001Okay, mister >> call the reg I'm going to call the regular school board to order. Show that all board members are present. Uh first we need a motion to approve the agenda. >> A motion. >> Motion by Nelson. >> Second by Brown. Any other discussion? All in favor? >> I oppose. Motion carries. Please stand for the pledge. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Assuming we don't have any open forum. Okay, moving on to the consent agenda. Uh the previous minutes from the October 22nd meeting, the November 12th special meeting, and the November 12th work session, claims and accounts in the amount of 98,716.99, the credit card report, the personnel report,
002the extended field trip request form for boys basketball, the extended field trip request form for the dance team, and retention of vendor panel ed response to administrative matters. >> I'll make a motion to approve the consent agenda. Motion made by Shabilian. >> Second by Sixberry. Any other discussion? All in favor? >> I oppose. Motion carries. On to donations. I will make a motion to approve the donations. >> Second by Sixberry. Any other discussion? All in favor? >> I oppose. Motion carries. On to the audit. I'm so excited. >> I I all year all summer. >> So, school board members, I'd like to introduce Caroline from Bergen KDV. Um she was here last few years, I think. So, um presenting our annual audit. And so, without further ado, I'm going to turn over. Thank you. Thanks
003for having me tonight. Yes, Caroline Stman. I'm the partner involved in your audits. I'd like to take a few minutes of your time to go through the results of the audit. Trying to see who's scrolling perfect to try to make eye contact. So, perfect. Um, the main reason you ask us to work with the district is to provide an opinion on the financial statements. That opinion is housed within the independent auditor's report. Also within the independent auditors record both management's responsibility as well as our respon responsibility is outlined. Management's responsibilities for the preparation presentation of the financial statements in accordance with that. Really what that means is management is determining the numbers. Then our responsibility is to obtain reasonable assurance that the financial statements are free of material misstatement. That's the audit portion of things.
004So reasonable not absolute. We're not checking every single transaction that happens during the year. would be in their hair much longer than we already are. Um, so we are sampling, we are inquiring, we are recalculating, we are doing all things about it to provide the opinion. The opinion we're providing is an unmodified opinion, highest level that you can receive, not a change from previous years, and meaning we do believe those financial statements are fairly stated in all material respects as of June 30th, 2025. In addition to looking at the numbers, we also conducted our audit in accordance with government auditing standards. That requires us to consider internal controls as we go throughout our process. So, one item uh one internal control item listed there is lack of segregation or accounting duties. It's one we've talked
005about in the past that's just inherently present for you with the amount of um duties that overlap based on the staffing levels that you have. Not suggesting a change for you, just an awareness. and it is at that middle level finding so that it indicates you do have mitigating controls in place that help to reduce it from that highest level. Um couple other things on that one actually we also conducted uh an audit in accordance with Minnesota legal compliance. So the office of the state auditor compiles a number of Minnesota state statutes for us to ask a lot of questions about any findings related to any of that. And then one final component is the the federal program testing or single audit testing. That is preliminary form. Currently we are awaiting the compliance supplement to
006be issued in final form. That is the rules of all things federal program related. Um so until that is issued in final form, we aren't able to finalize our work. We have tested child nutrition based on the draft that they have available at this time. no findings that we've come across at this point, but again, we can't we can't put it in final form until they provide that document. So, that will come after the fact that we're most of the way there. I'm hoping it's just, you know, finalized as soon as that comes out. >> I'm just going to add to that that we're not the only district. It's every district pretty much in the state of Minnesota. >> That's across the country. >> Yeah. Yeah. Across the country. Yeah. And in fact, MDE extended
007the deadline to like March 31st. So just because we're everyone's waiting on >> they've already said it could be into 2026. So we just >> test done they just can't issue the report. So >> right so with that we'll dig into the financial analysis and we start here um with the two main components that are involved in the calculation of general education aid. That is the largest funding source for you as a school district in the state of Minnesota. So the formula allowance and pupil units are those two main factors of that. Here we have the formula allowance. So showing where it's been over the last 10 years, what we know currently based on legislature, but focusing on that 2025 line and the 2% increase that was received this year. Then we look at resident
008ADMs and we begin with your or excuse me, then we look at pupil units and we begin with your resident ADMs which are only those students living within your district. So for 2025 resident ADMs increased by 22 and when you look at the grade levels as they're presented there um the kindergarten and secondary grade levels decreased and then elementary and early childhood decreased. Then if you apply the waiting factors that are at the top of this slide as well as take into consideration open enrollment you arrive at total PU served and this is the amount that you're paid off of from the state. So the resident line at the top of that second portion there that follows suit with what we just looked at only it has the waiting factors applied to it as well.
009So similar seeing an increase there. The next two lines are the impact of open enrollment. So for 2024 that was a loss of 663 compared to a loss of 653 in 2025. So at the end of the day then total PUN served increased by 24. And again that's what you're paid off of from the state. So next we have general fund sources of revenue. In total general fund revenues increased by just under 2%. State sources increased. Couple of things came into play here. Um there was the increase in formula allowance that we just touched on. There's an increase in special education and there were a couple of new aid components that were received this year as well. Local property taxes increase with an increase in the levy. And then everything else is in the other
010category. And this is where your federal revenue sources are reported for this um analysis. And that category or federal revenues decreased, excuse me. And that has to do that's where all of the CO dollars are. So it's just kind of the timing of that getting used up. Here we have expenditures per ADM served. This is a different way to look at things, but it also gives you the ability to compare to some state average information. So when we look at the general fund 2025, we see an increase there. Really uh that has to do with the increase in expenditures. Um the increase about 13 and a half%. We'll look at some of that when we get to the next slide here, but for uh that's the 2025 portion. Then if you look at 2024, you
011have the ability to compare to some state average information again. And so here you see as in previous years that the district is below state average. A lot of this is you know funding driven too and needs of of your students. So some of the things that can change things from one district to another as you're looking at this um would be referendum special education needs federal dollars compensatory aid all of those things and that does filter into the you know spending as well. Here we have that general fund expenditure analysis more of a pie chart format for this perspective. Um when you compare year-over-year see an increase in the sites and buildings this is mostly driven by the roofing project that happened this year with the hail claim. So that insurance >> yeah I
012just want to that's where we got the that was that hail claim from 23 I think it was. Yeah. Um so that percentage is a little higher and then that's kind of skewing or fluctuating the other percentages that you see presented there. Um one area that we look at usually is the instruction components which are the regular instruction vocational instruction special education altogether at 61% this year. Again it's a little lower because of that more of the pie going into the sites and buildings. So just an awareness there. What you're going to find is 25 is going to be a little bit of anomaly because of that because that that's in the general fund, you know, so like going forward at 26, it's almost like you're going to want to compare to 24 just because
013that kind of skews >> the sites and buildings that because that was a big project. >> Yeah, that's huge. 24 was 67% and that's more in line with where you trend. >> Here we have a budget to actual snapshot for the general fund. The two columns are your um the budget, the original and the final. So showing there were some amendments to that final budget. Final budget anticipated a decrease in fund balance. The actual results are in the third column there with essentially a break even year, slight decrease in fund balance in total. And then the actual results are in that fourth column there. If we look for some explanations, total revenues, follow that over to the far variance column there. We see over budget, we apply a percentage to that, it's 1.1%. So when
014you're looking at the size of budget that you're dealing with, a 1% variance is um pretty good. And then when you look at kind of the explan or the components of that above, you see the majority of that is in state sources. than that has to do with conservative budgeting for special education aids because that can be pretty volatile just kind of not only depending on needs but depending on state funding and how that all works itself out as well. Following the chart down, um expenditures, we see our underbudget there. Again, if we apply a percentage to that, it's 2.7%. Special education being another um topic in of conversation here, under budget there, that really had to do with um some unfilled pareducator positions as well as budgeting for more employees to take benefit elections
015than actually did. This one's a little bit hard to see, but we'll just talk about it kind of in a high level. Um, a lot of components there, but this is the general fund kind of pulled all together. The top portion, we've talked about a lot of that already. That's just your total revenues, total expenditures, as well as the change in fund balance. Then you arrive at where fund balance ended for the year, which was a 77.7 million. And then the bottom portion is all of the components related to that. Kind of starting at the bottom, there's a non-spendable line. This is for prepaid items. So, think of it as those dollars have left the building. You've already spent them. You can't use them for future operations. So, they're separated into their own category. Then,
016working the way up, you have a number of restricted components. And these are all of those statemandated funding sources where you have to spend those dollars in accordance with how those dollars were received. So, tracking all of that independently. Cumulatively, those balances increased by about 63,000 for the year. Kind of working our way up. The committed and assigned are all of the internally earmarked items. So setting dollars aside for projects or costs that you know are on the horizon for the district. So planning ahead for those things. Um the committed decreased by about 339,000 in total and assigned decreased by 981,000. A large portion of that, if I remember right, was the hail >> Mhm. >> portion. >> Y because we we had because we had sent some we had some money the year before.
017that was down about 2 million. So that made up a huge part at the moment when I was trying to look for the dollar amount. >> Um and then that leaves you with unassigned which that that is what's available without any of those earmarks or tags associated that we talked about below that. That component increased by 1.2 million. That is also the component that you look at um in relation to your fund balance policy. Your fund balance policy indicates that you would maintain a minimum of unassigned fund balance in the general fund of 9 to 12%. If you run the um of operating expenditures, excuse me. And if you rerun the or calculate that out, you're at 21.5% for 2020. This is yet another way to look at fund balance. It is unrestricted fund balance
018as a percentage of unrestricted expenditures. It's slightly different than the the one I just mentioned. um this is everything but restricted. So all of those assigned and committed components are included in this calculation as well as all of the expenditures that relate to that. So it's a fairly complicated one. MDE does it for us. So we're allowed or we're able to use that as well as compared to some state average information here. So you see kind of where you stand um in relation to the total state average for all traditional schools as well as districts of similar size. onage than above average for the last couple of years as presented there. The next couple of slides take a look at your computed tax levy as well as the tax capacity rates. So here we have
019computed tax levy. In total all of these components decreased um compared to 2024 by 1.7%. So this is the levy decrease cumulatively. And then if we apply that then to the tax capacity rates for 2025, you're seeing a slight decrease here as well. Then the last couple of slides that we have for you are the special revenue funds. So we have food service first. The revenues did decrease while the expenditures increased. And um really the the revenue decrease has to do with decreased commodities as well as the supply chain assistant funds um going away in 2025. And then um a decrease in breakfast participation as well. So at the end of the day, fund balance decreased by about 28,000 for the year and ended the year at 878,000. Let me just add real quickly to
020this. We would have had a surplus of probably 200,000 plus, but we we've been buying all kinds of equipment and I've reported to the board on that, but I just want to mention, >> you know, it's not it's not that charcoals isn't performing, you know, >> it was intentional. >> Yeah. Yeah. It's intentional. So, and we're going through that again in 26 and I think we're just about done maybe after 26. >> That's been a pretty common thing. Yeah. Statewide. Exactly. The last slide is a community service fund. Then the activity here we see increases um in both revenues and expenditures. It really has to do with an increase in the kids club participation as well as program participation um fees and activity. Um, so on both sides of things there and then seeing fund
021balance increase by around 148,000 for the year in total and ending the year at just under 1.5 million. All of the components of that are listed below. School readiness is the only one that's a little bit in in that deficit. Pretty common that if there is one, we see that one just based on where the funding sources have been um historically. Be happy to take any questions anyone might have. Anyone have any questions? >> No surprises. I don't think >> Okay. Thank you. >> Oh, you need you need to motion. >> Okay. >> I'll make a motion to approve the auditor's report. >> Second. >> Okay. Motion made by Shabbillian, second by Sixberry. Any other discussion? >> All in favor? >> I oppose. Motion carries. Thank you. >> Thank you for your time. And on
022to the financial report piggy piggy back on Caroline's report. And so we are going to roll from 2425 to 2526. But first we'll talk about enrollment. Um and so our enrollment well you know it's down. I mean I reported that the last couple months. So, it increased in October, but we decreased just a couple um in November to November 3rd. Um we did have I did see a significant increase, not significant, but an increase in Big Lake online um that offset decreases in other buildings. Um but we and so I adjusted the GenEd a budget and I'll go over that here. Um, so our average ADM in so so far this year is 3,39 and um, so I decreased the budget to 3,42. So it it's a little bit short, but we usually see that
023growth in like a line throughout the year. So that's why I kind of went a little bit higher with the budget at ADM. So um yeah so it was a decrease of 73 from the original budget and and then so then that is shown graphically then on the next page just like you see every month and like I said the orange line is just a little bit under the yellow line and we hopefully maybe we'll go over that as a year progresses so that'd be a good thing and um with that we'll I'll talk about the um fall I call it the fall review or the fall budget revision and very similar I I actually looked at my presentation from last year this time and I I didn't change it much because it's a very
024similar process. We look at gen 8 or I look at gen 8. I look at I just double check our levy tax credit estimates. Um I look through all the states because when I do the original budget like in April and May there there's not a lot of information where now we're getting reports from MDE. So I go through those. Um we've gotten some grants. So I yeah establish budgets for that the revenue and then establish that expenditure budget. Um I did look at the investment earnings or interest earnings and um interest rates have not fallen I think as fast as I anticipated last spring. So I was able to up our investment earnings because our cash flow was up a little bit higher too. So um so I was able so that was a
025positive increase. um updated local revenue estimates and then um Stephanie actually went through community service and revised uh the community service budget based on their program enrollment like with preschool and kids club and so on. So that's on the revenue side. And then on the expenditure side, big I mean with staffing, you know, we we did a fall revision, but there really wasn't a lot we could do because just because the teachers contracts not settled yet. So we just adjusted for like actual hiring because we put in estimates if there's open positions. Um and then like benefit elections, you know, um updated like because I think we take average rate when we have an open position and then we updated for actual um and then updated transportation for and there it was mainly in the
026special ed and care and treatment routes. Um I already had known what our regular routes were going to be so I didn't do any changes there. Um but special ed's kind of an unknown and but I actually was pretty close. I didn't adjust it that much. Um updated budgets for curriculum subscriptions. Uh again, grant estimates and um oh and then a big one was just updating construction and other capital projects just because of the timing uh because sometime you know sometimes it just it might be one year versus another year. So I just updated all of that updated budgets for field trips and fundraising and again I'm stepping through the community service budget um based on enrollment. So with that, I'll I'll just go over the impact fund. So as I mentioned, so revenues increased
027a little over 144,000. So the decrease in gened aid was offset by an increase in investment earnings and other miscellaneous revenues. Um the impact to the gened aid was not as severe as I thought because I think last month I reported a lot higher number than it was actually was. But we get so districts get credit for declining enrollment aid and because we had such a large decrease were getting I think it was like $300,000 in declining enrollment aid. So that that was actually really nice. Um the other thing is there's something called pension adjustment revenue where um because of the increases in TR the state gives us more money for that. that data was not available when I did the original budget in in June. So that actually helped it. That was like a
028couple hundred thousand. So that really helped soften that that enrollment decline. Um the expenditures increased. A lot of it was just mainly capital um budgets. Um like I said, it it wasn't wasn't a lot of changes there other than that. And so bottom line is this is where the unassigned projected fund balance will be. It is um 17.8% as Caroline mentioned the fund man's policy is 9 to 12. What my key message what I I want the board to take away from this is we're we're deficit spending 2.1 million. So that of course is not sustainable. So um so it got a little bit worse than the original budget, not not a lot, but we're still deficit spending quite a bit. uh community service fund. I think I talked about this. Sorry. I just want
029to clarify the the declining enrollment aid. Isn't that only available for a couple years registered? >> No. No. As long if you are declining from one year to the next. >> It just what they do or what MD does it compares our units from last year to this year. >> But so next year though it would take this year's enrollment. So if we don't have a if we stay in the same >> right >> next year not have those >> correct clarify it's not like it gives it to you first certain right that is correct >> that one year in time. >> Yeah. Well we want to see the growth absolutely we we would not that is correct. We would not get that. >> So we got a little bit of help this year but
030that's not something that we would see next year. >> That is correct. Assuming enrollment doesn't decline. >> Yeah. Yep. That is absolutely correct. Uh, let's got community service. Oh, sorry. Was there any other questions on general fund? >> No, I'm I just wanted to clarify. It's not that we >> still get that on. >> Yeah. >> No matter what. It's >> kind of a one timer one. Yeah. As long as you're declining and we don't want to keep declining, >> right? >> Yeah. >> Um, can we talked about the community service fund? >> What I want to what I want to point out and Caroline alluded to this too. um you know projected fund balance over 1.4 million but that school readiness fund balance is negative and and it's due to in in insufficient funding
031from the state. So essentially the community education fund balance has to subsidize. So that's a concern and will always be a concern until until they change the formula I guess. I don't know what else to say about that and Stephanie's nodding nodding her heads. So I you know I just want the board to be aware of that too. So, uh, the other funds, uh, yeah, just I think it was just the, yeah, construction fund, timing of construction projects and then, yeah, staffing for food service just decreased a little bit. Um, I want to mention with food service fund, I will come to the board probably in January or February. I don't like to do a full revision until we have like three four months of participation rates. So I get together with Alyssa and then
032we go through it. So I'll be bringing back more budget revisions for food service later. Um and then debt service no pep trust. Again we I just updated the investment earnings estimates. So then this is the report that you normally see every month. And that's actually my last slide, but I just want to mention that okay, we've revised 26 budget, but we are already looking ahead to 27 26 27. So um we're entering that season and looking at probably um putting or calling a finance committee meeting to start talking about 2627. So we're looking at uh probably some kind of in early January we talked about so finance committee members look for some communication from me and to try and set up a meeting as we start planning again for 26 27. >> You might
033have to wait till the organizational meeting. >> Oh okay determine who that is. >> Okay to make sure it's still the same or if it changes. >> Okay. All right. >> So >> I'll write that down. >> Okay. Um, that's all I have unless there's any questions. >> I do have a request. >> Sure. >> And I I I don't know if this is readily available and there's no time constraint. It's not like an urgent request, but I'm curious if you could point me in the direction or if you'd be able to provide what types of mandates are required by the state or the um federal government that were previously funded but are no longer funded and we are still required to follow those. >> So, you're thinking like unemployment benefits? >> Yeah. things where
034at one point the state special ed state required it, >> they funded it and then they took it away. I know special education has a large portion in that and there's going to be some other mandates, but I'd be curious to know >> what all still exists. What what ones are we especially with, you know, we're deficit spending right now. I'm kind of curious where things are at and what what's happening. So, >> unemployment is the big one. I mean, because that's I budget almost 300,000 a year and we have funding through 20. I'm looking at one more year just this coming year. Yeah, this summer. This summer maybe some there's there's a limited amount that's available. It depends on what the summer is to see how much is left for the second year. >>
035All districts just completed that survey done at the beginning of November. So I'll be curious what they because Yeah, I think we'll know more. >> Wait, the November forecast comes out at the end of the month, right? We might know more then about unemployment. So, so really what you're talking about is unfunded mandates just >> unfunded mandates. So, I think >> any of them that we're still required to >> Well, I think we can >> special is a big one. >> It's a huge one. Uh I think we can >> government is not >> we can we can think about that one um from our departments and talk about that a little bit. I my the one that comes to my mind right now is that there is some changes there are some changes coming
036about that we don't know the actual impact um starting January 1 with some of the leave and and you know that kind of thing. >> Yep. So I mean that's that's kind of an unknown. So I don't for a lot