School Board Meeting of Trustees Study Session 05-26-26

001Great Spanish language, Michelle. Worldly online. Do I have a motion for approval of the agenda? I move to approve the agenda as presented. Second. Second. All in favor? Aye. Public comment in the room? Please go ahead. Okay, it's on. First thing I want to say about public comment is I want to make sure that you all remember to turn on your microphones when you're talking because I've looked at a lot of YouTube videos where not everybody's microphone is turned on. It's very hard for the public to hear what you're saying. Okay, my name is Leigh Cavalier. I'm the founder of Sonoma Schools Alliance, and I'm addressing item 6.1 of the 226-227 budget development discussion. California Education Code 5206 requires that the LCAP and the district budget be adopted concurrently and to align. The 2026-2027 draft

002LCAP currently shows a minimum proportionality percentage of 3.593%. The required MPP for the next year is 14.833%. This is an approximately $4 million shortfall in services that must be principally directed towards unduplicated pupils. You cannot adopt a budget that does not close that gap. State law doesn't allow it, and the Sonoma County Office of Education will not certify it. I sent these findings in writing to Superintendent Sutter, to outgoing Educational Services Director Christina Casillas, and to every member of this board. I've received no subsidence responses with the exception of Sutter, Superintendent Sutter, but you didn't answer all my questions. As a part of the budget discussion, I'm asking this board to address three specific items on the record. First, the unspent carryover from prior year supplemental and concentrated funds. Where is it? How much is

003it? And how is it being programmed back into the 26-27 budget? Second, the contributing actions that were underspent in 25-26 year. Underspending contributing actions in state flag compliance issue and it directly affects the MPP calculation for the year you are now budgeting. Third, resolutions 26-32 and 26-33, which eliminated the wellness and inclusion director, three librarian positions and eight positions serving bilingual students. Every one of those positions were tied to the LCAP funded services for unduplicated pupils. You cannot reduce services to the very students that that supplemental and concentration funding is designed to serve and then claim proportionality. The math does not work and the law doesn't allow it. The 3,100 students who remain after Presswood closes deserves a budget that complies with state law. I'm asking the board to direct staff to bring back the

0042026-2027 budget with a clear plan to meet 14.833% MPP with carryover accounted for line by line and with the eliminated LCAP tied positions restored or replaced with an equivalent service plan. Thank you. Anybody online, Michelle? Okay, great. Ready to go then on bottom six point one. It seems odd to use a microphone in such a small Got it, okay Thank you all for allowing me this opportunity to meet with you today. I was hoping to kind of give you a brief update on where we are so that on June 11th when staff comes back to you and presents at the public hearing both the LCAP and the adaptive budget, you'll have some context for what we put into that and also so that I can make sure that we're ready to answer any questions you

005might have at that time. I've got a PowerPoint presentation. It's very brief. I just want to start by saying I started May 5th. That was three weeks ago. have not had a lot of time to really pull together a much more formal, comprehensive presentation as I would have hoped to. My focus has been really in drilling down into this year's budget, making sure that we're going to bring to you a budget revision for this year so that you can understand what was the impact of all of the tentative agreements that you approved. What does the ending fund balance for this year look like based on those agreements? Any other significant changes like utility budgets, for example, we analyzed and said, you know, what? What impact did that have? The reason I always like to start

006with the current year budget is to make sure that you have a solid understanding of how we're ending or projected to end this year so that you have then a realistic view of going into next year and what the implications are. Because you've given all of these raises late in the year, it's important that we not only disclose that through AB 1200, which you've already seen, but also so that you can see what is the actual impact once we budget all of that stuff so does that give you some context for why we wanted to meet and then from there i wanted to go on and give you really a more detailed analysis of our revenues for next year Because as a basic aid district, it gets a little bit more complicated with all of

007the RDA, etc. And then talk to you about the process we're following for developing next year's budget. I'm not going to have a lot of detail in all of the expenditures related to that. The budget is about 95% done right now. We're not quite finished, and so that's why I don't have more detailed information for you. But to really speak to the process and the steps that we've taken to ensure we're going to be able to present to you on june 11th a really solid budget plan for next year as well as one that supports the lcap so does any questions about kind of what we're doing or okay good so um and again this is thrown together pretty quickly because i haven't had a lot of time my focus has really been on trying

008to analyze your budget and getting my arms around it and i would say that it's been like a big puzzle because of the school closure and all of the resolutions that you did to address that school closure to try to map out where all those pieces landed. And at which school, it took a bit of time. I'd also like to just start by acknowledging Kristen in your HR department, who has really been a huge support for me trying to do that. I could not have done it as effectively without her help. So I just want to acknowledge her. So anyway, going to the first slide. So we're going to, again, start with the 2526 key budget information. And again, or I should say, please feel free to interrupt me. I have no problem. Like, hey,

009I've got a question. So please feel free to stop me if you have a question. You want me to go into more in-depth with any of the items I'm going through. Okay? And it's nice to meet you. And by the way, I was here, I was sharing with Jason. I actually helped Sonoma Valley close the books back in 2005, the summer of 2005, when Gloria, who was your CVO, retired at that time. I actually came in. So this is my second time coming into the district to kind of help. So thank you. The faces are a little different. Okay, so starting with 25 to 26, I'm just going to go over some key information. On June 11th, we're hoping to bring back a more formalized budget revision for you to approve, but I wanted to

010give you an idea of what that looks like because we did pretty much finish that, and I can share with you at least what the impact looks like. Some of the unrestricted revenues, we looked at the recalculating your local control funding formula. And as a basic aid district, we're still obligated to do those calculations. They still help support what our entitlement is under the LCFF. how much of that entitlement is related to supplemental and or concentration grant. For Sonoma Valley, it's only supplemental. We don't qualify for concentration grant. And therefore, it drives what the obligation is. So when we do our LCAP, we actually have to put in the information for the LCFF calculations to show how much we're supposed to be increasing or improving services to students based on those calculations. I'm going to

011talk a little bit more about that in a few minutes. So we went ahead and we've completed those calculations. We've determined what our state aid is, local taxes, redevelopment. I've spent some time going through your RDA to try to understand the historic trends. RDA can be a little bit tricky. When I was in San Rafael, I actually sat on the RDA committee that was dissolving the redevelopment agency for San Rafael City Schools at the time. So I have quite a bit of background and context in what that looks like. And then... Also, the transfer to the charter schools. And so because we have two existing charter schools and then, of course, a new one coming up, we have to do what those calculations are, the in lieu tax transfers to those. And then interest earnings,

012I also kind of took a deeper dive in because it looked like the interest earnings were coming in stronger than the budget. And it looks like we're going to be able to increase those interest earnings by about $100,000 for this year. And looking at those trends will also be showing stronger interest earnings in the adopted budget, I believe, as well. Enrollment and ADA, I always like to start there, even though, again, you're basic aid. Enrollment, for most districts, drives revenue. It does in part for us because we still get lottery funding and other things that are based on ADA in enrollment. But it also drives staffing. So it's super important for us to understand what our enrollment looks like, how are we staffed, are we staffing accordingly. And also for TK ADA, I did put

013that your P2 ADA was 2733. That's a little bit lower than what was projected before. And I just highlighted for you how many of those ADA are associated with the TK because we get that augmentation to maintain that 10 to 1 average. Yes. What's the difference between CBEDS and P2ADA? That's a great question. CBEDS is our enrollment. It's actually how many kids are showing up. And that's as of the first Tuesday in October. So every district in the state of California takes an official enrollment count for kids that are registered and attending school as of that Tuesday. So that's what CBEDS is. It actually stands for the California Basic Education Data System. I rarely spell that out. P2 ADA is period two ADA, and so there's three periods that we take attendance. P1 is as

014of sometime in December. P2 is as of usually toward the end of March, and then annual. P2 is what our major funding is typically based on, and so that's based on attendance. And I can tell you that your attendance is actually coming in. Less than 94% which is a little bit lower for an elementary portion of the district certainly but your ADA is how many If a child showed up every single school day 180 days you would get one ADA which would be the same enrollment They only showed up 96% of the time you get 0.96 ADA. That's essentially what ADA is Absolutely. Yeah. Can you just tell me the REA funds of 4.2 million, how did that compare to what our projection was? Do you have any sense? I think I increased it about

0151.2 million. No, but this 4.2 million is for this current year. This is all for 25-20. So what do you mean you increased it by one point? So the budget was hovering around $3 million for RDA, and so I increased it by approximately $1.2 to equal that $4.2. Based on what? Based on last year? So what I did, great question. Like I said, I spent some time with your RDA, and we're going to go into a little bit more detail as well, and I'm going to show you some trends on what the RDA collections have been. There's actually two different types of RDA. Right. And so the first type, you roughly get about a million every single year. And so based on the information we have, that million dollars was not included in the adopted

016budget. I believe that Rena put it in at perhaps first interim. That was about $1,019,000. And then the second type of RDA actually fluctuates more significantly. So what I did is I went back and looked in the detail of the past three to four years of how your RDA receipts have come in. Is that better? Okay. So I actually went back and drilled down into the data for the receipts that you've received in prior years, and they generally come in two significant pieces, about 50%. And then you get about 50% in June, May, June. And so what I did is I looked back and confirmed that, and then I looked at what your receipt was in December. And if I added about 40%, that's equivalent to increasing it by about 1.2 million. So meaning we

017haven't gotten the full allocation, so you just basically adjusted it to the 4.2 million, which is kind of what I thought what our estimate was. But anyway, we can talk more about it when we get into the details. I think the budget was $3,088,000 and some change, so that's why I increased it up. I think we were budgeting at 75% was with the agreed percentage, not 100%, because the SCO says budget at 50%, and we went 75% as a compromise, and then, yeah. And that is accurate. That is exactly what SCO recommends. And I had a long chat with SCO, and I prefer to go with what the trends show and what averages are. And as long as we can help the county office see what our logic is, then usually they support it. But

018especially since we're so late in the year, that's why I'm recommending increasing it. Because really, I want to make sure the board and the district has the most accurate understanding of where we believe their revenue is going to end up when we close. We're always balancing right what county offices and other agencies recommend. And I consider myself realistically conservative, so I like to be conservative, but I like to be realistic in that being conservative so that it also builds credibility. So I don't know if I answered that question, but... And like I said, I'm going to show you some of those trends that I looked at in another slide. Because to be quite honest, I... I didn't increase it lightly. I wanted to make sure that the data that I had supported what I was

019recommending. So I did do some research on it. And then, Chris, could you just tell me the local tax number, the $5.5 million, what is that? So those are things like supplemental taxes that we receive. I'm sorry, not supplemental because we're basic aid. Secured taxes. So all of those other types of local property taxes that fill our bucket. So, yeah, the majority of it is in secured taxes. And then I also thought on the slide, but also you get a facilities portion of RDA. That was not budgeted in Fund 40, so I estimated that amount based on what you've received, and I budgeted that in Fund 40 as well so that we can also project where we think that facilities piece of the RDA will go. Any other questions on enrollment and ADA or revenues?

020So with that, I wanted to give you also kind of some of your historical enrollment trends and where they were going. And so on this next slide, you can see I'm just giving you, again, what I stated already, but also where is your historical enrollment. So you can see you're dropping consistently. And then for 26-27, we're projecting just over 2,700 students. That's based on what has been communicated to me for what the staffing has been based on, working with the principals and working with Kristen. These were the enrollment projections that each school site had provided and what the staffing was based on. So I just took that information and kind of collapsed it down. Yes. So we just had a demographic study done just... very recently. So are you saying this number is also coming

021from that? I didn't bring that report with me. No, I don't believe it's coming from the demographic study. It's coming from actual student registrations and where the school sites are seeing students enrolling for next year. So and then typically I wasn't aware there was a demographic study, but I might have used that to project out 2728. Right now I'm just assuming a drop of about another hundred students. Again, as a basic aid district, it's not driving the majority of your revenue anyway. So it's not quite as critical. It will drive staffing in the out years. Does that make sense? And it would be great to see the demographic study. Yeah, I'll make sure that we get that to you. And that first number is actually we've been setting classes, assigning teachers, actually scheduling. So that's

022a live number. As well as non-public school placements, et cetera. But I wanted to just show you kind of how your enrollment has dropped, really looks like since the pandemic. And then, of course, with the closure of Presswood and the uncertainty of how many students are going to the new charter as well. That number for 26-27 looks... Heavy to me if there's 200 kids gone to the Charter and then we've historically lost 100 150 kids a year well There's a part of this that we're going to wait to see. We are pretty confident that there's some number of families that are signing up in two places, that are signing up with the charter. We've actually been going through and making calls to all of those families that we think are coming from Prestwood and are

023included in that number. So we're calling directly to say, what's your plans? So it could be there's a part of it that we won't know until the first day shows up. But this is our best guess. But these are all the right questions to be asking because the reality is enrollment and predicting enrollment is not an easy thing. If I had had more time other than the three weeks I've been here, typically what I do is I literally go in and I create. both school site and district-wide cohort projections where I look at all of your enrollment over the years and I look at it on a cohort basis and then I determine how many what's the average change between grade levels some districts lose kids between the fifth and sixth you know when they

024go to the middle school some kids some districts lose kids between eighth and ninth grade and so I usually look at those trends admittedly I have not had the time to go through and do that especially since they had already done the enrollment projections at the school site level and because you are basic aid it wasn't quite as critical for determining what your funding levels would be but that's something that in the future could be done for sure so the next one is a little bit about the LCFF the local control funding formula I'm giving you again this is for 25-26 this is your base and then this is your supplemental So this is about the entitlement, right? So this is what our entitlement is. And then I've noted here that although the district is

025basic aid and receives excess property taxes of $16.1 million, so basically you guys are about $16 million into basic aid because your property taxes exceed your state aid entitlement. We're still required to fulfill that state obligation under the LLAP requirements to show that that 12.32% or the dollar amount that we are improving or increasing services equivalent to that. And so when we complete the LCAP, which has not been completed yet, because I have to finish the budget in order to actually put the numbers in the LCAP, then we'll be able to determine whether or not we're meeting the dollar amount and the percentage, which we believe we will. Based on what I've seen in the in the LCAP and what I'm seeing in the budget So again staying with 2526. These are some of the

026expenditure highlights So we had salary and benefit increases we talked about. I know that you didn't necessarily increase health and welfare, but all of the driven costs are considered a benefit. And so as the dollar for the salaries go up, of course, the driven costs are increased as well. So we understand that for certificate and non-management, there was a 1% effect of July 1st and 1% effect of January 1st. Essentially, not exactly, a 1.5% increase. I say it's not exactly because it's cumulative. It's 1% and then 1% on top of 1%, which is not exactly 1.5% for a half year. But for all intents and purposes, from a materiality perspective, we're going to call it about 1.5%. And then $1,000 one-time lump sum stipend, which I'm estimating at about $240,000. Now for the teachers, the

027certificated staff, we're using the one-time student support professional development block grant, which you'll see SSPDBG. A lot of people are referring to it with that acronym. That's one-time money we're receiving. It's about... It's about $900,000 and so it came this year as a new grant. It specifically can be used for teacher recruitment and retention, which is why I understand that the district agreed to use it to support these one-time bonuses. But it can only be used for the teachers of the certificated non-management because it's specifically for teacher recruitment and retention, not for classified or management. Yes. Can you repeat the name of that? Is it a block grant? What is that again? Student support. And I've listed it out on student support and professional development block grant. Tell me, why is the $1,000 one-time lump

028sum estimated at $240? when there's 195 FTE teachers? Shouldn't it be 195K? Except that we have to pay STRS on top of it and workers' comp and SUI. So I factor in about a 23% driven cost. And then are you going to cover the balance of this grant elsewhere in the presentation? It'll be in the adoptive budget, but I can tell you that there were two. Column coaches, TOSAs, teachers on special assignment that have been funded last few years who provide support, professional development to teachers. There are SEAL coaches, the two SEAL coaches that we've had. So they were funded by the Educator Effectiveness Grant, and that grant has to be spent by this June 30th, so that grant is going away. So we are taking those two because those positions were not eliminated, so

029we are moving them. into that student support professional development block grants a perfect use of those funds and that will buy you perhaps by you I mean the district about two years maybe two and a half years to continue maintaining those two positions I need to wave my arms did that answer your question not at this point So the anticipation was much like the educator effectiveness. We had six years to spend it. You have until 2029. And so if you use it on the next two to three years, then you'll be able to maintain those two seal co-chip positions. And in addition, it's restricted with strings attached, yes. And it can only be used for certain things, which happens to include teacher retention and recruitment. And then for the classified non-management, about $214,000. It's estimated

030about $290,000. Again, the driven costs for classified are much higher because CalPERS is running around 26.8%, 26.4% I believe for next year. And so when you take all of the driven costs, it's about 35%. So for every dollar we paid someone who's a PERS member, it costs us about $1.35, not including. health and welfare. So that's why that cost is higher. And then for management as well, we're budgeting all of that in the unrestricted. I would say the exception will be, and this should say cafeteria fund 13, not 12. So for those folks charged to the cafeteria fund, food service workers, the director of food service, that the raises and the lump sum bonus would come out of that fund, and the same thing with fund 12. And then management, we have approximately 26. I

031understand there's still some wiggle room when that approval process is going to happen, but we've gone ahead and made sure it's in the budget so that we have a good, accurate projection. And then for classified, I understand that there's a 2% increase for July 1, 2026, and so we will be building that into next year's assumptions. So we've already, you've approved the salary schedules, and so the way the front line system works is we've already updated the salary schedules for this year and then again for July 1st, so that is we're projecting positions that's coming up with the correct salaries. Any questions about that? Some of the other impacts, utilities, we did increase by about $231,000, and the special ed contributions also have gone up by an estimated $71,000. There's been a lot more increases

032in cost to special ed. However, we also had some revenue increases to help offset that. So most of the $71,000 represents those increases, those salary increases that you've provided. And fortunately, the special ed revenue kind of helped change a little bit of that. I would also say anecdotally for next year, there's been some really good news on the horizon from the state for special education in particular where they're actually looking at increasing the block grant by a pretty significant amount. Not, not. like the COLA, about 3.5%. And so that will represent an increase for us for next year. I'm actually trying to get confirmation from the county office that they feel comfortable that we can actually include that in the budget. So that'll be good news for special education. And it's the first time they've

033actually increased the block grant for the state portion anyway. Yes? Are we projecting in the next fiscal year any reductions in expenditure on non-public schools? As kids age out of that system, are we looking at that from a granular level or are we just rolling over the current sort of... NPS expenditure. To answer your question, I'll give you a preview of one of my last slides on our next steps. But I'll just tell you, one of the things that I feel it's important to do, and it doesn't sound like it's been a longstanding past practice here, but I've taken quite a bit of time to meet with Troy, who's your director of special ed, to really go through and map out the staffing for next year. Especially since Presswood closed, it was important to understand,

034like, where are all those pieces going to? By pieces, I mean people or positions. And so we, Troy and I, spent quite a bit of time together really going through both certificated staffing and classified staffing. We also met on the non-public school placements, and I believe there's about 32 for next year, which will be two less than we have currently. We will be building in a little bit of a contingency because non-public school can increase during the year as well. I think from a... programmatic perspective there's probably some work to be done as far as looking at staffing ratios for RSP for special day class which we also refer to as ESN I'm old school so I know what a special day class it's a more restrictive environment that that students are taught in whether

035it's speech and language there's staffing ratios around all of that and I would say that that might be a good next step for the summer into the fall to kind of start looking at some of those ratios and making sure we're within normal best practices. So there's Ed Code, RSP, I'm sure you know it's 28 to 1, speech and language 55 to 1. Special day class, there are not quite as clearly defined. You look at the age group and the setting to kind of determine what's appropriate. So I think that there could be some work. to do for that, especially as you're declining in enrollment. I would have expected or anticipated seeing a bit more reductions in some of the staffing because typically if your overall enrollment is declining, then your special education enrollment would

036be declining too. That's not always the case. Sometimes it's not always the case, but that's what I would kind of typically see. I think it's probably more of a wait and see when the fall comes. I like to say when we see the whites of their eyes. One of the things to add on to that that we've been working on right now is just making sure that we're very sharp on our staffing ratios for our general ed as well because we're seeing like we were working with our elementaries making sure that we're not operating where our class sizes are so low that we're actually not using our FTE well. So we've been maximizing that with our elementaries, looking at where we might need to do a combination class instead of having two smaller. standard grade

037loan classes because as we as we get smaller like that's a necessity and we're right now looking working with the secondaries because those those are much more complicated those master schedules and making sure that we are maximizing our sections that we don't have multiple sections that could be combined and saving an fte that so that we're making sure we're we're using all of that really well so yes to what Chris is saying about about our other staffing but right now that's also true that we are looking at that closely in our general ed staffing as well I will tell you that a lot of districts they will hire teachers on some temp contracts and make adjustments once we do see the whites of their eyes I mean when I was in San Rafael even we

038we eliminated a temp teacher in class collapse at an elementary school because they were going to be way overstaffed based on the actual students that showed up Now there are balances that you have to consider. We don't want to overburden with combo classes or make combo classes that are unreasonable. And I know there's arguments educationally on either side of the combination class educational program. But we're balancing not being overstaffed with kids not coming and showing up in neat and tidy packages of 24. And so it's not always easy to say we're going to have all our classes at 23 or 24 because they just don't show up that way all the time. It's a little bit easier when you get into the secondary and you have more comprehensive programs. But at smaller elementary campuses, it's

039really truly a balance with juggling that type of competing interest. if you could clarify um on the utilities that grew by 231 000 is that relative to what we actually spent last year or is that relative to the adopted budget which presumably already factored in an increase that's a really good question and so i would say i i looked at what had actually been spent to date And I projected out based on that what April, May, and June would look like. And then I went back and looked at the last two or three years. And it looks to me like your adoptive budget was historically somewhat under budgeted and not necessarily revised based on actuals as they were coming in. So what I did is I went back and did an analysis. and made adjustments

040both this year and in next year based on those trends. Part of it is you have solar and there's a whole true up. And when you have solar and you have those true up costs, they usually hit toward the end of the year. And so it may not be as obvious. In my past lives, I've had a lot of solar and a lot of true up. And so it's easy for me to project that out. I can also tell you one of the recommendations I'm going to be making is that we don't. we don't track our utility budgets by school are you we have one big budget for pg e one big budget for water one big budget for i'm gonna be recommending shifting that and tracking all of your utilities budgets by school site

041because that way you can see oh why is this school site so much higher than this school site the same thing with some of the custodial costs we haven't done a lot of I mean back in the I will tell you back in the late 90s the Y2K area we shifted away from those types of bigger budgets into more site-based budgeting where we tracked whether whether it's custodial costs including materials and supplies or utilities into much more of a site-based way of monitoring because it really like oh my gosh gosh why did flowery's water jump up is there a water leak is there you know what I mean So being able to track these costs on a school-by-school basis, I think, is going to be a really good thing, especially since I'm seeing the costs

042going up so dramatically. But because of how it's been accounted for, I can't tell if that's a particular school or not. So that's what we're going to recommend for 26-27. So we've got a large solar renovation program. I don't know when they're projecting to complete that. Do you remember, Gerardo? it depends on the specific scope yeah it was going to be yeah because once that's complete our solar production is going to be much more significant in terms of what it has been so yeah well and i would also say you know when i was in petaluma we had solar at every single campus and what we found is we actually cleaned those solar we paid money to have someone come and clean our solar panels twice a year and it really made a huge improvement

043in solar production even at home i've got solar and we we pay somebody because we have very steep roofs to come out and clean our panels so I don't know if that happens here or not but that's another way that you can help to reduce some of your costs so but that's a great I did not know that there was solar coming I would still recommend because it sounds like it's not quite going to happen fully for 26 27 that we continue budgeting higher costs higher anticipated costs based on what we've been seeing It's actually, there's no new solar being installed. It's a renovation of our existing panels and inverters to actually just have them producing at their capacity. Okay, so your inverters need to be replaced. Correct, yeah. And some panels, but mainly the

044inverters are the issue in the whole district. Okay, that's good to know. So coming back to special ed, so are you the special ed contributions or the contributions to special ed? So we had estimated they would be about $13 million for this budget year. Where are you seeing it? So is it going to be kind of what the projection was plus $71,000 on top of that? I mean, I didn't. Are you talking about in the adoptive budget or second interim? Second interim. I did look at it specifically. I just know I saw that we were increasing it by about $71,000. So unfortunately, I'm not going to be here June 11th to present this information. I have a pre-planned trip. I have a nephew getting married in Italy. will be unfortunately or fortunately in Italy. I

045will be back for the June 18th meeting. So I'm going to try to put some comparative spreadsheets together for the person who will be presenting the data. But typically what I do is I show budget revisions as they go in the spreadsheet format. Jason's familiar with my spreadsheets, my infamous spreadsheets, where I show here's your adopted budget, here's your first interim, here's second interim, here's your final budget. So you can actually track the changes. And then I take the final budget revision, I usually compare it to the proposed budget for next year so you can see how does this compare to next year. State reports are harder to see that in because of the way they have their formatting. I'll try to put together something like that for the person to present on June 11th.

046Okay. If that would be helpful. Just to clarify, the person that is coming to present is one of Chris's colleagues. Yeah. She happens to be named Christine. Yeah. Yes, she will be coming from Terry Ryland and Associates. Let's go on. Now, this leads us to What is our ending fund balance going to look like after we've made all the adjustments to this year's budget that we're going to make? I'm sorry the formatting got off a little bit when I emailed it So what I'm doing is showing you for the unrestricted, what's your beginning fund balance? That doesn't change. It's almost $4.8 million. Your total revenue is about $61 million. I'm only talking unrestricted at the moment. Your contribution to restrictive programs, the majority of which is special ed, but a big chunk is also routine

047restrictive maintenance, et cetera. your total expenditures and then your revenues over expenditures. In this case, you have about $400,000 more in revenues than you have in expenditures, even after we've done all the raises and so on and so forth. And then your projected ending fund balance, which is $5.1 million or $5.2 million, which is essentially that $4.8 plus the $400,000. Then I break down the components of ending fund balance. You've got some revolving cash. My understanding is you had by resolution a million-dollar commitment for future needs, which we're putting on here. Skip over the additional 2.5 additional reserve for a moment. We have the required reserve for economic uncertainty at 3%. That's that 2.275. Your restricted balances, which is about 5.263. When I took all of that out of your total general fund of 10,

048454, I was only able to give you an additional 2.5% reserve. I understand there's a target of 10%. The 3%, I wasn't sure where the million dollars played into the target of 10% or if that was over and above that. So I did have a question about that for the adopted budget. But this would give you your million dollar set aside. And it would basically give you 5.5% reserves. Your 3% minimum and 2.5%. Excluding the million. Excluding the million. Yes. So if we included the million, the math would be? Well, 3% is 2.2. It would be about 1.5%. So 7% roughly. Roughly. Yes. Yeah, and it's sitting in committed. Was there a specific? need for next year or is that just to set aside for now for future that are unknown so it's more future

049unknown like maybe one-to-one devices or a big curriculum adoption I'm not I wasn't sure yeah it wasn't restricted any it was just to be able to start building a cash reserve and and sort of addressing this 10 percent target. Okay. One of the things I can tell you in talking to Oz, because we're going to get on to the next steps in the 26-27 in a moment, but as I've been working with the various teams, departments, et cetera, on building the budget for next year, because I do believe you can't do this in a vacuum. You have to get input from the stakeholders. In this case, the internal stakeholders, ultimately through the LCAP process, your greater stakeholders. there is a need i believe for computer a computer replacement plan whether it's one-to-one devices or whether

050it's staff computers um because that is can be a high-cost item and it's one of those things that districts don't necessarily contemplate up front also what i didn't see in your budget that i'm putting a little bit in for next year is like copier replacement i i'm a much bigger fan of purchasing copiers than i am of going into debt and i don't like paying interest earnings. I'd rather, you know, we don't have a cash flow issue necessarily and so there's no reason you shouldn't build in equipment replacement, whether it's custodial equipment, copiers, or computers, or one-to-one devices for students. So it's just something to think about. In talking to Oz, you know, it's something I told him he and I would work on in the next few weeks. that kind of develop and bring

051back to you what the need is and maybe come up with a longer term plan. What's important is you operationalize these types of needs. What I mean by that is, let's say that the computer replacement needs to be $40,000 a year, right? So instead of having a big balloon payment in five years of $200,000, you build in $40,000 a year. So you're operationalizing it so it's part of your annual budget, and you're not having these big balloon payments come due. And so that's some of the things that I've recommended in other districts to start looking in con. Same thing with curriculum adoptions. I was under the impression, and maybe I'm wrong, when we were discussing this, we were going to bring it back when we talk about the budget in June, but we initially had

052talked about it to build that reserve. What did we agree on? What percentage? Wasn't it seven? 17 was the target. 17 was the target. And so this was the start of that. And so in my mind, until we got to that point, because that's the. oh gosh, some catastrophe happens, whatever. We have these funds and we're in a good place. I was under the impression that if these other recommendations came up, that we were going to be looking for ways to create a fund for those things, that this was going to be something that we built upon and not necessarily touched until we got to a specific percent reserve. All of those are completely fair thoughts. I didn't have the context or the background to understand what the million dollars was. the target of 17%,

053but what I can tell you is the need for computer replacement is probably more immediate and something that should start just being built in on the natural or like copier replacement. So I'll be looking at making some recommendations in the adoptive, but not here. We're talking $25,000 here, you know what I mean? Small amounts, not million-dollar chunks, but longer term, I do think there's a need. So just for a little context on the million dollars committed for future needs, that money essentially came from the sale of a long-term lease on our cell phone tower. And so in my mind, that would be sort of real estate funds, capital. And we didn't sort of specifically discuss that. It was reserves. But that would be the sort of, you know, it sort of came from real estate,

054so it should be spent on long-term sort of. And one way to deal with that is to actually, and we can put this in the budget so that you can codify this or budget it, if you will, is to actually transfer those funds into like a Fund 40, which is a special reserve for capital outlay. So it's not, it shouldn't even, if there was a sale, the proceeds from sale of real estate could have, should have, would have been put into a Fund 40 in my mind. because that's where those funds are reserved for capital outlay. And so we can, if it's the pleasure of the board, we can put that into this adopted budget, showing that transfer out instead of showing it as a committed item. To me, that would make more sense because

055it, if that's the intent, because then it actually puts it where you would hold it. But I'm... And look, that's something that we should discuss and kind of figure out. But it's essentially, it's coming from, you know, proceeds of a sale of real estate, a leasehold interest. And so that's how it should be sort of, in my mind, how it should be considered, you know. I know that going back, when we were looking kind of through the history, the million dollars was set aside in October, and then we later, there was a board policy that came, I don't remember the month, but it was later on in the year. That was when you had the, you stated 10%. It actually came up like, and it was listed as a board policy, and it was 10%

056with the intention of eventually discussing how to get to 17. So. That was where the question was. And there was a separate resolution for the million. Yeah. Was that million supposed to be part of reserve or was it separate? Yeah, the resolutions were separate and they didn't necessarily tie to each other. So we had the question. And this is part of why we wanted to have this. study sessions to get because neither one of us have the historical context for what the interest of the board is. We wanted clarity around that because as much as we can put it in the budget, then your next person in this seat will be able to understand kind of what the intent is. So the way I think about the lease payments, we had two choices. One was

057to continue to receive annual lease payments for in perpetuity with the lessee or to take the upfront, the net present value of those payments immediately. And so I see that as just capitalizing the cash flows essentially that we're going to be used for, which we were using that. the annual lease payments for recurring expenditures. So that's why I see it not, it doesn't, in my mind, I don't think it should go in Fund 40 unless we decide there are, we definitely need a capital, we don't have a capital expenditure plan, you know, so that has to also be developed. We don't have a CapEx plan. But I don't think, I personally was thinking that this was recurring expenditures, we capitalized it. And that's for ongoing expenses. And one of the other things the board can

058consider is, and again, I've recommended this in other districts very successfully, is setting up restricted programs in the general fund, a resource we call them, in which we say one-to-one device replacement for districts that have that. Curriculum adoptions, because we no longer get any money for curriculum. It all got rolled into the LCFF. And districts have not historically set aside contributions into a curriculum adoption account. And then also one-to-one device or computer replacements so that you actually are, again, operationalizing it. You're making a contribution. If you need $100,000 over five years, you put in $20,000 each year, and then you access it for computers. It would be Oz would access it as he needed it to do computer replacement. It doesn't have to be outside of the general fund. It can be within the general

059fund but over in the restricted where we can actually account for it and we can be transparent about it and we can show this is what we spent, this is how much we're putting in each year, and this is what the plan is. Those are just things that you guys can think about. I just want to give you tools in your toolbox, your budget toolbox. to be able to plan for those types of things and for administration to plan for those types of things so that when that need does arise, you're not hit with this, oops, we need a $400,000 commitment one year because we've got computers dying or copiers or whatnot. Yeah, I certainly support that device replacement plan had spoken previously with our acting superintendent and our new superintendent as well as directly

060with Oz that It seems something that was evident that we need the plan in general, but specifically relative to the huge purchase push that during the pandemic that those devices are probably nearing their end of life and then with the current uh ai explosion uh the spike in ram and ssd that we need to act quickly before it just kind of gets out of control we are we are completely and utterly dependent on using our computers as staff whether it's teachers whether it's classified staff, whether it's administration, even in the 90s and the 80s, we had computers. They looked a little different back then. But we are dependent on having our devices work properly, and I would argue that time is money. And when you don't have the tools, when you as an organization do

061not provide the tools that staff need to work productively and efficiently and effectively, it doesn't benefit the organization. So making sure that computers are faster and that they're doing the job the work that we need whether it's using ai or whether it's using and and i've seen ai tools i'm a little bit of a skeptic but not gonna lie but i have seen my younger colleagues as i'm going in consulting using ai very effectively and i've been super impressed with what ai can do to actually help us do our jobs better so your statement is very fair with the whole ai thing because it's a real thing even as small as having custodial equipment replacement. It's amazing what people miss. You don't want your custodians trying to re-wax floors without an adequate scrubber being able

062to take it down to where it needs to go to have that wax adhere to the floor and do a good job. You don't want custodians using old, broken down, constant vacuums that don't work very well and it takes them three times as long to vacuum a classroom because they have an old, outdated, not functioning very well vacuum. And I'm, just for you to know, I'm building that in for you because I can't not do that. So when I'm looking at custodial, we'll be building in some custodial small, we're not talking huge amounts, $5,000 here or whatever, so that when your staff have a need that you guys have the wherewithal to address the need. I'm just wondering, so we have this item every year for contributions, which is routine maintenance, that you kind of...

063build from your general fund and you have it in this kind of, I don't know if you call it a rainy day fund. I don't know why you don't do the same for these kinds of regular periodic expenditures that come up like curriculum adoption. And I'm curious, how are you building in curriculum adoption for 26, 27? Because we have a big curriculum adoption coming up. That's a great question. To answer a couple things or to clarify a few things, the routine restricted maintenance account is an obligation we have. We are obligated to put 3% or total general fund expenditures into that because as a district at some point in the 90s or the early 21st century, we took Prop 1A, the old Leroy Green Act money to help renovate our facilities. And the state came

064in and said, okay, if you're going to take state money to renovate, You have to commit to maintaining your facilities, putting aside at least 3%. And that 3% was a minimum. So that's the difference with that. And it does not include custodial, by the way. It's really maintaining your facilities, not cleaning your facilities. To your question or point about curriculum, that's what I've done in my past lives. We created a restricted account where we put annual amounts in. for curriculum adoptions and so maybe the curriculum adoption for math only came up every four years but we were putting money in every year so that we were prepared for that I do recommend that districts use their prop 20 lottery money prop 20 lottery is that amount that the voters set aside way back when so

065that any increases in lottery sales a percentage of that goes specifically for instructional materials But because we lost our former instructional materials funding, I've always used Prop 20 as my replace textbooks, textbook. It's just not enough to do big curriculum adoptions. It's just not enough on its own. So I don't know if that answered your questions. Okay, should I keep going? Yes. I wanted to put my trustee layman hat on for a second and just acknowledge the strides we've made just in this past year. We had gone through several years of deficit spending and our certifications were just not positive for year after year. So I believe at some point when the budget for this current year was adopted or at one of the interims where trending towards 2.7-ish, maybe someone can remind me. We're

066getting close to the 3%. We weren't even quite there yet. And then based on what you're presenting today, our actual is close to 5.5%. So it's pretty incredible what's been done just in this past year. I think part of it is also on the revenue side because we've increased. the RDA to where we realistically believe it will end up and we've increased interest earnings and both of those things I think because because of the situation Sonoma Valley's and being this is why I believe in being conservatively realistic because you know I I lived through the Great Recession where back in December of 07 I had a new superintendent and he wanted to give all these big raises and I'm like let's wait let's wait let's wait We ended up not, we were one of the

067few districts that didn't give raises, and we were able to leverage that by not laying off as many people. And so it's important to pay attention to the signs, do your historical trend evaluations to know what do I think I can count on. When I first got to San Rafael City Schools back in 05, One two different districts one was a basic aid one of the historic basic aid and one is a state funded district and the basic aid district the unions were very frustrated because it's like They always tell us it's only gonna be 3% and they did their own trend analysis and it's always at least 6% And I went back and supported that and so we started projecting more like 6% But that was in oh five and then oh eight kids.

068I was like, okay Now we're projecting negative because that's when basic a districts can get hit very hard is when for that particular recession they were Reassessing and we were losing hundreds of thousands in a shot every time they would reassess a bunch of properties So so you we need to be realistic and what we think it's going to be But we have to have the data to support that as well so we can't just say oh, this is really what I think If you look back at 10 years of trends, what are the average increases that we think we can count on and budget those? And I think if we can put some parameters in place that the new CBO can do some of that stuff, I think it'll help the district kind of

069know where they are and maybe avoid more significant fluctuations, whether in revenues or expense. But I would acknowledge what you're saying. You as a district, the board, has made some really tough decisions. and i think that has shown out as well like closing schools that's not an easy thing to do no that's not easy i was just going to say i don't know why i was recalling this but i thought we did i thought there was money in the budget that was presented to us for technology i could be wrong but i thought there was a portion of it and i would just i think something that could be that we should explore too is in conversations especially with our librarians being at the schools Oz is amazing, his team is amazing, but they can

070only be in so many places at once. So our librarians oftentimes act as tech support. And so I would just be curious to know, you know, we went from years ago, and I understand, you know, this isn't an anti-technology, you know. proposition. I'm just saying. You know, we went from years ago where we had computer labs where students didn't have access to computers every day in the classroom. So I think as a district, we have to be realistic about which grade levels are accessing. Is it realistic? Who's taking computers home? Like, what can we afford and what are our expectations? I think it's a bigger conversation than here's, you know, 200,000 and let's just fix it. Right, there's like there's the respect aspect of it. The kids have to understand I know that they sign

071contracts But I also know that we're not denying kids coming back three and four times with broken computers Because that is how they access much of what they do at home And so this may not necessarily be the purview of the board board in terms of you know how we implement But it is up to us to pass the budget and so it's just something I wanted to throw out there I think those are really good points. And it's good to raise and I think you're right like we would work with our with our staff to come up with a plan like where do we want to be using technology and how do we want to use it and do we want to use it when we started going to one to one we were

072like one to one for everybody and we put it all the way down to kindergarten and TK so like we may like that may not be where we want to go so how do we adjust and I think so we would come back and say here's how here's how we see implementing it and I think Chris is saying So as a board, how do we want to budget? Because we know that at the higher grades, it is important. It is important that they have access to the right technology to be able to learn in the way that will prepare them for their future. It may not be wise to be doing that all the way down in our primary grades. It's certainly not the way we've been doing it. But coming back with that plan.

073But then how do we prepare for that as well? And in most districts they go and they have technology committees where you've got teachers of various grade levels on a committee where you're having those conversations. As the grandparent of a second grader, I can tell you that we're limiting his access to one-to-one devices, not encouraging it because it's just not necessarily always the best thing. the questions are really valid questions as a district you guys have to come up with what is the policy that this district wants to implement long term and then how do you fund it so coming up with the plan is definitely it's a it's a bigger topic which is why i'm not necessarily recommending putting anything in for one to one because i don't know what your philosophy is computer

074replacement for a staff that is a that is a real thing and so but you're absolutely right and we're we're now Are we four years post-pandemic now? So, I mean, it's time to start asking that question. And just keep in mind that computer, student computers are also necessary for testing at second grade on up. And so those are also things I know I've had lots of directors of IT say, hey, Chris, but we need to have these computers over here for testing at this grade level. Yeah, so whenever we decide to, I just, I want to echo what Trustee Landry said, which is we need to have another follow-up conversation about how we're going to budget for computer replacement. I definitely think staff, you know, there has to be a schedule, and we did have

075an old technology plan that I don't think anyone's looked at for several years. So, but if we are going to go to fund, and set aside money for one-on-one computing i definitely want to revisit that as a board about what's appropriate what has the evidence shown us what's the data telling us about whether or not this was effective when my daughter was part of the first cohort of one to one she was in sixth grade and the promise at the time was like you know their uh their brains are wired completely then then you know than adults there it's going to be amazing it was this promise of like you know accelerated learning through the stars everyone was going to be a Nobel laureate and we know that hasn't happened there was I think there's

076been a lot of empty promises about what technology is was supposed to deliver to our kids and I think what I see in classrooms is There's so much transition time that's wasted by trying to get online and get the right, you know, application that they're supposed to read their book. Like whatever happened to, you know, like the paperback? So I'm just saying I just see a lot of wasted transition time and those instructional minutes have to be treated, you know, very preciously. So whenever we decide to do that, we need to have another conversation about it. And my goal in bringing it up is just to bring that to the forefront of the conversation, is that starting to talk about what is the plan for computer replacement or one-to-one device replacement. It's no different, honestly,

077than if you're going to put in a synthetic track and field and districts come up with a plan to put it in, we're going to pass a bond, we're going to do this, but they're not tracking on it. 15 years, the center of that field has to be replaced. or 10 years, 15 years, the entire field may have to be replaced. What is the ongoing maintenance of a synthetic track and field? It's very similar. Different capital funding, perhaps, but it's having districts jump to one-to-one device for good reason. Petaluma did it before the pandemic hit. But it's having what is the plan? How do we maintain that? How do we fund it more importantly? So that is my goal for you guys is just to start thinking about what does that look like and You

078have to set the policy you might use that budget and you create a new set policy as a board What is the policy for a Sonoma Valley moving forward? Is it that every student or is it just third and up or is it first and up? and I would argue that having a curriculum slot or a education services slash IT department process because you need both of those perspectives with having teachers and other staff on board too. So just to sum up, I'm not going to be including that in the adaptive budget just for you to know. I just wanted to bring it to the forefront of your mind. And one of the things that I do in another district is they get a lot of federal impact aid. And if that federal impact aid

079fluctuates, we count on a certain amount operationally. And they have 147 kids, so this is a little tiny district. But if... It comes in $200,000 higher. We put that $200,000 into a capital facilities fund because we don't have any bond or any money to maintain the facility. So we say we're going to count on X number of dollars operationally from this federal impact date. This is attached to the Coast Guard base. But then if it comes in higher for some one-time reason, we actually use that money. And the reason I bring it up in this context is with your RDA funds, you could also do that and say, oh, we just got an influx of RDA of... 500 000 200 000 a million dollars we're going to budget that revenue increase one time and we're

080going to set those funds aside for these other purposes so that's also a perfect way to make sure that operationally you're going to use this amount of money but if you get an additional amount of money over here we're going to dedicate that kind of like the million dollars so something to think about for future okay so i kind of gave you the end of the story which is you have 5.5%, you're able to, in the budget revision that's brought forward, because the intent will be at least at the adopted budget on the 18th to say, here's the final budget revision for 25-26, please approve that, and then here's the LCAP and the budget for 26-27. And we will incorporate some of these details into that, knowing what all of that looked like. More most

081importantly you're gonna have a general fund balance of ten million dollars ten point four million going into next year And that's what we will be assuming as we're building next year's budget So then for twenty six twenty seven because we're still in the process of doing this budget I wanted to focus on the revenues because I've done quite a bit of work on the revenue side as we've tried to work through the puzzle pieces that is staffing and so in doing your LCFF calculations Again, we're looking at your enrollment. It's the 2613 plus 11, so it's a little bit different on this slide than in my other slide, but it's pretty close. The numbers are still fluctuating a little as I'm gathering data. Your unduplicated count, we're projecting 1,675 plus 8 at the county office

082level. Your unduplicated percentage right now looks like 61.78. But again, we're still trying to work through and make sure those numbers are good. Cola, they're giving us a cola of 2.87. That's the statutory cola. So that's in statute, the calculation. But the state has come in in the May revise and said, we're going to give you an augmentation of 1.44%, which means you're going to get a 4.31% cola. So that doesn't impact us as much here because we get excess taxes, but it will be part of the calculations we do. And it will impact the supplemental piece. So because it will increase that supplemental obligation that you have because the COLA is going to increase all of those calculations. Does the COLA calculation also increase our state funding for special education that we receive or

083not? I was just about to touch on that. So, yes, good segue. The 2.87% is what's going to get applied to the categoricals. They are not going to apply the augmentation. So we're not going to get 4.31 on categoricals. We'll get the 2.87%. Special education, however, I'm still trying to fully vet that, and I'm hoping to have an answer before we finish the budget, which is what is our revenue? Because the SELPA has actually released to us, here's some preliminary estimates for next year, and they're definitely more than historically we've seen. And so we'll be taking a close look at that. And then your local property taxes. So I've spent more time on this. 57.295, RDA 4.2 million. I'm sorry, some of this formatting got off. So I've given you kind of some of the

084projections to show you the historical. So this is just your local property taxes, not your RDA. This is just secured. and in lieu and some of the other various local taxes we get. So you can see in 22-23, we got $48.6 million. 23-24, we got $50 million, $50.7 million. 24-25, $54.3 million. 25-26, $55.2 million. 26, 27, we're estimating 57.3 million and then 2 million more. So when I looked at the average increase over the four or five years, it's been about $2 million because that's what I was trying to determine, like how comfortable am I in recommending an increase? So we're looking at projecting about a $2 million increase in the out years each year. And we think that that holds strong when we look at one year you got quite a bit more, one

085year got a little less, but we're thinking about $2 million. So if you guys have a discomfort with that, then let me know. But that's what I'm seeing and that's what I'm thinking. The next slide shows, oh good, it's formatted there better up there than it was on this. This kind of breaks down your RDA into those two different buckets, right? And so your RDA tax portion is ongoing. And then you get that. And again, I've given you the historic trends. So you got about $700,000, $753,000, $830,000, $898,000, $994,000. There was nothing in the adopted budget for this year, but it was increased to $1,019,000. And then I'm recommending for next year in the adaptive budget, you have the 1.1, which is about $100,000 increase, and then a 1.2 in the out year. So for

086multi-year projections, for example. So that's because I can see these are minimally what you've received. And in talking to the county office, these are ongoing. This is the tax portion of RDA. Now your residual distribution, you know, that's the whole RDAs were dissolved and all of that. You can see here it builds and then it starts to decline. And that's kind of what, depending on your RDA, your redevelopment agency, what we saw. So you can see you got 3.1, 3.3, almost 3.4, 4 million. That was a big year from 21-22 to 2020. You know, you got like a $600,000 increase. And then 23-24, a little bit more. not very big of an increase 24-25 and then it starts to decline in 25-26 so this is what I've seen historically I was going to recommend budgeting

087about the same now that's not what you've historically done you've historically budgeted about 50% or 75% so and again I was literally looking at this this morning I could certainly bring it down a little bit and budget more like 3.8 or 4 million but being the conservative realist that I am, I wouldn't recommend budgeting at only $2 or $3 million. So I wanted to get your input and your thoughts on this. So what do you think is going to happen? So those residual distributions are based on two trust funds. And one of them has a... The end date for one is something like 2030 and the other one is like 2035. So I'm just curious, what happens past those dates? What I understand from the county and from other people in the assessor's office is

088that even though these trust funds may dissolve or terminate at those termination dates, the income will still show up in our revenue somehow. is can you just can you just if you have any background and could you clarify how that works i mean i don't know your rda and what i haven't looked at the data for your rda in particular to answer the question um i just know in the foreseeable future you'll be continuing to get probably around the four million mark now your question is a really good one though because if it's eventually going to completely go away you need to plan for that because Right now, you're building your budgets to a certain extent on assuming we're getting this $4 million. So I don't, I know others of you might have done more

089research on the RDA. I have not done extensive. I just looked at your trends to see what do I see. And to that point, I thought we agreed it. That's why we were going to do it at 75%, just to assume we didn't agree to that. No, so the question was answered by SCO, was that when those funds sunset, the revenue that's coming from those funds is essentially going to fall to property taxes, and we'll get the same percentage of that revenue on a forever basis going forward. But in the form of secure taxes, not RDA. Correct. Yeah, correct. So we don't theoretically, according to SCO, have to project the decline in that income. It'll continue just in a different format. And so... The discussion on, you know, SCO says budget RDA funds at 50%.

090Historically, they've never come in at 50% of the previous year. And so we've been more aggressive than the recommended 50% of the 75%. And so you're saying go at essentially 100%. So this is just a philosophical discussion based on the history. You know, we want to be accurate, but then we also don't want to be. optimistically incorrect you know you'd rather have a surprise in a positive way not in a negative way absolutely what's interesting is that we actually budgeted last year at least what I'm looking at from our adopted budget in the first interim four point three million so you know a hundred thousand dollars more I mean I I don't That's what I'm looking at in this presentation. So I also would like to be conservative. I'd rather have, like, oh, isn't that

091nice? It came in at, like, a few hundred thousand dollars more than, like, oh, no. Like, where are we going to make up the shortfall if we're totally – I've never thought of that money as being recurring, especially in the early years because it was so volatile. But we also got money unexpectedly, which was a supplemental tax revenue. which is what's put us in a much better situation this fiscal year. What was that, about a million something? And it was not budgeted, and it came in. And I don't know if that was the RDA tax portion of it or not. No, it was not. No, okay, great. So that was just straight. It was from the secured tax roll. Yeah. Because they didn't, the assessor, I guess, did, not a reappraisal, but they reassessed properties.

092And yeah, that's one reason I think we also discussed coming in at the 75% because that's an unrealistic number. That's not that's a one time makeup. And, and if you know, then you can assume not everyone is going to maybe be able to afford the supplemental. So then maybe next year, you get a little bit more, but in that third year, you've made up From the way that the presentation came forward. This isn't something that we should rely on If we're if we're then gonna project tax revenues at a historical average because we also had a discussion on what would be the inflator on tax revenues so you can't do both, you know count the RDA revenue at 100% and then count tax increases at 100% to be sort of somewhat conservative, you know? One

093thing I liked Chris's suggestion is that if RDA money comes in above the 75% mark, that we could then earmark those funds and say, okay, you know, X amount goes to equipment replacement or X amount goes to, well, I was going to just say curriculum, you know. Sure. Yeah. So I'm hearing I should budget for the next two years at 75% is that okay that makes sense and that's this is why I like It's hard to do a budget without any kind of historical context So this is super helpful. So then we're talking about roughly a three million three point one million perhaps Figuring 25% spent a million dollars. This is that so then couldn't we all then also agree that? that excess revenue beyond the 75%, then how do we then commit that to

094capital expenditures, you know, devices, curriculum, all that sort of stuff? Is that a resolution, or how would we sort of address that? I mean, I think you do it either by resolution or by policy. I mean, you could have a, I don't know if you have a current board policy on equipment replacement or adoptions or whatever, but you could adopt a policy that says... We are going to commit anything over the 75% that we receive in in the residual distribution RDA toward a restricted resource and I'm happy to create a resource and kind of put some seed money in it So it exists and is there But I think and frankly we could do that Even with 25-26, I mean, we could take a portion of the increase, and when we bring that final budget

095revision back to you, we could take a portion of that because in 25-26 you came in higher. And remember the RDA you see in there is combined, both of those RDAs. So the RDA, the budget will show $5.3 million. I forget, what did you say the adaptive budget said? Well, I see it here as $4.3, so I'm not really quite, I didn't look at the stats, but I'm not quite sure. It was a presentation. I'll look back and see. I'll look back and see. I'll let Jason know what it was. But that's one way we could also do it through your last budget revision for this year. And that way it kind of, I don't want to say codifies it, but it puts it in practice at least. So we could take a portion of

096it, $200,000 even, and say we're going to move $200,000 over to this new resource for either computer replacement or for curriculum. hundred thousand of each it's up to you so any direction you can provide me then I'll put it in the budget revision that we're preparing Do we need to provide that now or what do you think Jason? I think like if I look at the list that Chris shared just you know brainstorming you know curriculum adoption student devices teacher devices office and school devices such as copiers custodial supplies maintenance supplies all of those with the exception of if we take out student devices I think student devices we need to we need to reconvene at services and in IT and talk about what is the evidence about the impact of like where are we

097best suited to place our technology and how to deploy it with students so that's a separate conversation that we could then come with a recommendation but the rest of those i think are We could come back with some numbers about what we know what it's what the curriculum adoption cycles are we know we can ballpark what that might be so we can come back with some ideas of what would be wise we can talk with our IT about teacher devices staff devices what is the lifespan and the turnover though so I think a lot of those expenses we could come back with a good estimate of what it would take over here's the lifespan and here's what it would cost so I think that would be a first step and we wait a little bit

098on the student devices as we reconvene. So I would recommend in that vein that I'll create a curriculum adoption program fund and an equipment replacement, non-student equipment replacement, and we could put $100,000 each in, increase the contribution from unrestricted to restrict $100,000 for each of those so that it creates... process and it also creates kind of like the history of what's happening. It'll almost create a roadmap for your next person. Hopefully if I have opportunity once a person is selected I can provide them with some transition and show some of this but that's what I would recommend. You still maintain your five and a half percent reserves and your million dollars but that's what I would recommend. I could put that in for the final budget revision. Okay, perfect. Okay, we'll keep going. Thank you

099for that advice on the 75% too. So this is super helpful. Okay, so I wanted to just touch base with you on the process that I'm using for budget development. And by I, I really mean we, because again, I can't develop this budget in a vacuum. In particular, because this is a complicated year with... You know, the resolutions to reduce staff with classified and certificated, the closure of Presswood, it has been a huge puzzle to try to put together. So it really is a team effort, in addition to just meeting with various folks to try to get as much information as possible. So what I'm doing, or the process we're following, is I'm updating your LCFF calculations based on the current information and enrollment. I'm now going to tweak it by the 75% here. The

100property taxes will be doing based on historic trends, but the RDA will do it 75%. We're updating all of the federal, state, and local grant revenue. So any information that's been out by the state, I've been looking on the CDE website, pulling information on what your Title I is going to be or what your Title IV or what your ELOP and all of that stuff, including any information in the May revise. And so I'm also incorporating that information. with the student support and professional development block grant, et cetera. We are removing all of the grants that are going away. So there won't be any UPK. That's the universal preschool that we had for five or six years. That's gone. The educator effectiveness has to be spent by now. We're looking at Prop 28. We know

101what those funds are. And in June, the board will have to approve the plan for next year that will have to be posted before the end of June. So we're looking at Prop 28. Before I go into salary and benefits, we're also looking at those categorical grants and trying to determine if there's any carryover that we can easily project. We won't know final carryover until we close the books. But we can certainly make some good educated guesses. So for example, for... Prop 20 lottery, if we need more money for some of the curriculum replacement we need to do, and if we can assume $30,000 in carryover to help us get us through, then we'll do that. Or another good example is the ELOP, the Extended Learning Opportunities Grant. Sometimes our program exceeds what the grant

102award is, and so in order to operate the 30 days extended program, we'll assume a certain level of carryover. So we're going through and doing all of that stuff while we're then budgeting what the current revenues are. Then we go from there, we go into the salary and benefits. And so we're taking all of position control and this is where Kristen's help was super important to me and to the district is sitting down and. I would also acknowledge Claudia because she had to put people into different assignments, et cetera, in HR. But we reconciled what is the staffing for regular teachers. By regular, I mean non-special education teachers. Where do all the IAs go end up? Where do all of the custodians end up? So when you're closing a school, you're taking all of the

103staff because those people aren't necessarily the ones losing their positions, right? they're bumping other people that might work at other campuses and so we we spent several hours just working through what that will look like to make sure we a picked everybody up who does have the right to a position and made sure it's in the budget so we're reconciling all of that and double checking it and triple checking it now then we've met with Troy and his team on special education staffing because that's another critical piece and special education is a large enough program that we needed to determine you know who's an RSP instructional assistant ESN or special day class how many psychs do you have how many social workers how many nurses how many of all of these types of things do

104you have all the itinerant staff We're also worked with special ed on your non-public school placements and what those estimated costs have been. So they've been great helping to provide. I've been giving them some tools that would be helpful for me or my successor. And then we're also estimating a 5% increase in your health and welfare costs because you're on this 90-10 and you're in CalPERS, which I had in San Rafael too. So I know they're the big gorilla in the room. You don't have a lot of say in what their rates or programs are going to be. And so we're assuming a 5%, and by 5%, we're assuming 10%, because CalPERS program renewals January 1st. So any increases only happen for half the year. So that's what we're going to assume for health and

105welfare. Is that conservative? I mean, I thought his, like last year, our health and wellness costs went up more than 10%. I guess I'm thinking actually CalSTRS. I'm not thinking CalPERS. But anyway, I just think we ought to. I know that in all sectors outside of government, health and welfare costs have really skyrocketed. So I've just, you know. No, it's fair. And it's hard to know. Now, CalPERS has a huge. Bank of Business in the state of California, so they usually can try to offer some more competitive rates But it's a great question now. We the contingency comes for vacancies because you have a certain number of vacancies and The range of plans that someone can select, single, family, and this huge range of plans will also drive what the costs are. So we're taking

106around $25,000 per year. It can be as high as $35,000 per family, as low as like $15,000 or almost nothing if someone's not taking it. So we're assuming about $25,500 for vacancies, and so that will build in a natural contingency. So we're doing what we can. We're using a 5% rule of thumb. But it's hard to predict. And this is where your contingencies come from on your budget. Once we have the entire budget done, which, again, we're close to having done, then we're going to be... continuing to work on the LCAP and updating it with all the final LCFF calculations so that we truly understand what the percentage of increase is. We'll know if there's any carryover or not. So we'll be plugging all of those dollars in. I understand the LCAP had been presented,

107but it had very draft numbers, so it didn't actually have final numbers in them. that we are obligated to budget whatever is in the LCAP for supplemental we are obligated to include that in our budget and so we'll be doing that from what I'm seeing the district's budget for many of those things will exceed the minimum supplemental that we're receiving but we'll know that once we finish it Again, I've reviewed and continue to review with department budgets, getting input from food service, getting input from technology, met with the maintenance director to kind of understand, like, what is the summer needs, how do we go through all of, make sure he's got what he needs to do summer projects. Rena had done a... budget allocation for the school sites. So we got our hands on that,

108and we've been making sure those are all balanced for the various categories, including supplemental. Consider computer replacement needs. We've had that conversation. However, on the natural, just in talking to a couple of departments, we're budgeting in like a computer per department so that they can proceed with buying some computers. I am building in about $25,000 for a copier because my guess is you're going to need at least one new copier, and you should be replacing copiers every five years because they just start burning out after that point. Reviewing utility and insurance budgets, we talked about that. We're looking at 5% to 10% increase in property and liability insurance. I'm working with CISC. that help out with RECIG to understand what those rate increases look like. We've reviewed a lot of the substitute budgets. We've reconciled

109almost all of our categorical grants and entitlements. And we've completed most of the other funds. So we've budgeted the other funds, including the cafeteria fund, fund 12 I'm still working on. So that's pretty much done. I've given you most of the other funds right there. And then we're working with Ed Services, again, to complete the LCAP and make sure all of the costs that are in the budget are then articulated in the LCAP. Can we go back to TK? We were talking about the funding going away and absorbing it. And I recall that we, as a board, had a conversation early on, I think, in the school year about reviewing. How we want to proceed forward with TK and there was a conversation about the half-day classes Understanding that this is a requirement by the

110state but with the funding going away what we can afford and what we can do So with TK in particular, I believe that there is a code out that says TK has to operate the same bell schedule as kinder So it used to be when TK first came out You could have like that even if you had and I don't know what your kinder schedule looks like but we have extended day kinder which they go to 1 or 1 30 or something and then we were operating at tk for three hours in the morning like 8 30 to 11 30 but the ed code has clarified especially under full implementation I just went through this in another district, that the VELSKET, you can't say TK gets only three hours and Kinder gets five, for example.

111So TK and K have to operate the same schedule now. That wasn't always the case. And then there was also the conversation about, and I know this came from talking to some of our Kinder teachers, about looking at our Kinder day and what... you know, those educational minutes look like and how we're doing that. And this is just all stuff that we have talked about theoretically, and it hasn't really come back. But it might, you know, it might be, I think it's worth a conversation, especially bringing our educators in. Because I know that, you know, post lunchtime, you know, especially the early, how we've, you know, you can be. four and a half. And, you know, it's like there's a lot of things that have changed for these kiddos and the learning that's happening in

112the beginning of the day versus the learning that's happening at the end of the day are very different. And so I would just encourage us to maybe talk to our kinder teachers and see, you know, is it something that the district might be interested in looking at? And there was also conversation about those teachers then becoming, you know. Tosa's or you know we have we have teachers with credentials working with our four or five students You know I don't know there was just a lot of ideas that were thrown around that are all really great ideas that never really Explored and I feel like if I don't bring it up then this happens right where we're developing a budget and we're not really talking about the changes that we wanted to make so I just

113thought this would be a good time to talk about that yeah no I appreciate that and actually one of the TK teachers did did approach me and shared with me a little bit of their research on schedules and things like that we can take a look at all that there's also if we go back to we have some identified priorities so if we come back and say okay what will help us to achieve those priorities we'd have to look at do we Do we hope that we would actually have greater achievement for our kindergarten students by shortening the day or would that not set them up? So I'm not asking that at all rhetorically. It could be, as you're saying, like maybe we're utilizing our minutes better and then those teachers are pushing into our

114first and second grade class to help our early readers. All that is possible. Part of that we'll be looking at are our kindergartens hitting, are we hitting our benchmarks for kindergarten by the end of the year? And if not, do we have reason to believe that shortening the day would help us? And, you know, so those are the questions that I'm like running through as you're asking, as you're bringing that up. And it's stuff that I can talk with, talk with our team and talk with our teachers and think about what is the best and coming back to that priority, especially when we think about those early learners literacy, especially getting kids reading at an early age. Yeah. I just wanted to say just for historical context one of the dilemmas that we face as

115a district is we don't get reimbursement for TK because we're an L we are a basic a community funded right so this this actually costs us from the general fund like over a million dollars I can't remember the exact number whereas in an LCFF district they would get reimbursed for that and I've always struggled with um you know when the when the Department of Education was kind of pushing for high quality universal pre-kinder experience not necessarily TK some districts chose a high quality preschool experience versus providing TK because you get fully you don't get fully but you get 60% at least reimbursed and that's a significant amount of money for our district. We've never had a really policy discussion about what are the real pros and cons and trade-offs here and how are our kids

116actually benefiting from TK because it has the highest level of chronic absenteeism and I believe one of the reasons is it's because parents think of it as preschool yeah if i don't want to if i don't want to drop you off at preschool today and we're going to go do an excursion or you know we have errands to run i'm not going to worry about not taking you to transitional kindergarten because i don't treat it the same way as i treat kindergarten yeah i'm with you on the discussion i think we should definitely whether we do it in a board meeting or have a study session, but I'd really like to hear from parents, I'd like to hear from teachers, I'd like to figure out, okay, if we're doing a shortened day, then those teachers,

117how can they then help first, second, third graders in terms of instructional assistance from that perspective? So yeah, I'm all for the discussion. So next steps, I'll wrap up. One other thing I'll add to this, what process do we follow, is we're also looking at the implications of the new charter and the transfer of ADA between charters, because when we do our calculations, we have to contemplate that, as well as the in lieu tax transfer. And so my preliminary assessment of that is that the transfer out, which is roughly around $4.3 million right now. um is going to jump up by about 2 2.2 million and so just for you to know you'll start seeing that in the adaptive budget that that transfer out of your property taxes to the new charter will also hit

118next year and i'm estimating it to be and i'm assuming about 200 kids and about a 95 attendance rate so because it's based on ada not enrollment and so we're taking a look at that We also know there's staffing offsets because we've eliminated the staffing. So all of that will be factoring in. I just wanted to touch on that because that would be a piece. As far as next steps. Sorry, can I just ask on that subject? What's the revenue? What's the cost per student per year that we're estimating on that ADA allowance then for the charter kids? Do you know that number off your head? I don't because it's based on your tax calculations. So it's done differently. It's not necessary. So I'd have to get into the LCFF calculator. But it's not like

119the base, the grades, family, adjustment money we get. It's done a little bit differently. Because they'll also get money from the state as well. But the state wants us to give them part of our property taxes so it reduces the state's portion. So we have to give them their proportionate share, basically. Will we receive that number on June 18th? I mean June 11th. Well, we know like rough because we know I know what it is for the the two other charter schools. I'm just interested in that marginal amount. Well, the 8096, when you're pulling out the SACS reports, that 8096, which is the transfer out, you'll be able to compare. And I'm happy to put in a couple of bullets that just show here's your historic and this is the amount specifically related to the

120new charter. I mean, it would be nice, actually, at some point, if we could have, you know, schedule an agenda item in one of our future meetings where we actually go through. what were the actual savings of combining the two middle schools? And then also, what was the actual cost savings from school closure and how that was impacted by the charter? So just comparing to what was the expectation around school closure and then what actually happened. And I think that would be something you could probably do in the fall once you actually know how many students go to the new charter versus stay in Sonoma Valley. So I mean that's, you know, right now it's estimated it's about this many kids and so on and so forth. But again, until they see the whites of

121their eyes, until we see the whites of their eyes, we won't know the exact implications of that. So I would recommend maybe a fall conversation. So next steps, we're going to finish the budget, get it all balanced. We're very close, like I've said. We're going to complete all the state SACS reports that you've probably seen before. We'll complete the final budget revision. And then on June 11th, Christine, my colleague, will come and present. I'll be developing the spreadsheets and some of the narrative and assumptions for you all, and then she'll be presenting that. I'll be reviewing that with her so she'll have some background. And then on the 18th, I'll be back and we'll present the final adoptive budget. So on the 11th, it'll be the public hearing. But the final, and I'll talk to

122Jason about whether you want to take action on the final budget revision for this year on the 18th or on the 11th. Probably the 18th might make sense. And then we'll be spending the LCAP and the budget to the County Office of Education. So that's all in the works right now. I appreciate you guys being patient because, you know, not having a lot of background and contacts, we're working hard to make sure that we develop this budget in accordance with what you guys expect and with the data we're seeing. No, thank you. It was very helpful, and it was well done. Thank you. Any questions? Okay. We've got, what, seven, eight minutes? Yes. No, please. No, please. Thank you. for coming in and diving in. I mean, how could you not be an expert in

123three weeks? Yeah. So yeah, we appreciate the presentation. What would be helpful over the course of the next two weeks, combining this with the LCAP discussion, is helping us get a... how it aligns with the priorities that were established with our last study session discussion. You know, literacy was at the very top. So as we're looking at those specific goals and actions within the LCAP, you know, where is the true ROI on those programs? To paraphrase our superintendent, we can't do it all. So we do certainly want to focus in on what are those high impact. areas so that would be helpful if that is possible between now and then to give us a clear picture of those areas of focus. Yeah and I think the Ed Services person will have to weigh in a

124lot because a lot of that is going to you know part of the LCAP is you guys looking at the data looking at what the data shows, how are you measuring the success of those programs. So a lot of that is programmatic, and I would anticipate that the Ed Services person could speak more to that, the efficacy of the programs themselves. What we'll do is try to make sure they have solid dollars behind it so that when you're looking at whether it's your counseling program or whether it's whatever program you might look at, that you understand the cost and that we're giving you a good idea of what that cost is, that you can then measure that against how are you measuring the success of that program. So just to follow up. on the notion

125of literacy one data point that would be helpful is the dollar per kid you know within the library you know it is a dollar fifty is it two dollars three dollars and um you know how can we leverage those resources um to achieve those priorities that we've established thank you and then i think we as a district we thought we need to figure out a capital expenditure budget you know a three to five year projection so we're not coming up against unexpected expenditures um and it's just something that we you know we should have in terms of that as well as you know incorporating in the beautification of altamira oh sorry sonoma middle school sonoma valley middle school you know that needs to be addressed as well so um yeah Meeting adjourned. 1.55. Thank you,

126everybody.