School Board Meeting: January 13, 2026

00113th regular board meeting for the Machi School District, our 1st of 21st of 2026. We're going to start with the pledge of allegiance. 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. expect. We'll now work through the agenda board. Are there any proposed changes or modifications to the agenda? All right, hearing none. We'll move on to the consent agenda. Consent agenda. Items on the consent agenda were sent to the board and posted online last week. The board has had the opportunity to review the materials and ask the superintendent any questions they have about any items on the consent agenda. The agenda consent agenda for this meeting includes the minutes for the 12625

002regular meeting, vouchers and payroll, personnel report, contracts, field trips, and the October financial report. Do I have a motion to approve the consent agenda? >> Move to approve the consent agenda as presented. >> Second. >> All right. All right, it has been moved by Julia, seconded by Mark. Any discussion. All right, all in favor of adopting the consent agenda as say I. >> I. Any opposed? All right. Motion carries. [snorts] Uh, bright spots. So, I'm going turn over to Corey for the bright spots for the tonight. >> Excellent. Thank you so much. Um, our bright spots at each board meeting give us uh give us sorry gives the school board of directors and I an opportunity to highlight a celebration in the district and honor the work that is happening in order to intentionally remind

003us of the promise to our students from our strategic plan and to illustrate why we so passionately uh engage in this work. Tonight we have a couple of representatives from Wanchi uh city of Wanchi Junior City Council. So, we're thrilled to have Isabella Garcia and Betsy Espinosa with us tonight to tell a little bit about their journey as council uh junior council members. We also have council members Atinson and Navaro Gomez with us too. Thanks for joining us this evening and supporting. Um but ladies, we'd love to have you uh come up to the podium and you can share a little bit about your story. Thanks so much for being here. Uh and special thanks to Isabella who is also on our superintendent advisory council and one of our AEM uh students as well. she

004helped orchestrate and organize being here tonight. So, I appreciate that. Thanks, ladies. >> Yes. Thank you so much. Um, good evening everyone. I just want to say hello to everyone. It's nice to see some familiar faces. Um, I want to take a moment to thank the board for making some time for us. And as well, I'd like to thank Dr. Corey Kalahar for inviting me and Alex. But unfortunately, he can't be here today because he has other commitments. But we do have Betsy. So, I'm really excited to hear what she has to say. So, my name is Isabella Garcia. I'm a junior I'm a junior at High School, but also I serve a two-year term on the Junior City Council. For some context, I applied and was selected for a two-year term with the junior

005city council, which has given me the opportunity to learn a little bit more about how local government works, more specifically here in Monachi, and also how students can engage a little bit more in civic engagement. So during our meetings, we receive educational presentations on topics such as different forms of government, public policy, and most recently, we've been learning a little bit more about how parliamentary procedure works, which is going to benefit me a lot when I continue to attend future board meetings. Um, another thing that that this city council being a part of it has helped me do is connect more with the people in my community. I've been involved in what most recently a focus group for the city of Wachi's museum and the way that my voice was leveraged in there was that

006we all sat in a circle and got to share what we thought about the museum and how it could improve and also how it can be more tailored to the toward the youth. [snorts] So that was a really cool experience and as I continue to be a part of this junior city council, I hope that my voice can be leveraged in different ways. Um, and my experience will continue to grow and also I would love to learn more about our sister city which I plan on attending some committee meetings. Um, so I'm really excited about that. So yeah, thank you. >> Okay. Uh, hi. Um, my name is Betsy Espinosa. I am a sophomore at High School. My little script is probably not as good as it is. Um, uh, I applied for, uh, to

007be in junior city council almost expecting not to get in cuz a lot of kids want this opportunity. Um, but in my past, I've had a lot of experience with leadership and um, politics, like going into Olympia in the PH program. That was something that really [snorts] wanted me to push further into uh, working with the city. And so when I got the call that I was going to if I wanted to be in junior city council, I took it as an opportunity to try to use my leadership to benefit everybody who um who lives in Wanchi. And as a student who went to a charter public school that goes back here, uh our voices were heard but not as much as other students voices. And as a advocate um and for charter schools, I

008wanted to make an impact on not just the students at Pinnacles but but students everywhere. And so far, the experience on the junior city council has been a really fun experience cuz I get to learn things that I never knew existed and I got to meet new people and that is I think an incredible opportunity and I think we have the privilege to be able to be in a committee that allows little um children to have their voices. So, I thank you for having us here and I hope you have a good rest of your night. Thank you guys. >> Yeah. Excellent. Uh thank you ladies. Do any of the board members have any questions or comments that they want to um share? >> I was I mean you guys have kind of uh escaped

009already. I'm I'm going to give you one anyway. Um, do you guys vote or do you have like an advisory vote or do you have some way kind of um participate in the actual city council meetings? >> Um, okay. Um, so the way that we vote I guess is um some people pass a motion um but we don't vote like actually on city council. We do we are like invited to attend on a basis but we can obviously go choose to go, but we don't actually. >> Okay. Thank you. I appreciate that. >> Do you guys have any more questions? >> Uh Betsy, yours was just as good as Isabella. Good [laughter] job. Do you know how competitive the the application process was? And maybe Maida or Charlie. >> Uh yeah, we had um 14

01014 applicants which for the first year was pretty I thought was and and we rolled it out later than we would have liked but uh and we could only choose nine. We have seven members and two alternates and it was very difficult. They were all very you know qualified so having to say no to five was not easy. We encouraged them to stay on our list because we anticipated that there might be some attrition. However, four months, four months in, we've done really well and the students have been engaged and those who've had to miss a meeting have informed this and we've had a quorum every time and not had a really actually had a full slate with the alternate. So, yeah, it's been good. >> And the only thing that I would add is

011um we had very little time to get this first cohort going, but um I think one thing that we take pride in is that we reached out not only to public charter private schools in hopes of really getting a better representation [snorts] of what our community is here. But we're just fortunate to have these girls on board and we have a great group of students and future peers. >> Well, I want to say thank you to the city council because this is something that I've been advocating um for the school board for a few years. Um and I think um within the city and city uh local government, you guys are definitely setting up our students and setting the example. um on how it could u positively impact um city education. Um and so and

012kudos to Betsy and Isabella for um gosh, you guys are so well spoken and continue doing the good work. >> Thank you so much. >> Excellent. Yeah, I'll just say thank you council members. Thank you for joining and supporting and all the great communication you've had with with me as the superintendent. So, I just appreciate that. And ladies, wonderful job tonight. Thank you for sharing your story. and families, thank you for being here to support your students as well. So, uh, student voice is something we need to leverage and we should be leveraging and so this is great powerful work. Thank you very much. All right, that moves on to citizen comment. Kim, do we have anyone? Okay, get rid of that page. Um, that means we're at presentations, especially now. Hey, let's let's do

013this. Wonderful. Uh oh, and Liz. >> Hi, Diana. [laughter] >> Okay, we're just we're gonna we're gonna do this. Okay. And I I never use it well anyway. So, [snorts] it's uh we'll just we're going to here. So, >> I have to save myself. It's fine. >> Oh, thank you for this time. Uh, President Jackson in school board meetings. Uh, the 26 uh 27 school year will be the fourth year of intentional budget reductions for the Wanchi School District uh due to inclin declining enrollment, inflationary factors, and this year federal funding uncertainties. We know this work well. We plan this work annually and because uh because we make the necessary projections for the process. Um Sean will have an updated enrollment report later for you on January 27th at our next uh board meeting. And

014I really want to kind of center the the conversation tonight uh which is near and dear to to me is that it's around people. And people are the important part of our conversation this evening. We're doing the right work to align our budget and our staffing to declining enrollment and cuts in funding. However, [clears throat] we have amazing staff who work directly with our incredible families and our amazing students who are impacted by these conversations. So, it's just a reminder that the work is really hard. Um, so and uh and so I'll be showing numbers and graphs, but we'll try to ground ourselves in the conversation that this is also people. Um, okay, next slide, please. It's going to get really fun, Liz, when there's multiple clicks on each slide. So, we're just going to

015have this great energy. It's going to be awesome. Uh, I want to start tonight by off by clarifying the difference between our operating budget, uh, which is the topic of this evening, and then bond funds, uh, which we'll be asking for, uh, from our community later in the year to fund a new high school and HVAC systems throughout the district. Um, I just noticed you're all alone. Are you okay? We're with you. [laughter] >> Uh so uh okay. So if you can see here on the slide, we have uh uh we have an our operating budget, our day-to-day and just kind of a little bit of information about what that really is and the funding that is supports that as well. So the our operating budget funds our day-to-day operations, all of our student support

016and our staffing. Um it comes from a combination of state funding, federal uh federal allocations and local levies which we'll show in a little bit more detail in some of the graphs that come up. The amounts are based on student enrollment and our special and the special needs of our students such as poverty uh disabilities and limited English langu language skills as well. And what the operating budget can't do is it cannot build new schools, cannot replace facilities, cannot support any largescale construction, nor pay long-term debts. We really want to make sure that that is clear in our conversation. Bonds we know are for building. Uh they are voter approved uh funding to build or modernize uh school buildings. They are long-term debt that's taken on um by the school district over 15 to 30

017years paid by local property taxes. bonds cannot pay for teachers, uh, salaries or staff salaries, uh, supplies, daily operations, instructional programs, nor administrative costs, and they cannot backfill budget shortfalls. So, just want to set up the stage for that clarification. So, there's no confusion. Now, if someone tunes in now, there could be confusion. Okay? But we are going to move forward with the idea that we've explained that. Can I have the next slide, please? Uh, and this is a this is a graph that you have seen before when we've talked about uh budget 101 for uh school districts. Um, but all of the numbers have been updated to represent um our current year. And so it's a good clarification and it's timely that we outline where our funds come from. So you can see the

018breakdown between our state, local, and our federal dollars there. As you can see here, the bulk of our $133 million budget comes from state funding at 77%. Um, and our federal funding comes in at 9.4 and local funding at 13 uh.4%. Next slide, Liz. [snorts] There's a lot on this slide. Uh, but the m the the reason that we really want to share this is a large portion of our general fund uh supports staffing costs up to 82.6% 6% as this slide represents and the slide grounds us back in that conversation of people. When we talk about budgets, we talk about people because 82% of our budget um goes to people in our system. So the slide truly represents the wonderful people we have in our system from our maintenance and operations staff to nutrition

019services to teachers and par educators in the classrooms throughout the district. And you can see from this slide that the general fund not only covers staffing uh but our supplies and materials purchase services. We also have travel and a little bit of capital outlay um in this graph as well. Okay, next slide. So, here we have our milestones and Liz, you can go ahead and click one more time. Um we have our milestones uh for decision [clears throat] making and gathering input. And so, this kind of chronicles our year of budgeting. So, it starts off in August when you as a board approve our our budget. Uh and then it goes into October where we have our enrollment projections and then Sean tells us about the year end uh close out and what our fund

020balance is. We move on to November and we have preliminary budget reduction amal identified. We also talk to our leadership team. We have our board budget committee meetings and our association uh budget committee meetings as well. Uh we begin developing a preliminary budget plan. And then there it is. There's the there's the other click there. We are in January where we start we started our legislative budget session. Uh and we know that it's a short session. So we only have until March uh when the state legislative bud budget session ends and we are also at that time notifying impacted staff um of what next year will bring. May we finalize budget reductions. In June we really start the process all over again where we start talking about uh the 26 27 preliminary budget and then

021August is the approval of that. So, it's a whole process. And next slide. I really like how this system works. Not a lot of clicking on my end. Things are moving in the right direction. Liz has it completely under control. It's good. Um, and this gets us to the big number. So, the operational budget reduction target, $5.4 million for the 26 27th school year. And you can see where the breakdown of that funding lies. 2.5 million is in our basic education allocation and that is where we've spent the majority of the last three years in budget reductions in this BEA world. This year we have we have a new twist to our budget reduction process [clears throat] and that is the federal funding and the dollars therein. The budget reduction factors um as they're listed

022there declining enrollment. uh we'll show a little bit of some of the graphs of this year's uh uh count results and the projections for the years to come. You've already seen some of these, so it'll be a little bit of review. Um we also have inflationary costs uh outpacing our current funding. We know that uh we know that in the funding that the state provides us an an average cost of education through the prototypical funding model and the district covers the rest through federal and local dollars um including salaries, benefits, insurance premiums and the MSOT there listed as material supplies and operating costs. And this year uh the the the new wrinkle is the loss of federal funding. And this is where we are focused on focusing on areas in our special programming where this

023funding was held last July. So we have dollars that are related to uh title one funding uh part C, title two funding part A, title three funding part A and title four parts A and B are all in that uh category there. Um so this funding has been highly debated at the national level which we know and all indications lead us to believe that with the dismantling of the department of education this funding will go away if not this year then potentially next year. >> Correct. Sorry. Yeah. So you the previous slide had 12.1 federal dollars that we or 12 12.1 million that we get from the federal government. >> So the 2.9 that we're cutting going to next year is so we'll go down to 9.2 >> and then you're saying potentially we're losing

024the additional that new 9.2 as well or >> not not at this time. The 2.9 will either be we will either lose that for next year 26 27 or the following year 27. >> Yep. No, thank you. >> We're not. >> Yeah. So, we're not talking about the other 9.2 that we're still doing. >> Correct. >> Thank you. >> Yes. >> Thank you. >> At least as based on what we know at this point. And so the next milestone that we have in this uh work is January [clears throat] 30th where [snorts] um Congress needs to make a decision on whether they're going to move forward with a a balanced budget or if they're going to do a continuation uh a continuence sorry um or if we're going to shut down the government once again.

025So we've got another milestone that's uh in front of us with that work. So um next slide please. So areas of reduction. So, in the world of education, budget reductions refer a lot to staffing much of the time, as we talked about. We love our staff and just want to share that there are hard and uncomfortable conversations being had at any time when we discuss this. Um, and there are feelings behind each of these bullets. Um, which is important for us to to remind ourselves. However, we need to ensure uh to the board uh to our community uh that we are doing the good hard work uh being good stewards of our funds that we receive and that's important. Uh but in this list we have a restructuring of district office administration and uh we

026have shared uh this information with our staff and have many district office administrators who will be shifting back into buildings um for a portion of the [clears throat] work that they currently do at the district office and uh in support of our students staff and families in those buildings as well. And the second bullet restructuring our building administration to really make these shifts happen. um some of our our elementary assistant principles uh will be going back to teaching contracts or positions in uh in the buildings or elsewhere as well. Um we also every year we take uh very intentional time to look at our retirements and resignations uh really to see if there are any areas where there might be additional reductions that can be made. Um and also as we do that it does

027make room for some of the shifting that has to happen as we move administrators out of the district office and into buildings to support. Uh another bullet there bullet for staffing modifications. Uh there will be additional staffing modifications in our certificated and classified ranks that will happen in the next few months. And as you all know we always run a budget on 100% staffing. So there will be some unfilled positions that we'll take back into um the budget as well. For instance, this year we struggled to fill a few school nurse positions. Um so therefore we'll have which we have filled which has been great just recently, but we'll have five months of budget that uh we can you know put back into our uh funds because of those uh situations. And then we always

028have MSOC on there. And we know that Sean has done a great job with diving into the budget and removing as much of the um won't say fluff. Um it's definitely not fluff. Do you have a word for it that I shouldn't be using right now, but um he has clawed back a lot of uh the M socks there and made a major dent uh in that work. So there'll be a few contracts that we already know of that will be um on their way out of our system that will that will dive in into that area. And then I think importantly uh and this is something that has been a reoccurring conversation for us as a board is where are we looking at growth? How are we combating uh declining enrollment? How are we

029taking an active stance and being um just realizing that we're in competition for our students in a variety of ways and really um making areas that uh will bring students back to the district or create new opportunities for people that are maybe not currently in our system. Uh some examples of that have been Valley Academy moving them to a larger space where they've been able to grow. that helped us this year to the tune of 77 additional students which has been fascinating and fantastic. Um our accelerated pathways program has also encouraged more [clears throat] students potentially to stay um uh on site high school and uh continue their work there. So we're very happy with those and I have another slide that we'll share on some of those additional areas as well. And we really

030want to take the time to share with our community that for the 26 27th school year uh there's no for any school closures or major restructuring restructuring that would impact our schools moving forward. So just want to be be clear with that indication that there are no surprises at this point or foreseeable no surprises just leave it there. Um next slide please. I have some graphs and some data to share with you that you've seen before but I just wanted to pause in case there were some questions or comments that I might be able to address or write down. to come back later. >> I believe the session started yesterday and there was a press conference. Do we anticipate any cuts to EA funding from the state level? >> You know, uh I don't know

031if we anticipate cuts, but there are programs um at least and everything that we're hearing and learning right now is based off the governor's proposal. So, one of the areas that we're watching right now is um transition to kindergarten. Uh they're saying I think the governor's proposal was 25% uh right Sean I'm looking okay and Sean does have a legislative update on the 27th as well. >> Um so he'll give us more of that but right now TK is one of them. What are some of the other areas that we've been watching John? >> Um local ethan assistance falls outside basic education. >> Gotcha. Okay. So those are the two big ones right now that we're that we're seeing and we'll keep close close contact on that and let you know. >> Thank you. Good

032question. Okay, Liz, next slide. >> Okay, this is a slide that you saw in October and uh we know that there are a couple of major items that impact our numbers and budgets um in and creating our declining enrollment debacle. Um current birth rates in the Wanchi school district are one of those. And you can see here on the graph that uh the top line represents the Wanchi birth rate, the birth in the Wanchi school district. And then the lower line represents what we refer to as a capture rate. And so of all the students that are born in the Wanchi school district, the lower line is the is the number that we capture in the Wanchi school district. And you can see they kind of run uh you know they kind of run parallel

033with with each other for the most part, but there are some gaps and abnorm or abnormalities along the way. But pay attention to the 2020 birth rate there where we saw a 71 student decline in our uh birth rates in the 18 school district. And uh you can see where the capture rate relates to 381 students in our October count. Um and you can see that there's a little bit of a decline in the next few years. And then we look like we might have some optimistic hope there uh in 2930 that we like to find and look for. Um, but a lot of what we're uh aligning ourselves to is is around uh grade levels of around 400. And so um I'll just keep on moving here. Um that's all I was going to

034say. Okay, next slide. Okay, the next slide shows our enrollment decline slope which shows the last 10 years of enrollment decline equating 1,119 students. Um and then of course the factors that coincide with that as well. Then we have last year's this year and then our four years of pro projections that equal another uh 884 students. I just you've seen the slide before but I just I it's important for us to outline um that we know what the next few years look like and we know how to plan for that work. Um it is a whopping 2003 students in the last 15 years with our projections. Um, again, the good news is that we're fighting back and embracing opportunities for enrollment increases where we can. However, as much as we prepare to fight back, we

035still will be impacted by the new normal of our birth rates. Um, bringing in roughly classes of 400 students in our kinder. So, well, I'll show you a graph that you have seen before as well that kind of tells us uh the gone of the days of the 500 plus classes for um the foreseeable future. Uh, fourth grade has our last 500 plus class at 510 students right now. So, next slide, please. Um, as I mentioned, as we're adapting and responding to the shift in enrollment, preparing our system for the long haul, we asked Sean to outline what the next many years might look like if we were to look at our system as having 400 student uh, population grade level classes and our 500 plus student uh, graduation or classes graduating out. And this

036is kind of what that trend looks like. Now, the the next four years are the steepest part of that curve. So you can see that it kind of slows down a little bit and then we get to 2037 and we start to see a little bit of an incline. But this is a graph that charts the Wanti school district adjusting to roughly 400 students per grade level [clears throat] and click click another one more time. It shows uh or a couple more times maybe. Boom. Okay, right there. So it shows system alignments in 2037 38 and then the next one is just kind of a statement that I think that we can prepare go one more um we and I just think of the last few years of budget reductions in the school district and

037what we project for next year. We really can't $2.5 million every year our way out of this. Um, so we're going to we're going to need to be talking about what does this look like as a one anti school district as we are preparing for this slope. And of course these are projections. They are they are not based on anything other than what we see in birth rate data and then uh extrapolating that over time. We're going to be watching this. But one of the things that we need to be thinking about is what needs to happen in our system to increase efficiencies um and staffing to enrollment over time. That's the work that we need to do and the hard we're currently doing. [clears throat] We're not kicking any proverbial cans down any roads.

038We are doing that hard work. Um, but one of the things I do want to tee up is that um, President Jackson and I have been talking about our restructuring uh, committee that is actively working on potentially looking at what are the next steps for the school district down the road. We know that we need to look at boundaries. Um, we know that we need to look at school efficiencies and school sizes and what that looks like. But having that team uh make a presentation to the board uh in the next couple months is on our uh radar as well and that'd be hugely important. Okay, next slide please. This is working great. This is this is um so you've seen this information. You can uh go ahead and click the next slide. You can

039see there's our 381 kinder class. One more click shows our uh last uh fourth grade 500 plus class and then at the bottom you should see one more click should this is where we get the 884 students and it shows that projection from this year and the subsequent four years. So just a different way of looking at the data you've seen this information but I think it's important to share as we talk about budget reductions. Next slide. Another way graphically to look at the same data, but it's broken down by grade levels as opposed to or by grade bands as opposed to individual grade levels. Liz, one more click is going to get us to this year's uh total 86. Another click is going to get us to the total change 884. Just looking at

040it in a different uh graphical form. Okay, next click. This one's going to take us a little bit. We're going to be great though. um budget communication. What have we shared with our staff? What have we shared with our team? What have we shared with the board? So, uh next click there should show us uh we had a fund balance report on the uh sorry on in October uh to the board. Next click uh October enrollment uh also in October which is October 28th. Next click end of year finance report. Next clip. Uh when school district leadership meeting in December. Next clip. Uh we also have our 2526 board budget committee meetings which are ongoing. Next clip. 2526 association uh budget committee meetings. We have we we will have our our first one will be

041on Wednesday tomorrow. Our first one is tomorrow. We have meant to get in December but everyone's schedule is not able to make that. So, we'll do our first one tomorrow. They'll receive roughly the same information that you are all receiving right now. Uh, next clip. Uh, ongoing budget by videos. Next clip. Uh, board budget update in January. That's that's today. Uh, staff. We'll have a staff update also in January as well. And I will never do that again. That's a lot of [laughter] >> And then one more click uh staff update and then one final click enrollment projections to the board on January 27th. >> I know there it is. All right. And this next slide, Liz, if you don't mind, is really us taking a moment to remember the challenges of the budget reduction

042process. And this is not a celebration, but I think that it is a reminder of the work. And as you can see, the work that I'll be doing as superintendent for what appears to be the rest of my career, uh, to some degree. Um, I hope I make it to 2037. you will see. Um I'm not 37. So anyway, um but it's it's heavy lifting and it has an impact on our students and our staff and our and our entire community. So it is we just need to honor that this work has happened and most often 80% of a lot of this budget reduction has been staff members uh in our system in some way, shape or form. And then the next clip, Liz, adds on what we project for next year. And then a

043grand total for the four year would be one more. So $21 million in four years uh of budget reduction for the school district. Um just it needs to be shared with folks that we're doing we're doing what we need to be doing to align align our system. Um and then next slide, Liz. I shared with you earlier that I would be talking about opportunities for future growth and I do want to share what those ideas are at this point and excited for the opportunities that they represent for us. So one more click all in one shot. Um so we've been working as efficiently as possible trying to [clears throat] think differently about programming [cough] trying to be innovative trying to be creative um in ways that impact the student experience um as little as possible.

044excited about um some of the opportunities. So uh we are engaging in some new advertising opportunities and the 18 school district and may maybe you have seen the new billboard um out in North Wanche. Please drive by and check it out. So it is um it's on is it on the Huff North side or it's on the It's on the H. >> So if you're heading north on Wachi Avenue, it's on the Hub North side. >> Perfect. And so yeah, so check that out. It'll it's in it's in English in January. It'll be in Spanish in a different location in February. So, um that's great. We'll be doing some other work with dual language uh later in the spring, which we're excited about. And really what this is about is it's about sharing the unique

045opportunities that the school district has, not only to our own district, but to um people that are traveling through our area. Um we will be doing more um staffing for choice choicing in the district um not necessarily the district [clears throat] but in the district is our goal. Um but uh when we do this it allows us to um ensure that people that want to be part of what we're doing in the 18 school district have an opportunity to be part of what we're doing. We've had some lost opportunities in the last few years. We've tried to get as um I'll say as efficient as we can. We have not uh saved as many opportunities for people wanting to choice in as we need to. And so we're going to work on that. Uh also

046accelerated pathways year two. We're excited to see and understand what that brings to the district. We have a few different opportunities at Valley Academy next year that we're excited about. the most um I think the most fruitful will be our ninth graders will be able to move to 10th grade and that's exciting and they are excited about that opportunity. Uh we also have some additional AL opportunities. Uh one thing that we are actually starting second semester is we are creating an additional classroom for our credit acceleration program lovingly known as our CAT program which has predominantly been at the tech center. will now have another classroom at Westside High School which will invite uh 20 to 25 new students into our district even halfway through this school year. So, we're excited about that opportunity. Um

047we've changed our uh registration timeline already. You might have noticed that we have opened registration [snorts] early uh and excited about what that means for for people that want to come to our district. and Eric shared with me in the first day we opened without even mentioning anything, we had three or four new registrations. Um, and then we're researching other areas for growth. We're halfway through the 2526 school year. We know there's going to be other opportunities for growth and we are excited about embracing those opportunities. >> Okay, Liz, one more slide. [snorts] questions and comments uh from the board or anything that I can bring back to you at a later time. I'd love to know that. >> The staffing for choice is that at the building level, >> correct? Yeah. Uh yeah. So

048um for example, um we we staff for the students that we know of and we haven't always predominantly in the last few years when we've tried to be very lean haven't always had space for folks that want to come over and join what we're doing. So yeah, >> in regards to that, have we ever had um like mixed grade classrooms like second and third grade? Um >> not not in my recent history, we uh the closest thing to it, I think we've had teachers roll from one classroom to one grade level to another, but not anything to know. >> It's been a very long time. >> Very long time. Gotcha. Okay. Yeah. Thank you. Something to think about. >> I mean, aside from Valley, right? They're doing that, >> right? Correct. >> Right. >> We're

049doing it somewhere. >> We are. >> We're talking to someone high school does that, too. >> And I think if I if I [clears throat] remember right, a couple years ago when we were doing these budget reductions and trying to figure things out. We we talked about doing some mixed grade classes, but in theory, they don't generally work because you've got the fourth graders wondering why they're third graders and parents getting kind of making it more complicated than it's meant to be. But not something that's probably off the table forever, but I just remember having that conversation I feel like a while ago. >> Yeah, we I think we did that did come up and it it is definitely challenging especially when you think of one grade level and your extremes in that uh classroom

050itself and you have two grade levels and and you even increase those exponentially, but definitely not something that's off the table. It [clears throat] just, you know, having worked with choice, how we, you know, >> you restrict the numbers for class sizes, um, and it just made me think, you know, if we get to where you have, >> you know, enough for half a teacher at one grade and half for, you know, deep combined classrooms. >> Um, and just from personal experience, my nephew has been in two different years in a combined classroom. >> Interesting. And successful experience. Great. >> Love hearing that. >> Okay, that's awesome. Yeah, you have unique experiences with choice school district. Don't you love that? Awesome. Well, thank you everyone for your time this evening and uh and let's I'll

051turn it back to President Jackson. >> Sounds good. Um all right, so we're moving on to discussion and we're starting that with the board committee nominations and appointments. Uh so I was going to kick it off with a little discussion about what they are. Um, according to board policy 1240, no more than two board members will serve on any one board appointed committee and the board chair will appoint board members to serve in each role. Um, so so here's a quick overview of what they are and who's doing what right now. So start with the budget committee. Uh, the budget committee was created four years ago out of a desire for transparency and necessity by Superintendent Eagle. This committee meets with members of the cabinet regularly to receive an update on the overall budget. It

052is customary for the board presidents to sit on this committee. I have been on this for almost a whole year and Julie's been on it for two years. Uh the policy committee, the policy committee focuses on district policies. Cory and Kim White co-f facilitate this group and they negotiate and the group the committee negotiates necessary updates and revisions from WAZA as well as policy concerns that come up throughout the year. Uh Maria's been on this committee for the past two years and Julia for the last year. Is that right? Um, >> more than that. >> How many How many years? >> Three or four years. Five. >> All the years. You've been there for all the years. As far as they go back. Okay. All right. So, Maria's you are a tenure member of the

053committee. You should You're going to do the um assigning for that one? >> Yes. [laughter] >> Okay. the legislative rep uh per board policy number 1225 and was legislative representative serves as the contact person and acts as the coordinator of the board's legislative activities. The legislative representative also serves as a board liaison at WASA's general assembly. The legislative representative affectionately turned the ledge rep um is elected from among its members at the first rail board meeting in even numbered years this year and will serve for appointment serve for a period of two years. Miranda Soliski who served as the first for the first year and a half and uh Maria finished it out. Um so you're the current ledger rep. Uh so we're electing a new representative for the next two years. So that would

054be until January 2028 and we already figured it out. Um so now that we have an idea of what each committee does, I will entertain discussion regarding interest in serving on these committees discussion. >> Quick question. Are we still having a facilities and restructure committees? I think the facilities committee is done for for or this iteration of the facilities committee is done >> and the restructuring committee does not have a board representative. >> I got they they gave me they let me be a special guest at their last meeting but I think that was that was enough. >> We're working on if you can be a member. >> Yes, that's the next discussion. Okay. So, yeah. So, not that. And then I I asked earlier if we needed a WIA representative, and it sounds like

055that's handled for the whole board, so we don't need a rep there. >> Do I just go hang out with BJ sometimes? >> Hi, I'm the board rep. >> Um, okay. So, um, budge committee, I I'm the president, so I'm I'd like to stay on it. Um, anyone else want to do it? >> I I've enjoyed doing it. That's my favorite of all the committee. So, if there's one I could put my name in for, but you know, if there's new blood that wants to get involved, that's fine, but it's kind of in my wheelhouse with municipal financing stuff. So, >> haven't tried that. >> Okay. Well, sounds like that's a strong endorsement. A lot of like Yeah. Okay. So, budget committee all locked up. Uh policy committee, are you still want to do it?

056Are you >> um yeah, I mean, I was willing to give it up this year. >> Um uh but I think in the past um >> end streak. [laughter] >> Well, here was wait. So, in the past, um, we've had somebody carry over from the previous year board who did the the continuity. Um, Julie, >> so there's three committees, right? Oh, ledge, breath, policy, and budget. That's it, correct? >> Okay. >> Um, >> do you want me to continue since you'll be on budget? >> I I don't particularly care if you want me to be the one that carries over. I know that gives me two committees, but then your your vice and >> maybe something. >> Well, I mean or policy and then lecture, which is >> I see to appoint the lecture. >>

057Okay. I think I would nominate Caroline to be a phenomenal >> I think. Silence. >> Perfect. >> Done. >> Um >> so then um I would I would love to continue on plus committee and have Mark be my partner. >> Mark, you you [clears throat] for that. >> That way everybody. >> Great. Does that work for everyone? >> Yeah. Make Mark do something. >> Yeah. [laughter] >> Kids. Kids. Um, okay. So, it sounds like we're going to do budget committee be Julie and I, and then um Maria and Mark will be on the policy committee, and then our ledger rep will be Caroline. Fantastic. >> Uh yeah, that was that was that was a lot more fun. I don't get to hang out with my siblings very often, but that Oh, they have the same

058energy. [laughter] But um and then that moves us to the fund balance. >> Oh yes, correct. So we have executive director of business and finance Sean Fitzgerald, also known as the main event. Uh we've asked Sean as we as in President Jackson and I have asked Sean to come back and share his presentation on fund balance uh with the board for discussion and the conversation tonight will inform whether or not the policy committee needs to take on board policy 6022 on the school district's minimum fund balance. Excited about that. Thanks Sean. >> Thank you President Jackson. Members of the board Dr. Calhart. to be here tonight to present once again uh on the minimum fund balance. Uh this is a very similar slideshow that you've seen in the past, but I will point out some

059of the updates in it, but it also kind of reflects the consistency uh that you've been in discussing and presenting since last May. Uh so we really see the consistent and unchanged nature in around this discussion. Uh next slide please. Uh so the goals minimum fund balance uh provide sufficient cash flow for daily financial operations. Secure and maintain investment grade bond rating which again in the past we've seen with our refinancing of our one outstanding bond uh which led to one we were maintaining our Moody's rating but also uh saving uh taxpayer dollars of 6.6 million over the remaining life of the bond term. uh offset significant economic downturns or revenue shortfalls and provide funds for unforeseen expenditures related to emergencies. So the question uh that's posed for all school district boards is what is

060the minimum amount of reserves uh the district needs to achieve these goals. Uh next slide please. Uh so some history our current policy was adopt 5% of uh current year expenditures was adopted in August of 2011 and so there's been just a few minor changes that have occurred since then. Uh our enrollment peaked in 201516 at 7,655. Our current enrollment is at 6,447. Uh assessed value which affects both our levy rate and local effort assistance funding. You can Back in 2011, the assessed value in um that's determined by our county assessor for the district area was at 3.7 billion. Uh the 2026 projection is 8.5. And then also this policy was adopted uh before mccclary. Uh so again that case was decided uh by the Washington state supreme court in January of 2012. Uh but

061we didn't see the actual nuclear league changes. They were not mented until 201819. Uh so since this was adopted we've undergone um you know the entire funding structure of school districts has been overhauled and renovated uh many times over and then also this was again before the pandemic and again at the same time we had our same infrastructure but it was 14 years younger. Uh next slide please. Uh so our current what we're kind of current factors we're looking at this is our current situation using the historical context but enrollment decline as we've seen in Corey's presentation uh enrollment continues to to decline both in actual and our projected numbers. Uh local effort assistance uh fluctuates annually based on enrollment and assessed value. And if the governor's budget proposal uh goes its way, we could

062see cuts to funding at LEA. Um increasing inflationary costs uh continue to outpace states funding. So for example, insurance premiums. [snorts] Um also in the previous uh budget presentation, we had our federal funding uncertainty. Uh it is January of 2026 and we still do not have a budget at the national level. Uh so the fiscal year for our federal government uh runs from October 1st to September 30th. Uh so we anticipated a federal budget at the beginning of October. Uh and here we are in mid January. Um state funding. Uh so last year in June we had to access our minimum fund balance reserves to to the tune of about $640,000 uh because the state did not uh budget sufficient capacity uh in its state budget. Uh we did receive that funding in July of

063the next month at the start of the new uh bienium and the new budget. Um but again um when we were notified of that shortfall, the response from OSPI was like, "Well, you just got to use your fund bass reserves. Sorry, we can't help you." Um and so no one was aware of that, but we had adequate reserves on hand to cover that. Um currently, as we discussed briefly, the uh state legislative session began yesterday, uh January 12th, and it's projected to go on through March 12th. Uh right now the state is projecting a $2.3 billion deficit and for again for the current legislative session we have legislators are legislators [clears throat] already discussing additional tax increases and cuts to services. Um maintenance and operations again uh aging infrastructure both preventative and emergency projects. Um

064for the last couple of years we've transferred roughly $500,000 to our capital projects fun. uh to assist uh with addressing our infrastructure issues. And then again uh compliance with unfunded mandates is always a risk. So for example, the clean energy act. Um this is something the district has to do on its own and luckily we're receiving funding u from the PUB. Uh it will assist with our infrastructure audits, but at the same time um this is an unfunded mandate. So, while the district is working through this, uh there is no set aside from state or federal funding that would assist um with us complying with this act. Next slide, please. Uh so, just for comparisons, uh so a slight update to this slide. So, there is no required new month fund balance threshold. It is

065set by the school board. Um, however, as of I was notified yesterday, uh, news came through that OSPI is looking at proposing a new state law [snorts] to codify the percentage of fund balance reserves uh, for school districts. This is a very early draft that was uh, sent to school districts. Nothing has been filed or proposed in the legislature, but it it looks like OSPI is looking at some sort of uh, RCW for minimum fund balance reserves. Um, I wouldn't say in the near future. I mean some of the early draft language was saying 2030. Uh but what the fact of the matter is nothing is codified now. It is based only on schoolboard decision. Uh but maybe in the near to late future we could see something where we're compliant within RCW. >> Do

066they have any kind of any kind of ballpark on what that would be or do we have any insight into that? So what just was, you know, sent via email yesterday was we were looking at sending kind of a standard based on enrollment. So if you're above 2,000 students, they were looking at, you know, a both a minimum and a maximum fund balances are between six and 12% based on your prior year um aortionment revenues. So that would be what we received from this a percentage of what we received from uh state funding from the prior year. So, but again very rough draft. Yeah. Um so again here the district's current policy is 5% of total expenditures and as you can see would not cover our average monthly expenditures which was last year came around

067to for our average monthly expenditures for the 202425 school year was about $10.8 million. Um if we compare that to our minimum fund balance reserves that's about 8% uh which is also uh currently east school district's policy. Uh and then we have this again in comparisons uh Moody's uh investment uh who will also handle our bond investment ratings. Uh they recommend uh 10.5% and then you have again the state auditor's office and our governmental finance officers association recommending 60 days of cash reserves which would translate to about 21.6 million which is more than our entire fund balance. Uh so again um is a judgment call and so we can take these recommendations into account and some are more feasible than others. Um however sufficient reserves are needed to cover district expenditures and mitigate risk between

068October and April and again healthy and stable financial balance fund balances play a factor in the district's creditworthiness and we cannot rely on a restricted fund balances to address revenue shortfalls or unanticipated expenditures. Uh next slide please. Uh so here we have our finishing out our where we are with our fund balance for the 202425 school year. Uh so again uh this is a slide you've seen before. Uh but you kind of see uh a consistent trend of going back the last four years. And then we have our dash red line at the very bottom which represents our 5% minimum fund balance policy. But as you can see, we have our highest uh peaks in October, April, July, and August. So in October and April, that's when we receive uh local property tax collection for

069our EPO levy. And then July and August are our uh highest uh distribution of state aortionment revenues. And again, we receive those at the end of the school year because the state likes to hold on to the money for as long as it can so we can collect on the interest. uh so we can get our largest payouts at the end of the school year and then uh between and that aortionment schedule is set by state law. So if you were to look up the RCW kind of have the percentage payouts for each month. Um so the real crux of the factor is between October and April there's always a downward dip. So those are the times where we receive the least amount of our state aortment funding and we're not collecting any property tax.

070Well, we are collecting property taxes. They are just not due. They are due on October and April. Um, so we we have to uh rely more and more on our fund balance reserves between October and April. And so generally, historically speaking, uh March is when we are are at our lowest before we jump back up in April. Uh this last year again, there was an anomaly with what happened last June with the state budget shortfall. Um so you can see we got that little We spr back up in July. Next slide, please. So once we take out, so the previous slide showed all of our fund balance reserves. So that also included our restricted balances. Uh here we have our minimum fund balance, our unassigned and our committed. Um so you can see those are

071the reserves that we are generally accessing on a monthly basis to fund dayto-day operations as opposed to restricted um restricted portions. So you can see here where we're at. It's like okay where are we going to fall if we're just looking at our unassigned committed reserves where are we at in relation to the minimum fund balance. So again um the top line our purple line is where we're actually at. So we started the school year at 9.6% % of total minimum fund balance and finished at 8.2. So looking very good there. However, when we start applying our actual policy and what that would look like in reality, uh so if we're taking that bottom line 5%, it's like what if we what if we just drew down we're actually starting the year at a 5%

072you know minimum fund balance reserves. That's what we have. So you can see how low we can get, especially in June where we have the unanticipated shortfall. We will only have about about $15,000 left in our general fund unassigned and committed balances at that time uh before screening back up in July and August. And as you can see, we could also finish the year uh below our minimum fund balance policy. And even with our proposed increase to 6% um we're still falling below we would still fall below that target for 2425. However, if we looked at June, we would be in a much stronger safer position with about $1.3 million in reserves for actually. So again, if we're exactly following our policy, this is kind of how we would plan for the 24 25 school

073year. Next slide, please. So again, here's [clears throat] our budget and forecast um numbers presented back in August. So we have our 5% minimum fund balance. Um as you can see, really the key numbers [snorts] or key row in this presentation is the unassigned balance at the very bottom. As you can see, we're slowly drawing down on that unassigned fund balance. These budget forecasts do take into account uh budget reductions and so we can see 2627 through 2829 that change in fund balance we're drawing down much less and less. So you can see the impact of of our passing our new levy uh is really helping to mitigate the draw down of the fund balance but ultimately you know due to continuing enrollment decline and inflation uh you can see that And we would continue

074to draw down on our undeigned balance. Next slide please. And then again here is updated budget forecast. We have 6% minimum fund balance. Uh so we can see in the 2728 and the 2829 school year uh that we would be uh you see a negative numbers uh both in the unassigned row. So this is demonstrating that we would need to be have to do additional budget reductions uh because we want to be want to that unassigned balance at zero or more. So, anytime there's a negative number, that means we're um we've used up all of our unassigned balance. We would be impacting other balance fund balance reserves which we can't use uh based on the restricted purposes. So, that's kind of factoring in okay even when we're drawing down year after year uh additional reductions

075may be needed uh to stay above um to maintain healthy minimum fund balance reserves. Next slide. So again, each percentage of uh by increasing the minimum fund balance, uh you're shifting about $1.3 million from the unassigned balance to the minimum fund balance uh fluctuates annually based on budgeted expenditures. Um right now our goal is again just to increase it gradually to avoid unnecessary budget reductions. Um and then the goal would be to maintain a minimum fund balance at or above policy level at year end. Next slide. Uh so just to recap uh were we looking at what is again the question we need to ask ourselves what is the minimum amount of reserves? Uh the district needs to operate during the school year and have sufficient reserves to address risks. Again this is a long-term

076financial planning um goals that we're looking at trying to set. We ask ourselves is 5% an adequate amount and again every year the district is drawing down fund reserves to mitigate budget reductions. Um and then we are doing this both in the face of continued action projected enrollment decline and then continuing funding uncertainty at both the federal and state levels. Next slide please. >> Any questions? [laughter] Yeah. Can we can we turn all those graphs the other way? And then [laughter] look at it just keeps going up >> to the right. >> I mean it it seems like with the uncertainty we have and the need because again we talked about this last time if we go to zero we we can take a loan from the state but we end up like paying extra

077on top of that. >> Yeah. you would be and it's not necessarily that you would be successful but essentially you're you're petitioning OSPI for an advance in fund in state aortionment funds. So we would receive that advance to cover our operations to make you know make payroll essentially. >> Um and then uh we're going to get we're going to have to pay that money back on interest. So yeah, so you get it like a month earlier but you're going to be build a month with interest, >> right? >> Yeah. So, so it seems like it, you know, that graph where you're saying at this we go below zero is not something that is very attractive to anyone. >> No. >> Um, and with, you know, my understanding is we're we're anytime we have something that

078goes over knowing we're going to get the money, it's state money for the tech center, >> right? Like we have to cover that >> in the meantime. Yeah. And if we don't have money there to cover, that's a real bad place to be. >> Yes. Yeah. >> And these these forecasts um are with the assumption that we are not going to have any rollovers like any extra money. >> Yeah. I assume when I build the budget, I mean, one of the factors I do in my methodology is I assume that there's going to be no like state bailout, you know, or they're not going to increase essentially they're not going to increase our funding, it's going to remain the status quo. Yeah. Uh so therefore, if they do increase their funding from us, it is

079it helps us improve our projections. Yeah. >> There any way they can anyone's working on legislation to help us get our sooner so that we can start investing them in interest and we can capitalize on the interest that is occurring because right now the state is just using it for their purposes >> and so we get the bare minimum but if we could get our aortionments sooner and put it in our interest bearing accounts then that would cover some I mean >> yeah we would be we would be earning the interest and that would be going towards our reserves. Yeah. >> So currently no I don't see any sort of proposal from the legislature on regarding So on that note, >> so we don't control our our um assigned reserve where we invested. We cannot

080invested. >> So um >> it's already invested. So >> the state has it >> state. So the state treasur has it when it's distributed essentially it's staying with the county treasurer and then so our county treasur acts as our banker and any interest the county treasures earning on that we get that but if it stays with the state they get the interest [laughter] >> let's vote on that >> and I the outlook I mean we all school districts last year got I mean one of the things that had a lot of momentum last year in the legislature was actually further [snorts] delaying um they wanted to amend the aortionment schedule and further delay uh payment out. So all again it would just be shifting more and more of our aortionment payout to July and August

081and finally that bill was defeated. Um but that would put not only the [clears throat] school district but other school districts that are you know I mean severe financial in very more difficult circumstances between October and April. I >> mean, I don't have any more questions, but it to me it doesn't make sense. And and I, you know, I I was the one that brought it up um several months ago because when I think about, you know, if something were to happen, we don't have we can't make payroll on the minimal fund balance of 5%. >> For a month, right? We only have two weeks worth. >> Um and so that's very troubling to me. But at the same time increasing it to say 6% I'm not it's I I given our current projections with

082enrollment um it would be another blow to our district um and our staffing. Um so how I mean you know how do we balance that? I'm thinking can we do 5.5%. Um, and that would get us through maybe three more years before we hit a zero and the unassigned, right? Um, >> yeah. I mean, >> yeah, I think it goes back to the the scenarios I showed um with it's like, well, what would we look like if we were operating at 5%. So, we [clears throat] started the school year at 8 8.2%. If we started at 5% um we would have no at all. Um, especially or you know in a couple weeks at the next board meeting I'll be talking about transferring funds to the capital projects to help the skill center. those funds

083would not be available if we were strictly operating if we actually had a 5% fund balance we were strictly following that we would not have sufficient funds to transfer over to cover the skill center project >> and I think you know it is if as we were uh closer to um passing a bond that's also what we need to be thinking >> well the difference between a bond so that's a great question is so what we have at the skill center is a grant >> so that is based on a reimbursement basis. So we pay first, then we get reimbursed. But the bond, if you pass a bond, you get all the money up front. >> Okay. >> And then you pay back on the principal and interest over 15, 20, 30 years. >> Okay.

084Okay. >> Yeah. I'll just kind of echo what Maria was getting at is I think it's it would be great if we could increase our fund balance because that would be the responsible things to do, but it doesn't feel responsible at the sacrifice of people and operations to bolster our savings account. And so it's like I struggle with it because if we have the ability to project, you know, excess funds in any year, then I think we should put together a goal policy that says if we have excess, it'll be put in our fund balance um and strive for a particular balance over time, but >> it just it doesn't feel achievable at this stage given what we're going through in the cuts and the various things. >> You know, I don't want to compromise

085the services to our students. >> But I mean, yes, but like if we're if we're really legitimately getting to like no wiggle room, that's a really dangerous number to have, you know, like I I see what you're saying like 5.5, but like at some point zero to me is not I don't want to default. I don't want people to not get paid. You know, we have we saved jobs, but no one got a paycheck. >> Doesn't seem like that's a better option. So, yeah. Yeah, I mean I think it's going to be I I think it's the information is is you've given us good information. I don't have any more questions. It's just more like a wrestling with y >> what does this mean for our district? What does it mean for our staffing? But

086like you said, we're cutting jobs, but to protect the paychecks for everyone. >> I mean, I see what you're saying. Um I mean, we we can you can budget really conservatively, hoping that we have a little extra bucket of money at the end to where we continuously build that non unassigned money >> um to that maybe in a year or two we could be like, "Oh, yeah, we now we can make it to 6%." I don't know. I I I'd rather have that cush, right? like could build it without outside of the policy >> and then at some point and we're we're we're capable to transition through the policy. >> Does that make sense? >> Yeah. That's what I support is that's why I say kind of phrase it like a goal. We're going to

087over time try to put these excesses in and then when we get to 6% say okay our our policy now is 6% and we'll never drop below the 6% we've now accumulated. But I I struggle with intentionally saving at this stage right now to the sacrifice of more jobs and and programs and things. And the one question I have is I know we're talking about our unrestricted and we do have various funds. Can we do an if it got so dire could we do an inter fund loan to ourselves that we would have to pay back? I understand that. But do we have enough restricted fund balance where we could do an inner fund loan just to bridge a gap? It would not be possible legally possible. >> Yeah. >> So, if we're if we're

088going to 6% then we have another roof issue and we need $160,000 again. >> Yeah. Like which is what happened at the high school and we're cruising in June at zero. We can't do that. Like there's no even though it's it's money and savings, we wouldn't be able to touch it. >> Do you mean we load it back to ourselves? >> So I guess I guess where loading the money from. So for example, it's like restricted funding is um you know skill center some sort some sort of carryover. A lot of these things are you know or like federal grants. Um those are things that it's like if we even want to use this money we can't because they're prevented from we just legally prevented from doing that. A lot of times if you're seeing

089school districts um you know they're loaning from like they're doing temporary loan generally you're going to see from your capital projects fund. people are loaning their capital, their taking a loan from their capital projects and going through their general. But the problem is we're transferring money from our general fund to our capital projects, you know, so that's not an option. And then, you know, someone will look at our debt service fund or ASB is we have money in there. It's like, well, it's not legally permissible to transfer funds from ASB or debt service to your general fund, even in a loan format. >> Well, and I guess that's what I was trying to envision is and now I see the wrinkles of ederal funding. We probably can't, but you know, in a municipal context periodically,

090you can um you can loan inter fund loan, proper documentation with interest paid back, but loan from say your water sewer revenue fund into your general fund, but those aren't necessarily fally funded or grant funded. It's it's revenue funded or you do have to pay it back because it's a loan, but you could do that in some municipal context. So, I was just curious. >> Yeah. Yeah. No, that's um yeah, the only probably if we were again in the situation as we previously discussed it would probably like be petitioning uh the state OSPI for you know an advanced payment from aortionment. >> Okay, this might be a really stupid question. >> Can't we just model to lower our reserve policy to back to 5% and then freeze up that money? >> That's possible too. Okay.

091So, I guess it wasn't a >> um I I guess what it's not like our retirement plan that once you go up there, you can't go back down. >> Yes. >> Do you know like how about if we went to 6% right now, how like that would directly affect staffing I would assume. So, how many people would that >> it would not right now it would not impact anyone. So, what we're looking is if we're looking at forecast, we probably look at some sort of, you know, I think in the previous slide it was like 2728 was like slide n. >> Thanks, Liz. Yeah. Here. So, if we take that number so again we can see like 2526. So, our current budget is based on 5%. So, 5% is locked into our this year for

0922526. If we move to 2627, you can see the change in the bottom couple rows. Minimum fund balance versus unassigned at 1.7 goes down 137,000. Looks [clears throat] like it did disappear. It moved to the minimum fund balance. So right there and then 2728 as we continue based on this forecast, we draw down at 85,000 at this time. So that means we're falling below our minimum 5,000 reserves. So based on whatever reductions we're doing, we're probably going to say reduction factors would include defining inflationary costs and we have to do $85,000 in additional reductions to um maintain our minimum balance reserves. So that's what that forecast is saying here, >> which could be one FTE. >> Yep. Correct. >> And then the 600,000 that's >> Yep. >> a lot more. >> Yes. on the slide

093before that where we saw the numbers if we stay 5%. I was just trying to extrapolate out how far we thought before we hit the red at 5%. >> So here uh we stay above the red. So >> yeah, I was trying to figure out how far out would we be >> past this in the 30s. we're going to hit red again. >> Well, there again um a number of factors because by 2930 we're going out for new leving and you know that could change our whole discussion as well. Uh and you know probably with likely increased assessed value that may help mitigate um but again putting it out whatever you know we can keep projecting out um but the farther we go there's going to be more factors but again we can enough boost

094in 2930 as well with a new levy. >> Um but again >> in 2930 we get more babies. >> So >> you know goes up all of a sudden I'm going back to presentation but like >> the other the other factor that's actually segue is [laughter] >> again the steepest part of the enrollment decline is occurring in the next four or five years. I mean, we talked about 2037, but if we're able to extrapolate that out, I think 29, you know, going off the top of my head here, if we're going to 29, if we're looking at 2029 or the 20331, uh, enrollment decline between then and out to 20378, that's more like a decline of 250 students, correct? So next four to five years 884 and then the next few years after that it's

095going to be 250 cumulative as opposed to what we kind of experience every year. Uh so again that's going to play a big factor on fund balance reductions as well. >> But if our enrollments are going down so will the amount required based on the policy. Well, it the amount will change or you know it'll fluctuate annually based on whether we're like if we just tag it to budgeted expenditure. So as expenditures decrease you know that minimum fund balance reserve will also decrease just because it's based on a percentage. >> Yeah. But I mean right now our our aortionment is going down faster than our our our aortionment is going down but our costs are not going down as fast. Right. So every year it gets a little bit more expensive to run the district

096>> than what we are getting from the correct >> from our different revenue sources. >> Correct. So, we're constantly kind of this meeting where we're going down in our um money that's in and our money that's going out is not going down at the same rate. >> So, at some point we're going to have to hit the wall of we need to stop. We we can't afford to keep having our, you know, we're going to have to start looking at if it's FT, if it's MS, whatever. We've got to make a cut at some point. So, we're just deciding when that line we hit that line. >> So, Sean, based on your expertise as the CFO of this um school district, what do you recommend? >> I recommend the district move to 60%. Just to

097clarify, the numbers you're showing are including your our enrollment projections. >> They're including all of our other projections. Are they is it also addressing proposed cuts to match those enrollments? >> Yes. Okay. Yeah. >> So, yeah. So, like that slide already includes if we have fewer students that's this x number of FTE that's already worked in. >> Yes. >> Well, and I guess um so just because we changed a policy now doesn't mean they can't can't be revised in a year or two. Um right Mark [laughter] >> Well, if we get to that point where we're looking at another 5 million budget reduction projection and that does take us below that threshold. We could have that conversation what that looks like and take us back down to 5%. That's always an option. >> Um yeah,

098good point. >> So could we make this change now or within the next month? Adopt a 6% fund balance requirement without materially changing our staffing operations for the foreseeable rest of the year. Yes. And your projection is for next year. >> Yes. >> Next year. >> So then so a change in policy would be in effect this this current fiscal year. >> Yes. >> And and you feel comfortable you would feel comfortable with that? >> Yes. >> I feel more comfortable that you feel more comfortable. [laughter] How do we feel? We will eventually we'll have to [clears throat] adopt >> I think I mean our norm has been 5% as far as I can remember right it's always been 5% 5% um um knowing that we can always revert to that 5% um but where

099the state controls it or tries to um you know just knowing that we have that flexibility of Um, yeah. I mean, maybe some verbiage is included in in the policy. [clears throat] >> Yeah. I'm just trying to think like could we do it like it's a renewable 6% fund balance and so we have to revisit it every two years or something to decide if this is the level or if if we do need to have a reversionary. Mhm. I >> mean, it seems like right now we can make this change, reserve the money that we that doesn't impact us the way we're looking at it this year or next year >> and then we have especially if OSPI makes some kind of minimum like we don't want to be in a position where we're that

100puts us in the red. >> Yeah. So it seems I mean the obvious we're not doing action right now but like it seems like it makes sense to me reserve the money while we can and that gives us the flexibility to make that adjustment later with the money in our bank as opposed to trying to scramble it back. >> So technically we would have about two years if we start this academic year before we we can really tell if we're going to need to adjust. >> Correct. >> [clears throat] >> And that will give us plenty of time to not only do the bud budget reductions that we need to for the 26 27 school year, but also the um areas where we're hoping to increase growth in the school district as well and see

101where we land so we can monitor that very closely. >> Yeah. And I think it might be helpful then in the future years of budget discussions then to talk about make sure that that conversation is had when we're doing the budget reduction saying this is what it looks like at our fund balance if we were to dip into this or reduce it in any way to free up some additional funding. These would be you know the less impactful or the things and then we can decide yeah you know we've been a couple years like we can >> adjust. Last question. [clears throat] You feel really really confident that in June we will not need to borrow money >> this June. >> Yeah. Or the next Well, this >> one year >> I No, we're not

102borrowing money in June. >> I was like payroll. >> Well, and the and the process for moving forward based on this conversation is polic 222 would then go to the policy committee for further discussion and it would come to this uh uh board again for first read and then second read. So there are a couple of if anyone is not sure or unclear then we can provide more information as we move forward that >> I was just say I feel like we did a lot of work on like discussing it. So I mean is everyone good moving past the discussion knowing that we're going to see it two more times? >> Yes. Okay, cool. Thank you. Thank you. Appreciate it. >> Thanks, Sean. >> Oh, and then I'll begin. All right. So, action uh or

103our first action or only action tonight is resolution number uh conveyance of right away on Red Road. Um it's kind of Cory's been given us a lot of stuff. Is everyone ready to go? All right, cool. Uh, do I have a motion to approve this resolution? >> I move that we approve resolution number one-26. >> Second. >> All right. Has been moved by Maria and a second by Julie. Any discussion? >> All right. All in favor of approving the resolution say I. >> I. Any >> oppose? No. Okay. Motion carries. >> And you. >> Okay. Superintendent report. I mentioned this earlier, the accelerated pathways marketing campaign, but starting this month, we're launching an advertising campaign focused on promoting our accelerated pathways program at WHS with the aim of proactively attracting new students to enroll in

104this one-of-a-kind program in our region and potentially earn their AA without ever leaving the high school. Students take rigorous college level courses, enjoy a half day schedule, uh have limited no have no fees, and uh do not miss out on the high school experience. So hopefully you'll see the billboards soon. It's it's exciting. Nice job on that, Diana. Um as as I mentioned in our weekly update, um the heavy rains in December brought about a host of known and unknown roof situations that have uh needed to be addressed uh quickly. So most of that uh and the costly uh nature has been at 1 High School, which you mentioned the $160,000 uh mark that we've been at. So, um we're working uh we're we're excited that it's not raining right now. This is good, but

105working Sean and I are working with Brian Brock and our maintenance and operations uh to make sure to mitigate that. One of the things we're also doing, which is exciting, is roof audits. We are looking for potential new problems to address when we have people on the roof. Um so, we can do that now. to the next time that we have heavy rains. Um, bond RFQS. Uh, last week we or actually, yes, it was last week, we received nine submissions from architectural firms, um, who would like to be part of our pre-bond engagement process with our community for our 2026 bond in November. Um, and so that was great to get nine. Uh, we moved five forward that will be interviewing for this partnership January 22nd. So, we're very excited about that. And our goal

106this spring is to uh engage our community uh do tours at Wanchi High School and then learn from our community what they'd like to see in the next 50-year high school. We're really excited about that. Uh and the last one I have is we have some administrator openings. So [clears throat] with the announcement of a retirement of Jeff Jagger at Mission View Elementary, uh we'll have a principal position that will be posted there. So it feels like the end of a great era at Mission View with Jeff Javier moving on. U we also have Donna Bozer continues to lead Wanche High School as our interim principal at Wanchi High School. Um we'll honor our commitment uh to open this position at Wanchi High School. Uh as we do that, we have been thrilled with the

107continuity of leadership at Wanchi High School under Principal Moser. Um and the transition from Principal Anderson to Moser has been excellent. Uh Mrs. Boer is planning on applying for the continuing principal position as well which is also uh great for us. So just a couple of announcements uh as we move forward. Those will be posted in the next week or so. Is that right? Okay. >> Excellent. And that is it for superintendent report. Thank you. >> Thank you. We got move on to board communication. Mark, you want to take it away? Boom. >> Uh, not a lot to update, but I did want to congratulate Caroline who was cast in London. >> [laughter] >> unanimously. >> All right, >> um just I got to attend a couple basketball games uh where the uh the Chris

108the winter break um and both women um girls and boys basketball has shown a lot of progress. >> Well, I feel like it's only fair to congratulate Mark then on his role in League of Leg. Hey. >> Yeah, we're we're running the show here. Um going to Westside High School tomorrow for a visit. Miss Deborah invited um they're doing an assembly, I guess, where the teachers and the students are giving like progress reports on what they've been doing this year. So, I'm really excited to go and see that. Um getting those principal visits scheduled. And then just shout out to uh Rachel Lier at Wachi High School. She invited all of the girls basketball programs at the middle schools to come down and do a shared practice with them in a couple weeks. So great

109getting the program back up. Very excited. >> Thank you, Julie. >> I don't have much, but speaking of basketball, they hot off the court tonight. 4923 W girls beat up. >> So, their first home win in a couple years. Very exciting. Okay. Full team effort as I did not watch. Um but yeah, it's it's exciting. It's just to dubtail on what you said to see the the reach out to the younger team and stuff. I know BJ's been great at the AD role and um I'll just personally say that my daughter had a pretty rough week in basketball last week uh after the tournaments, but BJ sent her a really nice card. So, I thought that personal touch was just above and beyond. So, I just I was really excited about what collectively they're all

110doing and what girls and boys basketball are doing. So >> that's great. Nice. Thank you. Um I had a couple uh Caroline and Corey and I were all at the talent show for uh before the break >> for um for Westside and I it's the energy was very much family talent show and so it was super cool to be a part of that. They tried to get me on stage because of my sweater and I like very much declined. Um but uh it was really great to see like there were a lot of really talent people and it was like great energy, very supportive and no they were a ping contest and no one vomited. So it was a real like a win-win win-win. Um and then last week we did our the Orchard music

111program had their finally had their holiday musical which you know little little late to the game but um they had some problems because they weren't able to have enough space. They had 80 they had beginning band, advance band, jazz band and choir. So they had over 80 student participants and they couldn't find the space. So, um, the high school auditorium accommodated them and it was great to see everyone on stage and it was it's a much more of a official feel and the the kids are great and kudos Mr. Sandberg um for the music department also James Wallace and the rest of the auditorium for making us feel welcome and making it just a great show. Um, and then, uh, I'm also doing my principal, my annual principal, um, walkthroughs, and I really appreciate all

112the principles taking the time to talk with me. They've been very honest success, like sharing successes and also struggles as we're talking about uh, budget and stuff. It's maybe not the greatest timing for me, but um, it has been it's been really it's always nice to go back from the buildings, and it's it's been really great talking with principles, and they've been very helpful. So, >> that's why you're pregnant. That's why. Yes. >> So, I guess you're next. >> Anyway, but yeah, that was it. Um, I hope everyone has a great night and Let's