Thank you.

Good afternoon.

It's March 19th.

Uh, just after 130, this is the Education and Culture Committee.

This is uh our third and final work session as a committee on the FY2732 capital improvements program for MCPS.

Um I want to thank my colleagues, Councilmember Evans and Councilmember Mink uh for their work and for staff's work on this.

Uh I do want to just say at the top, uh this is uh a difficult moment uh for MCPS's capital budget uh here and in the sense that you know we're confronted, I think for the first time in a long time with the fact that two-thirds of our facilities are in need of significant repair.

They're older than 25 years old, 75s are older than 25 years, 75 percent need uh significant repairs.

Um there's a there's also on top of that, uh there's a billion dollar gap between what the board says our school actually needs and what our affordability guidelines would allow us to spend currently.

Um as I said at our last session, uh, you know, the the kicking the can metaphor is upon us again.

We we can't continue to do that.

Um and so that even though we're gonna discuss the non-recommended reductions today and uh and likely move uh many of them forward uh to full council and as part of the overall consideration.

Uh every gap creates every maintenance gap creates more cost and more problems down the road.

And uh I'm I'm mindful of in my schools a lot.

I know my colleagues are too, of just that the need is really real.

Um so we've heard over the last two sessions from the superintendent.

We've looked at enrollment projections, we've talked about the boundary studies, uh, and and we went high level on the non-recommended reduction scenarios.

Um I appreciate you all providing those.

We'll go project by project today with Mr.

Proudy and Mr.

Levchenko and colleagues can ask questions.

I think the public, it's important that we go through this and allow people to talk about the changes and what's happening so people know uh what not only what the need is but uh what is being proposed and what what we're gonna have to recommend based on affordability.

So uh with that, uh unless my colleagues have anything they'd like to say.

I'll turn it over to I think Mr.

Lovchenko first.

Mr.

Lipchenko.

Uh sure.

Thanks for that introduction.

Uh and just a little bit on the schedule.

Uh we are looking at uh taking this to the full council probably we're looking at April 14th right now.

I don't think it's a set date, but uh and as you know, we've got the operating budget hearings the week before, so there is a lot of scheduling going on for that.

Uh that would also be the date where we would also provide an update to the council on the CIP as a whole.

So to get a sense of where we are in terms of the gap that we've talked a lot about, and the GO committee has also talked a lot about.

Um but this will be a chance for the full council to hear that uh on the 14th.

And that gives us about a month from then to work towards reconciling the CIP in mid-May.

Um and as we talked about, uh the scenarios that MCPS was asked to come up with were intended to address the undesignated reductions that the executive had made for the MCPS CIP.

And and they certainly, as we talked about at the last meeting, they did that.

Staff felt that they um uh were responsive to the requests that you had asked them.

Uh what we still have before us, though, is the gap related to spending affordability going forward, because the executive assumed a significantly higher amount of bonds planned for issue than uh the council's spending affordability um would allow.

Uh so we're gonna have that reconciliation issue going forward.

Um, and uh the council will hear more about that uh when we do the update in in uh mid-April.

And maybe uh Keith, if you could just lay that I know you lay it out uh in the packet, but just to say it on the record, so the it's important I think for people to conceptually understand the difference.

So there's obviously a the school system made a request, the board made a request, uh the county executive made a recommendation, which was less than the board's request for MCPS, um, but was based on a higher level of spending affordability.

And so that could you talk about that gap versus what the larger gap is, which obviously needs to be made up with the whole CIP.

Yeah, the the board's request um was a significant increase from the amended CIP.

The executive also recommended an increase to the amended CIP, but at a lower level than what the uh what than what MCPS had requested.

And that difference is what is reflected in the undesignated reductions we're talking about.

About it was about 160 million dollars uh for the schools uh that they had to come up with both current revenue and bonds uh that the executive had not made specific rec uh cuts to.

Now the executive did make some specific cuts uh in the CIP, including, for instance, most notably the um CESC headquarters uh future project.

That's a a big pot of placeholder dollars uh that the executive recommended further discussion about a potential P3 project, and the school system agreed they would look at that, uh and the school system made a significant change in that project as part of its non-recommended reductions.

Uh so that was an explicit cut in the executive's recommendation.

But he had the undesignated cuts as well, and that's uh really what uh we needed information from MCPS on to understand.

Did he did the uh schools first did they accept the explicit cuts?

In some cases they did, in some cases they didn't, uh, but then they had to make other cuts to get to the number that you had asked them for to try to try to get closer to the January 15th baseline.

Um so that's just sort of one set of numbers.

But with the spending affordability, uh the executive was about $390 million higher in bonds in the six-year period uh than the approved um uh council spending affordability guidelines.

That plus uh an ancillary impact on current revenue uh or pay-go in the CIP, since that is usually linked to the bonds.

It's 10 percent of bonds is the fiscal policy level.

So that was another $39 million potentially uh of a gap there.