Meeting Minutes: Sept. 18, 2018

NYC School Support Services, Inc.
Meeting of the Corporation’s Board
September 18, 2018, 4 p.m.
52 Chambers Street
New York, NY 10007

 

Meeting Minutes

 

The meeting was called to order at 4:05 p.m. by Chairperson Elizabeth Rose, who noted for the record that a quorum was present to conduct business. 

In attendance were:

Elizabeth Rose, NYCSSS Chairperson
Nicholas Storellicastro, NYCSSS Treasurer
Tom Shcherbenko

Also attending:

Stephen Brennan, NYCSSS Executive Director
Anna Taruschio, NYCSSS Chief of Staff and Counsel
Brooke Jenkins-Lewis, NYCSSS CFO
John Shea, CEO of the Division of School Facilities, DOE
Phil Napolitano, Division of School Facilities, DOE
Russell Buckley, Department of Education
Erik Osborne, OMB
Warren Ruppel, Marks Paneth

I. Introduction and Welcome of New Board Member

Ms. Rose opened the meeting by appointing Ms. Taruschio as Secretary for the meeting and then officially welcomed Mr. Shcherbenko to the Board. Mr. Shcherbenko stated by way of background and introduction that he had been a DOE teacher for many years (and taught, among other subjects, social studies, math, language arts, and telecommunications) and was also involved in community outreach and organization.

Ms. Rose then reviewed the agenda for the meeting, which included the appointment of Mr. Shcherbenko to the Audit Committee; a meeting of the Audit Committee and presentation by the Corporation’s auditors, Marks Paneth LLP, of the annual audit and financial statements; the approval of the FY 2018 financial statements by the Board; the approval of the July 24, 2018 meeting minutes; a brief management update and financial report from NYCSSS staff; the approval of an authorization for signatory authority; the approval of a van purchase; and the consideration of any new business.

II. Appointment of Audit Committee Member

Ms. Rose made a motion to appoint Mr. Shcherbenko to the Audit Committee and it was seconded. Ms. Rose put forward the resolution:

BE IT RESOLVED, that Tom Shcherbenko is hereby appointed to serve as a member of the Audit Committee; and be it further

RESOLVED, that the Chair is hereby authorized and empowered to take any such actions as she may deem necessary or appropriate to effectuate these resolutions, in accordance with the bylaws of NYCSSS.

III. Meeting of Audit Committee

Ms. Rose made a motion to convene the Audit Committee of the Board, and the motion was approved. Audit Committee members include Ms. Rose, Mr. Storellicastro, and Mr. Shcherbenko. Mr. Storellicastro led the Audit Committee proceedings as Chair of the Committee.

Mr. Storellicastro noted that the sole item on the Committee’s agenda was the audit presentation by Warren Ruppel of Marks Paneth LLP, the Corporation’s auditors. Mr. Ruppel gave a preliminary report to the Board based on the audit of the Corporation’s financial statements as of June 30, 2018. While the audit had not been completed, it was felt that the evidence obtained was sufficient to provide a basis for an unmodified opinion on the general fund financial statements, and a qualified opinion on the government-wide financial statements. In the interest of the City’s timeline, he noted that it was prudent to present to the Board at this time.

Marks Paneth highlighted that the modified opinion on the government-wide financial statements was a result of missing the net change in the pension liability for Local 32BJ and that, once they received the numbers from the actuary, an updated report would be issued with an unmodified opinion.

The full analysis of the general fund balance sheet, the reconciliation of the general fund balance sheet to the statement of net position (deficit), and the statement of activities for the year ending June 30, 2018 were all presented in detail. The auditors indicated there were 11 recommendations from last year’s management letter that had all been resolved satisfactorily, with no new additions. The auditors noted that for a new organization to clear an extensive list of this size was commendable for management.

Mr. Storellicastro questioned the figures on the Local 32BJ net pension liability and the implications, due to the size of the liability ($54 million). Mr. Ruppel responded that this is usually seen as a longer-term liability and therefore not as notable. He went on to note that under a multi-employer sharing plan such as NYCSSS’, there is no FASB-imposed requirement to report the liability, but that under GASB it was required to be reported, and that it is not a liability NYCSSS would be responsible for paying. Ms. Lewis further explained that the Corporation operates under a union contract that defines the contributions for the pension based on an hourly rate.

Mr. Storellicastro asked whether, given that there weren’t recommendations for this year, there were any risks the auditors wished to advise the team about. Mr. Ruppel responded that he did not see any concerns on the horizon but that it was important to continue to monitor the progress of the industry for not-for-profit organizations like the Corporation. More specifically, he went on to state that part of the Tax Cuts and Jobs Act had made certain taxable fringe benefits (such as transit checks) non-deductible and that depending on the services provided, certain taxable fringe benefits offered to employees may be subject to the UBIT 21% tax. Members of the Audit Committee concurred with the auditor that this would require investigation on the Corporation’s part.

IV. Approval of the Corporation's Audited Financial Statements for the Fiscal Year Ended June 30, 2018

Chairperson Rose then officially reconvened the meeting of the full Board and requested a recommendation from the Audit Committee to approve the Corporation’s Audited Financial Statements for the Fiscal Year ended June 30, 2018. The Chairman of the Audit Committee gave his recommendation in favor of approval. Chairperson Rose made a motion to approve the Audited Financial Statements and it was seconded. Ms. Rose put the forward the resolution:

BE IT RESOLVED, that the Board Members hereby accept the Audited Financial Statements for the Fiscal Year ended June 30, 2018; and be it further

RESOLVED, that the Members authorize the filing of the Audited Financial Statements in the form presented to this meeting with the required governmental entities; and be it further

RESOLVED, that the Chair, the Executive Director and the Chief Financial Officer are hereby authorized and empowered to take any such actions and execute such documents as they may deem necessary or appropriate to effectuate these resolutions, in accordance with the bylaws of NYCSSS.

V. Approval of Meeting Minutes from July 24, 2018

Ms. Rose made a motion to review the minutes from the July 24, 2018 meeting, and the motion was seconded. Ms. Rose noted that no questions were raised with respect to the minutes and made a motion for approval, which was seconded. The Board unanimously approved the minutes.

VI. Management Update and Financial Report

NYCSSS Executive Director Stephen Brennan gave the management update and noted that the status quo had not changed significantly from his update at the July meeting of the Board but that he thought the Corporation’s new Board member would appreciate hearing the management update.

Mr. Brennan highlighted the success of expanding recruitment efforts within diverse and higher need populations through city community partnerships; the effort to develop, implement, and document standard operating procedures; the reduction of grievance proceedings, now at 10-15 cases per week; the auditing of excessive overtime and accuracy of rates of pay; and the significant reduction of call volume fielded by Customer Service representatives.

At the close of the presentation, Mr. Shcherbenko asked a question relating to the volume of customer service called fielded by the Corporation. Mr. Brennan explained that most of the calls related to employees confirming the number of hours, checking on vacation and sick time, and similar human resources issues that included many points of information rather than complaints. He noted that before the Corporation existed there was no central call center or resource for employees and that over the past two years of the Company’s existence there has actually been a significant drop-off in call volume.

NYCSSS CFO Brooke Jenkins-Lewis then presented the Corporation’s financial update and also noted that much of the information was identical to the presentation she had prepared at the Corporation’s last Board meeting in July with an additional month (August) added in. Ms. Jenkins-Lewis noted as significant that at the Corporation’s last meeting it had been projected that there would be a net cost savings of $500,000 on account of vacation replacements but that, due to several cost-savings initiatives implemented by the Corporation, actual savings had come in at $1,200,000.

VII. Grant of Signatory Authority with Respect to the Corporation's Operating Account

Chairperson Rose noted that because of change-over in composition of the Board since the Corporation’s inception, that their bank, JPMorganChase, had requested that it’s list of authorized account signatories be updated to reflect current Board membership. Mr. Storellicastro noted that a correction should be made in the spelling of his name, and Ms. Rose made a motion to grant signatory authority for the Corporation’s Operating Account and it was seconded with the requested change. Ms. Rose put forward the resolution:

BE IT RESOLVED, that Board member Nicolas Storellicastro in his capacity as Treasurer shall have signatory authority with respect to the Corporation’s operating accounts held by JPMorganChase Bank, N.A.; and be it further

RESOLVED that this individual is hereby authorized and empowered to certify and deliver to the said bank a copy of this resolution, and to execute a proper signature card, or cards, bearing the authorized signatures as aforesaid, and to execute and deliver to said bank subsequent cards bearing the specimen signatures of such others as may from time to time hereafter be authorized to sign the checks or drafts of this corporation; and be it further

RESOLVED, that the Chair and the Chief Financial Officer are hereby authorized and empowered to take any such actions they may deem necessary or appropriate to effectuate these resolutions, in accordance with the bylaws of NYCSSS.

VIII. Re-Approval of Purchase of Van

Ms. Rose made a motion to consider the resolution to authorize the purchase of a van for use by a route crew and the motion was seconded. She noted that this authorization had been approved at the last meeting of the Board, but that a new motion was being considered to seek Board approval of an increase in the purchase cost of the van.

Mr. Shea explained that while the motion had been considered and approved at the July 24, 2018 meeting of the Board, the approval had been for an amount up to $26,000 which has since been revised to $39,000 given that the original winning bid for the van purchase had been rescinded by the dealer based on the dealer’s misunderstanding of whether it could offer a government purchase discount to NYCSSS.

There being no further questions, Ms. Rose put forth the resolution, which was unanimously approved.

BE IT RESOLVED, that New York City School Support Services, Inc. (“NYCSSS”) is hereby authorized to enter into a contract for purchase and sale of a new van for an amount up to $39,000 which will be used to transport employees and equipment to NYC public schools for the purpose of cleaning and sanitizing restrooms in schools; and be it further

RESOLVED, that the Executive Director of NYCSSS hereby is authorized and empowered to take all actions and execute such documents as he may deem necessary and appropriate to effectuate these resolutions.

IX. New Business

Ms. Rose made a motion to discuss any new business of the Corporation, and the motion was approved.  As no new business was raised, a motion was made and approved to adjourn the meeting at approximately 4:55p.m.

 

 

Respectfully submitted by Anna Taruschio, Meeting Secretary