001Thank you and thank you for joining us for our afternoon meeting today. Um, do we have any needs for translation? No. Okay. At this time, I will accept a motion to approve today's agenda. >> I will make that motion >> and I'll second that. >> Motion made and seconded. All in favor? >> I. >> Any opposed? Motion passes 40. Um, at this time, we will turn the time over to our superintendent for board recognition. >> Yeah, our our friend Miles is he's dragging this out. He's enjoying the recognition. So, Miles notified us at the last minute that he would not be able to attend today. So, we're gonna push that back. >> Okay, no problem. >> Um, do we have anything for our student rep report? >> Um, well, September 5th is our first football
002game. That's exciting. Um, we've been working on a lot of leadership stuff with ASB for the past week. Um, there's nothing much besides freshman orientation on the 28th, first day of school on the 29th. That's it. >> Yeah, >> perfect. Thank you. >> Um, we will now move into board member discussion and check in with Director Gerber for our legislative report. >> Um, nothing major. Um, Washington DC just shut down for the month. One of the things they put off was the um, appropriations committee stuff which includes um, education. So, they'll get to continue fighting about that in September when they come back. >> Awesome. Thank you. Uh, anything else for board member discussion? >> Okay. At this time, I will accept a motion to approve the required approvals. >> I will make that motion.
003>> I'll second the motion. >> All in favor? >> Any opposed? Motion passes 40. Uh, moving on to C2. Uh required approvals early accounts payable warrants two. >> I'll make a motion to approve early accounts payable warrants two >> and I'll second. >> Motion made and seconded. All in favor? >> I. >> Motion passes three with one absention. And now we will turn the time over to Dr. Perez for superintendentformational items. >> Uh just two brief items uh this afternoon. We certainly want to save space and time for the budget presentation which will be the bulk of our meeting. I do want to start with the site visit calendar. As you'll remember in June, the board went through a process where we discussed adjusting the site visit tone and and kind of purpose for those
004meetings. We did confirm the calendar with our administrators uh last week and so this is the updated calendar. Uh two reminders for you I think. Number one is we'd asked each board member to invite a constituent to join them. So looking for a group of 10 that will be able to join us on that date on the 15th. I want to give you the initial times right now. The draft agenda would start about 8:00 a.m. and it would end at around 11:30 and we would visit a couple of our school campuses to watch breakfast after the bell. We'd visit the transportation center, food service, storage, those kinds of things operational. Uh and then a chance to engage with those three departments. So, wanted to put that date on on your calendars and to hopefully encourage
005you to reach out to folks and if MADISA needs to coordinate and get them details, we can certainly handle that piece. >> And we would like for example on the 15th we would meet here and travel out together. >> Yeah, great question. Our initial idea is to meet out at uh transportation out at the bus garage >> and then we'll secure three or four district vehicles and have folks jump in and then drive from sight to sight and then end our visit out there as well. >> Okay. So we would be able to invite a constituent to each one of these. >> Uh no, just bring one person for the whole experience. Okay. So they would get a chance to see all of those different sites and different interactions. >> Okay. So one person and
006they're going to come you want them to commit to like all of these dates as best they can. >> Just just the the I would think you'd have one member show up on the 15th, somebody new on the 20th, a different person on the 3rd. But you could work through that. I I I thought Aaron meant we would want someone different on the 15th at each of those areas. But no, I I'm my thought is uh I think the intent was to broaden our communication with key communicators. >> Okay. >> And so ident if you can identify a number of people to would participate that would be h that would be almost 50 people throughout the year if we could get that many to to commit and you could find you know seven or eight
007in your circle that could do that. >> Perfect. And if there were repeat folks who we thought did a good job and were asking the right questions and communicating the the story of the school district, you know, certainly would welcome them back. >> Okay. We will start thinking of people who we can invite. >> Yeah. Uh the second item I want to invite Carlos Gonzalez forward. Carlos has been uh leading a project this summer with participation from the high school and the middle school. And so we wanted to give you just a brief update on the athletic and activities handbook and some refinements we've made to that process. >> Yeah, good afternoon everyone. Uh today just to keep this brief because I know we need to get into budget. Just wanted to share some of
008the quick changes that we've made to the revisions of the OSD um student or athletic and activities handbook. It's gone through several revisions and so it was important to at least inform you of what those revisions mean and look like. What you see on this document here that I've shared with you all is basically just a quick summary of of the changes that have occurred. But things that I do want to highlight for example include the expanded philosophy statement um working with uh a stakeholders group that included uh Dr. Perez uh Dr. for meek, the Oll High School administration and also including the middle school administration. Um, we felt it was important to include district language around the graduate profile to basically completely revise what the athletic philosophy has been for years and and something
009that's more streamlined and current uh with our values and beliefs in our district around that. And so that's clearly outlined uh with the five different components of that which includes critical thinking, communi being a good communicator, being a learner, being a collaborator and an advocate. And so it was important that we have language in that as our philosophy for athletics and activities. Um also the 712 eligibility requirements in the past it's um that also went through some revisions where we now have thresholds clear thresholds when it comes to attendance behavior and academics. When it comes to academics the the what that language reads and if you do have do you have the handbook? Do you have a copy of it? If you go to page five of the handbook do you have a copy of
010the handbook on this document that you see there? There's a link to the handbook. So, if you can minimize that, that link on the top, you have access to it to see it. It's open to the public or anyone who wants to see it. And so, there if you go to page five of that document, if you can't access it now, you you there it is. You'll see on page five that to participate in OSD athletics and activities, you must be able to do these things. So what we've done now in this committee 712 that applies at 712 is providing very clear language of what that eligibility needs to look like. For example, for attendance, students must be in class and on time at least 90% of the time or greater in a four-week period.
011So, if you look at a timeline from A to B, we're looking at a four-week window that'll shift that'll move along the school year where we would uh provide greater focus around attendance for kids uh to maintain their eligibility. Of course, we're going to be mindful of exceptions that need to be made for medical appointments, family emergencies, funerals, or other unavoidable circumstances. Same for behavior. If you imagine a four-week period, what we're talking about is students cannot have more than one skyward referral in a four-week period. And that's something we'll be monitoring as well. I've been working with the OS team for the powerless to powerful work and the systems that we're putting in place to to closely monitor student attendance and behavior and academics. And so we have some really good systems in place
012now that uh really just comes down to the implementation and and consistent monitoring of that. And so a pretty good team there to be able to do that. And then of course the academics piece. It used to be that students couldn't fail any course at any time. That was more of a local decision. But what we've done is we've gone to the the WIA >> want to protect our most impactful programs um while still trying to be fiscally minded. Um, we want to lead with integrity. We want to hold ourselves accountable with high standards. And um, the very last sentence on here is kind of um, where we're going. This budget reflects the really hard choices that we have made the past couple of years and this one coming year is going to be even
013harder. Um, through all of it, we want to be transparent to our community and to our members. the next um the next slide. Um just I know this is Maria Mariah's first one, so there's some um things some words you might um not know. So, we're going to go through a couple of them. A budget is just an um a projection. We're just estimating what we think our revenues are going to be and what our what our expenses are going to be. It's not um it's not black and white. uh when when we work on a budget, we forecast um like I said, we're for forecasting not only our um revenues and expenses, but also our enrollment. That's the big one. >> Hey, Amy, would you you want to define budget extension? So, a budget
014extension would come if I were to tell you that I needed you guys to approve an $80 million budget and then it be and then we're in May and we've exceeded that amount and we need to hurry up and get a resolution filed because we need authority to spend $4 million more for example. A lot of our districts surrounding districts are having to do that during this month. So the IPD um you'll hear that word a lot. It's the imp implicit price deflect deflator. Um OSPI sets this in January of each year and it tells us what our what the increases will be to our revenues. Um this year it was 2.5% and for reference the previous two years it was 3.7%. Uh the other one is prototypical funding model and that is a model
015that OSPI uses of how they fund um art teachers or our staff. If we have this number of students in McFarland, that means you're going to have this many custodians, principles, teachers, etc. It's all based on a model that they have. Um, MSOCs are material material supplies and operating costs, which is everything but salaries. Um, TK is the transition to Kinder. Um, one of the things that I wanted to bring out about TK is that there was legislative action to limit the number of TKs that we can that were going to be funded this coming year. Uh because we started one of our classes in January and they go by adjusted annual annual adjusted um FTE. Our um they capped us at 72, but we did receive word that for us to go ahead and
016um count all of our TK students because there might be funding at the end of the school year for it. So right now our FTE what we're going to have next year with added classroom is going to be 86. Uh local effort assistance um that is the amount that we get if we pass our levy. Uh fund balance is uh what we what we have after our expenses and revenues are paid and received. So, we project what our beginning fund balance is going to be and then we get our revenues minus our expenditures and then that's our ending fund balance. It's our actual cash in the bank binding conditions. This is a new one this year because it's um something that's been happening a lot in our state. that is um a district goes into
017binding conditions when they cannot um project a budget with uh without being in the negative in their cash. So right now there's eight school districts in binding conditions and if you would have looked at how many we had prior to these past three years it would have been zero. The next slide, financial management. Um, I think the biggest thing from this slide is that, um, I think we should all have financial management in the forefront of us. We should all be thinking what is fiscally responsible for our school district and for our community. Um, the next slide. So the district has five funds. We have the general fund, the capital projects fund, the debt service fund, the associated student body fund, and the transportation vehicle fund. Um the general fund is our biggest fund and
018um that's what we use for the instruction of our students. Um what I've highlighted in the debt service fund is that our current balance as of 123124 was 7.4 4 million and that our last schedule payment is scheduled to be made December 2027. The next slide shows um what we're asking the board to approve at our next board meeting uh for expenditures in each fund. Sorry, do you guys have any questions? Maybe it's going to show up later in the slide. So, I understand this is what you're asking for. Do you know >> what what our income is? >> Yes, we'll be we'll be showing our revenue. Mhm. >> So, in the next slide, um what are the some of the major changes? when I started working on this presentation um the beginning of July
019uh we had received word from OSPI to use our federal grants now actually they said spend them yesterday so when I made our budget um it includes a lot of the carryover that we thought we were going to have so we but then we got to spending more of our federal grants so there it might be a little less revenues than what I anticipated because we were in the in the mindset of we have to spend our federal grants. We might have it today and not tomorrow. So, um the other thing is uh we are having to use more of our federal grants every year and so that means that our carryover into the next year is less. So, for example, in title one we're able to carry over 15%. And in most years we
020are able to carry that forward but because our expenses are are increasing that carryover is becoming less and less every year. Um we are continuing um right sizing. So we we are decreasing the number of positions. And then the other one is that our grants our state and federal grants are not keeping up with IPD the 2.5%. I just want to add a little bit of um context to Director Prow's question. What you'll begin to see uh graphically represented, I'm not sure what slide it is, but you'll see over the last 10 years where we're finally at a point where um expenditures and revenues cross in the wrong way. You know, typically the board has been able and the district has been able to spend just under what comes in and build a bit of
021a reserve for moments like like we're in now. Um, we've crossed that threshold. >> The legislative impacts. Um, I've said it before, the IPD is 2.5% and this is for our funded FTEES, not all our FTEEs. Uh, MSOC, uh, we did receive a little bit of an increase when I calculated it out. It's like a 5.3% increase. Um, so Mox will increase by $191,000, which isn't very much compared to what we do spend, what's what the amount that's unfunded. Uh, special education. Um, they went away with a three- tier model and, um, that will indicate that we're going to get about $278,000 more in spend money. They also removed the um cap but because our enroll our sped enrollment is less than the 16% that didn't affect our our revenues for sped. >> Okay. I
022had heard people saying that special education funding was decreasing. Sounds like that's not the case. >> That is not the case. It did it did decrease during this school year 2425 compared to my budget because our enrollment in sped was under projected. >> Okay. >> Maybe that's what you've heard. >> Okay. >> Uh in SEB, that's our state insurance, our medical insurance, it increased by 11%. Um, so that would mean that every position that's not funded or for every um and for every sub that we have to pay insurance, that's an uh $1,300 a month expense. Um, and then I did put in there for the 2425, the SE premiums that we've paid for 27 substitutes is 147,000. >> I think SEB is a really good example of where a school district and a board
023and a community have to begin to make decisions about what their priorities are. Because if if you play the math game, you say, "As soon as you get up to this number of hours, even if you're our most skilled and qualified sub, the best sub for our kids, we're no longer going to offer you substitute work because then we have to pay for your insurance for the rest of the year." And we can't afford to do that. Those are the kinds of conversations that school districts are having to have that have maybe deeper subpools and are running into this barrier to try and save a little bit of money. Can we Is it an option to say we'd love for you to sub, but we're we're not going to provide insurance for you regardless or
024not? >> Yeah, that's not an option. We're not allowed to do that. >> Damn. >> Um HB 2049, local effort assistance, is giving districts who qualify for local effort assistance. That means you pass a levy and you're at $1.50 50 a temporary two-year boost. In the next um slide, I'll show you how much that means. Um but it does show I have the amount there. It's $3,964,000 >> in that boost if we pass the levy and if we're at the dollar total for the two years. >> Wow. So in the next slide if you'll see um the amount per student that's highlighted it's increasing to 1 thou 1,332. Sorry it's high and then uh in 27 it's 1,565 and then it's going to go back down. So it's a temporary boost that they're giving us.
025And like I said, this is if um the biggest amount is going to come in 2027 if we pass our levy. >> One one uh point of interest for the board um regarding levies. Just this last week, they announced the um special election results for uh a term in Washington. You I think is going to become more and more prevalent. It's a supplemental levy. So, I believe it was the Shoreline School District ran a levy for one year just to help close some of these gaps they've identified. And so, in a place like Shoreline where you can tax everyone for an extra 20 cents and raise, you know, $6 million, not possible in a place like Oll, but those inequities are going to start to come into the system if the state doesn't intervene and
026fix the allocation model. People are going to try and fix it for themselves in their own communities. And you know, we shouldn't begrudge them that, right? They can tax themselves, but it might slow down Olympia from helping everyone at scale. So supplemental levy, if you're in WA there in some of those settings, that's a a new new phrase. And if you wanted, I'll get you an article about it and you can you can look at what they did. >> I think it's the first one that we that they ran is anybody has run a supplemental levy. So, they had a a current four-year levy, and so now they're going to have a one-year levy at the end of that four-year levy. >> Wow. >> So, um in the next slide, um this is off the
027OSPI, and I thought it was a really good slide to show, um where we have received how much we have received in Levy Leah throughout the years. Um, one of the things that I pointed out to Pete last week was like, Pete, look in 2018, the first year of the post mccclary decision. Look how much money we received in Levy Leah. It was $8.47 million. So that's where we're when they were making those contract negotiations. That's how much we were receiving, right? And then all of a sudden it just kept going less. Um and so the decrease that we've gotten in LEA throughout the years has also been due to the decline in enrollment and the increase of property values. So how do we get our revenues? It's all based on our enrollment. Um so
028our enrollment uh they put it into this formula and it gives us our prototypical funding and then they fund those um those FTEES and the and then the material supplies and operating costs. I wanted to give an example of a prototypical um just for Mariah. So for example um they tell us that for at a high school for every six 600 students you get 1.88. Um that would have meant that in um in 2425 that we were funded for 3.2 principles and we had five. That includes Desert Oasis because that's part of our high school numbers. We had five. So that's kind of how that works. Okay, enrollment. Um, how do we project enrollment? We do a conservative conservative rollup except for kinder. So, our first grade numbers turn into second this coming year, second
029grade second graders. Um, what I'm projecting in 2526 for our kinder is going to be 282 and this year's uh kindergarteners were at 332. So, that's a big drop and we'll show you why in here in just a second. Um, and then the other grade that I don't do the roll up is for our 11th graders because I subtracted subtracted 60 for our running start students. Um, we're going to continue with our online. Um, so then in the 2526 our total K12 enrollment is going to be 4,234. That's 60 less than our actuals this past this current school year. Um, also for reference, this is 191 less than 1920, which was our our highest enrollment number. And then we are projecting a decrease of another 163 by the end of the 2829 school year. So
030this um is showing what I budgeted in and then what we actually had in 2425. So I just wanted to point out it's my personal best. I actually did really good. I budgeted 4290 and came in at 4293. Um, and just so Mariah knows, we are funded by the annual average of our students. So even if you had this money in September and then you had a hundred more in June, it it they average it. >> In the next slide, this is how we project next year's enrollment. And you can see where everything but kinder and 11th grade just rolls down and then the difference. So the big the big change then will be in the kinder, second grade and fifth grade and eighth grade will have the biggest declines. So the next one is
031our birth rates. This is a really good indicator of what uh kinder enrollment will be. And if um in 20 the 25 26 kinder students will be the ones that were born in 2020. And you can see that our en uh the births in Adams County went down and then they're going to go back up and then they're going to go back down and then they're going to go back up. Kind of sounded like sound like what happened in my in my little family with my grandkids. babies. >> I think a a complicating factor that could be impacting communities like Oll for the next couple of years will be uh federal pressures and federal changes to um farm labor practices. Like what's really going to happen in a place like Oll um if if the
032work isn't there or people don't feel safe going to work? Are they going to abandon this area? if there are adjustments made for the nuances that our economy and our community require, will we have an increase in people coming to to work here? Um, that's even more of a I think a larger unknown than what we can try and predict with birth rates. Um, and I don't think anyone has the answer for that. >> Yeah, there's no telling how many students left for the summer and won't return. So, we'll see. So the next one just shows our other enrollment um that's not K12 and just so that you can see that we have the early learning TK running start open doors and the Ollo online these enrollments and the CTE enrollment are not part of
033the um prototypical funding formula. So kind of want to point that out. The next one is an enrollment history by grade level. And like I said before, if you see 1920, it was um the highest number of 4,425. The next slide is just um in a graph. And what I'm pointing down with the with those arrows is here. You can see that we are almost back down to the 1617 enrollment numbers and that's going to play a little part here in my in uh in a future slide that I'll point something else out. The next slide, fund balance. Um like I said, fund balance is our actual cash. And here you'll see where the beginning cash uh balances are for each fund, the revenues, the expenditures. Uh there will not be any transfers out or
034in to any of these funds this year. And then our ending fund balance and we'll go into more detail for the general fund revenues. The next slide, um, this one shows what we budgeted last year and what we're budgeting this year. Um, there really isn't too much change. The only thing that you will notice is that our expenses are about the same. They're going to be $592,000 less. And then that's due to the elimination of some um positions. This slide was in one of our um budget um webinars. Um, and I found I find it very interesting that in the year after the McLarry act, our our first our 18/19 school year, um, we were, uh, school districts were getting 51.6% of the of the revenues from the state. Now we're only getting 43.2. And
035like it says there, if we were getting the 51.6, 6 the school districts in U would be getting about $6.5 billion more. >> Can you can you walk me through that? What does that actually mean? Like we're getting 43.2% of what? Like the federal budget that >> state So the state budget, the full state budget, you know how the state >> Oh, >> okay. >> does uh corrections and schools and whatever else they fund their revenues. We were getting 51% of the revenues that they were funding all those with. >> Okay. and now we're only getting 43.2. >> I think what you will hear in Olympia when folks talk about this kind of data, the the people on the other side who think we're funding schools adequately will say the percentages really don't matter that
036much. You needed this much to run schools in 2021 and we're giving you that or more than than we did previously. You need to figure it out. where the other side would say, hey, as we earn more money and as we generate more revenue, we need to fund schools at the same level and keep those lines accelerating. So, I think it's just a different philosophy on how to how to fund schools. I do want to step back two slides, I think. Um, that one. So, I'm going to talk through this and then you all you guys are the experts. Correct me if I'm wrong, but for the board. So, we're we're getting just over $2 million more this year, right? and we're spending 600,000 less. >> And then here in a few slides, you're still
037going to see how much of a deficit we're going to run because you would think based on that math, we're 1.5 to the good. We should be able to put a little bit in the bank. And you'll learn quickly here why that's not the case for our school district or any school district in Washington. One of the big things is that our revenues are going up 2.79% mostly because of the 2.5 IPD that we're receiving. But if you were to um and I just calculated this one, if you were to look at a teachers average in 2425 compared to uh 2526, what they're going to get this coming year, it's gone up like 4.3%. Because not only are we getting the 2.5% increase, but they also get a step increase for years of service. Okay.
038So this one is comparing um this uh the 2526 budgeted revenues and compared it to what I budgeted last year for revenues and the differences there. And again you'll see that we are going to get um $2.3 million more and then oh the graph didn't show. So the graph, we'll pretend the graph is there. >> It's on our slide. >> Yeah. >> Um the revenue, um I think that's happens because I do it on PowerPoint and then they open it on Google Slides. Sorry. uh revenue. If you're ever wondering what all those um local taxes are, local tax, non local non- tax support, state general purpose, state, federal, they're all listed there where those revenues are from. Um, if you see the state uh special purpose, that amount that I'm projecting for this coming year,
039that includes some of the 2425 carryover. >> And the next slide that shows >> can we go back to that one just for a moment? And I think you can see it graphically in in the slides, but also that number, the nearly $10 million in federal special purpose. There were just a couple of those um banks of money that were withheld for just a couple of months in Washington and you saw the turmoil and tension that created and uncertainty. We should expect that this fall as they move as a director Gerber indicated as they come back to DC and begin to plan for um changes to the federal department of education that that number is going to be impacted. So again, in a place like Oll, we need to begin to plan and strategize for
040what that means for our students and for our staff. Um that number will probably not be the same next year. Could be significantly lower. >> That's correct. >> So these are our staff changes um the new positions and the eliminated positions. And then in the next slide shows um the cost savings from eliminating positions. It's a net. So that total is $2.4 million. The next slide um is our employee FTE by program. So, here's where you would see um the ones that are highlighted in blue. Those are our federal programs. Those are the uh employees that are how how much we spend on salary and wages from federal programs. Um one thing that I wanted to point here is um if you notice um the very at the very bottom it it's comparing it to
041the 2425 budget. So in the first um column you see our certificated staff. We're budgeting for 303.8 FTEES. Last year we had 321 for a difference of 17.5. So you we go through that for the certificated and the classified and the benefits and you see there that the expenses are only um going down $335,000. You have any questions on that? >> Yeah. Okay. So, you said we lost 17 people, but our total expenditures only went down 300 grand. >> Yes. Because remember, everybody got an increase in pay. So, it wasn't only, like I said, it wasn't only the 2.5%, but it was also their um their years of experience. >> We're fighting a losing battle. That feels like >> Yeah. >> Wow. >> Yeah. I I it does feel like it it can feel a
042little bit hopeless, but when you think about it when you're communicating with your constituents and maybe people that will come to the site visits, I think what she just said is you own a business and you laid off 20 people but gave everybody else a raise. >> Would that ever work in the private sector? >> Definitely. Yeah. >> I mean I mean I mean the people who stayed on would be thrilled. >> Yeah. Right. As a as an employer, I would be furious. >> Yeah. Yeah. >> But but the the people who are still working there are like we you know >> when you see the change in fund balance, you have to keep that in mind. Can you imagine if these positions would have been in our budget? >> So, um the next slide
043is our student count on the left side versus how many employees we have on the right side. And you'll see there the the the change. So if you remember in slide 20 I said that our enrollment is right about um what we were at in 1617. In 1617 UC we had 458 total FTEES student I mean employees and in 2526 we are projecting even with the right sizing that we've done that we're planning on doing and what we've done the past couple of years >> with the same amount of enrollment essentially. >> Yes. >> Wow. The other thing that I wanted to point out here, if you see the 18/19 school year, that was our first post mcclary um contract and you'll see that the staff where the staff and the in the enrollment were
044right about and then the changes that have happened since then. >> Can I just ask and this might be a question for Dr. But why do you think that is that that happened? why we have you know so many more student uh FTEES per student than we did you know back in 15 16 >> learning loss during co was >> yeah I think that's one certainly one of the driving factors we also 1617 was also the year we made um we had a been almost two decades in a transition in superintendent leadership and so there were different priorities and different initiatives and different staffing levels that were required and so you saw this ramping up of staff for a couple of years and as we you know we got into year four or five of
045that then we had the pandemic which again funds poured in to keep people on staff. This this downward trend in in um district uh fund balance and in um where those lines would have crossed would have happened two or three years ago if we hadn't experienced the pandemic. So we knew this was coming. But I I think it's tied those are probably the two driving factors. And now for us it's how do you unwind that? How do you go to a school and say, "Hey, you've been the principal here for 3 years. You've only known that you have 14 paras. You're still trying to get your work and get it done every day and not burn people out and next year you only have 10 paras." Right? That's there's just this windown process that we're
046going through as well to make sure that our our staff feel supported and our kids are do as well. Um, so there's there's certainly some things we need to tighten up and think about and in the federal programs area that might really get accelerated here, maybe more quickly than anybody's ready for because we might get jolted if those funds don't come through. Another thing to keep in mind with employee FTEES is um admin and teachers, we're all 1.0 FTEES, but our classified, a lot of them are not 1.0 FTEES. for example, a PAR is only a 0.58. So, the next slide is just a closer look at what's going on with our federal and state grants and where the changes are projected to be at. Um, I said previously that our um our pay's going
047up about 4 and a.5%. You can see that a lot of these grants are not keeping up with that. So, so the next few slides is um where are we spending our money and they're going to be um the same amount 87.2 million, but it's going to be by program and then we're going to go by um activity and then object. every every expenditure in our district has um an account code where we're able to track where the money goes by the program, by activity, by object, location. We're able to run those reports. So, this is um you can see the biggest the biggest chunk is for regular instruction and then we have special education and then vocational and it just goes on from there. in the next slide. Um, sorry, real quick. >> Sorry,
048go ahead. >> Uh, what does compensatory education mean? >> Those are our grants. >> I think um I think besides regular and regular instruction and special education, I might need like a for example for for all the rest. What is vocational education? >> Vocation is our CTE program. >> Okay. >> Uh uh compens compensatory is our lap our um bilingual our um title one. Other instructional is our high program. Our community services is uh what they it's our early learning. It's our preschool. And then support services is our district-wide. And that would be like admin um technology. That's um maintenance, transportation. And then that's the graph. So this slide is our expenditures by object. Um so here you're going to see it compared to last year's budget. Last year I also budgeted about $87 million.
049So there isn't really too much change in there. The one thing that I wanted to point out was that our um salaries and benefits are 77.39% of our budget and last year it was 77.58. So about the same but in um 23 24 it was 75 and then the year before was 73. >> So a little bit >> sorry and that includes um our retirement went down to about 2%. So the amount that we pay in our u benefits and payroll taxes is going is going to be about two 2% less than last year. And this gets back to director Gerber's question about staffing levels and when you see that experience uh in 201617 when we were in the policy governance world the board had a policy that the superintendent would not submit or they
050would not approve a budget that um 80 more than 80% of expenses was on salaries and and so that was it really put some um gave some clear guidance to the school district. Well, you can see we're below that threshold. We've always been there and still in the same situation. So if you were trying to calculate those numbers, you would just say, well, how 80% buys me how many employees? Some years it was 500, some years it was 520, right? You just kind of play that game a little bit. So still another example of good budgeting and healthy practices, but revenues aren't where they need to be. >> Yeah. So, it's just crazy to me that our budgets are pretty close and the the amount that of our budget that is spent on salaries is
051pretty close and we lost how many I mean, we let go of how many people and it and it literally feels like it didn't make a dent. >> But like I said, imagine if Yeah, imagine if that was part of our expenditures. Our expenditures would have been almost at 90 million. >> Yeah, definitely plays a In fact, I I put it here. If um we would to add that 2.4 million, our expenses would have been 89.7 million. >> So, that would have reduced our ending fund balance even more. >> I I do want to I think the other side of that is to also acknowledge that this board and other boards before you all were very mindful of putting some money in the bank so we could wind down in this way. I mean, nobody
052wanted to spend the money in this way, but that's where we're at. And I hear so many stories of other school districts where people walk in in in the spring and say, "Hey, we're in trouble and next year we're doing this." And we've tried to wind it down down hard decisions like Amy indicated, and there'll be more hard ones to come. But as far as trying to navigate this, um, I feel as a community and as a school district and as a board, we've all done a an okay job of saying some really hard things to try and that would not have been possible if there wasn't money in reserve. >> And and so some of you were part of those boards who kept that that fund up. And we want to hold on to
053as much of that as we can, but also provide the services that our kids deserve. >> Yeah. One thing I want to point out about this slide too is that that is our projected salaries and benefits, but that doesn't include something that might come up um additional in time sheets. So, we usually get up to about the 80 81%. And that would be like we give um the high school a $300,000 budget and they spend a h 100,000 of it on salaries. That would be an increase to our salary benefits at year end. The next slide um it's just um object summary history for the past um since 1718. And I always go back to the 1819 school year as the first um post mccclary um year. So you could see there in 18/19 that
054we spent on salaries $49 million and we're projecting to spend $67 million this coming school year. That's an $18 million difference. In the next slide it's just p this is percentages. Um it's the same information but by percentages. And this is just to show what um Dr. Perez was saying how much we spend on salaries. Um so in the 2526 is the budget and 2425 is what we're projecting. We still haven't finalized professional development for this uh summer and and um time sheets for summer school. And then uh the 23 24 and back those are all actuals. So that is actually what we spent on salaries. the salary um from 82 to 77 there 24 25 26 that's a projection based on what we're planning on doing or what >> that's what our planning so
055what we do is the big project that Angie does she gets what we're what we have on payroll now and she puts everybody into the 2526 with the increase of the 2.5 and the increase of um their years of service and that gives us a number Um, one of the things, this is where I said if you look at the benefits and taxes, that's going down 2% because um, OSPI is funding 2% less on in um, retirement. And then this one um is just expenditure expenditures by activity and it's just comparing it um to pre to last year's budget. Like I said, not very much difference. Um in previous years it would be like you know it would be like $3 million difference and you would be able to see where we were budgeting it.
056But there's this is all about the same. And then in the next slide, it's by program again. Um, just kind of showing what what I budgeted last year compared to this year. Oh, I knew that it was coming. So, in this slide, it shows what all the programs are if you ever want to know what um the compensatory education is. And then in the next slide, this is the change to ending fund balance. What we're projecting this year um to start is 13.8 million. That is what I um calculated during June when I was finishing up my budget, projecting worst case scenario. If all the schools were spending all their money, if all the programs are spending all their money, professional development, summer school, taking all that into consideration, that is my best professional guess
057of what our uh beginning fund balance will be. It uh we won't know that until October, what it actually is. So if it is at 13.8 million, we will add the revenues of 84.5 minus the expenditures and our ending fund balance will decrease by 2.6 million. So uh one comment here about the history of the board and going back to 201617 again during policy governance there was clear direction to the superintendent that the ending fund balance should never be below 10% of uh the budget. So we always use a round figure of $8 million. You should always have at least $8 million in the bank. And you can see I I don't know if Amy included a slide that built this out multiple years, but that we'll be below that threshold if we stay on
058a a similar pattern that we're on. >> Yeah, that's coming. >> Yeah. >> Um I did want to read all these bullets because I think there uh it's very important. We always get um comments of well you have fund balance, you have fund balance, you can pay that at a fund balance. I wanted to express why fund balance is important. Um, it covers gaps in cash flow. It ensures payroll is on time. Uh, if there's ever an emergency financial situation, it avoids sudden program cuts. It offsets uh, revenue declines. It improves our bond credit ratings. It can fund one-time investments like if we say we want to um, secure by by a fence, right? Um, it supports our strate strategic goals. It follows board best practice. It meets standards set by the um the auditor.
059The auditor says we should have at least 60 operating days of of um expenses in our fund balance. And we'll get into that in a couple of slides down. It builds community trust. It demonstrates fiscal health and it protects student learning. I I want to call back to slide 22 because the finance team will again check my math. I believe we said we were 1.5 to the good on slide 22. I don't know if we need to go back because then people will really be able to check me. But >> isn't that what we said on slide 22? Yeah. >> 1.5 to the good. And you see that Amy's predicting that we're going to be almost 2.7 in the hole. I think you need to add 1.5 to that number to get the real deficit
060for the for the year. You see where I'm going? >> No, >> we got an extra 1.5, right? >> Okay. If we if we had spent at the same levels or we hadn't um if you add 1.5 to that number, what number do you get? >> 3.2. >> 4.2. >> Yeah. Almost 4.2. >> So, we're getting less services. Even though we got more money, we're down all those people and still running that hole. It's this idea that lots of school districts are dropping down into it, we're trying to ramp it down a little bit, but we've um until the state intervenes, we're in really difficult circumstances. >> Well, and yeah, I mean, we're 56 people heavy compared to where we were for the same enrollment in 1516. >> Yeah, we're we're carrying around 56 more
061full-time employees for the same enrollment. according to page 31. So that's that's a lot of salaries. Yep. >> And that's a problem. We can't lose $4 million a year or we'll be out of money really fast >> out of our fund balance. >> Yeah, we we're getting to that in our four-year projection. Our next slide um kind of shows back to the 1617 of where we were at and then compares it that we're in the almost in the exact same place as far as fund balance. But what you have to remember is that in uh between 1516 and 1617 we had a fund balance of $43 million. I mean expenses of $43 million. Now, our expenses are 87 million and their fund balance is going to be the same. The other thing that I wrote
062here is this would like Pete says, this would have happened a lot sooner, but we had ESER money. And if you remember um from last year's budget presentation and I wrote the number down, we reclassified basic ed um salaries to ESSER because there was no um uh no not carryover. What's that word? Sub there was no supplanting. So, we're able to say um to keep our classroom small, we reclassified basic ed salaries to to um ESSER and that increased our fund balance by $7.9 million. That would have been money that that would have been we would have been in the negative. Yeah. So, >> that carried us. We remember we said we kicked the can down. >> Yeah. I But I also want to I want to step back to something that uh Director Prow
063just shared. If you look at 201617 and this is what I shared earlier that gap between the green and the blue line and you see what the district's done over the last 10 years that gap um if we didn't hire people you'd throw that money into the bank or spend it on services right so we had increased revenue hey we have some extra money let's get some good people in front of our kids and you end up with more employees that's what you're chasing And and so I I I I I just want us to think about um I know we have more people, but we're providing different programming and different supports. I hope we're getting better outcomes because the other part of this equation is the salaries are accelerating at a rate that their
064state is not funding and we're not not able to keep pace. There's two sides to it, I guess, is what I'm getting at. We've we've maintained the district has maintained since 2013 same spending patterns in relation to we're going to put some it's what why save give invest right you can only do a few things with money we've always done those things and now these lines have crossed because of unfunded positions so the your the point that you're making and I I I take it is that well now we have too many people and that's accurate how do we how do we again wind that down in an appropriate way >> I just you know if if I'm a community member looking at this I'm saying in the last 10 years you've doubled your expenditures
065you have the same amount of students what are your outcomes have your outcomes doubled what have have a teacher salary has doubled in these in this time or gone up our budget has doubled so that means our salaries have increased significantly are we getting significant more sign significantly more out of our teachers for the for the the money that they've increased in the last 10 years. Is it that's what I'd be asking myself as a business owner. I'm putting in all this extra money. Am I getting out, >> you know, is it is it worth the double the cost? Um I hope the answer to that is yes. I I don't know how to answer that because >> yeah I I think that it becomes so complicated in public work and and working with young
066people because um the other side of that is that that um green line includes significant changes in um employee health benefits. It includes significant changes in retirement. It includes significant changes in um utilities in insurance. dramatic changes that school districts have had to deal with. And again, I think this this is a such a powerful slide because it tells a story about where we're at, but it also acknowledges that there's been a lot of good work done for over a decade in a way that is very systemic. We we because it I hope you would say to the community member, every year we spend a little bit less than we get. And I hope they would nod their heads and say, wow, that's how you should run your home. That's how you should run your
067business. And now we realized that we knew what was coming and some of the contract disputes that you get into, they're not sustainable. >> Yeah. >> So the answer is you either have less people, you get people to take things out of contracts, or the state gives you some additional resources. One of those three things has to happen. Really the only one we can control is we have less people, which is I again we've demonstrated the last couple of years that's what we're doing. um the outcome part of it, you know, I would I would hope that I the lines I would focus on with them are the blue and and the green ones. We're spending at a in a ratio in a percentage the same way we have and and I hope we're getting
068good outcomes. So, >> um but in these moments when you don't have all that history, you're like what salaries went up that much and this is what's happening. I I understand that narrative as well. So anyway, this slide to me when I first saw it, it it it tells a very complicated story and if you spend some time looking at it, there's lots of um factors that have to be considered when you see where we're at. And we we would like Amy said, three or four years ago, we would have been dealing with this without the esser impact. >> Yeah. Yeah. So the next slide, uh, we are required by OSPI to put this in our budget presentation. And what this one says is how much they fund us for material, supplies, and operating cost.
069So um, the very first number you see up there, they give us six, they're going to give us 6.8 million and we actually spend 12.5 million. And these are just basic ed. >> The rest of that's funded through money. >> Uh this includes levy levy Leah. Okay. Um we so I wanted to read these. Um what are our strengths? What are our weaknesses? Our opportunities and our threats of our budget for this coming year. Our strengths we have continued collaboration and transparency. This u presentation is probably really long has a lot of slides in it but I feel like the more information you have the more you're capable uh you're equipped to make decisions right. Um we have continued uh budgetary realignment with resources available. you know, students versus FTEES. Uh multi-year planning to anticipate
070fiscal um pressures and that will be um what I'm uh our four-year forecast which is coming. Uh our weaknesses, we have declining student enrollment. Um we have IPD that's not being fully funded. Um what I mean by that is we we're getting IPD, but our grants are not keeping up with the IPD. declining federal grant allocations, projected reduction of our fund balance opportunities. Uh we can align spending with declining enrollment. We continue to seek out efficiencies and cost reductions. I think we've been really good this past year of every not just uh finance, not just superintendent, but everybody says just because it's it's in the budget doesn't mean we have to spend it. Do we really need this? You know, I think uh all of us are doing a really good job of doing that.
071And I'm talking about all our administrators. um oversight of all spending um threats, continued enrollment fluctuations, increase in unfunded mandates like sub and substitute cost, um uncertainties in our federal grants, reliance on fund balance to offset recurring expenses, and operating deficit, our expenditures being more than our revenues for two years. Okay. So, our four-year budget, this is what our enrollment is going to look like in the next four years. Um, based on uh like I said, what we do with our Kinder, we projected with um Adams County Birth and then um making an adjustment for running start. So you can see there that um the decline at the end of the four years will be 162. In the next slide, this one has a lot of information on it. Um so we're projecting IPD for
07226 27 27 28 and 28 29. Those are the green numbers. Um could be more, could be less. We don't know at this point. So, we're just doing our best guess on that one. Um, so if you look in the projected revenues in the blue font, you're going to see the 88.8 million there. That's going to be a really big jump from the 84 that I'm projecting for this year because of the the HB um 2049 bump if we pass our levy. Um the other uh big numbers or other numbers here that we need to look at is our ending fund balance. So you can see there that by school year we're going to be running with a fund balance of of about 5.8 million. And then in the 2829 that's 319,000. In school year
0732728 when our fund balance gets below um 7.7 million, we're going to be probably running into some cash flow issues like maybe we won't be able to pay time sheets this month. Maybe we're going to have to wait till our portionment gets has an increase the following month. Um, SAO, the auditor's office, recommends that we have 60 days of expenditures in our fund balance. Right now, in this current school year, I think we're about 60. We're right about there. We were, but we're probably going to end a little bit less. And we were one of 60 county uh, school districts in the state that had that. >> And now we're probably going to we're going to be with everybody else. So in 2526 we're projecting to have 46 operating days in our fund balance and
074then we're going to go all the way down to 1.2 days. So we will not meet the require the recommendations from the auditor's office in the school years. That's pretty heavy slide, huh? >> Yeah. And like I said, the reason um is we get the projected the 2.5% the the IPD increases, but our our um expenses will be more than the than what the increase to our revenues are. The other um I'm just looking at my notes here. The other thing is um 26 27 27 28 28 29 is as if we passed our levy and we make no changes to our staffing or anything. So this is worst case. Okay, next slide. um basically just telling us where we're getting our revenues and our expenses and the changes from year to year. So you
075can see by school year 2728 our expenses are going to be $5.5 million more than our revenues. >> Yeah, we're already in trouble today. Mhm. >> We we we can't get to 2728. >> Yes. 2728 is without any action as far as continued right sizing. Um thinking about programs and you know tightening the belt up each year. That's again we have to present it in a way that says if nothing changed what would happen. Um but even when we do those things you can see we're just treading water right. Yeah, >> that's how I think you described it that way earlier, like it feels like we didn't make much progress and really just trying to tread water until until the there's a solution across the state. >> And then the next couple of slides are
076just uh same information with um graphs. >> Could you go back to slide um the general four-year fund forecast? What does it take to get into binding conditions? when you submit a budget um where your ending fund balance is in the negative. So you can have um your revenues and expendit your expenditures to be more than your revenues. But it's okay if you have fund balance, but once that fund balance goes away and you're projecting an a negative ending fund balance, you go into binding conditions. >> So there are eight school districts that have a zero or a negative number where we have our 319 already. Wow. >> And maybe when that number gets to 80 school districts, the state will figure it out. But right now, it's eight. >> Well, every school district in
077the state has to report this four-year forecast. You think OSPI would be on top of it and help lobby? >> One of the I think the self That's a good point, Ken. One of the self-inflicted parts of this. So, Amy has showed me a number of these from across the state. What you'll see, at least everyone she showed me, the finance team in those districts, they copy and paste 25 26 and they just they just put it in there. They don't do the math. We noticed a couple in our region that were doing that and then now you read in the paper all of a sudden that they're out of cash and we could predict that but they weren't. So, I I I think OSPI owns some of it for sure, but also there are
078local school districts who either out of fear or or incompetence are not giving that data to folks and they're not prepared. So, >> I think it's a scary situation where um you're saying, "Oh, well, I'm just going to spend every every single dollar that I get and that's it." You know, where you're not even thinking about, you know, yeah, you're getting the 2.5%, but what is it actually increasing? Um 5 years ago our property insurance was 400,000. Now we're we got a bill for 1.2 million. >> Yeah. >> You can't you know you can't just copy and paste. >> Yeah. >> You can't just say oh my expenses are going to go up just 2%. No. It doesn't work that way. So we'll just go to this one. Um I was in a webinar last
079week and they um a lot of the school districts that are submitting budgets like this uh one of them said this and it just really resonated with me and it said prioritizing fiscal health now ensures that future students will benefit from stable highquality education. So I feel like what every decision that we make from now on it's it's going to be for our future students. >> Yeah. So, and then um we're going into the four-year forecast for um the other four funds. So, the first one is our capital projects. Our projected beginning balance on that one um will be about $1 million. Um and this is a uh fund where we do all the major repairs and renovations come from this fund. We have had um an item here for Ludakaga roof repair for 400,000
080for a couple years, but we want to make sure that we have that because we know it might be coming. Um and then there's um I the other line item is uh other repairs as needed for 752,000. Whether or not we we use it, it's going to depend on what the year brings. Right. The scary part is is if we do use it, if we do have those needs, there's no money coming into this fund because there's nowhere to get it from. >> So you can see there if we were to spend if we were to have some major repairs, we would really be hurting not only in the general fund but also in the capital projects. >> Um so our roof repair isn't covered by insurance. Not generally. >> Okay. >> Can't we make
081that happen? >> Okay. So, any questions on that? The next one is our debt service. And this is where we make our bond payments from. So, the money that we get in our from property taxes goes into here. we make our bond payment. As you can see here in 2728, we have an ending fund balance of 19,000 because the bond will be paid. And then um the ASB 4-year forecast fund is pretty stable. Nothing um major. And then the transportation vehicle fund. Um so we get uh our revenues here come from depreciation of our buses. So depending on how many buses we got in the past depends on how much revenue we get and then we purchase our buses with that money. Okay. So what are our next steps? August 25th, we have a budget
082hearing and then uh gives them opportunity for public comment and then a budget resolution where we will ask the board to approve a resolution for the 2526 budget. And then August 31st is the last day that we have um to submit it to OSPI. And I did forget to mention at the beginning that ESD has reviewed my budget and um gave it its blessing. So, and then I always like to end with pictures from the past year. So, questions. Um, I just want to say thank you so much. I know everything has gotten more expensive in the last 10 years. I mean, I when I think of my own budget of, you know, what I was spending in 2015 to what I'm spending today, of course, everything has gone up so much. So, I appreciate
083that you guys are doing the absolute best that you can with, you know, the hand that we've been dealt. I know it's going to be a tough couple of years coming up where we have to make some more hard decisions, but this is a ton of work. >> This is so much work. So, thank you for the hours and hours and hours you have poured into every graft and chart and everything to to help dumb it down for us so that we can get a grasp on it. So, I just I really appreciate all the work that you put in and um I hope when I'm asking questions or, you know, processing this out loud that it's it's never like, you know, I'm not I'm not trying to be your dad and scolding you for
084spending too much money. It's just, oh no, we're going to pickle and we got to figure something out as a team to how we're going to get out of it so that we can sustain >> and and do what's right by our kids like you said. So, just thank you so much for all of your hard work and for everything that went into this report and for making it so that we're not one of those school districts that's already blown past our fund balance and you guys have been so responsible and um dependable that I I know that when when people ask, you know, what what's going on with the school district? Are you guys in trouble? I've heard this about Moses Lake or these other schools. And honestly, I I feel so confident in
085your guys' abilities. I always answer very confidently like, "No, we have a really great accounting team and they know exactly what they're doing and they know where we're at." So, anyway, just thank you so much and I I have so much faith in you guys and appreciate that the school district would not It's not just teachers that make a school district run. That's for sure. And you guys put in so much work. So, thank you so much. We couldn't do it without you. Literally, >> I have I have a lot of rock stars on my team. I appreciate them and they are amazing. Ask anybody, not just them. Alandre, Alexa, Aurora. They're they're they're amazing. They are amazing. I am so blessed to have them. >> Thank you guys. >> No, I just really appreciate
086the work and the time that you put into it. Uh it's really helped benefit. I know with even the reduction of almost 20 staff members for next year's budget, but because of how good you are with a budget and you got the trust of all the employees in the district with that everybody was able to come to the table fairly easy and understand the numbers and uh I think it's going to be great help for the next couple years to that are coming to that everybody will understand these numbers and how they're coming together. >> Uh because I do see some more difficult times and it's going to take us all to work together to get through them. >> So I really appreciate it >> and I always say I I have a spreadsheet for
087that. Ask Pete. He knows I love my spreadsheet. >> Okay. Do you have anything else? >> Okay. And also thank you to you uh Superintendent Perez for putting this together and making it all work and and for walking us through it. Thank you. Um we will move on to item D1, policy review. This is just for everyone to review and we'll be uh approving that next meeting. Do we have any public comment? No. Okay, we will move on to upcoming events. Um, we've got student registration starting next week um in the OS gym. We've got a regular board meeting, sorry, we've got a special board meeting August 25th and at 6:30 p.m. and then our regular scheduled board meeting August 25th at 7 p.m. Um, and then on August 25th is also new teacher orientation.
088The 26th is the all staff orientation and the 28th is the first day of school. So that's what we got coming up. Now we'll move on to the board self assessment of the meeting. Um, excellent presentation from all of our finance team on our 2526 budget. Really appreciate all of the work that went into that. Um, >> sorry, you go first. >> Carlos's presentation. >> That's what I was going to say. >> Yeah. Um, just to reiterate what he was saying is um, giving those requirements for students. I feel like it was a lot different when I was in high school to compared to what it is now. So, it's nice to see that we're keeping people accountable, but also keeping our coaches accountable as well. You know, sometimes we get lost in the we
089want to win, we're going to put the best person out there, but it's not always about that. It's about how we can succeed later in life and giving students those uh accountabilities for later on. So, thank you for that. Um, but we miss Cesaro. It's never fun not having a full board. Anybody have anything else? >> Wish our new meetings could continue, but we know we got to go back to >> I know. I I my throat choked a little when I said 7 p.m. >> like please. >> And you're excited for it. >> Yeah, it's because I have to work longer now. I don't get off till 6 because I have the two-hour break. >> Okay. Okay. Um, at this time the board will recess into executive session for 20 minutes to discuss potential
090litigation. No action will be taken following the executive session. This meeting is adjourned.