LSR7 Board of Education Meeting -06/12/26

001Good morning and welcome to the June 12th, 2026 Finance Committee meeting for the Lee Summit School District. We will begin with Facilities Item 1.01, Epoxy Coding Specialist Contract. Mr. Gorell. Thank you very much. This contract is an important part of our Long Range Capital Plan for flooring. We have for many years replaced our old flooring that requires floor finish with epoxy flooring. Epoxy Coding Specialist has been our vendor for about eight years now. We reached out to others for this bid and unfortunately did not have any other people's supply information or bids on Ionwave. So we are recommending a word of this contract. As I mentioned, we have about eight years of pricing data from them and they have been very fair with very moderate CPI type increases every year. So you can see the

002unit pricing that we use to assess to the project on the contract and I'd recommend award and we'll be glad to answer any questions. Good morning, Kyle. This is Michelle. This looks great but I was just wondering if your team had any speculation or knowledge about why nobody else bid? You know, I believe because it's a fairly small community. There's just a handful of bidders that have bid in previous years and they just haven't been low. My feeling is they've probably just felt like they don't have a competitive number and kind of the know where the price point is that ECS has provided us. Gotcha. Thank you. Yeah. All right. Thank you, Mr. Grille. Moving on to Section 2 contracts. Contracts $15,000 and less. I only had one question on the less than $15,000 contracts.

003Yes. There was a line item for digital signage renewal and I was just wondering what service are we renewing? Is there like a software or technology that we have to use to make the signs work or like what is it a renewal of? I believe that's a technology purchase. Mrs. Gretzinger is on the call. Yes. Good morning, Michelle. So we utilize Rise Vision is our software that provides digital signage access. And so the renewal covers existing signs, which are sometimes TVs and sometimes also interactive flat panels are smart boards. And then we also added some new locations with buildings expanding the need for signage. OK, so yeah, you answered my question. Then it's the access to the OK. Got it. Yes. Thank you so much. Physical hardware. It's the software component. OK. Thank you. Thank

004you. Moving on to item 2.02, contracts greater than $15,000. We will cover most of the items that are on this list. Were there any questions about the items that we won't cover later in the meeting? Yeah, I have a few questions on this. So one of them is I know that typically for this past year, we generally skip over ones that are renewals with no increase or this or that, you know, or that type of thing. But when you look at the ones that were skipping here, but they're on the next Thursday's board meeting, they add up to a lot of money and they are all renewals and they are all, you know, I do understand. But it's a significant like I think I did a back of the envelope adding it up and it's

005like a million dollars or something like that. And I noticed that a lot of them are renewals of like the software and the technology that we're using for classrooms. And I wanted to make a point to thank Dr. Barger and her team for all the work they did to put together that list for us of everything that the district buys and the buildings buy for all those needs. And it is it's a huge list and we're spending a lot of money on this. So I'm not sure the best way to acknowledge it. I understand the need to understand that we don't need to go through it line by line, but in June, it just happens to be a lot of those renewals. So I don't know if there were any specific ones I wanted to

006call out. Like NWA is pretty significant and it went down by $94,000. So I don't know if we want to talk to that. Like, how did we, you know, I went and looked at the agenda item on the Thursday meeting and saw that it was because we're using it in fewer places. But, you know, stuff like that. I don't know if we want to talk to any of that. So this is a reminder to everyone on the call, as well as anyone who might be watching the live stream or the recording items that are new and or items that have a renewal, but an increase over the CPI. Those items are the items that we pull off and add to our meeting agenda. If an item, if an agenda item or purchase is renewal and

007the renewal is under the CPI, then we, as you have mentioned, Board Member Dawson, we listed here on this document and it may very well be a very large dollar amount, but it hasn't reached that increase over the CPI. And so this is for everyone's either recollection or information. So, you know, we can talk about any of the renewals that you would like to talk about. You mentioned, you know, the NWEA and how the price has gone down, actually, $94,000. And as you said, it's a result because we're using it, using less sites, less licenses. And so that's going to drive that cost down. Was there another item on this list that caught your attention? Yeah, I noticed that that Markhead Start is listed on this list. And when you kind of scan the list,

008you don't realize by looking at the list, because the contract amount is a large dollar amount, that that's actually a contract where they're paying us. We're not paying them. So is there some way to highlight that? So like we're actually getting a half a million dollars versus spending a half a million dollars. Yes. Well, I'll say this. It's kind of like federal title money. You know, we spend it and then we get it. We do get it back because there is an expense for the for the Head Start program, which is what Mark is reimbursing us for and the busing cost of that. But yes, we can definitely note that, that, you know, in the future, that that is actually funds that they're sending us that grant, if you will. But the reason it's coming

009is that, you know, we asked the board to approve, you know, all contracts and agreements. That's true. It is an agreement, of course, and it's and it is a lot of money. Do we have any concern or discomfort that we're not going to get the full amount this year from? You know, we have we have not heard any signals. You know, last year, obviously, there was a significant delay in these Head Start funds. And maybe a question of we were going to get them at all. That eventually reversed. We have not heard any any signaling that we would not receive Head Start funds or the title funds, the federal funds that we typically receive. Mm hmm. OK. All right. And I think the only other one that I had a question on, I did appreciate

010that we had a few renewal decreases and that was great. But I noticed that the employee benefits contracts are not on this list, but we're going to talk about them later. Is there a reason for that? Are they kind of because they're special or unique? Well, you know, our as you know, salary and benefits for the school district are are a lot larger expense. And in that menu of benefits that we're going to talk about later in the meeting, you know, the benefits of dental life, short term disability, long term disability, you know, those items are are benefits that the district pays. And so those are large dollar amounts that that the district pays. And so we want to talk about those because of the dollar amount that that's associated with them. No, absolutely. I

011was just noticing that they're not on the list. Oh, on this list. They're on the agenda, but they're not on this list. Oh, that's probably an oversight on my part. Oh, so I apologize. OK, yeah. No, I know we're going to talk about them later. And there's a lot to say about that. It's like one of the biggest expenses. So, OK, all right. Thank you very much for answering all those questions. And thanks again to Dr. Barger and the team for for making that list of software, because it's significant. I mean, yes, we've got so many schools and so many grades and so many programs, and it's just so many. I mean, yeah, it's a lot. So thanks. It definitely is. And many people work hard to put all put all that together, put all

012this together. And of course, at the end of the day for our kids, for our students. So, and her staff. Absolutely. Thanks. All right. Thank you. Moving on to two point zero two contracts. Oh, already con. That's it. We are. All right. Are we at two point zero three? I believe we are. OK. All right. Two point zero three. The paper corporation, bulk paper bid for inventory. This is Bataglia. Good morning. In good in April, the greater suburban Kansas City joint purchasing cooperative. That's a mouthful. Put out a bid for bulk paper, which we do annually. And they are they have been the lead agency for several years. Park Hill is the ones that do the solicitation. And then they send it to all the members of this particular cooperative, which are very local school

013districts, Blue Springs, Independence, Park Hill, Lee's Summit, North Kansas City, Oak Grove, Lone Jack, to name a few. So all all sizes of districts, but they're all local. We come together for this bid to get the best buying power that we can. And so Park Hill put it out in April. The bid closed in May. And because of a timing thing, they are taking it to their board June 11th for approval. But we wanted to get it on our agenda. Pending their approval, we wanted to be where we could go ahead and get our approval through our board and not wait for July, because the actual orders for this bulk paper is due the 1st of July. And when I say bulk, it comes on semi trailers. So we we do this contract every year.

014And we are probably one of the biggest supporters and users of this cooperative when it comes to the amount and the size of the district. So we're bringing it forth. Like I said, they sent it to their board last night. I don't know if that's been approved yet. I haven't seen the email, but we wanted to get it in front of you all, pending their board approval to make sure that we were ready to hit the ground running once we knew that they had approved it and we could place our order July 1st. Are there any questions? And you said you haven't you haven't heard the news from the board meeting last night. And I have not. I was on a ventful. It was probably like ours. They probably had several items on there. But

015usually they send us an email in the morning saying it was board approved and, you know, to move forward with our orders. However, we just because of the timing of it, we wanted to get it on our agenda. So I can check and I will have that information for you before the board meeting. I imagine it was uneventful or you would have heard sooner. So it was probably probably best. Yeah. OK, thank you. Thank you. All right. Thank you, Mr. Patagliani. Any additional questions? One of the advantages of belonging to the cooperating school districts of greater Kansas City is being able to have access to to that co-op and be able to make those large purchases. Moving on to two point zero four Wilson language. I see Dr. Kenny here. Welcome, Dr. Kenny. Good morning.

016Thank you. OK, this is it has just a couple of different pieces inside of this twenty one thousand dollars. And so we've been working towards a three year plan for Wilson language. And this started when we hired a current middle school reading specialist, Stephanie Demet, and she was already trained in Wilson reading and she was interested in becoming our trainer. And so we in order to reduce funds after three years, we wanted to start the process of training someone here in Lee's Summit to be our official Wilson trainer. And so this invoice is for her training to be the intern trainer. And then in order to be the intern trainer, she has to have five trainees. And so those those teachers will go through our level one Wilson training. And then it also encompasses eight

017thousand dollars for us to train people initially. So Wilson language, we call it Wilson reading, is really for our most significant students who are need help in reading. It's our most it's our most intensive. Sorry, it's early. Our most intensive reading intervention. We have about 48 students enrolled for next school year. Right. Thank you. Right. Thank you, Dr. Kenny. Are there any any questions? All right. Moving on to two point zero five Clayton Disposable. I believe this is Mrs. Denella. Good morning. This is for our renewal for all of our paper, foil, any of our supplies we use for serving. And although there is an increase this year of seven point seven percent, I've attached all of the industry trends because right now all of that everywhere is gone up. And with Clayton Paper, we

018do not pay a fee per case like we do on a lot of our items. So we save a lot of money through that avenue. And also they have agreed when or if the market goes down, they will adjust our pricing. So we're fortunate on that. They don't lock it in. But we're just wanting to renew because we have excellent customer service with them. No product shortages. And they've just been really good working with us. Right. Thank you. Thank you. So thank you. All right. Thank you. Moving on to two point zero six. Turn it in renewal. Mrs. Taylor. Hey, good morning. So turn it in is our academic integrity tool. It's what we use to determine whether there's been plagiarism in any of our student work. And it is the tool that we are

019using to determine whether or not there's any AI in the work. It is an increase this year of twelve hundred dollars. It was originally an increase of, I think, seven percent. But we did meet with the company and were able to negotiate getting a reduction in that increase. So any questions? Thank you for doing that. We appreciate your work on that. Any other questions? Thank you. Thank you, Mrs. Taylor. Moving moving on to two point zero seven. Notable purchase and renewal. Dr. Etchison. Good morning. So notable is the parent company for Cami, which we've used for about six years now as part of our interactive platform for student annotation and our I.F.P. And that came back at the same price. Cami also notable also came out with a called companion this year, which is an

020accessibility feature. Previously, we had used Everway for the last six years, but we use them as what we call usually it's our accessibility tool. So for that, it would be we've used it around orbit note, but we've also used it around text help. So like what reads to you, what the kids use as the accessibility features. So we had our Kelly Moore, who's our assistive technology person, look at this because it was in beta version last year. So we just looked at it last year. This year, it's out of beta. And when we looked at it, we were actually the features and the Cami companion compared to what we've been using in the past. There's more robust in the translation features and we are actually able to save about seven thousand dollars moving to Cami

021companion as opposed to using Everway based on what they had given us as a renewal rate for this upcoming year. So that's why there is not a price increase for Cami that stayed the same. But then companion is this additional feature under this umbrella company. So it actually is also WCAG 2.1 certified and all the good things and accessibility features. But then they've also rolled out additional languages that may be a little harder to translate that didn't have as many in text help. So when will the Everway subscription end? Is it in July? Yeah. So that would be great. OK, thank you so much. Thanks for saving us seven thousand dollars. All right. All right. Thank you. Thank you, Dr. Hutchinson. Moving on to 2.08 and the next four items belong to Dr. Janeway and

022Dr. Berger. So we'll just let you work through these items. All right. Thank you, Dr. Shelton. Good morning, all. We're going to start with ZernMath. This is a digital resource. It is the only paid digital resource that we do provide for our K5 learners in math. It allows for individual and whole class work through problems, and it is aligned back to our standards. We have been purchasing this for quite some time and we're a little surprised they did let us know last year to see such a significant increase this year and did inquire back with the company. I think what's notable about this increase is that there has been no price increase with Zern for seven years. And so when you consider a stagnant rate for so long and then see a jump, it makes

023a bit more sense. It really is about just catching up with industry costs. We were told there have been several updates as well. There's some new reporting. There's a cool feature where you can look at student performance live, see what kids are doing on their computers in real time. And so there are some definite upgrades, but also I think we're seeing that increase because it's been stagnant for so long. Questions about Zern? No, thanks. You answered my questions already. All right, perfect. Dr. Shelton, am I correct? The next is mystery science? Yeah, the next 2.09 mystery science renewal, yes. All right, fantastic. So mystery science is one of two primary resources we use in K5 science instruction. Definitely an inquiry based approach to learning science. We have just completed at the elementary science level two

024years of curriculum work and mystery science is one of those core resources. We've made a lot of connections to all very aligned. And so one notice for this year in terms of pricing is one hundred dollar increase per building, which is what's contributing to that increase. You know, we also have fun with vendors and the way that they figure their early bird pricing year to year. That also was one of the factors that contributed to this. But again, this is one of those really core resources to which we've aligned our critical concepts and proficiency scales. Questions about mystery science? No, thank you. All right, moving on to 2.10 Gizmo renewal. So Gizmo is a really cool tool. It allows us to simulate hands on experiences without the cost of providing that in real time or

025in physical ways. We've used Gizmo, especially at our middle school level for quite some time. But again, with the curriculum work that's been done over the last couple of years and noting that our high school science classes really do not have a comprehensive universal tool. There was interest in adding opportunities for our secondary students to begin using Gizmo, which is really what's contributing to that big jump is that we've added over six thousand licenses for high school students to have access to this cool tool. So we're very excited actually when you consider that we don't provide a huge number of expensive, comprehensive resources. This feels like a win win for us to provide a cool thing for those high school kids and really not at a significant steep cost. So I do have a question

026on that. So it was in the past only available six through eight. And so was it input from the nine through twelve teachers or was it I mean, how did we switch from six through twelve? Yeah, so part of our curriculum process, as we have worked on scope and sequence, is we've identified we've really made a commitment to our teachers that we will provide a core resource that does the work of teaching and providing the information for those critical concepts and those proficiency scales. And so, again, because we don't have a comprehensive resource as teachers were working through that process, it became clear that there was a need in this particular area, which was highlighted by teachers who were part of the work and the recommendation was made to expand access to all of our

027high school students additionally. Great. And since the license is per student and not per building, does this also include online Academy students or online science students? I will have to go back and double check that to confirm it, but I'll have to look at the itemized part of the licensing. But knowing our curriculum specialist, Greg Matthews, I am quite certain that it does. All right. Thank you. Appreciate it. And then finally, we have my math lab, which is a really interesting when I've gone back, I have not purchased this in my tenure as a curriculum leader. In part because we've had some really interesting purchases as I went back and looked through board docs. Essentially what this is, is access to an online platform that provides students access to textbooks, virtual textbooks, as well as

028practice activities that are associated with higher level college credit math. So it's noted pre-calculus, college statistics, college algebra, calculus and IB students are the ones using this license. We do use a license per student per year. And so this is somewhat flexible based on enrollment year to year. But in the past, essentially the way that they've structured the contracts is that sometimes we buy a one year contract with X number of licenses. And sometimes we have bought a multi-year contract with a much smaller number of licenses, which really yields the same use. So as I have gone back, I think the best way to look at this is really to calculate the per student use on this. And admittedly, this year it is significantly, it's almost double. And that's in part due to a one

029year contract and not a six year contract. So when I look at six year contracts that we've purchased in the past, we're somewhere around $20.83 per use all the way up to most recently $21.25. This year that was significantly higher because we lost the multi-year discount. And that was largely in part to managing a curriculum budget and trying to stay within historical numbers because we had some other significant purchases. So this is essentially a one year stopgap to ensure that we continue to provide access for our students in those courses with the understanding that next year we'll be seeking out a multi-year license when more funding is available. To bring the costs down of the per student use. Yeah, that was really, I think you really answered the one big question I had and that

030is that, you know, there's so, so you were using your curriculum by department curriculum department budget for other things this spring. And so therefore there isn't enough to do the six year contract. And so, so when it's a six year contract, do you pay upfront for the whole six years or is it where you pay in installments or like, so there's no way to get around this? Yeah, that's a great question. With this product and this company, this is a pay upfront. So in our other very large contracts, which we are paying in year one with Savas for renewal for K-5 social studies, but we're in year two. There's some pretty hefty price tags on our HMH ELA resource and our Amplify Desmos resource. So with those really, really large contracts, we're able to split

031those into two payments, but this was not one that we were able. We had multiple quotes that we sought out and really when we just put all of the pieces together, it was necessary to go with a one year with the understanding again that we're going to get back into a multi year in the future. Yeah, that's a shame that we have to do that. That's rough because, you know, you kind of, yeah. Overall benefit. Yeah, yeah, it's not ideal. So the cost savings, yeah, that's a, it's an interesting juggling act with all of our products. Many of our vendors will offer multi year licensing. Sometimes it's a significant discount, sometimes it's not. But it's one of the tasks that we've been working on these last few years, really making sure that we have a

032long term plan so that we can balance the needs year to year across the department, across all of our disciplines to ensure that we really are maximizing opportunities for multi year. But we're just not there yet with this particular one. Now with the length of the big contracts that you're spending the curriculum budget on this year and the length of the one that you're going to have my math lab next year, will they coincide again in six years or or will we be now off by a year and be able to afford another long term contract in the future? That's another excellent question. So one of the documents that my team has been working on is a 10 year plan for all of our resources. It's the best of our ability. We're really trying to,

033you know, stay within our current budget, not expand significantly every year, but also manage those multi year contracts. What's really become challenging is anticipating what the market will look like in six years and not just from a pricing standpoint, but really as much from a practice standpoint. So 10 years ago, we didn't have companies that were only providing digital and consumable access. We were still able to buy texts that we could, you know, that had a shelf life of 15 years or more. And now we purchase these six year contracts and have digital access and then they disappear. So it's going to be really interesting to see in my world what instructional resources continue to evolve into because, yes, we're in a bit of a precarious position right now with this idea of a constant

034turnover of five and six year contracts. I think also we're in a space, you know, where you have made this commitment back to providing digital resources and resources in general to our teachers. And I think as we continue to live what we own, I think we'll get smarter about what's most effective such that we can continue to make really great decisions about how we spend that money and what's actually needed. And we don't get caught up in some six year, you know, completely redoing and getting caught up in those costs. So this is one of those sort of band-aids for a temporary fix as we really try and seek out a larger, more sustainable plan. Thank you so much. Appreciate it. Thank you, Dr. Janeway. And she touched on a topic that I'll expand on

035not only in the world of curriculum, but in all of our departments, we've asked our budget managers to develop, you know, long term plan for budgeting. And so as you think about any of our departments, I think each of them, each of our budget managers would tell you that we were asking for five, 10 year plans on expenditure so that we can budget appropriately, not only in their departments, but throughout the entire district. All right. Thank you, Dr. Janeway. Moving on to item 2.12, Logicalis, Data Center Switching Professional Services. Mrs. Gritzinger. Good morning, everyone. I think you're going to have to listen to me talk for several items here. So the first one up is our Data Center Switching. This is for the professional services for the configuration and the installation of the data center

036equipment. This is going to go hand in hand with the next two items that are all around the data center and the firewall. And this is, as you say in the written description, this we've already approved like this cooperative contract. These are just pieces of it, right? Yes. So all of these were brought with the intention of using the one GPA contract to use as the purchasing vehicle. That contract had been previously approved for this purpose. This is just bringing in those individual pieces. Right. Thank you. 2.13 is the enterprise agreement. This is for the actual network and security products, the actual physical hardware. We do have a little bit of wiggle room in there as far as true ups over the next three years, where if we need to change configurations or add in

037additional equipment, those are kind of already built in. Any questions on 2.13? Okay. 2.14 is also with Logicalis and also under one GPA. This is for the actual firewall services and support. Once again, going along with those other two items. Any questions on this one? No. Okay. 2.15 is our Apple computer and tablet replacements. This can fluctuate greatly, depending on where we are in our cycle and what labs or what devices are getting refreshed. This year, it is definitely on the lower end. There was a significant replacement last year. So this is getting to a couple of labs doing iPads that are used in various ways across the district. Any questions on 2.15? Do the departments go through some sort of process to demonstrate that they need an Apple versus something else? You have multiple

038as you see coming up next, the Dell contract versus Apple. Historically, over the last couple years prior to my arrival, the department worked with different curriculum areas to get to a point of standardization. The majority of our Macs usage and labs are all going to be in the areas of music, art, broadcasting, publishing, yearbook, journalism. And so across the three high schools and into the middle schools, we have pushed to a point of standardization where those have all been part of their like curriculum decision that everybody is going to be moving forward with those products. Got it. Thank you. Yep. So 2.16 is a cooperative agreement. This is with the NASPO, which is, I have to read it, the Interlocal National Association of State Procurement Officials. So it is the NASPO contract and the element

039that we are bringing with it is the Dell market purchasing agreement to purchase the next three items on the agenda with Dell products. Okay, so 2.17. So this is not our full Chromebook replacement. These are basically our loaner devices. So over the last three and four years, we have had our Chromebook lease, which is the bulk of our student devices. But as we have devices that are broken beyond repair, as we have devices that have battery issues, things that it's not feasible to repair. The last couple years we have bought very small like chunks of loaner devices or extra devices to kind of bolster our numbers until we are ready for our new lease coming into the next school year. So this is 1500 devices to get us started with the school year and have

040as replacements. Now I heard some casual conversations like during one of the breaks in the retreat that there's no, if a Chromebook is damaged beyond repair and they have to come and get one of these loaners, there's no cost to the student anymore. They just come and get another one and you guys try to fix the other one. There is a cost. It is very dependent upon circumstance. What we do not do is that we do not have a flat cost, as in we do not have every student paying an X amount of dollars. We have kind of a tiered structure based on what the damage is. So, and then we also can get really into working with the building and determining if the damage is intentional or accidental. We also always keep in mind

041as students and families, financial and home situations and understand that some damages are outside of the control of the student and we do not want to negatively penalize students who are unable to pay. So we do a lot of work with the buildings to ensure that an accident happened, the student is not going to be able to replace that cost of the device. We cover that cost as a department. Okay, gotcha. And if we do have to tell a student or a student's family that they do have to pay because of some sort of intentional damage, where does that money go? Does it go back into your budget? It goes back into the general fund is my understanding. Okay, got it. All right, thank you. Yep. 2.18. This is part of our, we try and

042stay on about a four year replacement cycle and these are replacements for lab devices across the district. There is potential that we will have reimbursement with the enhancement grant funding with Dr. Booth's CTE programs. Great. Do we know what the amount might be for that or? They do not come out with that amount until I forget if it's at the very end of this month or the end of July, but we do not know that information yet. Gotcha. So we have we have budgeted to cover it and we are hopeful that there will be grant funding as well. Great. Fingers crossed. Yep. And then I believe my last one is 2.19. This is Dell Technologies for staff replacement devices. We replaced teacher devices last summer. So this would be support staff, SLC, other people across

043the district who are also working on a Dell device. Thank you. All right. Thank you everyone. Thanks. Thank you, Mrs. Gritzinger. We're moving on to 2.20. Dental Vision Life Disability Plans for the 27 year calendar year. Dr. Herzog, you know, you have this item and then you have the entire next section. So turn this over to you and Mrs. McMillan. Fantastic. Thank you and good morning. I want to talk first about Dental Vision Life and then our Disability Plans for the plan year 2027. So this will begin in January of 2027. We were on cycle to put these out for bid, which we did. There are minimal changes, but I just want to talk through some of them for you so you understand. Dental, no plan design changes recommended in dental. We are going to

044have a one year rate guarantee in dental. Delta did present us with a three year rate guarantee. But it was a significant increase. We chose to go ahead and stay with our one year rate guarantee knowing that we'll have to go out to bid again next year. Which we're fine with because there actually were competitive bids on this, but because Delta did not change and did not increase their pricing, there was no need for us to change our plan and change our provider. So no plan design change recommended with dental. And by the way, dental is paid by both the district and the employee. Okay, I've got a quick question on that. So you got the three year bid. It was going to be higher. So you decided to go with the one year bid

045to keep it flat. So when we're looking ahead at the budget for 27-28, we're pretty confident that the rates are going to be higher, right? I am very confident they'll be higher. Okay. Just confirming that I heard that right. Thank you very much. You are correct. Okay, vision and a vision is entirely employee paid. So there is no cost to the district for the vision plan. We did receive competitive bids and we did choose to change our carrier from Delta to IMED. And major reason why, so in the past, we've offered two plans to our employees to choose from a basic plan and a buy up plan. Most of our employees choose the buy up plan. It's a better plan for them. IMED came in with a very nice proposal, which was to go to

046one plan, but to make it the better of the two to make it very much like the buy up plan. And the cost of this plan is really in between what our previous base plan was and the buy up plan. So we took this to the insurance committee and they were in favor of shifting to one plan to make it simple. And then also for the better plan being what we offer the district. So again, this is all employee paid. The district does not incur any cost for the vision. Oh, sorry. I think I misheard you before. So it's all employee paid. Okay. It is employee paid for vision. Yes, I'm sorry. All right. Thank you. Thank you. You did say that. I just, my brain hurt otherwise. All right. Thank you. No problem. Okay.

047The remainder, basic life and disability and then supplemental dependent life, short term medical, long term disability. These are all separately lined out in the document. However, they're all with the same company. They're all with the standard and the standard did originally bid us these bundled. We had other bidders as well with this particular piece. We actually did hear proposals from one of them. The major reason we chose not to move away was in terms of cost, it was negligible. You can see the cost increases here that are being proposed. So for basic life, going from five cents per 1,000 to basically, or I'm sorry, 0.05 and then to 0.067 per 1,000. So very minimal change there. The other change is in long-term disability from 0.263 or 0.263 cents to 0.271 cents per 1,000. So minimal

048changes. The other company we met with really was unable to, they told us they would be unable to administer our short-term medical leave. They really did not see eye to eye with us on how we administer it. This short-term medical leave aligns with our board policy on short-term medical. It is a very employee-friendly plan for the short-term medical leave. So we chose to stay with the standard because the standard has provided us good quality service. The cost increase was minimal and we felt like it was the best benefit for our employees. Any questions? Go ahead. No, no, go ahead. Any questions on any of the ancillary lines? Okay, so when we look at this in its totality, and I know the health care was a separate piece in a previous month, the overall estimated cost

049to the districts, I guess it depends on what employees select, right? So we don't know the precise number, but do we have an estimated cost and then approximately what that'll be compared to this past year? I don't have that right in front of me right now. I can get it for you. Sarah, do you happen to have that? If I total up the items that are on this board agenda item, that is 1.1 million in board-paid benefits. Like we said, that is outside of the medical, which we will present to the board in September. Oh, September. Okay, got it. But you're right. It will vary depending on plan enrollment as to how many take the dental, how much the district pays towards that. And so that estimated 1.1 million, how does that compare with 25-26

050was not including the health care, which will come in September? And I would say to that, the district premium for dental is staying the same. Life insurance will be going up a little bit, short-term medical leave, same rate as we're paying now, and then long-term disability is going up a little bit as well. We would have to go back and calculate, you know, current enrollment based on projection. No, that's totally fine. I know you can't predict precise enrollment. I just wanted to ballpark. So thank you very much. No, I appreciate that. That's kind of the information I was looking for is just kind of the high level total cost to the district. Thank you. The last piece that I would just share with all of these Anceler lines, specifically the standard, is that they also

051do provide us with a fund, $31,000, roughly, that comes back to the district. We use that as a basically funding, partial funding for our benefits administration system. So we have several of our carriers who will do this. They will, as part of their bid, they will put in basically an administration technology fee that they will pay back to the district or pay directly to PlanSource, which is our preference, to offset our costs that we have for the benefits administration system. So while we do pay these providers for their services, there is some money that comes to the district to offset some of our costs too. Okay. So we have that arrangement because we do our own administration. So it would not be offered like in contrast to a much smaller organization who has them do

052the administration. So that's why we're getting a bad... I'll let Sarah answer that. I think the answer is it might. It depends. Yeah, I would agree with that. And CBIS, they are our insurance consultants. They really work with our carriers and know we like these extra technology funds. So I think they really push the bidders to provide that in our RFP responses. And with the standard, it is a percentage of our premium. And then with Delta and IMED, it's just a lump sum. Gotcha. Now for the insurance or the, sorry, yeah, like the disability and medical leave and all of that, are we expecting significant increases in 27-28? Or do you think it'll just like increase the normal amount? We have three-year rate guarantees, I believe on both of those. So no, I do not

053anticipate an increase. Okay. Good news. That is good news. Excellent. Thank you. So you're welcome. Remember, Dawson, I do want to highlight this agenda item because this is... These services and benefits that we offer our employees at district expense aren't offered in other districts. This is unique to Lease Summit and an incredible benefit to our employees. If you compare what we do for our employees in this area, the ancillary services, as opposed to other school districts, you won't find this kind of district paid benefit. Thank you. All right. Moving on to section three, finance. Dr. Herzog. Yeah. There are several items. The month of June is a busy, busy month as we close out May, and then we move into the new fiscal year at the end of June. So there's a lot of information

054to cover here. The normal finance portion I'll start with, and then we'll get into some of the unique items to the month of June. So first of all, transfer funds. This is a standard item every month of the year. I would say 10 or 11 months of the year, we do have to make this transfer. This is one of those. So we do need a transfer of $5,143,66.36 to move from the general fund to the special revenue fund to cover our obligations in that fund for the month of May. So any questions on the transfer? Nope. Thank you. Okay. Okay. Treasurer's report, the same three items that I do present monthly. I'll go through each of those, starting with the revenue and expense report. So for the month of May, ending May 31st, in terms

055of revenue, I would say that we are looking as good as we possibly could right now from a revenue perspective. Every month throughout the year, it's like almost a broken record. I've been talking about the same revenue challenges. But as we close out the fiscal year, it is nice to see that some of the things that have occurred, that we started the year thinking were a negative, like receiving some federal funds this year that we should have received last year, that's helped on the revenue side. A few intentional moves. We don't have many levers to pull typically with revenue, but a few moves from capital into our general fund have certainly helped us from the revenue perspective to offset some of our local losses that we've talked about or local credits really, and then some

056of our state withholding as well. So that ultimately, all of that has put us in a position where, ending the month of May, if you compare our actual to budget from this year versus last year, we're looking very good. 94.45% revenue received this year as compared to 94.36% last year. So all things considered, I would say this is a very positive revenue report for the school district, given all of the challenges on the operating side. So any questions on the operating revenue? LESLIE KENDRICK No. We've been looking pretty close at this for a long time, so no new questions. Thank you. PAUL Absolutely. A lot of these items are repeats of things we talked about at the retreat, but I think it's great to go through them again just to make sure that they're clear

057for everyone. LESLIE KENDRICK Oh, 100%. PAUL Debt service, bond, capital, I won't really go into detail there. You can see those numbers in the revenue side. And then on the restricted side, just I will reiterate, I think things look fine on the restricted side of our budget. From nutrition services, activity, and before and after school services, those are all coming in either at or better than expected for this year. And then the expense side, I will get to it when I talk about the amendment to the budget, but on the expense side, I'm very comfortable with where we are from an expenditure standpoint in all of our funds. The only fund that I mentioned it briefly last month, the only fund that I think there is a potential for us to go over the budgeted

058amount is Fund 2, mostly due to, well, really two factors. And I'll talk about them now, but then I'll just reiterate them again when we get to the item about the amendment. The first factor is I mentioned substitute costs. That is part of Fund 2, so our substitutes for certificated staff members. That comes out of Fund 2. But the other piece is, and this is a variable that's hard for us to predict, is leave payout. So when we have people retire or leave the district in the month of June, we pay them out for their leave. And that is a variable amount. We don't necessarily know up front how much leave someone is going to have remaining at the end of the fiscal year. So for our retirees, they're going to receive money for that

059leave. For those that leave the district and have leave that they need to be paid for, that's going to happen as well. So that potentially, depending on how much is remaining, it looks like it could be more than last year. So that is a small concern I have. It's not a huge concern. It's just a small concern. We do budget for that, but again, it's also something that is a variable that we don't necessarily know from year to year how it's going to compare. I would say that's less of a concern to me. The bigger concern is most definitely in the substitute costs. I do think we're going to go over budget slightly there. So I've seen organizations handle that differently and different non-profit and for-profit and stuff. And if there's an employee's contract, a

060guaranteed payout of unspent leave, it sits on the books somewhere as a liability or something like that. So if you have a lot of staff members who are getting closer and closer to maybe a retirement year or something like that and you look and that number is really big, you've got that somewhere in your books, you can kind of see do we have a lot of liability in that area coming up like in the next three years or anything like that? Good question. So we did run a report for this year and it looks like it could be a little, I mean, it looks like worst case scenario, it could be $200,000 higher than last year. Because we're cash basis, we don't sit those type of liabilities on our books ahead of time and accrue

061them like some organizations who are accrual-based might do. We book these things when they become an expense or we receive the cash. So no, the answer is no, we don't do it that way. We do have a payroll department that monitors this. So we have a general idea, especially when we create the yearly budget. If we know we've got people who potentially are at this point who have a significant amount of accrued leave and are also retirement eligible, then we can up the budget a little bit. I only say, I don't believe I'm super concerned with the leave payout for this year. It's just a variable that when we get close to the end, that we don't always know with 100% certainty. Now you just threw out a number of $200,000. Is that the risk

062for next year or is that the risk for this month? That's the worst case scenario for this month is what I would consider that to be. Worst case would be $200,000 more than last year. But we've also built in significant increases in fund two expenditures from fiscal year to this fiscal year. So it's not as if I do not believe it would necessarily be $200,000 more than budget. I just believe it could be $200,000 more than last year. So just to say precaution, I actually am somewhat optimistic and I'll mention it a little bit later in the amendment section. I'm somewhat optimistic we'll actually still come in under budget in fund two. There's a piece of me that believes we can still do that. So I'll talk about it more here a little bit. But

063overall with expenditures, I do feel like in terms of fund one and fund two combined, I feel very strongly we'll come in under budget in those two funds combined. And I will get to that a little bit more in the amendment section. But expenditures are tracking very well, very, very pleased with operating expenditures. All right. And you're going to talk about that other, that $2 million transfer later? In the amendment, yes. Okay. Okay. Got it. And then on expenses, debt service, we should have no more expenses coming out of debt service. Bond fund, we should have expenses continue to come out of that fund every month for the next three years. So that will continue to be spent. Capital, we're very close to I think to the end of our capital expenditures for the year.

064We'll continue those in the next fiscal year, but at a reduced rate, which we'll talk about with the budget for next year. And I know back when the bond started, you explained to us how we have to spend a certain amount of the money. We're not in any risk of that anymore because we're spending plenty on all the different projects, right? We are. That's a great question. So the risk we run in bond expenditures is called arbitrage. So the arbitrage liability for us really doesn't exist the way it did previously in previous bonds. So previous bonds, we were actually earning a percentage rate higher than our coupon rate for our bonds. So we had to spend that rapidly in order to not incur the arbitrage liability for those bonds. We're currently not earning, we're earning

065a nice percentage, but we're earning under or below the coupon rate. So we're not at risk there, but there are still spend down requirements in terms of time. I just talked to our representative at MoCat, who is investing our bonds for us. I talked to him yesterday and he feels very confident, as do I, that we are on a good schedule to spend the bond funds as we need to to meet that requirement. Great. Good. That's good news. Okay. Nothing more from me on the expense side. I just talked briefly about the fund balances now at the bottom. All of our restricted fund balances look healthy at this point, and I'm very pleased with all of them. I've mentioned throughout the year, nutrition services fund, if it had met budget, we would already be close

066to a zero balance there, or maybe even a negative balance in that fund this year. So that fund has done a nice job this year, and our staff in nutrition services has done a great job of everything this year in that area of taking care of our kids first and foremost, but then also in terms of the fiscal responsibility, it is fantastic the way that that fund has rebounded in this year. So very happy there. Yeah. Absolutely. Overall unrestricted fund balance, as you can see at the bottom left, this is tracking close to where we thought, maybe slightly better actually, what we thought earlier in the year. So right now, 35.14%, as compared to 36.73% last year. So tracking very good based on all the negative revenue issues we've experienced throughout the year. And we

067know that this is a normal pattern for June for it to be high, and then like that's typical based on what I'm looking at here, right? It is. It is very typical. So well, you know, if we're within a percent and a half of where we were last year, we should end the year roughly in the same position as we did last year based on June expenses. Thank you. Thank you. Okay. I do want to talk about, I'm not sure which item is next, either the balance sheet or investment. I want to go to the balance sheet actually next. So balance sheet, which does mirror the revenue and expense report in terms of bottom line numbers. I do want to just briefly talk about something that I haven't talked about throughout the year. And it's

068certainly not a concern. It's something that I'm thinking about doing that I want to get some feedback from the board on. So in the operating fund, you'll see a line item that you've probably seen all year that's titled prepaid interest. And that has shown a negative amount all year. And it would all year because it's a expense that we paid at some point during the fiscal year where we purchased an investment basically at some point between coupon payments. So at some point we bought an investment. I can't tell you which one and where, but at some point we bought an investment or multiple investments. And because of when we bought it, we owed the seller, the person selling it to us, some prepaid interest so that when we received our coupon payment and received the

069full amount, we wouldn't be receiving excess funds because we didn't own it the entire period. So let's just say, for instance, the coupon period was paid January and June throughout the year. We bought it in April. Well, the person who sold it to us is owed some level of payment from January to April. And then we're owed the rest. So we prepay some of that interest to the seller up front. So we book that as its own line item. And we don't actually have to do that. So because we're cash basis, we don't have to show that separately. We just choose to do it. And so we've been talking to our auditors about whether or not we need to show that. So the question I would have to the board members on the call is

070if we were to move the prepaid interest and remove it completely and just simply put that number in the investment line, which is really what it is, it's a cost against the overall investment number. Would that cause an issue for you all or would it be confusing? I'm just curious because we're trying to simplify our reporting because we are cash basis. So basically, if I was to move the $48,000 negative into the investment line and just reduce that by 48,000 roughly, it would still tie out to the balance sheet exactly as it should be. But there's no real need for us to do it the way we are. Well, I'll let board member Haley chime in on his thoughts, but my thoughts, normally I like more visibility is better. I like seeing that on a

071separate line. But in this particular case, the way you've described it and the fact that we look at the investment sheet every single month, I would say for me, I would be okay with absorbing that into the investment line because, because like I said, we do look at the investments on a separate breakout every single month. And so therefore, we would see where that went. But normally, I think more detail is better. But in this case, I'd be okay with it. And board member Haley had to step out of the meeting. And we can always get more feedback on this at the next finance committee meeting as well. So the next finance committee meeting in July is still talking about this fiscal year's expenditure. So I'm, I can get more feedback before we make any

072changes. It was just a question that I had on my mind. It's interesting, our auditors actually brought it up to us as a, hey, you're doing this and you don't have to, which I always like it when the auditors say you're doing something and you don't actually need to be doing it. So it at least caused me to want to ask the question. Yeah, I think, I think we're not going to lose full visibility in this, you know, because of all the scrutiny that we give to our investments every single month. I would be okay with it. I would tend to agree. And that's why I brought it up. So I will table it and bring it up again next month, just so that I can get some more feedback before we'd make any changes,

073which we wouldn't do until the beginning of the next fiscal year. Got it. Good morning. This is Erica. I just wanted to chime in because I am on the call, but I just want to say I'm in agreement with board member Dawson. I also like to have more information. And so I never think that giving more is a bad thing. So I'm in agreement with what she has shared as well. So just offering that perspective. Thank you so much. Okay. Any questions on the overall balance sheet? Again, this all ties out to exactly what I presented in the revenue and expense report. Nope. Other questions. Okay. Well, let's move on to the investment report. So as that comes up, I just, and I'll just simply, you know, kind of talk about this in general. No.

074So part of the, so by the way, the prepaid interest portion of the previous document is all related to the UBS investments at the top. So that has nothing to do with the most CIPR and MOCAT investments below. We do break out UBS into much more detail than we probably need to, to be quite honest, because if you'll look down under MOCAT, under the bond, the bond 26 term, there's a significant amount of term investments there, much more than what's in UBS. And because of the quantity of investments there, we don't break them out on this report the same way. We could, we could also provide all the statements that we have monthly for that, those investments so you could see those. But we do kind of simplify that down. Hearing what you said on

075the previous document about the liking the investment structure, I will probably keep it similar. We are thinking about trying to simplify a little bit on the investment side, because, you know, right now you see par value total cost. For us, really, the most important thing is the cash basis. What did we pay for the investment? And so I think we're going to come at what probably in July with a proposal to try to simplify the UBS side down to here's what we paid. And here's the interest on average we're earning. So you have an awareness there. I do think there is value also in showing when we have maturities coming and sort of a plan with that too. So I don't have a lot of changes I want to propose on this other than I

076do want to try to simplify the cost portion of this. Yeah, I'm open to simplifying this a little bit. I do the things I appreciate seeing every month are like you just said, the maturity dates, the interest rates on those things that are maturing and the new ones that are coming in at the bottom. But you're right there. I mean, there is some detail on here that I don't you know, it isn't critical for me or for what I'm looking for as a board member. So I'd be open to some simplifications as well. Yeah, well, what I'm saying, I totally agree with each of these, the most important parts of this, the interest rate, the maturity date, and the cost. So I think knowing those things, we'll work on trying to simplify that a little

077bit. Okay. And then again, we'll bring back some feedback. We have no no decisions, no changes until we get to the end of the fiscal year. Okay, and then a question here, I'm jumping ahead a little bit, but in talking about the June budget, which I think you're probably about to do the the the investments that are the UBS ones that are rolling off soon are the 240, 240, the first three 240s and then and then the 1.45. Right? That is correct. Yeah. Okay. And and we'll be discussing those when we talk about next year's planning and cash and all that, right? We will. So you can also see and we've talked about this as well. We have a significant number of investments rolling off in 26, which is abnormal for our term portfolio, we

078typically like to even it out and have more kind of spread out through each of the next five years. In planning for the next fiscal year, we did we did set up a lot of these term investments to mature right around the time of year where our fund balances are at their lowest. So we have access to these. So especially the CDs. So, you know, you mentioned those three CDs, when we lock a CD and we don't have access to it, we can't actually receive those. It's not liquid. The treasuries are relatively liquid. So you'll likely see a recommendation for those CDs to become treasuries. And, and I just had a meeting this week with our UBS invest investment manager. And his thoughts are that right now, there isn't really much of a there isn't

079much of a benefit to going out and buying an agency versus a treasury. He feels like treasuries are very solid, the interest rates are very close. So I would likely recommend also that we when we get to that $1.45 million agency that we reinvested as a treasury. The maturity date on that one, we're going to have so much maturing in October that I may may suggest we push that one out a little bit. But but we'll see we will. I still want us to be as liquid as possible when we get to the lowest points of this year at October, November. But the very nice thing about all go ahead. No, no, you go ahead. The very nice thing about that agency is that's a $1.45 million investment that is our lowest coupon rate currently.

080And so once that one rolls off, no matter where we put it, we will see a coupon rate that is significantly higher. And then our you'll see our overall portfolio, you know, coupon rates are very strong for the current market. In talking to our investment manager for UBS, there's a probably a difference of opinion right now amongst investors on what's going to happen with rates over the course of the next six months. Some believe we're going to see a rate hike. Some believe we're going to see a rate reduction. And that's it depends on who you talk to right now, what's going to happen. We've been talking about rate reductions the entire year. The entire year, everybody who invests dollars for us has said we're likely going to see rate reductions. And now they're kind

081of talking the opposite. So we'll see what happens. But from a from this perspective of our investments, it's great if we don't see a rate reduction as consumers who also are part of the market. I know we don't mind reductions in rates sometimes because they do benefit us in other ways. Yeah, I think you already highlighted one of the things I was going to comment on and that was that agency one that's rolling off. That can only be good news for us. And then also I wanted to highlight for anyone who's on the call who maybe wasn't the last few months, last several months, the one that's rolling off in October that you had just put on in February intentionally making it shorter that at the lower interest rate, the 1.125. That one I'm imagining.

082I mean, that was by design, you know, just, you know, I know you guys plan that and that's, that's a good thing coming up in October. You mentioned all that's rolling off in October, but that was intentional. So that's, we appreciate all the planning and foresight that you put into this. So absolutely. The last thing I would highlight on the investment report is just the very bottom, just a little bit of a note. You'll notice in, in MoCat, there's some term versus liquid on the bond. That's, that is very intentional, trying to term out some of the dollars we don't need immediately. And so those, those term rates, if you average out the, the, what those look like over the, the totality of the investment, their, their rate of return is higher than the liquid

083rate, which is what you want to see. We don't, we don't need to go out and buy term investments if we can simply just buy liquid investments that are going to yield us more. These do benefit us, especially on that, the, the large amounts of bond that, that's going to earn 3.645, that's locked in. Those terms are locked in regardless of what happens with the rates. So if there is a rate reduction, which, you know, still could happen potentially, we're going to be locked into that higher rate. So I really appreciate the work that our investment managers do to truly look long-term at how we can, can best maximize our funds. There's not, not, you can't take any risk with public funds. We can't go out and, and we shouldn't, but so our risk is

084always minimal. It's very minimal, but I like it when they're, they're looking out and trying to maximize that for us. Yeah, we appreciate that. Absolutely. Okay. Any other questions on the investment report? Nope. All right. I think that's the end of the treasurer's report. So I believe the next item is to talk about the amendment to the 25-26 budget. So I mentioned this briefly during our, the treasurer's report about the reason for the amendment. So we, I could have amended a significant amount of this budget at this point, based on what we know. We are only required to amend where we feel like we may go over budget and I'll just be further transparent. Our auditor has told us that we could, if we chose to, we could actually just wait until July and amend

085back to what actually occurred and still be within the law. I don't like that necessarily because I don't think that that shows that we're monitoring, we're watching, we're looking at what's occurring and trying to predict it. So I do like to, to make amendments in the expense side. On the revenue side, we don't, we aren't required at all to amend that. So I didn't, even though we probably could and we probably know it's going to be different. So the major amendments to this budget, there are only two, is the amendment in fund two and I was very, I padded this more than I probably needed to. I'll just, I'll admit that. I don't believe we're going to expense this, but I essentially took what our expenses were going to be for the year and added

086half a percent and I felt like half a percent variance was reasonable. If we ended up a half a percent within a half percent of budget at the end of the year, I would be comfortable with that. So I used a half a percent and that, and actually on that large of a budget is $843,593. So that fund two dollar amount is increased on the expense side by that number. I do believe there is a, oh, go ahead. No, no, go ahead. I do believe there's a good chance, there is a chance that we'll still end up under the original budgeted amount, but I also feel like there's a larger chance we'll go slightly over. So I just wanted to make sure we had enough variance there, but we didn't have to come back and

087amend again in June, I'm sorry, in July. So I feel very confident that we'll come in under this number significantly. I'm very comfortable with that number and I think it puts us in a good position to end the fiscal year. So I'll pause there on that piece and then I'll go on to the next part of the amendment. Okay. So just to be clear, you came to the $843,593 number using just a 0.5% increased number, but you do believe that the additional substitute pay and the and the retiree leave payouts and everything, you believe they're going to be at or under or maybe slightly over that 0.5%. Like you didn't take numbers and add them up and say, oh, it's about 5%. I did do that initially. I did take what I think the sub

088pay is going to go over, which potentially could be $300,000. And then I took the largest amount that I thought could probably happen with our leave pay, which is $200,000. And so that gave me a $500,000 number that I believe is reasonable. And so I went ahead and chose the 0.5% because I felt like I was comfortable with that number. And it gave us a little bit of excess padding just to make sure in case something unexpected occurred, which I don't believe is going to happen. I don't believe we're going to expense it. I just want to make sure the budget can handle any variance in June. So that's where I came to that. And I felt comfortable just increasing it by 0.5%. Okay. Thank you. And then the other major change, which we've talked

089about numerous times is the capital transfer. It was budgeted for a $2 million capital transfer out of the operating into the capital projects fund. So we've talked about it for the entire year. And I just want to go ahead and put it on paper that we're not going to do that. Make that we've done enough. I feel like our budget managers and capital projects have been very responsible this year in keeping our expenditures under budget significantly. We have redirected some revenue out of that fund into fund one intentionally. I still feel like ending on the amendment, ending the fiscal year potentially with a $4.5 million fund balance in that fund. Given the fact that most of our maintenance and operations is being funded through bond currently is reasonable. So that's why I went ahead and

090recommended the move out of capital projects. I'm sorry, the move not to transfer the money from general to capital projects. So those are the two major components. Okay. So the full 2 million, it's not like the 843,000. It is unlike that in that that's being spent on specific things on like the substitute pay and the things in the budget that we expense. The 2 million is going straight to the fund balance. Is that right? To the 25%. It is no longer an expense on a fund one. So it is not going to be expensed at all. So it is a direct increase in our overall fund balance. Thank you for clarifying that. Absolutely. All right. Any other questions on the amendment? Okay. Next item is to discuss the preliminary budget for 26-27. So this was

091discussed at length during the board retreat last week. And I appreciate all the conversations around budget that we had as a large group. I feel like this budget is a very good, accurate reflection on the revenue side of what we believe is going to be the case with reductions in funding, both local and state. So if you look at the overall number, that number that I have budgeted for revenue on the operating side, the 277,064,725, that number represents about a $7 million roughly decrease in revenue from this fiscal year to next. And those are completely tied to local tax credits and reduced state funding. Those two are the biggest drivers of that number. If those two weren't in place, we would be looking at a very balanced, for the most part, budget for next year.

092Or very close, I guess is a better way to say it. Very close to balanced budget. I think I would also just simply state that this includes the increase in potential in revenue based on the Prop C waiver that our voters approved. So had the voters not approved that Prop C waiver, this would be an even more, this budget would be more negative than it is currently. So that includes the increased revenue from Prop C. So overall, a $277 million operating budget for revenue next year. On the expense side, I'll just highlight a couple things on the operating side, and then I'll pause. Our largest expense increase in FY27 is salaries and benefits. These were known increases. So we gave our team Lee Summit recommended step movement, and then also recommended a $975 increase to

093the teacher base with a corresponding percentage to the other schedules. And then we knew in the fall, we approved our insurance rates for this particular year, we were going to see an increase there. So this budget builds in a little over $10 million of increased salary and benefit costs for FY27. But the overall number for next year, the $286,774,632, is just a little over a $5 million increase from last year. And that is doing part, that is due totally in really two things. The capital transfer that we're moving out, we're not doing now, but that's part of that difference. But also, and this really is a credit to our budget managers. I went to our budget manager and asked them to reduce down their operating budgets by 10%, which is the biggest driver of most

094of our operating budgets in the district is supplies. And so they were able to significantly reduce their supplies costs for next year. And I really think that that has helped this budget quite a bit. You'll still see it's a negative $9.7 million budget for next year. But I believe our budget managers did a nice job of trying to reduce down expenditures where we could. And that negative number, in my opinion, is due in large part to the state and local revenue issues that we know were occurring, and that we currently have no ability to impact what they're doing at both those levels. So I'm going to pause for a minute. I do want to talk about the other funds, but I just want to pause and just talk. Any questions on the revenue or expenses

095for operating for next year? I did. I'm just not sure where to start. This is so much. I mean, you answered, we, I really appreciate all the time that we spent on it last week at the Board Retreat. It was extremely helpful to do deeper dives into all these details that you're showing us now. And I'm still digesting the book. There's a lot there. So I don't even want to touch that yet, but I'm still processing. But so would we do a budget amendment if there's a decision in the future to, like in September, to change the tax, like take back some of the rollback? Would we do an official budget amendment like the following month or whenever that went into place? Yeah, we would. And we're actually required to do that. If the tax

096rate we set significantly differs from the budget, which potentially could, depending on what's decided, then we most certainly would amend the budget to show the difference in revenue at that point in time. We can amend the budget just so you're aware. The budget can be amended every month throughout the year if we choose to. We just typically don't. We could also amend the budget on the expense side if we feel like we are seeing expenses that are off significantly as we start the year. We could also make changes there. But most definitely, based on the tax rate, we could change the budget if the tax rate that is set differs significantly from this. And would we make a budget amendment if we got something official from the state? I know they're kind of all over

097the place with the state funding and they say one thing and then tell us it's going to be lower and then it goes back and forth. If we ever got a firm number from them, like when they update the foundation formula, for example, would we do an amendment for something like that as well? If it was going to be significant enough, I would say yes. The answer is yes to that. The nice part about the state funding is it does come in monthly and you are told every month what you're being paid at, what the state adequacy target is. So the calculated state adequacy target for this year and next was $7,145. This year we are being paid right around $6,900 and we are being informed from the state to budget for $6,900 next year,

098which is what we did. We did that in this budget. The difference in $6,900 and $7,145 is roughly around $4.5 million of revenue. So I would say yes. The answer is if we knew and we're confident at some point in the year that we're going to continue to receive that amount, we could make a budget amendment on the revenue side for that as well. So yes, the answer is yes. Okay. So you just said the difference in SAT is $4.5 million? If they were to fund it at the highest level that they have told us, yes. Versus the budget, versus what's in this budget. This budget is based on a $6,900 payment for that. Okay. And what is the state, I think you told us this last week, but if you could refresh my memory,

099what is the state transportation funding assumption that's in this budget? The state transportation funding assumption is slightly lower than this year, but just slightly. So I believe there was six, we budgeted $6.8 million in transportation revenue for this current fiscal year. For next fiscal year, that number is $6.6 million. So a slight reduction based on what we're being told. And so to generate that number, we looked back a couple fiscal years prior just to see what the payments were. And we took a percentage of that as a conservative estimate of what we believe we would receive. So about $200,000 less. And this year we're being funded at FY24 rates and that's what got carried over to next year. And of course there's always a little fluctuation as districts have a little bit difference in expense

100history and what they report. Thank you. Appreciate it. And not to go backwards because we spent a lot of time on the current budget, but that transportation, slight transportation underfunding this year, we just covered from our own general funds, right? That is correct. By statute, they're supposed to cover 75% of transportation costs and it's in the low 70s. I can't remember the exact, maybe 71, 72%. So they're just under what they're required by statute. Thank you. Appreciate it. Okay. Thank you. Okay. I do want to shift over then to the capital projects fund and just kind of note what's occurring there. So you'll notice a significant, well, similar revenue in capital projects is what I'm planning on for next year. And capital projects revenue just for everyone's awareness is essentially funded by two major sources.

101One source is that we do put a portion of our levy, five cents of our levy goes into capital projects. And the other portion is our merchants and manufacturing tax dollars that we receive, about 70% of those funds go into capital projects revenue as well. So I'm planning on the same amount going into capital projects for next year that we did this year. On the expense side though of capital projects, that has been reduced significantly, which I was very pleased with because we currently can do this because of our bond funds. Our bond is funding a significant portion of maintenance and operations capital projects. So we currently, for this fiscal year, certainly can move forward and you'll even see the very bottom, an increase in fund balance because of this. So very comfortable with capital

102projects, even without the transfer. I will also say this though, beyond FY 27, I don't like this model. I think we need a better model to ensure that we have a strong capital projects fund balance when we finally expense our maintenance and operations portion of the bond. We'll need to continue to use those capital projects for purchases like buses, technology infrastructure, other large capital needs around the district. We need to continue to fund those and have a plan for the future. I'm good right now. I just want to make sure that we note that we're going to have to move back to a transfer at some point from general to capital to continue to build that balance. Okay. So can I clarify then? So when we, a few minutes ago, we were talking about the

1032 million transfer from general to capital and how we're not going to do that. And then you're talking about the budget being the 5% merchant and the 5% of the levy. So that's all transfers from general that we say we're going to transfer this much and then you're saying we're going to do less. Great question. No, those are not transfers. So that is money that we have budgeted to go into that fund as revenue initially. So it's not money that's moving from general to capital. It's money that we have designated for capital revenue upfront. The line item you see down below under transfers, when there's a number from general to capital, that's a budgeted transfer and we're allowed so much by state statute that we can transfer over. So we're continuing in capital to put

104revenue into it to offset our expenditures and then hopefully build a small fund balance. We will need that fund balance to be larger in the future so that we can maintain our facilities and all of our equipment that we need for the district. And if the board votes in September to increase the taxes, would your proposed amendment to the budget include a larger balance in that fund? That's a great question. If that were to happen, then we certainly could consider a capital projects transfer at that point. And we would have to look and see what that number does and decide if it made sense based on what the levy was, what our revenue looked like versus expenditures for this particular fiscal year. In future fiscal years, it most certainly would include a capital transfer. I'm

105still uncertain about this year and I'll be better able to answer that question probably in October. Yeah, gotcha. Totally respect that. Okay, the type of thing that I would want to see at that time if the board is going to continue to discuss and consider these things is when that comes is what do the years without a large bond that we're spending down look like? Because like you said, you're saying, well, in future years, we're going to need a little more. We've got to continue to do these capital projects. And obviously, I agree with the district this large and the expenditures that we have. So I would want to see since I've only been on the board for a year, I would want to see what a year where we're not doing capital projects out

106of the bond would look like or fewer projects like when we're winding down a bond or something like that. But that's for future. That's for a future day. It's awesome what we could easily do is in a future board update. Dr. Shelton has this spreadsheet of what we spent capital projects each year that is not part of the bond. So you can see what kinds of things we do. But a good way of looking at it is every dime that we don't put into capital projects, that's more repair and maintenance we don't do. Right. Exactly. Yeah. And we don't want to build up. And so I think when we looked last time, we had a twice as much need as we were funding. And now we're funding that at a lower rate. Things catch up

107with you over time. They really do. They really do. Yeah. And we just don't want to end up in a hole and have to be having tough conversations three years from now or something. Yeah, absolutely. Thank you. Okay, debt service. I won't spend a great deal of time here. We do have an 87 cent debt service levy and that is where the majority of the revenue comes from for debt service. I will note that the tax credits that I've talked about that impact our operating fund, they also impact that debt service fund as well. There's an impact there, which you'll kind of see at the very bottom line. We are at a negative, we're going to lose a little bit of our fund balance, which means we're not bringing in enough completely to make all

108of our payments for next year that we're anticipating. That to me is not a problem for next year. That fund balance is significant at this point. And I believe we're positioned well to take care of our debt that we have outstanding through our debt service levy of 87 cents. So debt service is in a good place in my opinion. If the tax credits were not in place, it would be an even better position. So I'm very, very comfortable with debt service at this point and being able to pay off our obligations. And that number in expenses is exactly what is in our debt schedule for next year that we will owe in our general obligation bond payments. Any questions on debt service? No. Okay. Restricted, I will simply on that, that is typically been made

109up of three funds. In the past has been nutrition services, activity, and then also before and after school service. You'll see at the bottom of this particular budget that I have removed before and after school service from restricted. And what that means is the revenue and expenses for before and after school services will now be part of and are part of in this budget, the incidental fund, the fund one. So they are no longer included in the restricted funds. So that is only nutrition services and activity. Activity is typically a break even. So we budget revenue and expenses exactly the same for those. So there's a, there's, it's in the budget book, there's $3.9 million of activity dollars in revenue, and there's 3.9 budgeted for expenses. And those activity funds are designed to do exactly

110that, bring in exactly what they need to expense. So the remainder is nutrition services. You'll see a negative fund bounce at the bottom there of about 777,000. I would just simply say that I don't know that I believe fully that we're going to have a negative in that account again next year. I did increase revenue in this particular fund based on a potential meal price increase for FY27. We this year came in well under budget in our expenses, mostly in the area of supplies. So food costs are variable. They're tough to really try to budget for that large fund there. Even though that shows a negative amount right now, I believe we'll know relatively early in the fiscal year with nutrition services, how that's tracking, and if we need to make any adjustments in the

111future we can. But I feel good about the restricted side, even though it shows a slight decrease for next year. And we're, the board is voting on those meal prices in, what was it, July or August? Something I believe is in, I believe it's in July. I believe it is in July. Okay. And so that will firm up part of this. And your assumption is that that there will be an increase and that the board will approve it and that's in the budget? It's in the budget. It's an assumption right now and it could always be changed on the revenue side if things were different. I did go ahead and add it in because I think it more accurately reflects what the Pratt had recommended earlier in the year. Yep. Yep. Thank you. In the

112final fund is the bond fund. So on the revenue side, the only revenue in the bond fund will be interest. And I was extremely conservative with my interest estimate here. I think we'll be higher than 3 million. Just, I believe we will be. And if we come in significantly higher, I can amend that, but I was conservative there. And then the expense side, that is the exact expense number that Mr. Gurel has given me for all the projects that are planned for FY27. If that ends up being more, that's fantastic. I'm happy to amend that budget and make it more. If we're getting projects done and moving on to new ones in a timely manner, I'm happy with that. But that estimate is based on his projections for next fiscal year. Mm-hmm. And I saw

113that there's a, I can't remember which project, sorry, I have too many things in my head, where there's some change orders and stuff and he's going to keep them all until the end and then get the board's approval on all of them. And I think according to what he wrote that's in the budget, right, it's already part of the project's budget, they do build in contingency in the bond budgets for those projects. So yes, they built, I believe he's built that in. Great. That should be coming at the August board meeting, board member Dawson. Oh, great, August, yeah, thanks. Okay. And the last thing I will share is our ending fund balance, the bottom, and you'll note that that is a significant decrease, 9.7 million roughly of a decrease in our fund balance, which puts

114us at a projected 21.88% at the end of FY27. That would be below the CSIP standard for our fund balance, is also below where I'd like to be as well in fund balance and that was talked about at the board retreat. And that is a result of the decreased revenue that, and we do have more expenses next year based on salary and benefits, but large reason for that is the decrease in revenue for next year. And we talked last week, but if you could share here as well, at a 21.88% fund balance at the end of next year, what does that approximate to in our low month? Is it October, November? October, November, our lowest point is going to be once we expense, typically when we expense payroll in November, because November is right before

115we start to receive our tax revenue. And tax revenue can come in at any time in December. We've gotten it early some years, we've received it very late some years. It's an unknown. So that could be as low as a 5% fund balance potentially. I think this particular fiscal year, we started at a 26% fund balance and by the end of November, that fund balance was around 7.5%, I believe. So if we are starting closer to 22, we could easily see a fund balance of 5% or below. And what that just for everyone's knowledge, what that really does is it puts us in a very difficult position to be able to meet all of our expenses during those low months of the year where we're not receiving the revenue. And that is something that I

116monitor very closely. That's why when I say that number concerns me, it certainly does concern me for those months. And yesterday's update, you'll see scenarios. So if we are funded at $6,900, which we're hoping that young people do spend as much in gaming that creates the funds that haven't been there in past years to get that $6,900 SAT, not only do we end 21.88%, but then it projects out the next two years to be ending the year at 18.03% and then 15.67%. So it's not just next year. That's assuming a 3% growth in expenses and 3% growth in reassessment, 1.5% revenue growth in non-assessment year from new construction. We have several scenarios for what happens then. Right. Yeah. And I did want to comment before the call was over that I really appreciated those scenarios.

117That was extremely helpful. And I'm still processing those, but that's exactly the level of detail that was really helpful for me to kind of get my head around different scenarios. I'm definitely going to rely on those here for the next several conversations about this. And I think Dr. Buck just touched on this, but yeah, I think the impact, like you said, that we're going to be at about 5% at that low, but then if revenue were to stay flat or keep trending with all the situations we have locally and at the state, what that November fund balance would be in 2027 would be below 5%. Right. And I think Dr. Buck just said that, right? Yes. That is accurate. And just, when that occurs, there are mechanisms that exist in the state for school districts

118to be able to make sure they can meet expenditures, but they require what's called a tax anticipation loan or a note. We certainly don't want to be in a position to have to do that. Some districts do, but that's what it causes. It causes us to have to take out a short-term loan against our tax revenue that we'll be receiving the next month. Yep. Yeah. And we don't ever want to find ourselves in that situation in November. Yeah. Like wondering if we can make payroll without being and having to get that note. Yeah. We don't, at least someone doesn't want to be there. I agree. I would agree with you 100%. Okay. Any other questions on the proposed budget? I did just want to focus in here. The budget book matches the one-pager in terms

119of overall numbers, but there is a there's a lot of detail in the budget book that if anyone is interested in looking at, they are certainly welcome to. I feel like it is a very comprehensive look at the entire district budget and what goes into building that budget. So were there any questions on the budget book that I can answer? Not yet. It's still processing. Yeah. I want to thank you once again for those scenarios that you put into the board update. That was extremely helpful to kind of give some like context to it. So I appreciate it. On those scenarios, there are a number of assumptions built in that if those assumptions were to change, we certainly could change those scenarios. But I think those are relatively solid assumptions at this point. Right. And

120that might be a question, a future question between now and September where we might say, okay, we just heard this from the state or we just heard this from the county. Can you give us one more scenario row with this assumption, you know, or something like that? Yep. Absolutely. Thanks. Thank you. Okay. One thing that's remaining on the finance section, and that is the resolution regarding the prior voluntary rollback. This was also discussed at the retreat and I wanted to discuss that now as well as it's going to be an item on the agenda Thursday. So what this resolution does is it provides options. I think that is the most, that is the simplest way to describe it is there's a non-binding resolution that provides options. So currently the school district, at least some of

121our seven school district has a voluntary rollback of our tax rate of 65.24 cents. So 0.6524. That was put in place in 2023 and in an even numbered year, the school district, the school board has the option to set a tax rate that no longer includes that rollback. That rollback could be restored. In order for the rollback to be restored or the option to exist to restore it in September, this resolution needs to be adopted by the board of education. So that's what this resolution does. I believe it says in there numerous times it's for the purpose of calculating the tax ceiling. It is not binding. It does not set a tax rate, but it certainly gives the option to calculate it at the voter approved ceiling for the school district. So what questions can

122I answer on the resolution? We talked about it quite a bit. I feel good about it. Okay. Well, with that, I believe we are at the end of the finance section. Thank you, Dr. Herzog. Section four, the future agenda items. This is a document that we provide the committee to look forward in time here to determine agenda items that are coming before the board being considered. Board member Dawson, you mentioned mill prices. That will come to the board in July with an anticipated increase of 50 cents for lunch. And then there's a list of other items that are coming as well. So we just provide this as a reference point. And if there are any questions in the future that you have, please reach out to the budget manager or project manager for those items.

123As you know, the staff works sometimes months in preparation to bring something before the board. So there's a lot of work that's going on leading up to the agenda items coming to you. Yep. And we really appreciate all that work. I know how much it takes behind the scenes to get to what appears simple and high level. It's so much work to get to that point. And I really appreciate all the hours you put in and all the detail that you offer us. And just the diligence that you guys use to get multiple quotes and to come up with different scenarios and to look at our options and to save us a little bit of money where we can, but give our students what they need in the classroom. And we appreciate that. Thank you.

124Thank you for being here today. That concludes our finance committee meeting for today.