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This is what goes to meet and confer. Um this is the main operating budget of the district and it is set up uh through an account code fashion so that you can have some knowledge even though it does look like numbers on a screen. Those numbers tell me an immense amount of data. So, uh, when you look at that column to the far left that talks about where the expenditures are being budgeted to, you can see that the program 100 is regular education. Below that, in that second box, you can see program 200, which is special education and gifted. Uh, below that 400, pupil transportation, and then some other um areas that we have to account to. Um but the the main uh portion of our budget exists up in that top area. It is then broken down additionally through what's called a function. Those are the fourdigit codes of 1,00 and then the the 2000s.
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And I talked about this in the budget 101 very quickly. Um 1,00 is in the classroom. That's that's that number. That's the one that we want to put as much of our dollars there as possible. But as we've noticed, you can put all the money in the world into the classroom, but if you don't support the teachers and you don't support the students, they're not going to succeed and we're not going to reach our goals. Um, and that's part of the conversation about uh the coaches and the instructional coaches. Um, that cost falls into a 2200 which is when we support our instructional staff. We we teach teachers how to teach and that's where instructional coaches fall. So you will see increased dollars in that bucket as we move forward through the um instructional coach plan. Um 2100s are direct support to students. So you'll see uh numbers in there and that is um services that are facing with students.
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So PT services, nursing services, uh psychologists, all of those directfacing uh supports for students that aren't happening in the instructional classroom are in that 2100. So um you will typically see our budgets are heavily weighted in the 1,2100 and 2200 functions. The rest of it is the operational values of um like 2300's are the executive team and their support. 2400s is school administration which is the principles and their support. 2500 central services. So, um that's fiscal services, payroll, um uh human resources, a warehouse, all the things that kind of make the guts of the district run. Um 2600 is the operations of maintenance and plant. Uh when you drop down, 2700 isn't um in that breakout, but it is located under the program 400 pupil transportation. That function and that uh program go together. they just report that out separately on this budget. So you can see that that does carry down into uh sped services also where things happen directly in the classroom and then support to students.
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So I I think with account coding those are some of the key areas and the takeaways that allow you as board members to very quickly identify what types of services and where those budgeted dollars are sitting in this budget as it stands. This is the proposed uh this is before we know final numbers, but we know where we're budgeting our dollars and that doesn't change very much from year to year. Uh except for when we're making choices to um add additional programming and it gives it that opportunity for us to see it happening real time on the on the spreadsheets, which is exciting to me. Um the rest of the budget covers Oh, I guess I could stay in it. um covers those additional funds that we've talked about um before which are very highly regulated, not as much flexibility. We have to spend them exactly as stated in statute.
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They typically have restrictions or supplanting restrictions, meaning we can't um uh replace the existing dollars that we're spending in those areas, but we could add to that's what supplanting guidelines mean. So classroom site fund is a supplanting fund. Uh this this uh fund is uh specific to adding to teacher salary and performance-based pay. Um and that's just kind of how the whole budget goes. It breaks down those various capital funding sources. Our bond, you're going to see a big change here in the bond dollars because we just had a bond sale. So we're um finishing up the past bond and then adding in our new budget. That's why you'll see an increase there. Our unrestricted capital outlay stays pretty steady. we have an override that doesn't change. It's 2.9 million each year um until uh we need to go back out again for that. Um another big thing happening this year is adjacent ways.
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We will not be going out for any adjacent ways dollars. That's a a direct levy to our taxpayers happening through the budget process. Um reason being is is we've planned our projects and our bond sale year to keep our tax rate as flat as possible. One of the things that we don't want to do is um have our tax rates go up and go down and go up and go down and go up and go down. So, we work really hard to try to maintain um just consistency through that tax rate. Um and part of that is managing our adjacent ways projects along with our construction projects. Since we have a bond sale year, this would not necessarily be the best year to put out an adjacent ways, but we will next year. Um, this kind of breaks down in the presentation what those functions since I went through very quickly.
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Uh, and this kind of gives you an idea of what costs sit in those areas. You'll see this also when we do our annual financial report in October. Um, it's the same codes. So, what we budget to and what we spend are the same codes. So you can see well we budgeted you know 10 million in uh salaries and we spent you know 9.5 million in salaries or however that correlates. Um it's the same coding. Uh also on that budget sheet we went over what was on the left. What happens across the top are the object codes and those are 6,000. I break that down here. um happy to do any kind of uh account coding on the spot uh training with any of the board members uh by request. Love to do it. I'm sure I could fill at least an hour uh talking about account codes.
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Um but as I said, you know, having um specific account codes allows for structure, planning, and transparency. and then we can all see those numbers and see where the dollars are sitting and absolutely know what that was spent on. Um, so this is kind of just alignment. I've I've given this out a couple of times. This kind of puts some of those pieces together and connects them so that when you see them in the budget or you see them in our annual financial report, you can know, oh, those codes together create teachers. Those are teachers salaries and benefits. Um, or teacher support or contracted staffing. uh we're still struggling uh to fill positions. We rely on contracted staffing. We have strategies that we constantly uh discuss to try to reduce that reliance. But at the end of the day, we have to provide for our students the necessary supports in order um to continue uh increasing those student outcomes.
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Um, and again, just some more alignment with the words versus the numbers to kind of give you some insight and you can review at your leisure. And we did want to kind of go through some examples of our alignment, strategic clarity. These are this is like the all of those progress reports uh in on one slide. Um, these are talking about some of the strategies you've been hearing uh in some of those reports. Uh, what we're continuing, what we're increasing. Obviously, we're increasing uh content coaches. That's a very large focus for us. We've seen success. We want to duplicate success. Uh we do have some uh new strategies coming out. Um adding that director of student support and inclusive practices. Uh we think that's going to have some just priceless results. Um adding that to the learning walk platform so that we can increase the amount of data that we are collecting.
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uh we know that uh datadriven decision- making is um key and then abandonment at this point we don't have specific things uh identified other than what we've talked through the progress reports last year we had um eliminated the other coaching model we eliminated the CJAS there were just a couple of strategies that we really clearly knew at that time which I don't really have right now but we will continue to showcase that in our U progress reporting And then just some uh significant changes, the new budget forms. Um oh, I did want to show that to you. Sorry. Let me show you one more thing that's kind of causing me a not heartburn, but um it's just new. It's just something new and I'll have to adapt to it. So uh when we talk about our fund balance reserve we maintain that fund balance reserve uh through the 10 15 20% whichever the committee and our recommendation comes to the governing board.
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This year we had recommended a 5.8 million uh reserve in our carry forward to ensure that we um carry forward the dollars we needed um to protect us and help mitigate the the uncertainties with the federal funding. uh the declining enrollment, all of the risks that have been identified in previous presentations. In the past, that was accounted for on a different budget sheet. They have now changed the budget sheets to include that as a line item on this budget. You'll see that grade area. And then how much are we maintaining? I plugged in a number. This is not the number that it will be. um that number will occur after we've completed our spending for this year. So we can do the calculation. Uh that calculation comes from a percentage of our expenditures in the prior year. So we're in our prior year right now.
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We're still continuing until uh June 30th. Then we close up the books. We will then get a final cost by the time we do our annual financial report. At that point, we can do the calculation and take that into committee and um and kind of understand a little bit more of our risks and then we will do a budget revision to change that number to what the committee um recommendations come forward and we'll know if we're at do we feel like we're in a 10% world which I I just don't see anytime soon uh with what we're experiencing the next few years. Um but we will make a recommendation at that time. So at this point in time that's just a holding number until we revise after we have some conversations identify risk and go into committee. Um uh but I wanted to point out that they are and and I said two years ago that this was coming uh that the the fund balance has become just even more important as uh we see what's happening with other districts that don't have a fund balance policy or a process and we see kind of the troubles that some districts have been having.
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Um, so I think that our pre-planning and kind of knowing ahead of time what was what was coming um just kind of shows how we're ahead of the game. We have good best practices and I believe that our budget is um a healthy budget that allows us to forward think and plan um and have uh enough contingency built into it so that we can pivot as necessary. I was not I, as you guys know, every conversation we've had, especially about the federal funding, I just kept reassuring you that I felt like we had the space to deal with what gets thrown at us. And this is why u because we have been planning forwardinking budgets um for quite a while and prior to me being here, Mr. Man did an excellent job of that. So I was able to pick up the reins and just put some verbiage to it.
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But he's had that process the whole time. And that is why Kraton continues to excel in this area. And I think it's um because of this I I think that we have impact when we sit on the cohort for SOFG. Uh because we're not coming at it from a broken budget process. We have a pretty strong budget process. It makes it easy for me to walk into the cohort and have good conversations about how this can support and be very clear in the SOFG process. So, uh, and again, this is not something I created. This is something I'm continuing with Fidelity. So, um, that is pretty much it. Again, no adjacent ways. Those federal budgets, I'm putting them at 8 to 20%. Um, could be worse. We we just, you know, we saw some current news today. You know, again, every day there's new news about what monies we're not going to get.
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Um I kind of like I'll believe it when I see it both ways. When I get the money, I'll believe it when I see it. When I don't get the money, I'll believe it when I see it. So, I just keep planning forward. I know that we have cushions and protection. And it's not that I'm not concerned about the things that are happening. It's just that I think that we will have some space to have good conversations to deal with it as a team whatever comes down on us. Um I think that's pretty much it. Uh next steps are going to be our adopted budget in June 24th. Um October will be our uh report out on our capital and bond spending. I really love that report for you guys. It really gives us a chance to showcase what those capital dollars are doing since typically we're talking about operating cost and salaries and uh the maintenance dollars.
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So the the capital presentation is really fun. Um and then in October is when we'll see our annual financials from the fiscal year that we're closing out in June. And then we'll be heading right into we may do a September revision most likely. Yes. because I don't have the final dollars on these um budget forms. Even if they come out now before June 24th, I can't change our proposed budget um and fix it in the adopted. I will have to do a budget revision, which we would do very quickly in September. We we're just getting used to doing it because of how late the information comes to us. And then um December may or may not do a revision, just depends. the May we'll definitely do a final.
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So that's our budget process and and our um uh budget calendar uh states that also which you got at the budget 101 uh last board meeting and I'm happy to take any questions. Board members questions or comments. The only thing I'm going to say is thank you so much for including the examples of alignment and strategic clarity. That's something that that's the first time I've seen it. It makes sense when we are actually being upfront on how it's connecting to our guard rails and our goals. Um, and I know that strategic abandonment is one of the hugest things that um, the cascading of funds and as we get into it, I'm I'm sure that we'll start adding more stuff. So, I just appreciate that slide and it helps also for me verbalize when I'm out in the community on when I get all these budget questions.
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What are you doing with all these millions of dollars to make sure you're moving the needle? Thank you. Absolutely. I'd like to give a quick shout out to Mr. Russell Denult. Um I know he's typically in the back of the room just running the show here, but um he's also been one of the leads on our strategic abandonment work as well. So thank you for the presentation and the reassurances and then the explanation of the carry forward because I was like that looks different but yeah uh All looks really good. Thank you. All right. Hearing no other questions or comments, I move the governing board approve the proposed budget, call for a public hearing on the 202526 fiscal year budget on June 24th, 2025 6 p.m. and authorize public notice of such meeting. Second. All those in favor? I I Any hearing? None. Motion passes.
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That brings us to 12A. Do we have any future agenda items hearing? None. That brings us to 13A. I move the governing board adjurnn. Second. All those in favor? I any n hearing? None. We w have a great night. Thank you guys. I know, right?
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electronically and will be broadcast live on CTN channel 19 and online at a2.gov.org. Watch CTN for all of our fans. For all of our fans out [Laughter] there, excellent. Okay. Um, Erin, do you want to do roll call? Yes. Um, Commissioner Buffford, present. Iani Township. Thank you. Council member Harrison said she would be absent today. Commissioner Fuller, present in Chelsea. You. Commissioner Katarski present. Ann Arbor. Commissioner Neil present in Ann Arbor you porter will be absent today. Uh chair thiefs present in grass lake and commissioner we Leonard. Oh you're on mute present in Ann Arbor. Thank you. And that is a quorum. Excellent. Okay. So, if everybody's had a chance to review the agenda for tonight, um, is there a motion to approve? So, move. Thank you, John. And is there a second? I think Sarah. Okay. I don't have my video on. Sorry. Um, and then hopefully everybody has had a chance to review the minutes from last week.
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