SmartTranscript of Senate Finance - 2025-02-26 - 1:30PM

[Chair Ann Cummings]: Don't have last name. Alright. This is senate finance. It is not yet Friday. Feels I know. We're coming up on school vacation, so this will be a rough week. But we will get through it. Today, we're gonna take some testimony on s Let me put these here. Thirty nine. We got the map and we need to state aid for school construction anticipating it will show up here at some point or You know? Can hightail. I believe it's in education. No. You got it. High tail s thirty nine. It is not on It's [Vice Chair Thomas Chittenden]: not on our board, but you got it. You had it for [Chair Ann Cummings]: I thought you did. Thirty nine? No. We don't see. [Vice Chair Thomas Chittenden]: Isn't that the isn't that the small construction? Yeah. I thought for sure [Chair Ann Cummings]: We were gonna we were gonna ask if they would do it. No. No. But they haven't done it. Well, maybe I need to remind them that they could do that. Okay. At some point, it will touch base in here because it will require raising money. So we are gonna be taking some testimony today from Eric Lafayette, related to school aid for construction program. And, Eric, you probably just tell us who you represent. Absolutely. The floor is yours. [Witness Eric Lafayette]: Just quick question. Should I turn on the compute computer audio or not? Or No. The Zoom? No? [Chair Ann Cummings]: No audio. No audio. Makes a nasty noise. Yep. [Witness Eric Lafayette]: So I figured it was. And then did you want me to share my screen? That's the best way to do it. Right? [Chair Ann Cummings]: Scott, can you hit okay there? Yep. Thank you. There we go. Oh, okay. [Witness Eric Lafayette]: Alright. Great. Hello, everyone. I'm Eric Lafayette. I'm a project developer with Energy Efficient Investments, also known as CDI. I was born and raised in Burlington, currently live in South Burlington, Vermont with my wife and two girls who both attend public school over at the Orchard School. I was also part of the school construction aid task force with Martin, which was my first kind of experience in the government foray, which was a lot of fun. EEI is an energy service company, also called an Eskom. We have an office in Williston, Vermont. We're currently working with multiple school districts around the state. And I'm here to talk to you about construction procurement and energy efficiency in the k through twelve market and how I think performance contracting could be a valuable tool for school districts as we look at doing school construction as we move forward. We operate throughout New England. We have a lot of presence in Vermont, New Hampshire, and Maine. We're very familiar with school infrastructure. It's our main target segment that we work with. And we look at financing options and long term energy efficiency of buildings. We operate some of our successful clients include the Addison Northwest Supervisory Unions, Shermfield School District, Burlington School District, Nesysco Valley Supervisory Union, Prairie Unified Union School District, just to name a few. One of our successful stories from earlier this year I posted on it was Springfield School District. We started working with them about three years ago. We've had a twenty percent reduction in their energy bills. And we've actually quantified the sick days that they've lost since we've done a a complete ventilation upgrade over there with, and they've reduced their sick days by thirty percent in the two years since we did the project. [Vice Chair Thomas Chittenden]: Wow. So That is [Chair Ann Cummings]: so cool. [Witness Eric Lafayette]: And it was cool because that was actually a phased project where we did the work over two years of ventilation improvements. The first year, we saw an eighteen percent reduction. In the second year, we saw an additional sixteen percent reduction once we actually did the entire schooling. So, those were some quantifiable results that we were very proud of. And that was that work was done with a lot of ESSER funds for ventilation. Right? Energy savings performance contracting, ESBC, is a solution to address aging infrastructure and deferred maintenance at our k through twelve schools while making them more efficient, cost less to operate, and reduce our overall carbon footprint. The state of Vermont is facing significant challenges with their school infrastructure and has many decisions to make over the next decade on how to address the deferred maintenance. Questions that we often see from our constituents, facility managers, do we replace our equipment in kind? What are the long term operating cost of a new system? What is the fuel source of the future, and how do we decarbonize in reasonable steps? And how do we know that the money that we are now spending today can incorporate into the long term vision of the initiative? ESDC or energy savings performance contracting is a solution that school districts can leverage to help make good long term decisions for their school infrastructure. ESCOs will provide an upfront investment grade audits on buildings at no cost to school districts, and then works with the district to select energy conservation measures, ECMs that fit the goals of the district. During the initial analysis, the energy conservation measures and their costs come from similar schools in the area. The process provides accurate budgets prior to procurement, ensuring timeliness and cost protections through construction. Once measures are selected, ESCOs will design the work and put it out to bid to local subcontractors for competitors with local price. Benefits for the k through twelve schools are really the no upfront capital cost required in the initial analysis and procurement process. We can provide tax neutral options for schools where the energy savings pay for the work. We can address long term deferred maintenance at schools, and we can provide schools a road map to infrastructure capital projects with long term planning. And most importantly, the work that we do provides safe, healthy learning environments for our students. Difficult facility measure that we address when we're at schools are really the items that address the energy. Four key components are your building envelope, so roofs, windows, walls, doors, and insulation, mechanical systems, boilers, ventilation equipment, building automation controls, plumbing, so, pictures, water heaters, anything that has water flow to it, and electrical systems. LED lighting, electrical transformers, switch gears, solar. Those are all items that have energy efficiency opportunities and are involved in projects that we're doing right now in the state. Combining progress. We're if you're operating school ventilation and taking out the unit ventilators, there's an opportunity usually to replace the ceiling tile, the floors. A lot of times, the systems that we're putting in are above ceilings. In that case, it wouldn't make sense to put the old ceiling tile back in. Same thing when we're taking out a unit ventilator. A lot of times, there could be asbestos floor tile around it. So instead of just doing a spot abatement of the floor tile, a lot of times we're abating the whole floor and putting in new VCT flooring or whatever may be required. There's also certain thresholds of renovation. So a lot of times when we're doing ventilation upgrades, we're providing new ductwork down four doors. Part of that requires us to upgrade, egress. So life safety systems often get triggered when we're doing the projects. We have to maintain smoke and fire barriers through the egress corridors. We also find a lot of EDA issues, American Disability Act, which also usually gets triggered. Once you pass a certain threshold of school renovation, a lot of times, twenty percent of the funds need to be put towards ADA upgrades, and that's a requirement for building applications in the state. Combining projects that save the district money and procurement time addresses more issues than just energy efficiency. So a lot of times, these projects lead to other similar types of stuff inside the school that helps out the overall, renovations in the space. So our services and, really, the services of any ESCO, ESCOs provide turnkey options from schools from initial analysis, design engineering, financing support and information, commissioning, and then long term reporting to verify the savings. We provide financial support, including recommendations and assistance in grant writing. We maximize state rebates through efficiency Vermont and other providers, and we inform them of USDA low interest grants or loans. We're looking for every source of funds to get these projects over the finish line because we're incentivized to do so. We recently helped Hannaford Career Center receive ninety six thousand through the Inflation Reduction Act, an IRA, a direct pay option for solar projects on the job that we did two years ago that really provided no benefit for us. But when the when the funds became available, we notified them of it, and we were able to secure those funds prior to there being a hold on those being dispersed. In New Hampshire, we're working with multiple school districts around the state on a new comprehensive building aid application, that really addresses school visioning and programming analysis that I think could be beneficial to the state as well. Ultimately, we need to keep a substantial number of our schools in this state, and we need those schools to be safe, healthy, watertight, and heated, and efficient. Energy service and energy service performance contracting can do that for the state. This is not the option to go through and build a new school. This is really how do we keep the doors open? How do we make sure that we don't get hit with huge bomb votes down the line by doing stepped capital improvements in our districts? So why are we here? What I'm here for is to review the the efficiency or performance contracting statute for school projects in the state. Right now, it requires approval from the town voters for anything greater than the ten year payback. We're asking that it get changed to a twenty year, that really matches the reality of energy efficiency today, the life expectancy of the equipment, and then ultimately to provide more upgrades to [Member Ruth Hardy]: the school. [Witness Eric Lafayette]: A lot of times when we're looking at doing boiler replacements, window replacements, it's very tough to get within that ten year payback term. With an expanded twenty year payback term, it would allow us to essentially take on more school infrastructure projects in the state. The change would resemble similar laws in Vermont and surrounding states. So it'd piece more closely to New Hampshire and Maine. And the reality is that cost neutral contracts where energy savings paid for the work in ten years is very tough to accomplish, and the ability limits the the school upgrades. Twenty years is often inevitable, and it can include solar, LED lighting, like I said, mentioned before, windows, and then also roofs. And it would align with the state of Vermont BGS required roofs that also have support for your put back terminals for theirs. [Chair Ann Cummings]: I reckon, for you, Shay, do you mind if I [Vice Chair Thomas Chittenden]: ask Yeah. Okay. [Chair Ann Cummings]: Is that Integrated Arts Academy and the geothermal digging? [Witness Eric Lafayette]: That is the Tesla that was put in initially. Yep. And it's still being utilized. Thanks. And that just got billed last week. So, specifically, what we're looking at is really this Vermont statue three four four eight, section c number three, where it's the voter approval perform a proposed performance contract the terms of the, proposed performance contract permit the district to make payments to the contract over a period of time exceeding ten, we're looking to have it changed to twenty years, then the district shall not enter into the five year performance contract until it receives approval from the electorate to do so. So that is really what my presentation is on. I Yeah. Apparently went much faster than my time allotted today. I know you guys are busy, so I'm happy to answer any questions you guys may have. [Chair Ann Cummings]: K. Oops. [Vice Chair Thomas Chittenden]: Thank you. This is really interesting stuff. I have I'm not sure how this would change in the potential new world order or news fiscal order that we're talking about, because voter approval of things will undoubtedly change. But under the current regime, how what is the what is the average cost of these projects? So I understand this the kinds of projects they are, but without voter approval, what what is the kind of cost here? [Witness Eric Lafayette]: So a lot of times when you're doing, say, a fuel switch from oil to propane, if it's a high school, you might be looking at six, seven hundred thousand dollars, and that would be a whole mechanical room. Anywhere, we did a project for Mill River. This is a few years back, which was a cost neutral project. I think they were about two point five million, and that addressed building automation. It addressed a lot of the controls and the that was the controls in the building. There's a new steam boiler windows. So they range if the on the cost neutral side, anywhere from, you know, the lowest of doing a twenty thousand dollar project, which we're more than happy to do, all the way up to three, four million depending on the size of the district and the needs of the school. [Vice Chair Thomas Chittenden]: Okay. And how do school districts generally pay for them? Do they take out a bond? [Witness Eric Lafayette]: So a lot of times, schools have been taking out bonds when it goes past the ten year threshold. If it's below ten years, then a lot of times we're looking at doing these agreements. Well, so there's leasing there's third party companies that go out there and solicit these agreements from different banks. So a lot of times we're doing LED lighting. This was a year ago back when they were incentivizing it. Those had payback terms in the seven to eight year time frame. We'd also look at potentially doing, like, a few windows or a new school entrance along with the LED lighting that had it just below that ten year threshold. And then they would work with either a local bank or they would put it out to bid, and they would get lease finance support. After the lease term is up, they would still own that. Mhmm. [Chair Ann Cummings]: Okay. How do you interact with efficiency Vermont? [Witness Eric Lafayette]: Oh, we do a lot of work with efficiency Vermont. So they bring us into projects as well. So we did a prod we're working right now with Vermont Academy. They were burning eighty thousand gallons of fuel oil a year. It was, you know, something that Efficiency Vermont has been wanting to tackle for a lot of years. It's very inefficient system. They brought us into that school. They introduced us to them, and now we're actually working on phase one of the renovation. I know it's not a k through twelve school, but, usually, they're one of our first contacts. We get rebates through efficiency Vermont, Burlington Electric, or whatever utilities would be out there. They notify us of different grant opportunities as well. So it is a Okay. [Chair Ann Cummings]: Frustrating. You do the work. They may identify the problem. Yep. You Usually change the light bulbs. [Witness Eric Lafayette]: Yeah. And a lot yeah. Exactly. A lot of times, we negotiate with efficiency remodel. It's a lot of, like, these these are really what the needs of the school are, and they help us maximize what we can get for a return for the school. So a lot of times, it's energy modeling and providing them more information on products [Chair Ann Cummings]: and products. Would need to we could do a lot more schools if payback with twenty as opposed to ten years. [Witness Eric Lafayette]: Exactly. Yeah. And then certainly help out the schools that have a tough time passing bonds or passing budgets in general. [Vice Chair Thomas Chittenden]: So to follow-up on the chair's question about efficiency Vermont, we're having conversations down the hall, senator Beck and I, in the mornings of about the efficiency Vermont funding and the the flexibility or inflexibility of it. And I'm wondering, have you run into problems where you're trying to get some of that funding, but it you hit the wall because it doesn't fit into the work you have to do? [Witness Eric Lafayette]: Yes. Yep. We absolutely run into that. I mean, they're they're a partner. A lot of times, the the projects that we do are custom incentives. So it's not just your standard, you know, x and you get y in return. So we have Kathy Reynolds. She actually just retired last year, but she was our rep. We're working out with Dane Edson. But a lot of times when we're starting a project from the initial analysis, we're running different projects by them because we need to provide those upfront rebates even though they don't usually commit to them until the project's been fully designed and approved. Uh-huh. But, yeah, no. They you know, one big thing that really stinks was, you know, not providing incentives for LED lighting because LED lighting is a low hanging fruit in a lot of schools, and there's usually there was very good incentives with it. And when you coupled the LED lighting with building automation or and doing, like, a fuel switch from oil to propane, you know, that is a really nice target project. We did a lot of biomass, and those had really good take back periods with them. So they were heavily incentivizing wood chip boilers and pellet boilers. So when those incentives came out, a lot of times, the districts that we're working with, if they had aging boiler infrastructure, we'd be bringing those incentive programs to them as as a solution to their products. [Vice Chair Thomas Chittenden]: But some of the the efficiency Vermont funding is specific to electric energy efficiency. It are you're not able to use it for thermal Yeah. They don't they don't give rebates for, you know, gas for oil or whatever [Witness Eric Lafayette]: going to natural gas. Even though there may be efficiency picks up and decarbonization with it Yeah. They don't there would be no incentive. But they they wouldn't give incentives for, you know, a lot of time, ventilation systems with energy recovery, building automation systems. They would usually get quite a bit of incentives for that. So I we work with them. They change their kind of incentive plans and what they're trying to target on a yearly basis, and they've been a good partner, but it is a little bit prescriptive. And usually, we have to sometimes cater the projects around incentives that they're able to provide. Mhmm. Usually, those are not make or break [Chair Ann Cummings]: for a project. So I've been telling that the the not huge rebate where [Witness Eric Lafayette]: they would typically make the difference. The LED lighting a couple years ago, they were at times supporting up to twenty percent of that rebate. That was, you know, a deal breaker for a lot of these schools because, you know, it was taking payback periods that were in the twelve year down to eight to nine and it was making, you know, a lot more attractive for these customers. And, actually, the health benefits and what we've been hearing from teachers and students with the LED lighting upgrades made significant changes at the schools. Okay. So that was very positive feedback. I'd love to see that in September. Yeah. It's [Chair Ann Cummings]: K. Thank you. K. [Member Ruth Hardy]: You may already have discussed this, but I assume the various projects that you do have various life cycles and various estimated lives. As you look at the projects that you do, what kinds of life cycle exist for each general type of project? [Witness Eric Lafayette]: Yeah. So, I mean, mainly the projects that we do have twenty year life cycle minimums. The leasing companies that finance these projects won't finance past the life expectancy of the equipment. So a lot of leasing companies, you know, they and then depending on what the size of the lease is determines what the terms are gonna be. So on a smaller LED lighting project, a lot of times, you can only get lease terms up to seven years. So if you're working with a supervisory union and you combine multiple schools together, even though these lights have twenty five year life expectancies, they'll sometimes jump those terms up to twelve or fifteen years depending on it. Boilers usually have a twenty year life expectancy. Roofs, same thing, twenty year warranties. And windows are usually thirty to fifty year depending on how far you [Member Ruth Hardy]: go with [Witness Eric Lafayette]: the the the latest initial purchase of the equipment. [Member Ruth Hardy]: I'm gonna buy my new oil boiler for you because I've never had one last anywhere close to twenty years. [Witness Eric Lafayette]: Well, it takes good maintenance on, and you have to have, you know, preventative maintenance programs and service agreements. One of the big things affecting boilers is the water quality that you put through them. And then service residential boilers don't have as long, like, life expectancy as commercial boilers. So a lot of times, the wood chip boilers coming in are fifty year boilers. I mean, most of the ones that were put in in the nineties are still operating today for schools, and the Messer Smith ones are still vital to most of our high schools in the state. And then as you get smaller to the cast iron boilers and the, you know, those are twenty five to thirty year end. So, usually, the bigger the equipment goes, the longer the life expectancy that that needs a bigger capital upfront. [Chair Ann Cummings]: Okay. [Witness Eric Lafayette]: You got a bigger board? Gender map. I'll start with twenty people. [Member Christopher "Chris" Mattos]: So do you guys do you GC these projects too? [Speaker 5 ]: So you're there through the whole entire project [Member Christopher "Chris" Mattos]: We do. Not just linking up with other contractors then? [Witness Eric Lafayette]: Yeah. We don't we I mean, usually, depending on what the project is, there's a level of oversight on the job that's gonna be required. And that's really usually depending on the scope of the work that we have. If it's a a roofing project, it doesn't always make sense to have, you know, one person on-site all the time. [Chair Ann Cummings]: Yeah. [Witness Eric Lafayette]: It's gonna be the same crew, and then, you know, that's a way that we can reduce the cost to the owner. But a lot of times on, you know, a major HVAC project, we're doing usually summer slammers. We're not usually shutting down schools. So let's get in there, get everything done, and get out, and that requires a high level of hand holding and holding people accountable to get their job done. No. Absolutely. [Speaker 5 ]: So taking through the whole process. [Witness Eric Lafayette]: Through the whole process. We help them find the financing, and then we do the commissioning at the end. And, you know, we're providing reports on a yearly basis on the the energy savings and ensuring that they they meet those targeting goals. [Member Christopher "Chris" Mattos]: And along with contractors, are you having any issues finding contractors [Speaker 5 ]: to be able to, you know, if you [Member Christopher "Chris" Mattos]: do an HVAC work or mechanicals and [Witness Eric Lafayette]: It's been I'll tell you, it's a lot easier now than it was a year ago. Yeah. It's I'd say the competitive bidding is back out there. I would say that started five, six months ago. Our contractors are getting hungry again. Two years ago, it was definitely tough. We really one of the things that we really try to do in all of our projects is create big packages that are attractive to local companies. Okay. So we we break out school by school. If if this project's too big for one contractor, you know, we'll say, hey. You know, bid on this part of the project, and don't worry about that part. So we have really good relations with a lot of different subcontractors in the state, which allows us to do this breakout. A lot of times, we are purchasing the equipment. So we put the equipment out to bid. We purchase it so it's not getting the markup by the subcontractor. We provide the servicing and the startup [Speaker 5 ]: of it. [Witness Eric Lafayette]: So we take the technical aspect out. We take the financing aspect of that out. So the last smaller contractors have been on our products. So we have a lot of two, three, four, five main shops coming in. They'll run the ductwork in between our new air conditioning units. We actually will set the equipment. We'll buy the equipment. We'll finance it. And it just opens up the door for for people to be able to live [Speaker 5 ]: in it. Do you have is that on your website? You have your, like, list of bids that [Witness Eric Lafayette]: are out? Or We do not. Through the schools or whoever you're Yeah. So, I mean, depending on what a lot of times we're doing, we'll do notifications either through a bid registry system. Yep. We try to talk to the schools and understand who their preferred contractors are and make sure that they get invitations to bid. And then we try to create, you know, competitive bidding situations from the subs so that, you know, a lot of times, if you bring the small people in, the big ones are are not interested in the project anymore. So we have to be careful on how we set up those big packages to make them attractive to [Chair Ann Cummings]: make a nice price of a little bit there. Sandy, your last question. [Member Scott Beck]: Shrub it up. I'm not seeing this in s thirty nine. It could be mistaken, but this is not in there. Okay. [Member Ruth Hardy]: This is [Member Scott Beck]: This seems smart to do with all the different maintenance we have. I wonder if this is an ornament for our miscellaneous tax bill later in the session. [Chair Ann Cummings]: I was told today we might not get one. I've told them I don't think I need one, but they apparently everything that was entered is going on other bills. Well, we have us thirty nine. We have [Vice Chair Thomas Chittenden]: Or we we may Well, [Chair Ann Cummings]: maybe that's Oh, yeah. That's Well, we need to we need to ask when we need to we have it all for that. [Vice Chair Thomas Chittenden]: Can I ask another question? I'm sorry. I've this is really interesting. The do you work on new construction at all? Like, if we were theoretically building a new school? [Witness Eric Lafayette]: We have been involved in it. It's just it's not as much of a well, it it's you know, a lot of times when we start working with school districts and we're doing, like, a planned capital each year, we're attracting somebody to just read school by schools. They'll ask us to be, like, that engineer of record on the mechanical system. So we do a lot of work with Manchester. And because they're pretty particular in how they lock all their buildings mechanically run and controlled, they asked us to do the procurement, the design of it. It's not typical that we do it that way. And in that case, a GC would still like, a GC would run the project, and then we would prob and then we would help on the procurement of the mechanical systems. I have [Vice Chair Thomas Chittenden]: one more question because I gotta ask it. Are are you involved with what's our term? P three? P three. Pete, do you ever deal with a public private partnership con contracting? This was something that would suggest that you have This [Chair Ann Cummings]: is why you're gonna build three schools. Like, if you built multiple I see. [Witness Eric Lafayette]: We've done it in kind of different in different ways. I mean, it you know, we've done battery projects in different places where they're more of a power purchase agreement. [Vice Chair Thomas Chittenden]: Yeah. [Witness Eric Lafayette]: Same thing with solar situations where it's a public a private public partnership. We've never, like, built a school and then leased it back to a school district or something if that's what we're referring to. [Vice Chair Thomas Chittenden]: I don't know if that if that is if that's sort of [Chair Ann Cummings]: what we're referring to. We know that. I just Yeah. [Vice Chair Thomas Chittenden]: We do to connect the pieces that we've all about. So [Witness Eric Lafayette]: Yeah. We do like I said, we've done we do a lot of different power purchase agreements, mainly in Maine right now just because of the way that their, legislators their their rules are set up where it makes a lot of sense for solar in that sense. But, yeah, we we're more than happy to explore it, and I I think we're seeing more of that with the renewable energy standards that are coming out in the state. We do a lot of work for municipalities as well. So we're doing work for the city of Burlington and we're starting to step set up a phased approach to all their city buildings. Three or three? [Chair Ann Cummings]: No. I don't know. [Vice Chair Thomas Chittenden]: No. Two or three of the renewable energy. [Speaker 5 ]: Oh, oh, oh, oh, oh, oh, oh, oh, [Chair Ann Cummings]: discussion. Great. Thank you. It's good information to have this. Yeah. [Witness Eric Lafayette]: We have [Chair Ann Cummings]: to work our way slowly through all the pieces of information we need to have. Did you go ahead and get? A whole package. Yeah. [Witness Eric Lafayette]: Well, I appreciate the time that you guys have given us, and you guys want any references of the schools that we're working with. I'm happy to do so. Okay. We've had a great success in the state, and we look forward to hopefully being part of the addressing a lot of these deferred maintenances at our schools. So [Vice Chair Thomas Chittenden]: Thank you. Thanks. [Chair Ann Cummings]: Okay. We are going back to our area of jurisdiction where we don't have to go yet either. And I'm still trying to find a copy. I couldn't I'm looking for a copy of the examiners. Educated in Bill. Do we have that? Yes. I did. There's a copy. I can There is a copy. Yeah. The copy. Okay. It's probably That's the one you sent the group on Friday. Friday. Okay. So it's on Friday. So it's like, alright. Oh, no. It's not. Distributed. So I'll distribute it than it is in my part. [Vice Chair Thomas Chittenden]: It's long, but a lot of [Chair Ann Cummings]: it is just crossing things out. So it's it's a fairly fast read for a dumb bill. Did we also know what? No. Do you like the hard copy? Sure. Yeah. [Vice Chair Thomas Chittenden]: Is it it's been introduced at this point. [Chair Ann Cummings]: I don't have a Yeah. Bill number that that we could It hasn't been introduced yet. I couldn't [Speaker 5 ]: find it. [Chair Ann Cummings]: No. I couldn't find it. Okay. There's some [Member Ruth Hardy]: unedited graphs that came out yesterday. [Vice Chair Thomas Chittenden]: Oh, yeah. That's what I have. Yeah. Okay. [Chair Ann Cummings]: Okay. So we are going to continue with our discussion of the yet to be named and introduced to build. You have you should also have the copy from let's see. State guarantee mechanism. We connect credit proposal. I don't have the whole thing with getting a hard copy. So Yep. Okay. Alright. So we're going back, and Ezra is here to help us understand the proposed foundation formula on that. And on up, the floor is yours. Thank you, Jerry. Do you know everybody in here? [Witness Eric Lafayette]: Oh, I think this is [Speaker 5 ]: my first time presenting four seventy one. Yes. [Chair Ann Cummings]: So do you do you need let's start with Chris, you wanna introduce yourself? [Speaker 5 ]: Yeah. Chris, my name is Richard and North Milton Westford and SS. [Vice Chair Thomas Chittenden]: Hey, Ezra. I'm Rick Hardy from the Addison District. [Chair Ann Cummings]: This is senator, Dean, Laura Gulick, who is Jitenbud Central, I believe. I'm Ann Cummings. Right? [Member Scott Beck]: Jitenbud represent the southeast area [Witness Eric Lafayette]: of Jitenbud County. Let's go back down now. [Member Ruth Hardy]: Yeah. Right. Frank Frank, one Northern Red. Alright. Wonderful. And, sorry if I [Speaker 5 ]: may grab my final instrument here. So, yes, great to meet all of you. I'm Nasir Holban for for record. I work for the joint fiscal office. And if it's okay with the chair, I will go ahead and share my screen. [Chair Ann Cummings]: Why do you have this on your website? So we're gonna talk about the base the base funding to which he's added the weights, right, and then the categorical. [Speaker 5 ]: Right. So Okay. Today, what we're going to be talking about is a overview of a quick overview of the foundation formula bug real the governor's proposed foundation formula, but, really, after having discussion with the chair, focusing on how changes move throughout the model. If you change one one piece, how that can flow through the entirety of the model and therefore affect the the base amount calculated using this model. So I constructed this kind of with a quick intro to this might be a recap for some of you. Some of these pieces might look new for the first time for you, just how I'm presenting them versus how they've been presented to you previously. And then we'll move on to the changes and how really, it's interesting. If you make one change to one area, it can flow throughout the entire unit of the model just to give you an idea of what policy changes can have additional impacts on the proposed validation model. So go ahead and [Member Ruth Hardy]: get here. [Speaker 5 ]: So just to get this out of the way, joint fiscal office, we are a nonpartisan legislative office dedicated to producing unbiased fiscal analysis. This presentation is merely meant to provide information for your consideration, not to give you any sort of policy recommendations, just Yeah. Recommendations and information for you all. And I'll just add my own little boilerplate on here is this the work I'm presenting is the administration's work. However, I have made, as mentioned earlier, that one change to illustrate how if you change one part of the model, it will flow through. But the vast majority of this work is, from the edge is from the Agency of Education and their, consultants. So just for the scores for that. So we will talk about today what is the base, try and do a quick run through of that so we have more time for what I consider the kind of exciting part of today, take a look at what's going into the base, and then the illustration of the skin of changes. And there's also an appendix at the end of this with a lot of the tables that go into the more the more granular calculations, but we we would need an entire second testimony just to get it through all of those. But I did put them in at the end in an appendix. [Chair Ann Cummings]: Foundation today, and then we'll get into the grain and sand another time. [Speaker 5 ]: Yes. Absolutely. If you'd like, tap me back for that. I'm more than happy to. But in the meantime, the appendix is there if you just wanna see it immediately. So so foundation formulas, they they are not new. Vermont had one. They've existed within the United States since at least the mid nineteen hundreds in some form or fashion. And so a foundation formula typically starts with what's called a base, and the base is the core amount of funding per student before applying any weights for any special circumstances, such as English language learners, the federal poverty level, special education, etcetera. So before any weights, any block grants. And it's typically understood to be an amount sufficient to fund what's considered you know, there is such things a typical student what's considered a typical student in a typical setting. So just to lay the the groundwork for that. So the governor's proposed base is calculated from the Pykas and Auden evidence based model, and this was developed by Piketasuddin and Associates to link strategies and resources in high performance schools to state school funding formulas. I believe you all had some time with doctor Kytas yesterday in a joint hearing, so you've had a chance to speak with him about his model a bit. And so, the most recent report, again, you probably are aware, is in twenty twenty four in Vermont. He was also here previously. I believe it's twenty sixteen, and he's done this research across the country and other states as well. So this EV evidence based based amount is built off of an identified set of resources, and these resources are identified using research from high performing schools, and the the idea is to bring all these concepts that have worked on their own into one model. And this work was then further modified by APA and Associates, employed by Agency of Education hired by Agency of Education to produce this proposal. So quickly, we'll take a look at the the case inputs. So those are primarily the schools, central office, and maintenance and operations, and the resources and staffing revolving around that. So there are some assumptions within the basis model here. So the evidence based model distinguishes inputs across school levels school levels, so elementary, middle, and high school, as well as at the central office and with your maintenance and operations. And so for each of these areas, each of these, I guess, broad buckets, you have two categories. It's either based around your staffing counts or your dollar based resource allocations, whether that be utilities, ongoing maintenance, supplies for your students, etcetera. And so this model then takes those prototypical schools and aggregates them into a prototypical district, And that district is used to spread out your central office and maintenance and operations cost throughout the district if it's a resource that, you know, would be shared, such as your superintendent, business manager. And so that's included in the central office as well as a cent dollar figure per pupil to cover your district wide expenses. And there is finally the maintenance operations, which includes the staffing and those resource costs such as utilities and ongoing maintenance. So your prototypical school staffing. So here we have the three schools in the mall. Your k through five elementary school, six through eight middle school, and your nine through twelve high school. And this is how it's presented in by the administration in their modeling. You know, I know Vermont has some schools where the grades don't fit into these three neat boxes. You might have seven through twelve or k all the way through twelve, but this is just [Chair Ann Cummings]: Okay. And you were looking at a school with four hundred and fifty students. Am I reading that correctly? [Speaker 5 ]: Yes. So I can clarify for that. [Chair Ann Cummings]: Six hundred high school. [Speaker 5 ]: Yes. The prototypical model uses these set counts. It's just the amount that was identified through Larry Pikes' doctor Pikes' research as being your efficient school size. This is not representative of a particular Vermont school. This is just the students presented by the research or done by doctor Pikes and the APA consultants. [Chair Ann Cummings]: Right. Should I repeat? Yep. That's why I'm not sure if you could answer this. And I don't wanna put you on the spot, but why why are we using the PICUS model as the model? And the reason I'm asking that and is because and this comes up in our health care committee all the time. Our morality and our small population makes us such an outlier and such a kind of aberration in any kind of modeling that it I just and he and he even admitted yesterday that the fact that he hasn't had, like, interaction with a local what is it called? The board of local something something that it was a there was a group that he normally puts together to have, [Vice Chair Thomas Chittenden]: like, a professional judgment panel, professional [Chair Ann Cummings]: Yeah. Thing. He didn't have that in Vermont. So just and he admits that's a you know? I think that I know his APA usually does that. That was their technique. Well, I all I know is he did bring it up yesterday. He has not yet. So, anyway, I just wonder if you I don't know if you have an answer to that question. [Speaker 5 ]: Sure. So the answer that I can give is the evidence based model is a research backed model that has been used elsewhere. And so these school sizes are the same school sizes that, for example, I believe the Michigan two thousand and eighteen study used as well. So I believe this is kind of just a blueprint that is used for academic reasons, as I believe doctor Pikus mentioned in testimony yesterday that, you know, if enough time and resources were available, he would have preferred to do a panel. However, I will say that that is part of what I'm going to show you today is I have actually said, okay. Well, what if there were changes? And one of those this is a would be a policy change, but one of those changes was I set the high school's student count to the median student enrollment in a Vermont school containing grades nine through twelve. So this first part might be a little bit grading just because we will have a lot of these numbers here. But if you bear with me, when we do get to one of the examples, I did do some modeling with this if that answers [Chair Ann Cummings]: I really appreciate that. And and, you know, he said he has done modeling in Wyoming, and I believe that is the only state that is equal or more rural than Vermont. We are despite everything we like to say, not the only rural state in the country. And we may have the most towns with fewer than whatever the x hundred number of people are. But I believe they're a lot closer together than they are in Wyoming. We don't have two hundred miles between towns. So some of the I mean, some of small by necessity and some is small by choice. And when we started doing these, we have closed. Okay. Riverton used to have because you couldn't get out of it. So that's in Berlin that had in school that were, I think, four in Dallas. There were Mhmm. Every neighborhood in Barrick had a school that kids could walk to. And I remember when they closed the neighborhood schools in Barrie and built elementary school elementary middle school. So we have been upsizing over time. It's, you know, mostly the roads got paved, the interstates got put in, and plowing got to be better. Mhmm. It's more so that's our question. [Member Scott Beck]: Were you walking us through how this administration came to the thirteen two hundred figure or just the model that EPA used to get to the thirteen two hundred figure? [Speaker 5 ]: So I'm sorry. I'm could you restate the question? So So the administration came forward with a base amount of thirteen thousand two hundred per pupil. Are you walking us through how they came to that figure? So this first part is a quick examination of the tables that go into that calculation. But for expediency's sake, my goal was to do that more of a broad overview rather than a step by step, I can, as another time, do a step by step if that would serve the committee web [Chair Ann Cummings]: or ratings. And I believe doctor Pikes has testified yesterday that APA had made some adjustments to his numbers to reflect That's true. On reality. [Speaker 5 ]: Yes. Well and to clarify, this is from APA. So this would be the administration and APA. They're the same here. So this is right here, for example, these are the schools and the sizes with the same unit cost that was used by APA to reach that to generate that thirteen thousand two hundred. [Member Ruth Hardy]: Sorry I had to comment too, but I don't know if I cut you off. [Member Scott Beck]: So I just I have not heard of an elementary school in Vermont with four hundred fifty kids. I all the ones I'm thinking of were, like, two to three hundred maybe. So I don't know if you're gonna in your model, you're also later on, if you're gonna have to do [Chair Ann Cummings]: a said he's he's got a model. Of the most sides of the south. [Speaker 5 ]: Yes. I, you know, I I wanted to lay the foundation, but, yes, it's good. [Chair Ann Cummings]: Thank you. [Speaker 5 ]: I hear a lot of concern regarding these these these. [Chair Ann Cummings]: Welcome to senate finance, Ezra. I don't want to dance. [Witness Eric Lafayette]: So [Speaker 5 ]: so, again, these are this is the the prototypical schools for that were used in the original modeling, and this was the prototypical district staffing use. So that takes those schools that we just looked at, wraps them up, and you'll note here that the assumption used for modeling is a three thousand nine hundred pupil district. This was clear by the original APA modeling, and it contains four elementary schools, two middle schools, and two high schools. And so this is the overall you'll see resources. That is the number of account of staff. The unit cost, which is salary plus benefits, those two multiplied together are where you get the total cost for each row there. So core teachers is a hundred and three thousand unit cost, which is the administration's proposed five thousand dollars in addition to the estimated median wage or salary of a Vermont high school teacher as well as the benefits on top of it. [Witness Eric Lafayette]: I see. One more thing. [Vice Chair Thomas Chittenden]: And then I understand. I would like to when I [Chair Ann Cummings]: enter him through his presentation. Go ahead. [Member Scott Beck]: Just unit is kind of abrasive. I'm just wondering why we would call a teacher a unit. I mean, they're FTEs. It's something of more common term, but I'll stop there. [Chair Ann Cummings]: I can't got all different kinds of This is all there is. [Speaker 5 ]: Yes. [Chair Ann Cummings]: They call them unit. [Speaker 5 ]: Yes. Just to reiterate, this table was it's plugged straight from the spreadsheet I was provided for this modeling, and I tried to change as little as possible for consistency's sake and to keep their work as their work and not me retitling their work and taking any credit reports. [Member Scott Beck]: Sorry to say it. [Chair Ann Cummings]: Tiny question. Yes. It's tiny. Thank you. That's right. How come APA didn't run a? Why isn't this run on the five district model, which was the governor's proposal? [Speaker 5 ]: That's a good question. I would defer to the. [Chair Ann Cummings]: Yeah. I don't think Ezra can ask. I'm sorry. I'm sorry. APA is what they did. Because they're flopping some people. They're flopping. Let's let Ezra get through his presentation. He's just presenting the numbers. So [Speaker 5 ]: this is just to illustrate that there are student to staff that there's a student to staff ratio, and I I find this important for each employment class, employment category. So for core teachers, the model assumes that overall, you have a twenty point seven student per teacher, and this is your core teacher ratio. And so the staffing ratios are rather important for achieving the the cost within this model because as you may be aware, staffing makes up a very large chunk of the cost within education. [Chair Ann Cummings]: So if you took that down, ten, you would be doubling the number of teachers theoretically, which would double your cost. Sure. [Speaker 5 ]: So I [Chair Ann Cummings]: mean, if if you drop the ratio, you have one teacher for ten students, which is probably pretty high in some of our schools, you would be doubling the cost. So what they've set up is the ideal. If we had an ideal, a mimicked system, that system is the ideal. It does not right now exist in Vermont. [Speaker 5 ]: Precisely. These are the prototypical Right. Staffing numbers that you see here, not based on Right. [Chair Ann Cummings]: If you could set up this mythically ideal school system, which probably exists somewhere in the country. But probably not in Vermont. Maybe we could buy one in Chittenday County where it's bigger. But that's the ideal. That's the goal. Our challenge is, say, we could stay where we are, and we can watch the cost go off and housing become more affordable because taxes are part of your housing cost. Or we can move towards this more ideal setup and how far our you know, first, we have to decide that we wanna move, then we have to decide how far and in what direction we're we're going to go. Or Or maybe we could find a whole lot more money if you just forward into the present system. What do you think? [Speaker 5 ]: Yeah. So exactly. The model is giving you a sense of staffing ratios that would be needed to achieve the sort of policy percentage. Exactly. And so here, I have presented the the prototypical districts, their pupil resources. So this is the dollar figure required for the model to provide, you know, whatever the different programs to bring technical education, flexible pathways, professional development, etcetera, for this prototypical district. And so overall and and you'll see that the resources and unit costs are kept away. So I believe that the reason for that is because you some of these are variable costs. So elementary students do not have flexible pathways or career and technical education. Middle school has career and technical education, but it's at a different dollar amount. So Okay. The total cost for this district is what you see in the total cost. And if you divided that state district wide, it would cost per pupil that one thousand one hundred ninety nine dollars to provide these resources. So, again, just level setting, what the work that has gone into the calculation of thirteen thousand two hundred. So that's the schools, a quick look at the schools. So a high level view of the prototypical central office. So this is the central office table provided by the administration. And so this assumes that that three thousand nine hundred prototypical district that I just mentioned. And in this one, we do have FTE instead of unit cost, so unit count. And so if you have this product typical district with this exact staffing and total compensation, you would have a pure a per pupil staffing cost of seven hundred and forty four dollars per ADM, and then you would have a per pupil resource cost of four hundred and fifty. And you'll see that is called out on the insurance supplies, miscellaneous per pupil. And so as the name implies, it's to cover the miscellaneous district wide supply, such as central office technology, some building insurance for the district, etcetera. So that's what was put into their central office calculation. And then the maintenance and operations for this district, again, assuming three thousand nine hundred pupils, unweighted pupils. So you would have a per pupil staffing cost of four hundred and ninety five dollars, and that's based on twenty three and a half custodians, nine point nine maintenance workers, and five point three groundskeepers. And in the modeling and, unfortunately, we don't have the time to go through here. But in the modeling, you'll see that some of these staff, such as maintenance, are key to the central office, and so they are designated as a shared resource, whereas some, such as custodians, are key to the specific school, and it intended that they would work at the school that they're keyed to. This just consolidates all of that and which is how the final modeling number is done. And it also adds in the one dollar per square foot. This prototypical district was estimated to have six hundred and twenty three thousand, gross square feet for its buildings. And there's also three hundred and fifty dollars for utilities, and that is per pupil. So that's where your one point four million dollars for utilities comes from your three thousand nine hundred pupils by that three hundred and fifty dollars. And so, overall, you would have a one thousand and fourteen dollar cost per pupil broken down by four hundred and ninety five dollars for staff and five hundred and nineteen dollars for the non staff resources. So to just aggregate that all together for in one slide, your prototypical district's cost puts all of that together into this forty one point four eight three million dollars, and then divides it by the three thousand nine hundred students. So as you'll see, further down this this table, we see the school level base amount is different by, school level, but the theory for the thirteen thousand two hundred is actually to take the total cost for the district and divide it by the three thousand nine hundred students. And so that was done to achieve a twelve thousand eight hundred and forty five dollar. And then as this work was done in twenty twenty four, a NEAP inflation index was applied of two point seven six percent to bring it up to the well known thirteen thousand two hundred dollars proposed by the administration. So [Vice Chair Thomas Chittenden]: So I know that people have asked this question, but I just wanna underscore this. So this is all based on a thirty nine hundred doll thirty nine hundred people district. Mhmm. But the disc none of the districts they're proposing are thirty nine hundred students. And have you seen in any of the information because I know JFO has gotten a lot more detailed information than we have. Have you seen anywhere where they grossed this up to the thirty five thousand, pupil district or the fifteen thousand people district or anything? [Speaker 5 ]: I have not seen any bottleneck. I would refer them to the agency to provide a more granular at district level. You are correct. [Vice Chair Thomas Chittenden]: Thirteen thousand two hundred is what they're saying is the base, but they're basing it on a much smaller school district size than what they're proposing. [Witness Eric Lafayette]: Right there. [Vice Chair Thomas Chittenden]: Yeah. Okay. Do you have an answer for this? [Member Ruth Hardy]: What's the math word [Speaker 5 ]: out to me? [Vice Chair Thomas Chittenden]: Well, no. Because they're they're they're making assumptions on, first of all, district offices and the district office for a much bigger district would have to have more. And then also the school district's size is there's a point beyond which you sort of get dis diseconomies of scale, and you'll have multiple different type sizes of schools within the district. And not every school is gonna be the sort of [Chair Ann Cummings]: need to Okay. Yes. This is an an idealized question is I know. [Vice Chair Thomas Chittenden]: But the their math, they never they never that stood their math to change the type of district size. I mean, they're using what the VSA is saying. It's more of an an ideal district size, more around four thousand Mhmm. Number, but they're plopping it on to a bigger district. [Speaker 5 ]: So the only I know it's not your work. [Vice Chair Thomas Chittenden]: I'm just underscoring it. [Speaker 5 ]: Absolutely. So, yes, this is based off of this model that we just did the quick walk through. Yep. You know, apologies if it does feel a bit rushed or confusing, but for expediency, say, trying to really hit the high notes. And so we can move on to some examples of [Chair Ann Cummings]: Okay. This is APA's numbers. Mhmm. Yes. And the first numbers we got was the the thirty nine hundred. That's core teachers. That's four thousand, if you run it, ideal district. And then the oh, this says thirty nine. [Vice Chair Thomas Chittenden]: They're all for thirty nine hundred. [Chair Ann Cummings]: They're all for thirty nine hundred. Yeah. Okay. So just stick with the thirty nine hundred. These are the numbers. If we take it down to smaller school to smaller districts because the number of schools within these districts are not specified, The more schools you have, the more custodians you're going to be I would assume the one nurse for seven hundred and fifty students assumes that those students are all in one school because it's pretty hard for a nurse to be there when a kid decides to be sick if they're moving between schools. So that's all part of converting this to Vermont. And we've seen proposed districts. We've got several of them up there. Eventually, there will be a decision on what is a feasible district size in Vermont and then pricing out that size. I am looking at something like the school board's association for reference just because that seems to be a more rational division. But we also heard that the with the larger school districts, the ratio of property wealth per student is two to one. And when we cut it down, it gets much wider. And so you have more risk of issues if you do any kind of funding above that. [Member Ruth Hardy]: Sure. So [Speaker 5 ]: Tell me if I'm misunderstanding, but that's what I'm understanding. So you're correct. All policy decisions went on district configuration, what towns, what schools, all of that would have an impact. So today, I'm just doing a very simplified version of this within the scope of their model, but those are all valid policy considerations to to have. Absolutely. Some of [Chair Ann Cummings]: them are a talked about where the mountains are in the middle of those districts and where the roads go. But it you should keep going. Yeah. You got it. [Vice Chair Thomas Chittenden]: So just stop and ask. [Speaker 5 ]: Yeah. So so just to move on a little bit. So scale changes within the base. So the base as we just walked through, lot of different components, a lot of different pieces that go into it. And so if you change one of those, they're gonna be impact statewide, and some of those would be small changes. Nice. Some will be bigger changes. So, for example, if the price of, oh, let's say, pencils or textbooks went up by one dollar thanks to inflation, Well, because we have weighted student counts with the current proposal, those are also policy choices, that one dollar would increase the statewide education's funds bill by hundred twenty six thousand three hundred and forty nine. You know, not much on the scope of the education. [Member Ruth Hardy]: That's when [Chair Ann Cummings]: you tell parents to support parents. [Speaker 5 ]: If if you make a change to staff ratio, so for example, if a policy decision was made that said, high school class size is at twenty five or a bit too unruly. We should cut that down to twenty three. Well, that everything else held constant in this model would lead to almost fourteen million statewide increase, and that is incidentally about one one penny on the tax rate for us. Just to [Chair Ann Cummings]: to give you an idea. Class two [Witness Eric Lafayette]: Two ten. [Chair Ann Cummings]: Ten, you know, on average. These are all averages. [Speaker 5 ]: Yeah. If if that [Chair Ann Cummings]: can make a thirteen point nine million dollar difference in the total cost. [Speaker 5 ]: Right. So that's roughly your your one penny on the nonhomestead homestead equalized statute. So and, again, there are also some costs that lie outside of the base. So changes there aren't taken into account here because they were never part of the original modeling for the thirteen thousand two hundred. So so next, I'm gonna walk through two examples, you know, illustrated, not a policy recommendation. These are just some things that I thought would be interesting for you to take a look at it, how they [Chair Ann Cummings]: help us think through. [Speaker 5 ]: What a job impact the base. So first example, we're just going to say that the presented prototypical high school of six hundred students, we're gonna say that's that's okay. But we want the twenty three students in a classroom instead of twenty five. So if you reduce your class size, that will increase your per pupil cost, like like I mentioned. And so now instead of meeting the APA model's, staffing cost per pupil of eight thousand eight hundred and sixty five, this same high school, the exact same number of students, would now need nine thousand two hundred and ten dollars to operate for staffing because you now have the additional teachers through that smaller class size. So and so that's just a quick example pulling everything else constant with with their modeling. So let's take it another step further. So smaller school as well as the smaller class sizes. So we're going to maintain that twenty five being reduced to twenty three students in your high school classroom, but the student enrollment at this high school is now three hundred and twenty five students, which I derived from being the approximate rounded median enrollment of schools in Vermont. And these are schools where the majority of their students are within grades nine through twelve. So this is a bit more of a Vermont number rather than the prototypical six hundred number. I also maintain student to staff ratios to maintain student to staff cost rather than defaulting to any other form formulas designed to generate staff because we're now changing the size of the school. So those formulas could all be grown at all. And in theory, as long as your staff to student ratio is maintained, the cost of that staff at the student per student should be maintained as well. But you'll also note that for this modeling, I determined that there should be a minimum just for ease of modeling, a minimum of one FTE per position. And that's because I'm assuming for this model, no staff sharing or dual roles for this position. So the high school size is adjusted, but the rest of the district remains at that prototypical administration's district. So it was a three thousand nine hundred pupil district, but now it's going to come down because I've reduced the size of the high school. So we have four steps here. So first step, looking at this model high school with a smaller class size and a lower enrollment. Our next step will be to see how these smaller high schools because if you recall, this prototypical district has two high schools. So see how that flows to the district office's cost. Step three is to see how that then further flows through the maintenance and operations for this district. And these changes together and see how the cost per pupil for this district as a whole for a typical district has changed. So step one. So you'll see that the three hundred and twenty five is up there instead of six hundred. So the student count has been reduced. You'll also see that the student to staff ratio is being maintained at approximately twenty three to one, which is twenty three class size, which we took a look at with the the first example of changing twenty five to the twenty three. So prior to this change, you know, just to reiterate, it was eight thousand eight hundred and sixty five dollars per pupil to cover statins. But now excuse me. Because the the class size has changed as well as the high school itself has grown smaller, and I made, for this modeling, the choice that one is the floor for your MTEs. The cost has now increased to nine thousand nine hundred ninety six dollars per pupil because for this, I determined that assistant principals would not go below one as it would if you just maintained your strict one per six hundred. I just froze it at one. Same thing was done with your library media specialist, your nurse, your interventionist. Just [Chair Ann Cummings]: the rule was So they're gonna need those for that? [Speaker 5 ]: Yeah. Yeah. If the rule yeah. So for this model, of course, that's a policy choice. The policy could be that you can hack below one share through your dual role where one person does two jobs, or you have one staff member who floats between two schools. But those are all policy choices and could be modeled differently. But these are the considerations, and you can see how that has increased the cost by, you know, over a thousand dollars compared to the the prior modeling at the high school level for staffing. So next step, how does this impact the central office? So even though we're not directly changing the central office's staffing, it's being indirectly affected because the district has now grown smaller. And, again, with this model, I made the decision to maintain all of the student and staff ratios. And you'll see that the cost is increasing compared to the APA modeling because, again, the the floor is one. So your superintendent remains at one. Your business manager remains at one. That same cost is now being shared by fewer pupils, which therefore increases the cost per pupil from one thousand one hundred ninety four to one thousand two hundred and forty one per pupil. Now your your miscellaneous cost per pupil won't change because that was set at four hundred and fifty for this modeling, but, you know, that that's policy change as well. So step three, how does this impact affect your maintenance and operations? Well, you have the smaller high school, a smaller central office, and a smaller district. So life with the central office, you have some costs that are fixed. And for this modeling, I decided that to maintain the high school as the same size. I didn't shrink the square footage of the high school because, you know, that's a building. It's harder to change that compared to some staffing ratio. So that was maintained. And so and as for the groundskeepers but so some of these resources will go down a bit because of that redo reduction in payment count, such as your utilities. But some of these can't go down, and so you now have fewer pupils bearing the same cost, which increases the cost from the administration's modeling of one thousand fourteen to now one thousand one hundred dollars per ADM is the cost here. So and and feel free to stop me if I'm if you have any questions or I'm going too fast. So I've got a question. [Member Scott Beck]: On this unit cost, the unit, which I still object to the abuse of Mhmm. Could you say tell me if those salaries are based in Vermont numbers? And I thought I heard you say including benefits, but those seem low when I think about what the total fringe and all health care sick days, and everything else should be. So can you talk about the unit cost, salaries that are in this model? [Speaker 5 ]: Sure. So I'll just back up one. So these models were or excuse me. These numbers were provided to doctor Pykus in twenty twenty four by the agency of education, and they are estimated to be the median cost per position. So they should be Vermont based salaries and benefits. The benefits number was also provided by the agency. Now for some of these positions, health care included? [Chair Ann Cummings]: No. We have [Witness Eric Lafayette]: to do [Chair Ann Cummings]: two fifteen percent increases since then. Right? We have one this year, and I think one what would mean this year's numbers, but we've had at least one since twenty four. So that would change it. But this is just to demonstrate. Okay? So This is the median between South Burlington and Lowell. Sure. And I think you'll find a a fair swing in your teacher's pay. [Member Scott Beck]: There's forty two thousand dollars per custodian. I I feel like you had to add on top of that the the health care advice. [Speaker 5 ]: So I can request from the agency for some clarification on how they determined the salary and the benefits number, which was maintained from doctor Pikes' work. But, again, these were provided in twenty twenty four for his work. Some of these positions, it is possible that, you know, I I would have to see what assumptions they use to find a median. Do all cut are all custodians full time and get the full benefits? Were they were some part time employees included with reduced benefits? I will I will need to see. I I can certainly reach out to them. [Chair Ann Cummings]: Thank you. But This is just demonstrative right now. This is what happens if you lower the number of students. And in this case, we're talking one student. If you've got a school that's half this size, it's going to have a larger impact. If your school is smaller, but we have schools that were built fifty years ago or this class size of fifty years ago. They're now older, but they're the same square footage that needs to be swept every day, and the floor is polished. And we know we've got a lot of deferred maintenance be because the money is going elsewhere. [Speaker 5 ]: And and just to perhaps maybe the point that, senator Chittenden, you were bringing up is if a cost was different, then that would flow through the entirety. So Yeah. Yeah. Absolutely. A clarity around if one cost change, and that's why when the modeling was originally done by the administration, an extra five thousand when that was added because one of the administration's proposals was an additional five thousand in salary for all for all teachers within this model. And that's why, you know, when that change was made, that would flow through and affect the the base amount as well. So if something similar happened to a different employment category, you could see a shift to that per pupil cost and then flow through to the base. And so and so you see where all of these changes that we took a look at, you know, first at the school level by reducing that class size and by reducing that high school size to the median Vermont high school that also flowed through to the central office, assuming that this district has the other schools unchanged was through maintenance operations. So now we get to the district cost. So the district cost, you'll notice, has is as a total has gone down to from the forty one million that we looked at at the beginning of the presentation to thirty six and a half. But if you'll notice that the amount has also decreased or, excuse me, that the enrollment has also decreased, so you now have to share this cost by fewer students. And because of the decision during modeling to maintain a floor of one and, smart class sizes, the amount added onto the base is more than the the the total reduction. So total excuse me. The amount added outweighs any of the per pupil cost that you are saving by having a smaller school. And so your base amount, after adjusting for the same inflation numb number two point seven six percent, would be now thirteen thousand six hundred and thirteen dollars per student as opposed to the proposed thirteen thousand two hundred dollars per student. And so if every sing so if this took place statewide, some, rough calculations would be that you would see roughly fifty two million dollars statewide in increased cost just from this one well, just from these two policy changes of smaller slightly smaller classes and also that your high schools are smaller than the prototypical number. And this is assuming that the district as a whole has maintained the exact same as model. If you did the same exercise at every level, you could see additional changes. I have not done this model, but you if a policy decision was made that middle school, we also would like smaller classes. You could see this effect continuing forward. [Vice Chair Thomas Chittenden]: So I understand why you're describing them as policy changes because they're not your decision to make, so I appreciate that. But in some cases, at least right now, they're not actually policy changes. They're just the reality of our school configuration. So it seems to me that even if we even if theoretically or realistically we wanted to get to where the APA numbers were and the governor's proposal is, we have to have some kind of transition to get there. We can't just say, well, this is how we're gonna fund our schools because this is the ideal that we wanna get to in ten years. So I'm wondering if there's if y'all could work on a how could we transition there? And maybe it's just that every two years as there are adjustments into the configurations of our schools, we adjust the base and the weights. Maybe that's the transition, but it would be great to model that out so we can sort of see. Because as I've said multiple times to the point where senator Keeler knocked me all the time about it, it's like you can't just take their model and plop it onto what we have now. We have to have this sort of transition period where we're saying we wanna get there because we wanna save the money, but that's not where we are right now. And we can't we can't fund our schools based on some ideal that doesn't exist yet. Mhmm. So we have to model and prepare for that. And so how do we how can we say, okay. Next year well, next year is irrelevant in this because it's next year. But in two years and four years and six years or whatever time period we say as we adjust, as we make different decisions, we collectively as state about what schools are open and how many teachers and kids we have in classrooms, etcetera. We're gonna have a different base and a different and different weights. So is it possible for you to you and Julia to work on that kind of smooth model that we could use over the next I think it's gonna be at least ten years that we're gonna have to do this. Oh, well, [Chair Ann Cummings]: I it's into that. I mean, we can theoretically move students around up on the chart as much as we want. But the first thing I wanna know is how many schools do we have that are capable of holding that many students, and where are they? Mhmm. Because that and then and what condition are they in? And then how many schools do we have that can claw you know, can hold the next greatest number, and what would it take to add them up, which is where we get into school construction. There probably aren't very many schools out there that don't need yeah. I'm looking at the school construction people. Some kind of major maintenance to keep them habitable, never mind, ideal for students in the next ten years. So there's a lot that goes into this. I think the lesson is the smaller the student body, the larger the smaller the school, the larger the or the smaller the class size, the more all those other costs add up on a per student basis. And that's what we fund schools on is a per student basis. So we've got the same size schools we had twenty years ago. We have, what, ten, twenty percent fewer students. I don't know what that number is off the top of my head, but significantly fewer students. So the cost per student is going up. I think three years in is an incredibly optimistic time frame. Ten might be pretty high unless we can get a control on the cost increases. If we could get the cost down to our historical three to four percent a year Yeah. We might survive. I also know if we we can keep coming up with a hundred million dollars a year to fight down the tax increases, not without doing serious damage to other places. And we know they won't let me do my job and raise taxes. So it's going to be a challenge, but I think we are at least going to have to have a growing map. I'm a liberal when I said growing map. I think we need to ask the department if they do have any kind of a mat. We and I couldn't find I think it's in the email that Charlotte sent us last week because the graphs weren't programmed well. But we do have a list of schools alphabetically by name, but not by county. And they're I think it had their capacity and the number of students. And we could look through that, but then we need a big map and lots of thumbtacks, and we can get that to start looking at where we have schools with capacity. And where we have roads. Mhmm. And where we have roads. And where we have well, I'm I'm assuming the schools are on roads. Yeah. But Even though we're heading out to the e the callous school is a little bit challenging and much. Decent. But it's getting from one school to another. It is now. I mean, to get from Putnamville to the Romney School or from Middlesex to the Romney School here, you have to go over the dirt road or do a twenty mile detour. And that dirt road is where we almost had a woman die in mud. It was a year. I think it was the year before last maybe as early as last year. I mean, the the last season was they already missed the year. But they're pretty challenging. We haven't driven them with some regularity Mhmm. During a normal well season. [Speaker 5 ]: So I just heard you say two things about it, Sharon. [Member Scott Beck]: I just wanna see if this sort of confirms in order to make I can confirm it. One, I really feel like what we're talking about your economies of scale through capacity optimization. That's what we're. With. Moving kids around on charts is not what we do in Vermont. And so what I think [Member Ruth Hardy]: and they also what I know about Vermont, they're [Member Scott Beck]: not gonna want us moving kids up into different schools out throughout communities that I don't know that you don't. So that that brings me back to the timeline. And my mind is now gravitating towards I I think I do support a new districts, consolidating districts, and then having those elected bodies make these decisions. But you lay that out. That's a two to three to five to ten year timeline, [Member Ruth Hardy]: which I'm on board. K. Journey of [Member Scott Beck]: a thousand miles begins with one step. But what I'm saying is I don't think anybody wants to hear Montpelier politicians talking about closing these schools and putting kids there. I think we need to think about those districts. [Chair Ann Cummings]: Well, we're in a dilemma here because nobody wants to hear us talking about it. A large number of people don't want any change, and an equally large number of people can't pay their property taxes. And some of those large numbers of people overlap. And to ask a local school board to make the decision that a large number of their friends and neighbors don't want them to make is not fair. I think it's our responsibility to set the course, to say that within x number of years, you have to reach this minimum class size or this minimum school size. And if you don't, we'll do it for you, kind of like go to the hall and work out a solution you like better that but we will work one out if you can. [Member Scott Beck]: And I don't think that's achievable with our current one hundred nineteen districts, but I do see it possible if we had intentional, rational sized districts throughout the month. [Chair Ann Cummings]: And I'm looking at the school boards just because they're as rational as anything I've seen. I think most people will have visited the towns within those. I think with the five districts, a significant number of people will never have been to New York. So the towns are being paired with. Took me a while to figure out where Buell score was. Then they put That's his last track. No. [Speaker 5 ]: In Chittendy County. [Vice Chair Thomas Chittenden]: It is. Yeah. Mhmm. [Chair Ann Cummings]: It's And it used to be in the Waterbury district, but oh. They put up a sign. I figured out where it was. But there's nothing that says your review score until they put up a sign. There's no down. There's there's Thirty people live there. Yeah. But any Most of them. Okay. I'm gonna I'm gonna let Ezra finish. And then I'm gonna take, like, a fifteen minute break, and then I have committee discussion because we are going to have to start making some decisions. I don't know what I know that senate ed is working on a governance structure. I will talk to them. They said they would release that sixty six. That's right. I wrote it on my hand last Friday, so I would ask. So we just haven't gotten it up. I I will ask them to get it up to the secretary and get [Vice Chair Thomas Chittenden]: a thirty [Chair Ann Cummings]: nine school instruction. Thirty nine. School instruction. Thirty six in. That's good. So, anyway, I did ask. They did say yes. Just nobody followed through. So we will get that because that will have financial implications, which will unless the state is willing to guarantee, we're gonna pay the debt service to the schools. The schools the districts will have to bond, And we're going to have to have a rational proposal for that because we do need to make sure that they're on paved roads, that they're centralized. We may be able to cut down on some of the tuitioning if we put up a school in an you know, in a larger district area than we have now. I don't want that. Mhmm. I love that. Okay. So but that's gonna require us to do some heavy [Vice Chair Thomas Chittenden]: What you [Witness Eric Lafayette]: do or you know? Cheat. [Chair Ann Cummings]: Ezra, we'll finish, and then three below [Member Scott Beck]: That's been great, Ezra. Thank you. [Speaker 5 ]: Yeah. That's great. Thank you all. [Chair Ann Cummings]: So And if you can stay with us while we talk, that would be helpful. Or [Speaker 5 ]: Absolutely. And that's what the committee [Chair Ann Cummings]: provide. Whatever you and Julia have for time frame, but letting us go on our own without anyone to say, yes, but this is what will happen if you do that, could be very dangerous. [Speaker 5 ]: I believe I have time blocked out with you all with the committee until four o'clock on my calendar. Right. So if you would like me to stay, I can. [Chair Ann Cummings]: I'll I better go prepare for a town hall at five. That should work out well. [Speaker 5 ]: Alright. So I just wanted to hit the summary slide here and reiterate that different policy choices, as I hear, being floated around the state house and within this room, they'll have different financial impacts, such as what what we took a look at. You know? It and also that staffing makes up the majority of the cost within education fund, and this means that any change to staffing related areas will have a larger impact. And the majority of the proposal savings are from the prescribed staffing ratios, those number of students within the classroom, having that set number of staff members within the school within the district. And so if any of that changes as, I think, the example kinda illustrated, you will see some of these proposed savings being, withdrawn. They'll be going back into the schools. And so, currently, just for some perspective, Vermont has one of the highest student to staff ratios within within the country. So four point two eight students for every staff member, [Chair Ann Cummings]: not just teachers, but just staff members overall through school paraeducators. Right? [Speaker 5 ]: Yes. So that would include paraeducators. It yes. So school year twenty three to twenty four. Historians. Yeah. This yeah. Everyone who would fall within, I did link a source for that number, the NCES. They they have great information. There's also a policy website called at at Genomics, they do graphs using this information to kinda display how in some states, you'll see enrollment lines going excuse me. Staff lines going up, enrollment lines going down, so showing how that ratio is deteriorating over time. You mentioned [Member Ruth Hardy]: the two organizations again, NCUS. Yes. Not the national [Speaker 5 ]: Yeah. NCES. E s. Okay. Yes. Yes, sir. Okay. N c e s dot ed dot gov. Mhmm. And, also, the other one's called Edunomics, like education Mhmm. Plus economics. And so they will do articles and research about all sorts of education and finance topics, including small schools, how to you know, some articles saying, you know, the ability of of sharing roles between staff members can make small schools viable. And so yeah. So some real neat information there. And but for reference, in other New England states such as Massachusetts, New Hampshire, Rhode Island, you'll see that they do have these larger ratios. And here, you want a better ratio because that means the cost of that one staff member is being spread among more students. And so that means that the cost per student is therefore going down. So Vermont is high in the country, but also within New England itself. And just to one Is that your problem? [Member Ruth Hardy]: Yes. No. No. If if I'll let you finish your your thought. I don't know. [Speaker 5 ]: Oh, thank you. No. Just just to hit the last point that in Vermont, we have we employ more people in the education space even as the student enrollment has gone down over time? Edgonomics does have a a neat graph using that. They took that NCES data and graphed it out to show how the the difference between those two has widened, increasing that ratio. Sorry, senator. Well, what what I was asking [Member Ruth Hardy]: is we have we we typically think of teacher to student ratio. Do any of these sources also look at the other categories and look at how states compare in terms of how many power educators you have per student, how many custodians you have, how many other things that would impact this. Is there any other one of these categories of jobs that you relate to students that may be either particularly noticeable, particularly unusual, particularly different in terms of how our mistakes as opposed to just teachers. Oh, you're not. So I am not aware at off the top of my head if they [Speaker 5 ]: how many categories they divide that number into. I know that the particular graph and source that I used for this slide was the overall ratio. If that is of interest to you, senator, I can see if I can find and perhaps share a link. Yeah. If there's [Member Ruth Hardy]: an and, again, I'll I'll I'm gonna look at these websites myself to look for that. But if there's anything that leaps out, then there may not be, but it's just just a question that's worth asking, I think. [Chair Ann Cummings]: And the the one difference we saw when Pilly mapped out their middle school, which hit the ideal within half a kid was in the behavioral intervention with mental health. And that's what led me to the question of do other states do the mainstreaming to the extent we do or have the non exclusionary discipline policies because, basically, we leave a teacher. And I think we're seeing mental health issues across the country. I don't think our kids are the only ones on the phones all the time, and there seems to be a correlation between the advent of screen time and depression, suicidal thoughts nationwide, from what I've heard over a couple of years in the company who made this table. So and I've heard years ago that we had one of the highest rates of referring kids to special ed. I don't know if we've reversed that trend. Don't go the way. Have we? No. It's gone the wrong way. I mean, I'm tired. Yeah. That Well, the [Member Ruth Hardy]: other thing, though, that we've noticed on schools when I'm looking at schools a number of years ago, the disparate rates of special ed referral from district to district. There were some districts that had virtually none or very, very low levels and they're some that had very lot of [Witness Eric Lafayette]: eye level. I was I [Member Ruth Hardy]: was struck by the the inconsistency with what I was seeing. [Chair Ann Cummings]: And maybe [Member Ruth Hardy]: And, again, then the allegations came that there were certain incentives for making some referrals that schools were using to gain the numbers. [Chair Ann Cummings]: Well, some of this would I I don't think schools are changing changing our numbers. Some of them are changing [Member Ruth Hardy]: changing the number to make them more favorable from the perspective of the leadership of the schools. That's essentially what I [Witness Eric Lafayette]: I see to hear. [Member Ruth Hardy]: And some of the numbers, just the fact that there was such a discrepancy did concern me as to why. [Chair Ann Cummings]: And I would think that some part of it could be the training and support the teachers get. I think most teachers in Vermont would give their right arm to have the kind of support and pay that God just puts in there. What is it? A good portion of our teachers and in some of our schools, the majority of our teachers are probationary. I hope defense can't fire them. But that means you have I can remember having a first year teacher with one of my kids in first grade, and she called up and said, how do you get them to listen to you? And I'm saying, you're the teacher. You should tell me how to get them to listen to me. But that that takes experience, and it takes some support so that teachers can learn the techniques that it takes to manage students. And that's different than classroom learning. And we may need to do that. And what are you showing me a picture of? [Member Scott Beck]: I just was ready to [Member Ruth Hardy]: put my visual, but I Yeah. Sorry. [Member Scott Beck]: If I can just read one of the things to be top of mind is that if this thirteen two is really based on labor rates, these unit costs, which, again, I just wanna say [Witness Eric Lafayette]: I don't like that currently. [Member Scott Beck]: I I would like to get us to recognize that pay rates across Vermont swing a lot. [Chair Ann Cummings]: Yes. [Member Scott Beck]: There are counties where it's forty percent more than our lowest county. So if we're gonna go with those assumptions or that, I'm I'm more inclined to look at an adjusted base rates adjusting for the what what is it? Cost of living adjustment that somehow accounts for the the labor variations in different parts of it. [Chair Ann Cummings]: We can look into that. Once we lay the foundation, that's a little bit of debris. Makes sense. [Witness Eric Lafayette]: We [Chair Ann Cummings]: know and schools know. It's the same issue that the mental health agencies have with the home health. You get someone. You train them. There's an opening in either the state or the school. They go there, and they make several thousand dollars or more day one. And we are responsible for funding some of those agencies, and you've taken care of our own first. And, yeah, we we've got issues there. And their level of funding issues performance budget too. Last year, if you remember, we had to raise insurance fees to get a three percent increase in the benefit. So we've got disparities. They are pretty sure there's disparities in benefits. There's disparities in cost of living, but not I I don't know if they it's just the cost of living that's reflected in [Vice Chair Thomas Chittenden]: You can't [Member Scott Beck]: get the changes to the same salary in Chittenden County as you can. In Essex County, it's the point [Chair Ann Cummings]: where you can get that. But is the cost of living the total difference? Because if it is, you're not gonna make any more money moving to Chittenden. I think the Chittenden County schools, they're bigger. They're gonna meet more of those costs per student norms. They can afford with what they're saving to pay their teachers more. That's what we're seeing. Yeah. We'll we'll we'll we'll Yes. We can get that off of them. Are we now in the community I mean, committee conversation period? Well, I'm gonna take a fifteen minute break. Woah. As Anzura has you've been through. We're at summary? Yes. Absolutely. Through everything? Okay. [Speaker 5 ]: We we have. There is a consideration slide for for people to ponder if they would like. I you don't need necessarily need me to read it to you, but I can if you would like, or you can just you know, you have it as a handout, I believe, and you can think about it. And, yes, if you would like for me to be finished, I can certainly be finished. Whatever you share would like. [Witness Eric Lafayette]: No. No. That's not appreciated. [Chair Ann Cummings]: Why don't you finish up your presentation. [Speaker 5 ]: Alright. So so just quickly, some considerations that I thought would be helpful to perhaps highlight here is that pre k, while proposed to be a part of the system, was not explicitly modeled with this system. So that's something to think about. Pre k costs more, costs less, costs the same, something to think about. And then how does the base as proposed interplay with the weights as proposed? Because right now, the base and the weights are set. But if one part changes in the in the proposal, do you need to change the weights, or will you leave the weights the same? Because the weights have a multiplicative effect. So if one part of the base changes that, then it gets multiplied out even further through the weights. That's one of the reasons why I was able to show that with the calculation of fifty two million dollar increase because it's not just all per students in seats. It gets played out through the weights. Weights. So that's another policy choice to think about. If one part of the base goes up, does part of a weight need to come down? [Chair Ann Cummings]: Does it need to stay the same size? And the weights they used are not you saw the numbers, but they are not the weights that we are they're not the numbers we are currently using. There were some I thought I heard of Tammy Colby's numbers, but they were the ones that we had. And some of there were different places they took rates. They're fine. Okay. [Speaker 5 ]: Yeah. And and so So if [Chair Ann Cummings]: we raise the weights, we're gonna raise the cost per student, basically. Okay. [Speaker 5 ]: Say why the cost would increase based on however your weights and base move. So just thinking about, do you want them to move together? Do you want one to be lowered as the other goes up? [Chair Ann Cummings]: Okay. [Speaker 5 ]: Just something to think about. [Chair Ann Cummings]: And then Because our weights, I don't think, and I'm looking at Sandra Hardy, are based on the concept that the that there's a base funding there that is adequate for all the things this was supposed to be added. [Vice Chair Thomas Chittenden]: Our weights are calculated based on a task capacity model, which is very Very clear. Than our foundation model. So there are ways to sort of translate our weights and and recalculate them for a foundation model, and I believe Tammy Colby has done that and has presented it to [Chair Ann Cummings]: the I know. House ways and means committee. I just So I know. Yeah. I've asked her [Vice Chair Thomas Chittenden]: I've asked multiple times if we can get her in here [Witness Eric Lafayette]: to [Vice Chair Thomas Chittenden]: talk about it. But there are ways to use her data or updates to her data or you I think even froth lock it. I I don't know. But Like that. [Chair Ann Cummings]: With API. I don't even know if she's gotten there because I know she canceled one day. Something was happening with Washington. She had to take care of. [Speaker 5 ]: And you know what? [Chair Ann Cummings]: She couldn't make it here. [Speaker 5 ]: Well, you know, when you talk about updating, you know, that's another thing to consider. How do you update this space over time? Do you want to use the in in inflation fact? And if so, what inflation factor need has been used by Vermont for years? But is that what you want to use? You could also ask make a policy choice tied to a different inflation metric, or would you prefer a professional reevaluation? Some states have professionals reevaluate every so number of years to determine if the base is sufficient needs to be increased, needs to be considered as well. And, also, not every cost was explicitly included within the base here. So a couple of big ones would be your capital construction, major repairs. That was not explicitly modeled. So definitely a valid house. [Chair Ann Cummings]: It's gonna eat out any savings. [Speaker 5 ]: How the state would like to model that, pay for that. And the proposed transportation aid with the current proposal, it would be a hundred percent transportation covered instead of the fifty percent reimbursement in current law. If that were to sunset over a certain number of years or transition back to fifty percent, where would that funding fit in the in the base? Because currently, there is no transportation at all. So that's just something to think about. It may never happen, but if it were to happen and, you know, those just a few things to think about. I'm sure there are plenty of others that can be considered as well. And just to quickly flag, I have a resources sheet here, a link to my house, ways, and needs testimony where I did more of a very granular walk through. I was in there for a few hours, so broken up with a lunch in between. So there are two videos if you do choose to put yourself through that. [Chair Ann Cummings]: Oh, I should mention. Thanks. [Speaker 5 ]: There there's also a link here to doctor Pikes's report that is the foundation of the foundation that that EPA constructed Yeah. And the link to a couple documents and then provide by the administration. And, finally, I do have an appendix with more of these granular tables if you are interested to see exactly what was the per pupil resources for the prototypical elementary school. I have a table in there. Food for thought, I am all finished chairing [Member Ruth Hardy]: for this. [Chair Ann Cummings]: Okay. Thank you. He may be back here at three

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