001Good evening, everybody. Welcome to our special meeting this evening. We're have a work session, we're going to be in about our budget. So with that, can I please have any get roll call? Dr. Alvarez? Here. Dr. Espinosa? Here. Dr. Holien? Present. Vice President Tidholm? Present. President Van? Hi, here. Here. With that, across from me is our superintendent, Dr. Ivan Duran, and would like to go around the table to introduce everybody, so. Good afternoon, everyone. Jackie Bryan, Chief Financial Officer. Andrew Burgess, Controller. Lauren McAllister, Director of Budget. Sarah Semerak, Director of Budget Strategy. Well, thank you, everybody. With that, Dr. Duran, would you like to go? Thank you. I'm just waiting for the slides to come up. I'll go ahead and get started. And while we wait for the slides, I just wanted to share some
002exciting news. And we just received our most recent election results and we're passing the levy with over 63 percent. So that is wonderful. It just shows that our community is is behind us and it's actually higher than our previous levy, the twenty twenty one levy. So, exciting news, I just wanted to share that celebration with all of you before we get started today. Okay, so we're here today to do our first of at least three budget work sessions. So we'll have our November session today, we'll have one in March and then another one in June, where we will be presenting the next year's budget. So, this, this first session is really to review last year's year end financials, our current year, and then planning, begin planning for twenty six, twenty seven. I will say that
003we are a month earlier than usual right now. So usually we would have this first work session in December, but because we have some information that we want to share as soon as possible with all of you, we bumped it up to November. So a lot of this, these numbers for this current year and going into next year are still very preliminary. So, as we review that today, I'll, I'll point that out. And with that, I'm going to hand it over to Andrew to review our promise. Your Highlands promises that every student in Highlands public schools is known by name, strength and need and graduates prepared for the future they choose. And when I get a chance to do something like this, I try to think about it in a different way that I hadn't
004thought about. And the word strength is what I was focused on lately. And if you know somebody's strength, it's like you truly know it, then you know they're not strength. And that's important as well. I've got it's in the system and they have a lot of strengths, but they have areas that they can grow in. And I want to prepare them to, to be ready for the future they choose. And we're going to talk about the resources that are available in the system to do that, not only support them in their strengths, but in those other areas so they can be really ready. So I'm going to pass it over to Sarah for the land acknowledgement. Before we begin tonight's budget presentation, I want to take a moment to ground our work in the place
005where we live and serve our conversations about how we allocate resources are rooted in a deep sense of stewardship of people, communities and the land itself. So I'll read our land acknowledgement. We begin by acknowledging that we are on the ancestral land, so sordid since time immemorial by the Salish people of the Duwamish, Green, White, Cedar and Upper Puyallup Rivers. Many of these giving birth to the contemporary citizens of the Muckleshoot Indian tribe. We honor and give thanks that we are able to collectively engage in this conversation on their sacred homelands about the future of teaching and caring for our sacred children and youth. Thank you. With that grounding, we'll transition into tonight's budget presentation focused on transparency and alignment with our strategic plan, ensuring our resources reflect the values of our community. And so
006to ground us further, our strategic plan here is shared and want to frame that all of the work we're doing is ultimately in service of delivering on our promise and reaching our strategic angles with our staff, students and community. So grounding in a culture of belonging, creating innovation, innovative learning experiences, focusing on multilingual skills and preparing students for multiliteracy and by literacy and preparing students to be future ready for the future they choose. So before we dive into the numbers, Jackie is going to take a few moments to review our board policy 6000, our financial management for equity, which guides how we develop our budget. Then we'll review the 24-25 year end financials, which we just submitted to OSPI last week. And then next we'll focus on the current year, the 25-26, looking at current
007enrollment and we will take a look at the 26-27 and begin our plan for development, budget development, and then we'll take a look at our new software platform, Aliveo. So as we get started tonight, I just wanted to ground us in our policy 6000, our financial management for equity. This is our board policy around financial management and within it, there are some goals listed. I'm not going to go ahead and read all of those, but you have those in front of you and these are what we really use as our guiding principles as we go through budget development each year. And keeping a consistent policy allows us to year over year remain grounded with these values. So we're going to start with the 24-25 year end financials. So these as I think it was Laurence
008just said, these were submitted last week to OSPI. They've been certified and are final. So we're happy to present those to you tonight. A lot of work went into to getting those numbers final. I'm going to turn it over to Andrew, who's going to go over the first few slides and then we'll jump back in to the next year. First off, revenue 393, let's round it up, $394 million. You can see from the pie chart that the vast majority of that is coming from the state through apportionment. The different year this year, we did not have as much federal funding as we had during the pandemic era. So that is a significant change. But after state funding and our local funding, 15%, as Jackie mentioned, our community is going to continue to support us there
009locally for the next four years. And then we have just wanted to verify that the other revenue sources category is grants, technology-level funds, donate. Moving on to expenditures across the $400 million mark. And I do, Jackie mentioned just the work that goes into reporting these. I've got a team that has been working for the last couple months to do that. They do a lot of work, but that work in my mind is easy. The hard work is honestly coming from the budget team. They're planning the way that money is going to be spent. We're just recording it. Their work of estimating, projecting, and trying to, you know, direct where that funding is going to go or how that spending is going to happen is the real art in my mind. We're just historians on the
010accounting side. So as you can see here, most of it's for regular instruction. And if we go to the next slide, we kind of have this breakdown of how that is used. And you've probably heard that the vast majority of states in the state of Washington have about 85% of their spending on staffing. So we are paying people and they are teaching our students. That's where the vast majority of the money goes. And these are those people, these teachers, nurses, paraeducators, all those staff, and it also goes towards our class size ratios and our other support systems. Transitional kindergarten is a newer one that we are spending funds on. So a lot of money, a lot of resources for our students. And then, yeah, I'll pass it over to Jackie to talk about special ed
011because I can't even, it's a topic. So Jackie. Thank you. So we have been having a lot of conversations about special education. As you know, it was one of the big three last year with the legislature, and unfortunately, we didn't receive any additional revenue. Really, when we've done the analysis now, we received close to zero with the new tax that went into place. So disappointing, but for 24, 25, the final numbers show that we were underfunded in special education by $14.4 million. So a lot of that, you can see where the investments are. So it's 145 certificated teacher and specialists. We've occupational and physical therapists, speech, language, pathologists, audiologists, psychologists, paraeducators, and contracts. And those contracts are staffing as well. So as Andrew said, this year, we're actually almost up to 86% of our budget
012is in staffing, benefits, and salary. And so you can see this is part of it. It's directly investing in people. One thing we'll do is continue to track our spending with special education. And we have increased our budget this year, and we're hopeful that as we work with the legislature, we will receive some additional funding at some point. It probably won't be this year. And then our last kind of big area that we like to talk about is our support services. And when we say support services, a lot of the time there's this idea that it's central office. That is not true when we talk about support services. That's a small portion of it. But it also is our bus drivers, our bus monitors, its nutrition services at our schools. It's our custodial staff. It's
013our grounds staff. And then it's things like our district wide insurance and utilities. So you can see last year we spent $5.5 million on district wide insurance. It actually went up to over seven for this current year. So it increased quite a bit and $6.8 million just in utilities. So and we anticipate that increasing as well this year with inflation. I'm going to turn it over to Sarah to review some other. Thank you. So I'm going to share a little bit more about where we landed the end of last year in our compensatory budget programs. And again, to emphasize the way we are grounding in our equity policy in alignment with our policy 6000, which speaks to the way that our strategic plan is our equity plan. And we are called upon to disrupt institutional
014biases and end inequitable practices. So all students have an equal chance at success. And one way we are looking at that, particularly in the area of all of our budgeting, and especially within some of the state federal funding we receive, is how are those resources distributed with impact to students? And so if we look at our compensatory education program funding sources here, what you're seeing reflected is the $44.6 million in expenditures from last year. So that's just over about 10% of our budget. And we've got here federal title programs, the learning assistance program, and the transitional bilingual program represented here. And as well in this image, what you're seeing under other and special pilot programs, those are some of the more supplementary grants that year to year vary with the types of legislation that is
015passed that we're able to apply for every single year, unlike the TBIT funding to support our multilingual learner programming and our learning assistance programming, which both come in from the state apportionment every single year. And when we're sharing about our compensatory programs, our grants, the supplemental funds, I want to just take a moment to share the way that we are ensuring federal program monitoring, especially this year. And so I want to first speak to the stability of funding for our federal programs, including Title I, Part A, and our IDEA grant as examples. And so this year I can confirm that all of the award notices for the 25-26 school year have been made by the federal government, which means our allocations are not expected to be disrupted within this term. I also want to share
016that that said, we are actively managing risk and ensuring we are positioned to respond quickly if federal guidance or appropriations shift. So that looks like our budget team staying very up to date with all of the federal and state mandates attending those local network meetings and partnering with OSPI, especially on fiscal guidance. So we are safeguarding our resources. Additionally, we are always looking at the rules around how we can spend and plan these programs, these funds. And so we're looking at continually reviewing carryover rules, allowable uses for the different funding sources, and ensuring our internal budgets align with these federal and state requirements. And as shared, we are also monitoring the risk and ensuring we're positioned to respond quickly and contingency planning to monitor current and future funding. And so we have a watch list
017of possible risks that we manage and track the direct impact. And I will say the direct impact on our district right now is currently low with the monitoring that we've been doing. So all of that information wraps up into our fund balance. And as you know, our fund balance is kind of what we think of as our savings account. And we have to have a 3% unassigned fund balance per board policy. You can see this year we had a beginning fund balance of 48 million. That had increased last year because we had our closeout of COVID-era relief ESSER funds. And so that allowed us to make some shifts to ensure we were spending all those dollars. And so we increased our fund balance last year. And then this year our expenditures surpassed our revenue for
018the first time in many, many years. And we used $6.5 million of our fund balance to offset that. So our ending fund balance was $41.6 million. And what that means, I'll go into on the next slide. As you know, there's many different pieces of our fund balance. So it's not just one number that we're looking at. And so I'm going to review them quickly. And then we'll show you on the next slide the amount for each one of these. So non-spendable are those items that are not spendable or were legally required to remain intact as is. Restricted funds are funds with constraints that are imposed by law or legislation. So a lot of our restricted funds are things like carryover. So if we have learning assistance program carryover, that goes directly into the restricted funds.
019And what it means is that we can't use that for anything but that specific purpose. So things like nutrition services are in there. Our skill center, if they have carryover, goes in there. Committed funds are funds with constraints imposed by the school board. So that is an example of what we're using that for right now. As you remember, we committed $10 million a few years ago towards special education under funding. And we continue to use $2.5 million a year to offset the underfunding. And so you'll see that reflected in our fund balance on the next screen. Assigned amounts are funds that are intended for very specific purpose. And so we use that for multiple different reasons. Unassigned is that remaining amount that has to remain at 3% or above per board policy. And so you
020can see we've called that out on the bottom of this slide. And when we say above 3%, it's a group of expenditures that make up that amount. And so I've listed them here for you. But it's mostly the state-funded amount. So in looking at our ending fund balance, you can see a lot of it didn't change significantly. Our restricted amounts increased slightly with carryover amounts in some different areas. And as I said, we can't use those dollars for anything but for what they're restricted to. Committed, you can see we used another $2.5 million shifted for special ed underfunding. Assigned amounts remained roughly the same year over year. And some of that is carryover, some of that is assigned for other purposes. And then our unassigned, we started the year with $26 million, which was 8%.
021And we ended at 21.7%, which is roughly 6%, a little over 6%. So well over the 3% minimum, but definitely we're seeing a trend where our revenues are not keeping up with our expenditures. Expenditures and inflation are definitely outpacing revenue at this point. So I'm going to pause for questions around 2024-25 before we move on to the next year. And this work session is always interesting because we're working in three different years. So let's close out 2024-25, and then we'll move into 2025-26. Thank you very much. Directors, any questions or comments that you'd like to follow up on? So where would we see interest from funds? So interest, it depends on which fund. If we're talking about capital, the interest would be within the capital budget. I can let Andrew speak to interest collected on
022general fund. We don't usually collect a significant amount of interest on general fund. The only other thing I'll add is, you know, we sell bonds, we sold 140 million in February. So there'll be a lot of interest during those first few months, but as Ellie and her team spend that, then you'll earn less. So you'll see a lot in our board reports. There's a graph showing the ups and downs of interest earned across funds, but the general fund, the transportation vehicle from the ASBs, those are pretty steady because those amounts are not fluctuating. It's where in capital, you'll see we'll sell bonds, we'll make a lot of money because we have a lot of cash, we'll spend it building, and that interest on that will slow down and then we'll sell some more bonds, a
023cycle, but they stay in the fund in which they originate. I just, um, to give clarification on, we know that, uh, last year we saw the increased fund balance because of the S dollars were rate to shift. And I just want to make sure that it's clarified that we weren't saving the S or dollars. We were able to save because we were able to use the S or dollars and save money from the other budget because I know that I had, you know, there's always this misconception of, you know, what happened to the S or dollars, where did they go? And so I just wanted to make sure that it was clarified, not just for me, but for people who are watching, uh, I guess, uh, uh, to clarify, like how come our fund balance
024increased when you mentioned this? Yes. And that was partially the closeout of, um, of S or dollars. It was also, we made reductions. And so, um, that also helped with that year. Just one more. And so, um, I think Sarah spoke to impacts of our federal funding, even moving forward that we're keeping a close eye and, um, and we know that there's constantly, I think at best, uh, to describe for myself is times things are being held hostage, things are frozen. Um, but I think, uh, I heard clear that, that we haven't had any impact so far and, and we're watching closely, it doesn't feel like we're going to have any impact anything currently, because I know that there's some, uh, budgets that were held and not released. And then some budgets that are being
025released, but some money was being paid ahead of time and some money wasn't. And so there, it's, there's, it's complicated, right? So just a little bit more on that. Sure. Yes. Um, it is, and it changes almost on a weekly, if not daily basis right now. So that's, we're doing, um, the team's doing a great job tracking all those changes. So for this current year, 25, 26, the dollars were already appropriated to the state. And so for title one, title two, all the title, the federal title and IDEA, we have, the state has access to those funds. It's really 20, the following year, 26, 27 is really the concern right now. And, and that's what we're keeping an eye on. Um, I'll talk about that a little bit when we get into 26, 27, um,
026and what we're kind of planning for. Director Helene, any questions? Director Tidholm, any questions? No questions at this time. I do have three questions and I'll just spitball them out. Then you guys can follow back up on them. Andrew on, on, uh, slide number 10 on the 24, 25 expenditures, there are a few fine items there. One is other instructional programs, and then the other one is other. Can you share with us what those programs are? It's about $4 million sharing in between those. So we'd love to know what that is. Second question is around special ed. Now that we're moving all the states asking us to move that under the general fund, how does that, I think I asked this, what's the purpose of trying to hide it under general funds versus keeping it
027under special ed? And we're going to keep that as his own bucket. So we know 100% what's going on. Last question is around the district insurance, 5.5, jumping up $7 billion. That 100% inflationary or things happen to be kind of the same, you know, other. So the first question, and I might lean on folks, I know that those slide 10 buckets align with, with state program numbers. So we have the old ones, the 10s, the 20s. So the ones you're talking about are program 60s and 80s. 88, for example, is a community relation. So it's just, it's the way that the state of Washington has organized a different programmatic one. So like the compensatories are titles, for example. So those others tend to be like, hey, they don't fit in any of these categories. But
028I know the community services, I'm trying to think off the top of my head, any of the 60s. I can add to a little bit. So most of those are grants. So in the, well, for the other instructional programs, some of those are grants and donations. And then for community services, that's things like the PAC that we operate, Memorial Stadium, and other areas. Anything else that I missed? Oh, and ECAP. ECAP's in there as well. Sorry, that's a big one. I'm going to try and remember the other two. Special Ed. Remind me of the question. It's around why are they moving it under general fund, just to ensure that, keep it as different. So yes, as you know, we are no longer allowed to pay for special education services under our levy. So what the
029state has asked and kind of mandated us to do is use our basic education dollars to fund the special education gap in funding. So what we're doing in order to ensure that we're keeping track of all the dollars is we are on a granular level on the accounting side, we're moving those dollars that are needed for special education out of the basic education bucket into the special education bucket. So we'll be tracking really closely how much it is that we're shifting over. Oh, insurance. Most of that is purely inflationary adjustment. Insurance is increasing dramatically. We did have some large claims in the past few years. I don't believe that those had a negative impact on the amount. It's just solely cost of insurance is really increasing dramatically. Andrew, you want to add anything? Yeah, the
030only other thing I'd say is we're in a pool with districts throughout the state. So despite what were significant insurance costs for us, that's, you know, every other districts that are all added up. So we all share the cost collectively. So we were in a meeting once and they were trying to blame us for, no, no, no, everyone has had their share fair or share their claims. But yeah, together, the whole state's paying way more. Any other questions? So moving on to current year, 2526 budget updates. So we're going to review some enrollment and then we're going to go through initial projections. But as I said before, this is very, very early on in the year to be making projections. So usually we'd wait till December, January timeframe. We don't receive our apportionment official apportionment
031amounts until January. So these are projected numbers. So our budget to actual for enrollment, we are, you can see we are over projection and over budget in every area, which is great news. Currently we are 180 FTE over projection. And we will, usually the trend is that is, is pretty much where we end the year as well. Our October numbers are usually really, really close to our annual average. So this is kind of what we're using as projection through the year. And then you can see our update for 2425 to 2526. This is a really interesting comparison because this compares our annual average last year to what were our October numbers this year. And you can see we have not lost, we have not decreased in enrollment. We've held very, very steady. We are 55
032FTE over the annual average from last year. So we just received from our demographer, the, his initial report for the year, not of our specific enrollment, but of the regional enrollment and his trends he's seeing. And in King County, most districts have experienced a decline in enrollment this year. So the fact that we are maintaining is great news. And it makes projections easier for us in the future. Some updates to projection. So when we built out the budget and presented it in June, we did so with the most up-to-date current information that we had at the time, which is how we always do our projections and our budget. But we did receive updates later in July through beginning of this year. And I just wanted to, to call out those updates. So as you see
033projections and moving things, shifting and moving, you'll understand what the impact is. So beginning in 25, 26, we did not know this at the end of May when we were building out the budget, this came to light later, but we, there was a loss of our transportation safety net funding from the state. So that was close to a million dollars, a little over 750,000 last year. This is for special riders. So it's our McKinney-Bento transportation is really the biggest piece of that. The state did not continue to fund it. So last year was the last year we'll receive that funding, unfortunately. We also had the loss of our outdoor education grant. That was another roughly 750,000, close to a million. That was another piece of legislation that we did not know when we built our
034budget. And so total that's close to $2 million right there. Unfortunately, that means that transportation actually took a reduction or a cut in funding instead of any additional dollars being added. And then as mentioned before for 26, 27 and beyond, as we look at these projections, we are monitoring really closely the potential loss of funding for Title II and Title III. That is one of those areas that it changes almost on a weekly to daily basis about what the federal government is going to be funding moving forward. So we are keeping an eye on that and we are developing contingency plans if that were to happen for 26, 27. There is also discussion of a potential reduction in Title I, Part A. That I feel is less likely, but still something that we're monitoring closely.
035So our 25, 26 initial projections. So the first graph you're seeing, the first bar graph, is 24, 25 actuals. That's what we just finished reviewing. And you can see we had a fund balance of $41.6 million with unassigned at 6%. And then if we look at this year, when we initially went through and ended our budget, we knew our expenditures were going to outpace our revenues this year. But with the additional $2 million in the loss of funding that I just reviewed, we know it will be even more so. And so our ending fund balance now is projected to be at $33 million at the end of the year. And unassigned will land around 5% for the year. So what that means for us as a team is we've made some 25, 26 budget commitments.
036And this is both within the budget team and within cabinet. We have committed to not overspend any of our budgets this year. So we are tracking everything very, very closely to ensure that doesn't happen. And if it were to happen, that will be matched with a reduction elsewhere. So any overspend will result in a reduction. We will have no new or unbudgeted contracts, no new unbudgeted positions, either centrally or at school, unless they are driven by enrollment specifically. And we are starting a hiring review for all centrally funded positions. So that started last week and it goes through and every vacated position will go through a process, a hiring review. And the last big piece of this is for 26, 27, we are anticipating a reduction of at least $8 million. We've started that process
037now, starting it early so that we can make informed decisions throughout the year. But we will have that initial $8 million reduction. And then depending on all these other unknowns, we will have to take at least one more year of reductions. I will pause before I go into 26, 27 for questions. Thank you. On slide 34, no, sorry, 24. When we're looking at 26, 27 beyond, what is our current revenue received for Title II and Title III? I'll let Sarah answer. So I can speak to our base awards for Title II for this year. We're around $600,000 with in Title II. That does not count if there were any carryover from the prior year. And in Title III, our base grant award from the state in Title III is close to about $840,000. So in
038the commitments and overspent in one area, the reduction in the other, is it in the same area? Or how do you decide? It will be part of the reduction conversation that we're having overall as a cabinet team and as a district. Okay. Regarding the $8 million reduction, is there a conversation happening about how we're going to be thinking about the $8 million? Yeah. Initially, cabinet is going through a process right now to think about reductions that we can make centrally. So that's the first part of our conversation. Definitely, we're going to review everything that we have right now and think about where we can target a certain amount. Right now, we're going to have like 8% is what we've asked every area to kind of look at as a beginning number for us. And then
039once we get through that process and see what that is, then we'll know what's going to be the remaining amount. We also have a list of larger items that we're researching right now. That could be something that could be impacted for next year or the following year based on some of those things that we're looking at. But one thing I think we're realizing is that there's so much interdependence with all the work that we're doing. And so having the collective conversation with cabinet and having real transparent conversation is going to be super important for us. So is the commitment for us not to touch any of our reduction in impacts of programs, students, or what? I'm just wondering because $8 million might not sound like a whole lot or it is a whole lot or
040it is not a whole lot depending on our budget, but I'm just wondering the impact that it can have with the student and the classrooms and programs. We don't know yet. And so, but what we're trying to do right now is to look again at a central level to see what we can do from the funds that we have. Definitely know that there will be some impact at the school level, but we're going to try to minimize again, going back to the grounding principles that are in policy 6000 to try to ensure that we're keeping the reductions away from our students as much as possible. But I think it's too early to say what we're going to end up with at this point. Okay. And then I think as, as we know more, I think
041the more that we can be as transparent as can, so we can really also find out because we might, you know, with our buildings or our principles or they might have some great ideas as well and that could be strengthened. I'm thinking also if it's going to get to the point as impacting our classrooms or programs, then we bring in community as well throughout. How can we ask our community, you know, what are there? Yep. Definitely plan on doing that. Any other director, do you have any questions for you? I don't have any questions. Thank you. I do have one comment or, you know, question. I love unfunded. I can't even tell it's about three and a half trying to reduce that, but the old, the no overspend of budgets want to make sure that
042our budgets are a stick. They're looking at, let me go back to special education, five over a billion, right? In past years, I would say that special ed, we have overspent because of the needs. What would that impact? Let's, let's just say we overspent by $10 million. How would that impact our students out there knowing based off of these commitments that we do throughout? Thank you for the question. So I can clarify. There is a, when we talk about budgeted amount versus revenue amount, that's two different things. So we budget special education much higher than the revenue that we receive from the state. So that underfunded amount is, has been made up for in levy funds. And that's the portion that we're saying we're underfunded by. So when we say no overspend of budgets, that
043does not mean we are reducing special education by $14 million. It means that the amount that is currently budgeted, which is significantly higher, Lauren, do you remember how much it's, it's close to 20 million more than we're funded. So that underfunded amount, we don't exceed that. Yeah. So I just, I just really want to make sure I clarify that because just because we're underfunded doesn't mean we don't. Yeah, we're overspent. Two different things. Yeah. Thank you. I just have one more comment. It's not a question, but I liked hearing that we're not losing enrollment, that we're not seeing a decrease in that. And I think that's a really compelling statistic to all that we offer students and families, and it helps us honor those other stories, people exiting the district. I would love to hear
044more about what cultivating that presence here. Yeah. And I would be, if I had received the report prior to having this done, I would have included it, the demographers report, because he has a lot of really interesting information that I'm happy to share with all of you. I'm also going to include it in the December update budget update. I'll include some of the slides and see those as well. Okay. 26, 27 budget development. So just a review of where we've been and where we're going. So as you remember, 23, 24, we took $8 million in reductions that year for 24, 25, the end of our ESSER COVID relief dollars. And we had an unassigned ending fund balance of roughly 7% that year. 24, 25, our enrollment was higher than projected last year, which was really
045good news. We had our long legislative session that unfortunately didn't result in really any additional revenue. And we decided because we had this long legislative session that we were not going to make reductions for this current year, because we were hopeful that having 295 school districts all advocating for the same three large areas would have resulted in some additional revenue, but unfortunately that didn't happen. And so we didn't, we wanted to hold because I firmly believe one of the worst things you can do is make unnecessary reductions and then have to go back and undo it. And so we didn't make reductions for this current fiscal year. As a result, our unassigned fund balance ended at 6% last year. And then looking forward to this current year, we have steady enrollment, as you just saw.
046We don't see a decline in enrollment, really minimal increase in revenue. Our expenditures will definitely surpass revenue this year as they did last year. And that gap continues to grow year over year as we, unless we make adjustments, which is why we're starting to make those reductions. And we are, as I mentioned, $8 million in reductions for 26, 27 as a minimum. So our budget development timeline for board and school leader engagement. So we have our budget work session right now, and we'll have two more throughout the year. In January, we will receive our enrollment projections and the legislative session begins. February is when our resource alignment and resource allocation tools go to all schools. And we will have, of course, monthly board update. In March, we will have our second work session where we
047will bring back a lot of the work we've done between now and then in relation to reductions for the following year. And we have our resource alignment meetings with school leaders. And I should say that we also just wrapped up many, many weeks of the fall resource alignment meetings with each of our schools as well. So big thanks to the team for that. April, we will have, again, a monthly board update. And that's really, April is really when we have a pretty solid idea of what the year will look, the end of the year will look like. And so we'll bring year end expenditures and revenues. We'll finalize those in April. May, we'll develop our final budget. And then June, we will have our public hearing, our work session, and submit our final budget to
048OSPI. And then we just had, we had a question earlier about how are we going to engage staff, family, and community? We have a pretty robust plan for engagement as we discuss these reductions. So for staff, we have our first of three superintendent advisory leadership team meetings next week. So we have one next week, one in February and one in May. We have our resource alignment readings with staff and our central budget development meetings. And we also will be doing a series of thought exchanges this year as well. For students, we will be visiting the SSLT meetings, have thought exchanges, and then of course, students have their ASB budgets that they are creating as well throughout the year. Families, we have our family action committee, and we actually have a sub team this year that
049is focused solely on budget. We had our first meeting with that team Monday evening and spent a couple of hours just reviewing what does Highline's budget look like? How do we receive revenue? How do we spend our money? And we had some really, really great questions. And so I'm very excited to be a part of that team. We'll be meeting on a monthly basis this year. And then we have our CFAC team, thought exchanges and public hearing for families, and then the same as community, we have our CFAC community oversight, thought exchanges, public hearings. So pretty robust plan for engagement this year. And then long-term planning. As we go through the year, we're going to continue to work with legislators to fully fund basic education. This bullet point is going to be on every presentation
050forever until it happens. So hopefully we'll be able to remove it sometime. We'll be looking at potential ongoing adjustments and reductions going into 27-28. So we are planning for 26-27, and then we're looking long-term. This will be a multi-year process of making reductions. We're going to ensure our unassigned fund balance remains above that board minimum of 3%. And exciting news for our budget team is we're going to fully implement AlloView to provide additional transparency to staff. And we've begun the rollout of AlloView and received a lot of positive feedback. I'll share some of that in a minute, but I'm going to turn it over to Lauren, who has really led the team and led the implementation of AlloView. And she and the team have done an amazing job. So I want her to share the
051exciting news with you. Go ahead. All right. So what is AlloView and why are we doing it now? And what phase are we in? So I'm really excited to introduce AlloView to you all. It is a budgeting software that is an add-on to our accounting suite, so our Power School or Business Plus programming. It has multiple modules. The first one that we rolled out to all of our staff, as of last week, is our budget planning tool, as well as dashboards with live data. So it is integrated with our accounting software, so it has live data updates on a nightly basis. So as we are introducing this, we are taking a pretty phased approach. So like I said, we had multiple modules within AlloView. The first one allows us to allocate, and it has all
052the different formulas, demographer projections, and all the things that go into making a budget. The second one is our budget planning tool, which is the first one that we rolled out. And then the last one that we will roll out in phase two is our trend analysis and live data. So in phase one, our approach is that we are getting everyone really comfortable using AlloView and getting those foundational skills so that they can be able to look at their budgets and see what is happening in there, how their allocations come to them, what formulas drive those allocations, and then be able to do really cool things in there. So our current state of budgeting tools right now really lives in Excel. Excel is our database, which is not a database. So it requires a lot
053of manual entry across the board. So whether it's our budget teams or from cabinet down to schools, having to maintain those Excel tools is really, really limiting. So tonight I want to highlight how AlloView will help us take that major next step forward, managing budgets to leveraging our financial data to strategically across the entire district. So with that said, AlloView gives us a unified platform to manage budgeting and financial system across the district, integrates directly with Power Schools, as I said, and does nightly updates. So we will have consistent accurate information instead of having to run financial reports that look really, really ugly. Honestly, they're hard to read and it's a really pretty tool to be able to really understand what we're looking at. Platform also strengthens our accountability and transparency. So each transaction adjustment
054allocations all captured in one place, and it allows internal teams and leadership to monitor that financial data. So most importantly, it's going to help us make those data informed decisions. So as we go into reductions, as we go into monitoring and really watching each budget, we'll be able to see that and it's a consistent place that everyone's looking and reviewing data. So for us, this really just isn't a technology update, it's an operational shift, which is I think is a big thing. So a lot of change management that's been going into this, aligning our financial systems with strategic goals as well, improving that collaboration and giving our leaders the insights. So the key benefits, it's going to provide us easier tracking. It brings everything into one place. So instead of juggling multiple spreadsheets or disconnected
055systems, it centralizes our budget and real time data. It's going to bring fewer surprises or allow us to have fewer surprises because it's connected to PowerSchool. It has that live data, that component that we're being able to see what's in our accounting system. It's going to allow us to make more informed decisions, streamline our budgeting and increase our cross-department communication. So a lot of what we do in budgeting is working with staffing. As Andrew mentioned, our budget is almost 5% staffing, so being able to collapse a couple of our spreadsheets is going to be a huge ordeal for us. We track staffing in multiple different ways and it's a lot as we go through it. So one of the first pages that we're going to look at tonight is our allocations. So allocations come to
056schools and central. They all look very similar with the little bits and pieces that are different. So they're going to be able to see their enrollment, their total FTEs, their dollars that are allocated and a per pupil amount that's allocated to each school. So each school will have access to other schools as well and be able to see everything. On there, what you're going to see a little bit below that is the allocations. You're going to see a principal and paras and teachers, and you're going to see the math behind it and where that funding comes from. This is the really, really cool one that is replacing numerous spreadsheets. So we call it a budget proposal. So it allows us to link the allocation with the line item details. So it replaces our position requisitions,
057our employee change notices. So when anyone's hired, when anyone changes budgets, changes hours, this is going to be able to do it for us and allow for more tracking as well as we go through this. So what we've done, and a big thank you to our team if we have entered everything into the 25-26 year. So right now our schools and central leaders are reviewing this tool and taking a look at what's currently in there and identifying, you know, can we break this budget down a little bit more? Schools are getting the opportunity to work with their office managers and identify that pot of money that's in there that they want to break down and pay for pencils or paper or any line item details. So we're really, really working with leaders and then school
058supports and central supports to identify and look at their budgets and look at what they're spending their money on. So the next, once a budget proposal is put through, you get a list of line item details. So similar to those allocations, you'll be able to see what's in your budget. It tells you who's in that budget, what their cost is and all the things that you've inputted into there. So all of your non-staffing expenditures. I think this is really cool too. It allows us to put vendor numbers in there so we can track or other descriptions in there so we can track those different, you know, whether it's a contract that we're spending in multiple different places, it'll allow us to identify and really link up where efficiencies could be improved upon or if we're
059missing large areas. I think Jackie has a few comments on you. And it's a tool that's really allowing us to have additional transparency to all end users, which is amazing. You know, in the past, as Lauren mentioned, we've had multiple spreadsheets and nobody really knew what happened to the multiple spreadsheets once they sent them to us. And now it's all in one place. So it's exciting. And the team has done a great job. There's a pilot group right now that is, well, prior to rolling it out to everyone, there was a pilot group that went through training and they tested all of our training documents that we've posted online and gave us feedback. And, you know, we made sure we had representation from schools and staff centrally. And they were all really excited about this.
060So I just wanted to read a couple of comments we got from some school staff, some school leadership around AlloView. And both of these principals, both Elizabeth from Seahurst and Clint from Highline were in the pilot group. Elizabeth commented, the biggest reason our Seahurst team is excited about AlloView is to have one space where we can combine many of the workflows and streams we are currently doing across lots of different spreadsheets and programs. Being able to see all staffing information and needs in real time in the same space as budgets and expenditures is both helpful for my two full principal brain and also really allows me to see the components of our annual action plan and ensure that our budgetary and staffing decisions are aligned with what is best for our Seahurst stars. We are
061really excited to begin using AlloView. And then Clint sent us a comment. My early experiences with playing around in the platform have been very positive as navigating the budget proposal module is fairly straightforward and coherent to navigate. Ultimately, the most promising aspects of the tool are what it is promising to replace. ECNs, Excel planning tools, requisition submissions, et cetera. Navigating these tools are time consuming, redundant, and often rife with errors, the cleanup of which is never even more time consuming. So we're receiving some really positive feedback from everyone, from school leaders down to office managers and central office staff. So stay tuned. We will keep you all informed of the rollout of AlloView. But again, I just wanted to say a big thank you to the team. It was a really large undertaking for our
062very small team and they've been working very hard. So thank you. And a shout out to the HR and the Department of Digital Transformation too that they have implemented this with us as well. And we have a two minute- And I'll just briefly add this is item 10.7 on the board intro tonight. Thank you so much. Any other comments on this last section, directors? So thank you all for your hard work on this. And I think transparency is important, but it also needs some guidance. So how to make sense of the data. And you mentioned cultural change of your strategy. So other than the pilot group, will you make sure that staff are knowledgeable, use this tool and how to make sense of the data that they're now seeing from across other schools? Great question.
063Do you want to share your training plan? Yeah. So we've implemented numerous different tools. So we are looking at this from two different lenses. So the people that we have in-house today and how we're training them. So we've documented step-by-step guides. We have how-tos. We're doing a lot of financial literacy components to it, glossaries and other things. We've got those all on our Lab 2.0, so our internal website. And then looking forward to, we have a lot of transition with staff as we know, office managers coming in and out and principals coming in and out. And we wanted them to be able to jump in at any point too. So the step-by-step guides and documenting every step of the way so that they can jump in there at any given time is a big aspect.
064And we also are doing in-person training, hybrid training, every kind of training over the past few months we've been doing that. And then I think we have two office manager trainings coming up in November. I'll, yeah, comment? Just one. I think that I was just letting Dr. Maris or Dr. Espinoza, I would love to also just dip in there and get to know it. So maybe the board should get a quick one-on-one too, just so we can dip our toes in it and see how that works. I was going to share the same thing, see if we have an opportunity to have a read-only access so we can drill down. I know that Dr. Grant shared with me and I know I shared this with others that being able to see those numbers from a
065high level and then drilling it down to the granular level, to the item level, it's great. I see this tool as being so helpful as part of the RAM process now, having this on top of what you guys are just talking with them, that's going to help dramatically. With that said, I think we're good. Thank you so much for presenting tonight and sharing where we're at with 24, 25, and then 25, 26. Moving on forward. With that, can I please have a motion to adjourn? I'll make a motion to re-adjourn. Have a second. Second. All in favor? Aye. Aye. Opposed? Adjourned. We'll see you in about 15 minutes.