Investment Product Discussion

The committee discussed an investment product update from Steve at Seeley Howard, following up on a previous discussion about PeoplesBank's Intrafi product last month.

• Lynn and Denise had spoken with Steve to get more information on Seeley Howard's offering as an alternative to PeoplesBank.
• Concerns were expressed about PeoplesBank's product, including issues with the construction of the bank list and lack of clarity on how they monitor bank health and safety.
• A bank on PeoplesBank's list was recently cited for management issues, raising further concerns.
• While FDIC insurance would protect deposits up to $250,000, there were worries about potential delays in accessing funds if a bank encountered problems.
• The committee seemed to favor Seeley Howard's offering as it appeared to be a cleaner and easier way to protect deposits while maintaining liquidity within 1-2 days.

Seeley Howard Cash Management Options Summarized for Minutes

The committee received information from Steve at Seeley Howard regarding strategies for protecting funds exceeding the FDIC insurance limit. Seeley Howard offers FDIC-approved banking products, including a sweep account that distributes deposits across multiple FDIC-insured banks, covering up to $1.5M for individual accounts and $3M for joint accounts. However, due to the low return (~0.4%), they often recommend alternative safe, liquid investments, such as U.S. Treasury Bills, Government Agencies, money market funds (e.g., Vanguard Treasury Money Market - VUSXX), and Certificates of Deposit (CDs) to enhance returns while maintaining liquidity and security.

Sample Rates Provided:

• FDIC Sweep Account: 0.4% (fully liquid, no volatility)
• Vanguard Money Market Fund: ~4.25%
• Treasury Bills: ~4.1%
• Government Agencies: 5.4%
• Certificates of Deposit (CDs): 3.5%-4.5% (varied maturities)

Money Movement:

• Same-day transfers possible if requests are made before noon.
• Money market mutual funds available next business day.

Treasury Bill Investment Proposal

Matt suggested investing in United States Treasury bills as a safe alternative, potentially earning around 4% interest minus fees.

• The pros and cons of this approach versus splitting funds among multiple bank accounts were discussed.
• Treasury bills are considered equally safe to FDIC-insured accounts due to the full faith and backing of the US government.
• The group leaned towards recommending the Seeley Howard proposal combined with Treasury bill investments to the full board.
• They planned to give PeoplesBank 60 days notice and present the recommendation at the upcoming board meeting (April), allowing time for board members to review and ask questions before voting the following month (May).

Monthly Financials 

• Lynne presented the monthly financial report, highlighting that the cash balance continues to move in a positive direction.
• Enrollment is down, with several students leaving in February.
• Government grants increased by almost $200,000, offsetting some tuition losses.
• Expenses are generally on track, with some categories nearing or exceeding 100% of budget.

Capital Expenditures and Facility Matters
Lynne provided an update on plans for window replacement at the middle school.
The project will likely be split into two phases due to scope and timeline constraints.
Phase one would focus on administrative offices and smaller spaces, with classrooms addressed in a second phase. This phased approach allows for learning from any issues encountered in the first phase. Lynne recommended using a single general contractor for both phases rather than separate bids.

Transportation
The committee briefly discussed transportation needs. The school's mini-buses have been working well, but there is a need for at least one full-sized bus to transport larger groups of students more efficiently. The school will likely propose purchasing one or two full-sized buses in the next budget, while continuing to contract out most transportation needs.

Snow Removal Contract
The committee discussed the annual $15,000 snow removal contract for the high school.
Despite recent light snow years making the cost seem high, the contract ensures priority service and responsiveness, which is crucial given the early arrival times of students and staff.
The committee agreed to review this and other Common Area Maintenance (CAM) expenses as they approach the end of the fiscal year.

Budget Update

• The budget for next year has been balanced, with a 2-2.5% contingency.
• Adding 12th grade next year will increase enrollment by about 68 students.
• The school is transitioning away from reliance on growth-related grants to a more sustainable model based on tuition revenue.
• Challenges remain in funding some programs beyond what typical schools offer.