001open the meeting for questions and discussion on the 202526 budget and tax mill rate. I believe that takes us to Mr. Rathbot. Is that correct? Good evening board. Uh tonight we're going to go through our public hearing which is required as uh President Green indicated. Um we'd like to start with the first slide here. We're going to talk a little bit about our taxable values. So you can see um 24 we had nonhomestead which is our operating that's what our operating millage is based on. We had a base of about 335 million or $335 million. And then uh you can see that's gone up to about $356 million. So we've seen an increase there of about 21 million or 6.36%. Uh we also saw an increase in all properties which is for our debt millage.
002So, um, you know, the the non-h homestead is is really what it what it says. It's it means it's all property that isn't your home. So, if you're a business owner, if you're a rental owner, apartment owner, you're subject to to that tax. If you're a resident, you're not subject to that tax. All other properties though, all of the properties in our catchment um New Baltimore and Chesterfield Township are subject to the uh debt and retirement um debt retirement millage of 10% or 10 mills. So you can see there that uh those went up also by about $86 million or 4.89%. And that's what we will utilize to uh uh for our millillage. This is the base that we would calculate that millillage on. I'm happy to take questions if anybody has some along the
003way too. Um, next slide is Headley and we'll just talk a little bit about Headley roll back and what that means. So the headley roll back basically what that is is it's it's supposed to um kind of uh make sure that the taxable value is not growing faster than the inflation rate. So at some point in time uh our community would approve a millillage and that millillage is then compared every year how fast it's going up the rate of inflation versus how fast property you know property values are growing. And if the pop property values are growing considerably faster than the rate of inflation what they make you do is they make you reduce the number of mills that you can levy. uh to try and flatten out the the amount of uh taxation that
004is occurring. So um that's what a headley roll back is and it like it says there results in a decrease to the millillage levy to ensure taxpayers are not paying more than they agreed to pay at the time they approved the millillage. That's the intent. Okay, next slide. um talk to you a little bit about what that effect has had on us this year. So um many of you will remember back in November of 2023 voters approved an operating millillage. We asked for 19.4687 mills and for a period of 10 years to begin in 2025. Uh the Headley Mill reduction fraction for this year was at N903. So, uh, it's reduced our, uh, mills, um, to, uh, well, let me back up for a minute. So, the Headley Mill has rolled back.9903. We're only allowed
005to levy 18 mills. We can't levy more than that. That's the max you're allowed to levy. So, you're you're probably asking, well, well, why would you pass it for 19.4687 um, if you can only levy 18? The idea is we're hedging against future roll backs. So every time there's a roll back like this year, instead of getting 100% of that uh mills approved, we have to reduce that. And now what's happened is you can if you do the quick math here, you know, from in 2023, we had passed it for 1.46 almost 1.5 mills over the 18 mills that we can levy. But you can see now in 2526 with the roll backs we only have about a mill a little over a mill that uh is sitting there for hedges against future roll backs.
006So you know we're about unfortunately in the very beginning of that 10-year millage. And so what we're hoping is every time we roll back we're going to take a little of that 1.0696 0696 mills off the shelf and put that into our millillage so that we can levy the full 18 mills. Because what happens is if you only pass 18 ms and there's a headly roll back, you're stuck at that rolled back millage until you pass a new millage. So if it goes from 18 ms down to 17 ms, which would be drastic, but if it did, what ends up happening is you can't levy the full 18 mills of your operating budget. You have to levy 17 mills. You're going to collect less local money and the state isn't going to make that up.
007So you are shortch changing yourself because this the state expects that you're going to have 18 mills levied. Uh the next slide this is also a little bit of a housekeeping requirement. Um truth and taxation similar to Headley but different. Uh this talks about any increase in total value. It's not necessarily measured against uh inflation but any increase in total value of existing taxable property. Um what we have to do is we have to present to the public for comment uh that we intend to levy our full 18 mills. Um and there is no um potential roll back for debt retirement that is that's exempt from this particular requirement. But um if you didn't have this truth and taxation opportunity for folks, then any increase if it goes up, you know, 4.64% like we talked
008about, you know, you're going to see a roll back of that 18 mills for the for the truth and taxation. But because we're having this meeting tonight, we're giving people opportunity. Uh we are intent on levying that full 18 mills. So you can see here 2526 and we'll you know this will be reflected in the budget when we get to it here shortly. You can see we're levying 18 mills for our operating which is what the state wants us to levy. We're levying 10 mills for debt retirement which is uh what Ankor Bay has levied for quite some time now and that's a total of 28 mills for the year. Next slide. Um, and I apologize little little small up on the screen here. So, we've got uh really four columns. Um, I'll be directing
009most of your attention to that third column, the one that's uh highlighted in a light blue. Uh, let's see if I can hit it from here. Oh, sorry. So, we're talking about this column right here. um that is the proposed budget for 2526. So in the first column we've got our 2324 those are audited numbers that are already in the books audited. We have in the second column our 2024 2025 amended budget that you amended back in uh I believe it was uh January I believe is when we amended that. And then um now we're bringing to you tonight a final budget for for the 20 or I'm sorry an original budget for the 2526 proposed uh original budget. In that budget you can kind of see at the top there we're looking at I'll
010start high level and then I'll kind of go to the variances. So we're looking at uh total revenues of about $80 million. We're looking at expenses of about $79 million, a little over closer to 80. So we're looking at a net revenue over expenditure next year of about $320,000. Now, let me get into some details there. So you can see on that final column, we have some variances. So, one of the things we like to highlight for the board is what is the the 2024 2025 proposed budget which you see there in yellow versus next year's budget. What's changed? So, we'll go through some of those variances and I'll try and explain those to you. So, the first variance for local revenue that primarily you see it's gone down about $150ome,000. That is primarily due
011to a grant that we received from DTE for uh our electric chargers for our buses. Um that was a grant we received in 2425. We will not receive that in 2526. So we have reduced that in the uh state sources. You can see there it's an increase of about $900,000. That's uh a number of items that are going into that increase and also decreasing that amount. So it's a flu. Some of the items are going up, some of the items are coming down. So uh you can see we're we're looking at we made an assumption that we would get $400 per pupil in the next school year in 2526. So baked into that number is an increase of about $2.1 million based on our enrollment. Also in that number is a decrease of about $3.3
012million that we received in Mipers's funds. We received those in 2425. We will not get those same funds in 2526. And then you can see for our federal sources, we've got uh a decrease there of about 1.6 1.57 of that. And you'll notice the line below that when we look at our other sources. Um what's happening is we're kind of flip-fpping those funds. So we used to receive a specialed grant through the federal government called IDEA B. And that uh grant was something that passes through the ISD and we've had for many many years. Recently, we were approached by the ISD to see if it they if we would be open to swapping federal money for local tax money that the ISD collects. And we were in agreement. It's a lot less administrative work and
013honestly uh you know it creates less audit problems for us potentially and so this made all the sense in the world. Um, so we've included that in the new budget and that's the reason that you're seeing primarily an increase. Well, it's let me also say that increase of 1.57 you see there because it's actually going down 1.6. The other piece that's going down is we don't have the sale of sugar bush in next year. So that is appearing in the current budget but not in next year. So that's a decrease of about 2.7 with that increase of 1.5. That's kind of where how you're getting that that variance. Coming down to expenditures, you can see there we've got a decrease from uh the 2425 final budget that we'll present later in the meeting of about
014a million dollars. A lot of that has to do with our 147G. That was a grant that we received in 2425. We got about $670,000 for that grant. uh we will not necessarily have that expenditure next year because uh the state has changed the law and we're not required to uh contribute to that. So um that's that's a big part of that decrease. We also had um fully loaded with all the benefits and everything a decrease in personnel cost due to retirement. So if uh you know a teacher on top scale retires and we're replace that teacher with a lower tier teacher um who's brand new obviously they're coming in at the bottom of the scale. There's savings in that regard. Um, I will also mention to you that uh, you know, in that number
015also is about uh, $1.9 million um, in increases that are are going to staff and and really I'll take that number down about it. It's about a million dollars that's going to our teachers. So, we have that's that's the amount that we're going to pay as a result of the steps. And I know that we'll have other conversations about um compensation for other groups later this evening, but just so the board is aware, all of those have been incorporated into this budget, including the teacher step. So, um those are the things that are kind of increasing. We had a little bit of a reduction in summer school going into instruction. We also had some additional GSRP expenses in there and and that's one of the things we'll talk about as well. Um kind of coming
016down the major changes I'll just touch on a couple of them unless there's questions. You can see the uh pupil transportation went down quite a bit from uh or went up I'm sorry went up quite a bit from 2425 to 2526. And that's really because we have not purchased our electric buses yet. as soon as we uh purchase those um they will be expensed. It'll likely happen next year. So, we've just kind of taken some of those funds and moved them forward to 2526. Uh that's about just under $2 million that we're talking about. And then um what do we see? Other support services. So, um you know, this is still kind of an open question. Phil and I have been struggling with this for for months, literally six months. Um, we have a a
017grant that we have administered for many years called GSRP, Great Start Readiness Program. And, uh, the state has had a big push, as you are aware, to, uh, extend free preK for all. And so, um, we have solicited from the ISD to convert all of our ECC early childhood classes that are tuitionbased to a GSRPbased. So, you're just going to see those show up in a different location. Uh, that's more up in the instruction area than it is in the community services. So, that's why you see that that change there. So, those are some of the major changes that we're talking about. I'll kind of go through and make sure I touched on all of those. So, when we get to our revenue budget assumptions, I've touched on some of these, but I want to
018make sure um I I touch on all of them. So, we're looking we assumed a decrease in pupil enrollment of about 50. That's very consistent with what we've seen the last couple years. In fact, it's been a little bit less than that, quite honestly. So, we think that's a good number. um that will result in a loss of revenue of about $490,000. The increase to the foundation allowance, as I discussed, we're assuming a $400 increase per pupil. That's been pretty widely accepted by all three uh the executive and the two uh legisl legislative houses. So, I think we're reasonably comfortable with that. that would increase our foundation, like I said, about $2.1 million. We also received a grant from uh we we were calling it the hotel grant, but it's actually a single line item
019grant that we worked with uh Congressman Herel to get through and we're we're using a portion of it this year and then we're going to have a portion of it in next year. So about 472,000. You can see below that the two clean buses uh awards that we received. We received one and we're still waiting on our buses so we can pay that and then we've received a second and we've placed an order for three more buses. So, um we're hopeful that by the end of 2526 we'll have six uh new buses, electric buses. We also saw our enhancement millage go up a little bit. That's going to increase about $115,000. And as I talked about, we swapped out some of our idea millage uh our idea funds, which are federal funds for the the
020local grants. And so we'll get even a little bit more specialed millage um in taxation than we would through ID IDEIDA. Um other increases, we also increased our Mipers rate. Um so we get a reimbursement as a part of our state aid for whatever our Mipers rate is. They reimburse us for that. So you it went up not only on the revenue but you'll see the same thing on the expense. It's a it's an in-n-out. So it it doesn't have much impact on the bottom line. Uh the next one is the we these are the elimination of Mipers that we talked about earlier. So you've got an elimination of Meipsters 147C2 which is about 900,000 and an elimination of $2.1 million uh Mipers 14784. So those will not be around next year. We've taken them
021out of the 2526 budget. We've also eliminated any esser funds uh the last remaining there from 2425. Uh and then we've decreased uh obviously the amounts for sugar bush. We will not have a obviously another sale like that this year. So any questions on the assump revenue assumptions before I move on to the expenses? Todd, I do have one quick question. Um on here you have an increased foundation allowance of $400 per pupil in the past years. Is that the same amount that you've been using per pupil amount of 400? No. I mean every year we've seen I I will say this Dennis we've seen in some years a an increase close to that but last year we received no increase to our foundation allowance. We literally received uh a zero increase on that. So,
022um, it can vary year to year depending on the budget, but, um, we do have agreement between the senator, I'm sorry, the senator, the governor and the two legislative houses that 400 seems to be about the right thing. I know they're still doing doing battle on that subject. And Phil, you maybe you want to Yeah, the they don't agree on much, but that's the only thing that they kind of agreed on. It's the is about a $400. Now, the expense part of it and what they're going to kind of push on and the retirement rate and whether they're going to roll that back, which that's we'll get to on the other part. That's where there's wide variance. All right. Thank you. Yes. That may have been appropriate at your last slide. Um, when you talked
023about the the struggle between tuition based versus GSRP, can you explain that? Was it just the decision? Yeah. To move from tuition based? Yeah. So the the the state really has a push to make prek available to all foury olds. Um there is some talk maybe even to three-year-olds, but we don't know the exact uh um result of that of those conversations. We won't until the budget comes out, which likely won't be until October. Um, so what we do know is that we have asked for slots in our GSRP program and and really what the state is doing is the way they're rolling out preK for all is through the GSRP program. So rather than kind of invent a new program, they're just kind of shoehorning this into the GSRP grant. So, what that means
024is we will receive funds for each student, much like a foundation allowance. Every GSRP student that enrolls, we will receive funds for that student. Um, and then the families will not have to pay because the state is picking up the tab. So, it's a it's really a nice thing for for folks that have two or three, you know, students that are that are uh pre-K. Uh especially if they can get three and four year olds in there, uh both ages, you know, that could be a substantial savings to all of the families across. And educationally, it's great for our kids, right, to get them started on the right track. And so we are really pushing to make sure that all of our all of our offerings this year are GSRP and we will not have
025if everything goes well a paid option. Okay. All right. Uh expenses some of our budget assumptions. So you can see increases in educational initiatives. So these are things like uh curricular um it could be software that is studentbased um all of those would be included. We have included an increase of about $470,000 in the budget. We also included as I talked a little bit about negotiated wage compensation increases of about $1.9 million. So that is just salaries that does not include the benefits. So if you want to for uh kind of get an idea, you're probably looking at about 47% of that as benefits. Um and like I said, you know, a big chunk of that, although we're going to look at a number of things later in close session and um the TAs that
026we're presenting um you know, some of the groups did not get those did not have to go through a TA because they've got negotiated contracts in place. And uh I'll just highlight again the teachers are getting a a million dollars on that stop. So it everybody's being included in this in the increases for next year instructional staff uh attrition and replacement. So that we talked a little bit about that. That's teachers retiring are being replaced by frankly uh you know teachers that are at a lower salary scale. So, we're not paying quite as much for that teacher and that results in savings to the district. Um, we're looking at we've added a couple positions and these are fully loaded, the 328 that you see there. So, that's inclusive of salary and benefits, but we're looking
027at a dis a district technology person, a security supervisor, and some curriculum improvement. Um, next item down increase in summer school. We talked about $100,000 increase there. Uh we talked about an increase uh for 147 C. You may remember on the revenue side, we increased that. We're also increasing it on the expense side. So that went from about uh just under 11% to 15%. Health insurance. So we've increased for all the hard caps for next year. Um so our security services. So this is something I want to touch on. going to spend uh a little bit of a uh flash point today. Maybe I I'm not on social media, but I heard this is a little bit of a flash point. Um we have a security increase for our security services of about $120,000 baked
028into next year. So that includes last year's amount plus we're looking at about 120 baked in there for next year. We fully intend to have security services next year. Uh we have budgeted for that. we wouldn't budget for it if we didn't plan on it. Um we we we are going to go out for an RFP on that and I think maybe that's created a little bit of buzz but we feel that that's important as good stewards of our taxpayers money to make sure that we're getting the best deal we can get and uh for has done a nice job for us. We don't have any complaints about their work, but um they're asking for a significant increase and we just want to make sure we are being frugal and good with our taxpayer dollars.
029General liability insurance that went up quite a bit, 30% increase. So that's about $139,000 just for our insurance. We didn't really increase well a little bit. We increased some of our um coverage because we've added new things at the high school, but this is this is general liability, not property. So, that's just a that's just a flat increase of about 30%. We've also built in some band uniforms. We've talked about that, I know, a number of times. And then we've got the cost of those electric buses built in. So, those are some of the big hitting pieces there. Any questions? Okay, next slide kind of gives you a historical uh of where we've been and where we are today. So you can see there um you know I think some of you will remember back
030to 201920 when we're um at our low point there and we're under fiscal monitoring by the state. We've since pulled ourselves up by the bootstraps and you can see now we're at a very healthy uh project projection of just over 19% in the fund balance. As we've had multiple conversations with finance and and other board members on this um you know we're not necessarily interested in growing that fund balance into the future. That's what I would say is a healthy fund balance really. We're targeting 15 16% something like that is what we think we need to avoid a lot of our costs of borrowing. Um this is a little high but I will tell the board this it gives you the opportunity to be a little bit more nimble right in some of the decisions
031that you make. So if there's a decision, hey we want to update our textbooks in middle school and that's going to cost $400,000. You now have the means to do that. I think Pat might be one of the only ones that will remember this, but we had that exact thing come up uh back in 201920 and we had to turn that down. We couldn't make that purchase because we were losing so much money. So, this really gives the board opportunities to, you know, if if there's some a change or something like that that you want to make, you now have the resources to do that. So, at this point, I'd take any questions that the board has. Any additional questions, I guess. Todd, do you know why our liability insurance went up 30%. Did we
032have like a lot of claims that we filed that that caused our providers to increase that rate? Mr. Powers, I think I heard you ask, I'm sorry. Did can you explain why our liability insurance went up 30%. Was it did we have a lot of claims over the last year that caused our provider to raise the rate or what was the reason for the increase of 30%. No, I think that was the especially frustrating part of this um is because both our workers comp claims and our liability claims have been almost minuscule for the last three years. But this is just an industry standard. I I've talked to a number of business managers. Everybody got hit with a 30% increase. That's just kind of what the economy is is doing these days. It seems to
033be across the board. I talked to two other people that use sets sag who we use and and they're getting about the same increase. It's unfortunate. Yeah, we thought we were going to get a flat rate or maybe even a decrease because we've had such great claims, but not the case. Todd, one quick question. um on the millillage uh from November 7th to 2023, if I'm reading this correctly, it's good for 10 years beginning in 2025. So, the next time that it goes out uh to the public for an election would be 2035. You are correct. Okay. All right. Yeah. So, the the concern there, Dennis, really is um we've got just over a mill kind of sitting on that ledge. And so, you know, if you get rolled back over the next several years,
034because I mean, the property tax, property values are just really going up right now. And if you continue to get rolled back, one of the one of the things we might face into the future, three or four or five years down the road, long before we get to that 30 35 you're talking about, we may use up all that hedge that we've got sitting on the shelf and we may be down to 17.5 17. I I think when I got here 6 years ago, they were at about 17.5 or 17.4 uh mills that they were levying at that time. And we went out and we did a supplemental to add millage back on. So, um you know, we'll have to keep an eye on that. Depending on the roll back, it may necessitate us going
035to the voters and asking for a restoration back up to the 18 mills because like as I said, the state is going to assume you are leving 18 mills and you're getting all that money locally. If you're not, they don't make it up for you. You're just basically getting less than every other student in the state of Michigan. Thank you. Anybody any else? Uh, do we need to solicit comments from the crowd as well, sir? From the audience? Isn't that part of the hearing? Yes. No. I'm sorry. I'm having a hard time. Are we reading the word questions on the screen? Um, do we need sol to solicit if any of our audience has any questions as part of this? If they have questions, they're welcome to come forward. So, I'll open that up to
036the floor if someone's got a question. Um, certainly feel free to ask of Mr. Rothben. Otherwise, we're going to move on. All right. Uh, hearing none, we are going to uh I will entertain a motion to close this hearing and adjourn. So, move second. Motion by Mr. Venitali, supported by Miss Knox. Comments, questions, or concerns? hearing none. Uh let's uh do a roll call to close this one, sir. Sure. Mr. Venitilli? Yes. Miss Knox? Yes. Mr. Sunnyburgger? Yes. Mr. Powers? Yes. Mr. Richards? Yes. And Mr. Green? Yes. Motion carries. Meeting is adjourned at 7:16 p.m. Uh if the board uh so pleases, we will move immediately into our 7 pm meeting.