to adhere to the same model(s) for reporting ADA.  April or May is when we will lock in, typically.  Next year's funding is most likely to be impacted, not this year's funding. 

Ms. Lopez-Vargas noted that there are four ADA funding proposals/models available, but only one or them would likely help charters this year. 

Ms. Malconian asked about ADA and PPP revenue reductions would take ECRCHS into the "red."  Mr. Wood noted that there will be approximately a $4M difference, but we'd still be okay.

Mr. Wood then provided a Cafeteria Financial Summary, indicating that ECRCHS Cafeteria has on hand approximately $78K in revenues and is projected to have a balance of $116K.  

Mr. Wood noted that cafeteria performance is a great improvement and is benefitting from school-wide breakfast and lunch programs.  

Mr. Wood and Ms. Malconian noted that Mr. Breller had discussed this item briefly during his investment presentation and that this conversation will be continued during the Capitalization Projects Committe (Ad Hoc).