001Good evening. I call this meeting to order at 5:00. This is a special meeting with just two agenda items. an action item requesting the approval of the 2024-25 annual financial report and an information item on the 2024-25 M and bond expenditure report that are required by statute. Um, special board meetings do not typically include a public comment section. However, Dr. Stum and I felt it was important that the community have the opportunity to share comments on the agenda items. If you would like to speak on either of the agenda items at public comment, please sign up now in the lobby if you have not already. If everyone would now please stand for the pledge of allegiance. Mr. Moore, will you please lead us? Whoops. Sorry, microphone. We are now in the agenda designated for public
002comment on agenda items. Mrs. Chaffy, do we have anyone signed up to speak? >> We do not have anyone signed up to speak tonight. >> Okay, great. We will continue moving on through our agenda. >> We are now at action items. Do I have a motion to approve the 202425 annual financial report? So moved. >> Do I have a second? >> I'll second. >> Thank you. Mr. Moore, will you start off the presentation? Board members, please hold your questions until the end of the presentation. >> Yeah. Thank you, President Davis. Uh board members, uh tonight we'll be presenting the 2025 annual financial report. This What is the annual financial report? Uh this is a uh reporting package from the Arizona Auditor General. Um, as you mentioned, this is required by statute that we complete these
003uh various financial reports and submit them to uh not only the auditor general but the Arizona Department of Education uh prior to October 15th. And so uh thank the board thank you board for having uh the special meeting and giving us the gift of time to make sure that we have these uh reports accurate and complete uh prior to that deadline. So as I mentioned um there's about five various reports in this package. uh they include the 25 annual Fanta report that's your general summary report there's a school level report uh desegregation AFR classroom site fund narrative uh and then a CTE of planting worksheet and so those five reports will get submitted up um at the conclusion of this meeting um within those reports um I'd like to take the opportunity to kind of
004summarize every single you know kind of some highlights of this so the AFR includes over 7 871 million in total expenditure from all funds and that equates about 1.1 million in uh accounting transactions that um you know our finance team myself and Ken's team has accounted for each one of those transactions. Typically somebody is reviewing those making sure they align with the rules and regulations. So I do like to take opportunity to give kudos to that team that reviews those and making sure that we are in alignment with our rules and regulations that we are prescribed to follow. So with that I'm going to jump into a few highlights. I do want to highlight um the two funds I'll be talking about tonight which is budget controlled versus cash controlled. The first set of funds
005include our budget controlled funds and those are typically formula generated. Uh and I'll explain some of the the re the differences that you may see on the AFR versus um what I'll be presenting tonight. Those examples include maintenance and operations fund, capital outlay fund, federal and state grants typically follow that formula generated approach on our cash control funds. I'll touch on a few cash control funds. Uh those operate um by revenue brought in minus expenditures and then you have a ending balance. So pretty normal to us as in what we um operate on a human basis outside of this accounting world. So first I'm going to touch on M and our budget controlled funds. This is a busy graph here and uh I'll explain starting from in the bar graph on the blue uh budget
006lines. So the blue graphs the blue lines represent the budget uh from year to year. So I've gone all the way back uh from fiscal 21 and uh showcase our budget and how it's trended over the five fiscal years. You may wonder why um over those five years you know we have had student enrollment decline uh and why has that budget shown increases kind of over that period of time. I do want to note the legislature every year typically has some different appropriations um that affect the budget formula. And so um inflation adjustments is is one example why you may see that budget line either um trending upwards or or flat u from a year-to-year basis. I will note out in fiscal 25 uh the year in which we are reviewing for expenditures for um
007you'll see that budget line if I I highlighted the portion of that was one-time funded and so we'll anticipate that coming off the budget going into next year but it was included in that formula for fiscal 25. The next line I want to highlight is the yellow um bar across the the sheet. So that represents our budget balance carry forward. So that is budget minus expenditures and then that gives us our remaining uh carry forward amount. Um that amount has has fluctuated from year to year. I will note so speaking to 25 um I know previous presentations uh may have stated the carry forward was anticipated to be closer to $30 million. I will say since I've come on board, I've had the opportunity to uh review some of our cash control funds and maximize
008uh some of the usage of those funds to um bring that budget bounce care forward to where it's at today, which is at 47 million 475. Um on the actual forms, uh thank you, Miss Benson. If you're looking at the actual uh financial forms um that are going to be posted on our website and that are submitted to the auditor general, you'll notice there's a $33 million ending uh budget line for ML. What that represents on the actual forms is our cash uh amount. So, as I mentioned earlier, we're talking in a budget controlled formula fund. So, the state gives us a uh budget capacity that we can spend up to. So we'll be carrying over the capacity of $47.5 million on the back end that Mr. Alexander and I manage is the cash piece
009of that. And so we'll be carrying forward a $33 million cash uh balance. And we know that's at a deficit compared to the uh 47 million that we have allocated to spend. Uh and that's a whole another conversation that we'll go into maybe a time when we talk about budget again and uh levying for additional dollars to true up that difference. Um, but right now we're we know we're operating at a a cash deficit, but that doesn't eliminate our ability to spend up to $47.5 million from budget from the budget side. So, I just wanted to notate that on the far right uh we'll look at so on looking at 25 that 47 million represents 9% uh of our budget. So, it's a 9% carry forward. In my experience uh and especially in today's today's
010world a good rule of thumb is to be anywhere from 10 to 12% uh with the uncertainties and today's economics uh especially with federal funding um it is better to have a higher reserve uh to allow uh some capacity to um absorb some losses from a year-to-year basis without losing operational consistency or um any changes drastic changes to the classroom. I did um that 9% I know 47.5 million seems like a lot of money and so I did want to an analogy I I prepared was if we take our average teacher salary which is 71,000 9% if the teacher saved 9% of their salary that'd be $6,300 and so it seems relatively reasonable when we're talking about that comparison and and I know the 47 million often gets um blown out of proportion but that
011is a very reasonable amount in addition that 47 million is expected to absorb. We have anywhere from $22 million 20 to $22 million in um compensated absence. So basically liabilities for if staff were to leave, those are 22 million in in paid leave um dollars that we owe staff. Um so hopefully there's not a mass exodus, but again that just shows the importance of a a carry forward. And then I already mentioned some other revision u important points with um regards to federal funding and the uncertainties with that um and having an adequate reserve. So the next bucket I'll talk about is the capital funding. There we go. Again, another busy graph here, but I'll um go line by line. So starting with the blue bar, our capital budget has been very it fluctuates from
012year to year over the last five years. So I'm going to start with fiscal year 21. And uh in fiscal year 21, you'll see the dark blue portion was our state allocated budget. Um and if you look at the 4.6 million that I have highlighted, that was actually still being reduced in 21. the budget was still being reduced from recession error cuts. So, uh while we were appropriated the entire bar, we were reduced at 4.6 million um from recession error cuts in 21. In 22, this the state completely restored the DAA cuts and you see that's a solid graph. So, that is the exact dollar amount we received. In 23, there were some additional capital funds appropriated. Those were ongoing funds from the legislator legislation. In 24, we saw um a large one-time legislative appropriation
013in capital funding. Um that was not ongoing, but it just tells the story with regards to our capital budget. And then 25, we saw again another one time a small appropriation. Uh that ad was about 1.4 million that we anticipate um coming off of the budget for next year. on the yellow bar that represents our carry forward. It is it is typical to see um higher carry forward amounts and capital expenditures because the nature of the fund. So if you think of capital as a a fund that supports right um our HVAC large projects such as textbooks adoptions right those don't come about every year but when they do come about they're large dollar amounts and so um you'll see that fluctuation in the capital budget and it's very normal with regards to the red
014bar. Um again these are the capital expenditures same principle it's normal to see high uh swings in capital expenditures from year to year and um that is just based on capital planning and when we anticipate uh expending those funds again for example uh if we did a large checkbook textbook adoption you know that's five to 7 million you'll anticipate seeing a higher expenditure in that fiscal year but that expenditure will last you five to seven years over time and So, one example is that if you look at fiscal year 22, the red bar, right, you can see a large um capital expenditure year that year. Um that that had several high dollar items that we anticipated spending that year, but you can see those come off in the previous year. In regards to future capital
015needs, um I just want to highlight on this graph the fiscal 25. If you look at uh solely the state the blue state allocated budget of $31 million and our capital expenditures in red on that fiscal 25 of $32 million. You can see that we're right now currently spending above our budgeted state budgeted amount and we're using carry forward to absorb the difference with no bond in place and no other capital funding source. It's going to be very important that we manage that carry forward amount for future needs uh and and be wise in in terms of how we use that with again no other capital funding available. All right, I'm going to jump to cash controlled funds. And just a reminder here, cash controlled funds again are generated by by revenue and then we
016minus expense and that's how we get our ending fund balance. Some examples of district cash control funds include civic center rentals, um instructional improvement fund, school plant, Medicaid, classroom site fund, community schools, which includes preschool and indirect costs. And then some examples of school cash control funds that are accounted for at the district level but completely managed at the school level, right, are your tax credit, your clubs, and your student activities. So those aren't highlighted in this presentation, but I just want to those are managed by us, but um excuse me, managed by the school, but accounted for at the district level. So looking at um our cash controlled funds at the district level from left to right, I provided a colorful chart here on the five fiscal years of ending fund balance. So this
017is the ending cash balance for these funds. So on the left, um we'll look at civic center. This is again civic center is also rentals better known as rentals. This is for rentals that are 12 months or less accounts for revenues that are 12 months or less. Um we have worked over uh this fiscal year to incentivize our schools to to leverage um or solicit and rent their sites a little more heavily. Um and uh we've we've allocated or introduced a split of 7030. So, as we rent a facility, 30 30% of that rental will go back to the uh school for some discretionary use, trying to again incentivize our sites to leverage their uh schools um to bring in some additional revenue for the district. The instructional improvement fund, this one has a lot
018of story to it. So, in 21 um I got some background from Mr. Alexander here. Um the district was um including this fund in the salary calculation formula. So what that means is the salary calculation would say have 70% M 25% classroom site fund and it had 5% instructional improvement fund and at the time it was supporting that but and that salary calculation got um I would say out of out of whack a little bit and that fund was reduced to a drastic um level and so um the district took some steps to correct that uh and make some adjustments to that allocation of that fund. Um going forward, we're evaluating the the best use of that fund. So we have ending balance of 6.5 million. Um in my experience, some some of the best
019practices are to identify a subgroup um that are eligible to be funded from that instructional improvement fund and then monitor that on a yearly basis on those salaries. The last one on the right includes our our school plant fund. This is our long-term lease revenue. This is obligations uh that we have in place for use of our facilities greater than 12 months. So some examples include cell tower revenue. Um some recent leases that we've got into with regards to Bezos and Polaris. And so these these revenues um the best use for these is is to leverage these for for large administrative projects which keeps um our state capital budget allocation working largely for the classroom expenditures. So again, ili utilizing these long-term lease revenues for administrative expenses is a great use of this cash controlled
020fund while we uh keep that capital funds that we get from the state solely dedicated to the classroom uh is a way the district has practiced and is a great uh use of this fund. Some examples of expenditures in the past years was a $3.2 million HVAC project at the warehouse that was greatly needed. So, couple more cash funds. So, on the on the far left, um looking at the Medicaid uh revenue, this is reimbursement for expenses that the district made for eligible services paid from M and other eligible funds. Uh we have a large kind of balance forward and we're strategically looking at leveraging that um for future district salaries. However, I want to caveat that there is some uncertainty on of how much revenue we'll be getting going forward with the federal u
021reductions in potentially Medicaid reimbursement. And so, um we're going to be cautious on how we utilize these funds, but uh use them strategically to offset district salaries, which um they're currently doing, but um look to continue to leverage that. The big uh one that's probably jumping out off the off this graph is the classroom site fund. Um these revenues uh we're looking at an ending balance of 52 million in uh classroom site fund. I want to jump back a little bit and you can see highlighted on this graph the the the difference from 21 to 25 and that I can highlight that also by the exponential increase from the state per pupil allocation for this bucket. Just back in 21, we were receiving about $425 per student and classroom site fund. We're well over $800
022per student in classroom site fund. And we have made I know the district has made strides to increase salaries um utilizing this bucket. But some of the hesitancy and over obligating this bucket include potentially going back to that even that $400 per student amount and being reduced uh revenue and not being able to support the ongoing salaries that are currently in place. So we currently obligate about 16.8% of the teacher salary from this from this fund. And so we want to ensure that's sustainable for not only next year but the next 5 to 10 years. And um some of the hesitancy even from myself from um is is just the uncertainty with the economy and knowing that this fund is um sales tax driven. This revenue is sales tax driven. So, um it is um
023difficult to over obligate this fund uh from a perspective, but we are doing we are making some strides to utilize this funding strategically. For example, the $900 um onetime stipen that the board approved going for this year. Um everybody who's eligible to be paid from classroom site fund is being that $900 is being funded from this bucket. So, that's a great use of one-time funding um and not obligating ongoing funding into this bucket to that would potentially risk future um years where teachers could be potentially affected. So, we're looking I know Mr. Wing and I are looking at this reorganization uh with the district um side and seeing if there's eligible staff that can be um coded or funded from this bucket going forward. So with regards to the last two, community education, uh this
024includes preschool and your community education programs are better known as explore, right? Your before and after school. Um we see some declining fund balance here. Um we just know a lot of this is due to lower enrollment. Um we're seeing lower enrollment numbers in our explorer program. The preschool program is also being evaluated. A lot of our preschool program is supplemented from our title one funding. Um but we're we're still the math is still um uh we're still running at a deficit with regards to that preschool program. And so um that will continue to eat into that budget balance carry forward which is at 9.9 million now um as we continue to evaluate like a future um solution to keeping that program sustainable uh for an ongoing uh period of time. With regards to the
025last bucket, the indirect costs, um indirect cost are funds, revenues that uh are charged back to grants uh to offset the overhead of operating that grant program. So um you can see I just want to highlight that yellow uh bar in fiscal year 23 that large increase that was dirt result from the in the um ESSER funding that expired. we were able to um charge back a a large amount from that last SR3 bucket. Uh and so that helped um grow that fund to 12 million in 23. Uh we are now utilizing some of those funds. Um they offset uh salaries such as as my staff, financial services staff, uh HR staff who help who work manage these grants. Um those are perfect uses for those funds and again saving M dollars leveraging these cash
026control funds. Lastly, I just I just again want to highlight these these three bullet points as I emphasized in this presentation, but the MO budget balance increase again was a direct result in us, you know, preparing through best practices uh for future uncertainties and then creating some adequate uh contingency um as we move forward. the FY25 capital expenditures um are starting to exceed the capital budget from the state and uh we know as with the next presentation uh we'll have a greater uh reliance on these capital funds uh going forward and uh that solution is only sustainable for so long which is why you know I'm I'm running a community presentation and evaluating how we fund these cap future capital needs and then just our cash balances are in a healthy capacity for now uh
027but again I just want caveat that federal uncertainty is a lot of those cash funds have a reliance or some association with um federal funds that we receive as a district. So with that I'll be happy to answer any questions. Thank you so much Mr. Moore and Mr. Alexander and your team. Um we appreciate all this information. I know as I've studied this I hope it's bigger on your screen because my eyes have crossed themselves plenty of times looking at all these numbers. So, um, we appreciate all the work that goes into this. Um, board, I'll we'll go around and if anyone has questions, we'll start with Mrs. Hutchinson. >> I I have a couple. Um the first question that I have is um when we go to the public for a bond or an
028override election, um how how can we demonstrate in this fiscal report, this financial report, um the money that's generated by the public vote, say the 2018 bond, the 2019 budget override, the 2023 budget override. How are they reflected in the annual financial report? >> Uh member Hudson, I think the the the is the struggle is this report is very in like it is a cumulative sum of all our which includes a lot of those initiatives that have been voter approved and so um isolating those. I know the next presentation has a little more detail into those, >> right? Um, you know, I I think we could take back some some points of maybe highlighting how we're utilizing those funds and and looking a deeper dive into the the specifics. >> Okay. Thank you. Thank you.
029I really appreciate that. Um, the the other thing that I wanted to ask is um with the ESSER funding, and I'm glad that that was all um very um prominent in the report. Um and I also saw our utility and energy funds. One of the things that when we voted as a board um particularly during ESSER 3 was we wanted to make sure that um that the ESSER funds were not just one and done that they would have a lasting impact. And one of the things that the board voted to spend err funds on was HVAC. and we spent over $75 million on HVAC. Um I know I know I'm putting you on the spot and I don't mean to do that and perhaps sometime down the road could you possibly um give us a
030report on did we indeed experience HVAC energy savings because we spent that money. Um, I know that there were other reasons why we spent the money on on HVAC and a lot of it was for um health reasons so that kids who have um respiratory issues wouldn't have them with with the new um systems. But if sometime if you could possibly um um report on that, I would appreciate it. Um I and I one thing I did want to ask a question on as well is um in the presentation it says a six 69,93 average teacher salary. Um and that's for 2024. Is that correct? And the average teacher salary right now is 71,857. which >> in the bar in the bar yeah in the presentation um it says 71 but in the in the
031in the report it says 69 is that because it's the it's 2025 and >> yeah it could be I mean for my example that I provided just just to emphasize the 9% that would >> an average teacher salary from last year so I I just took it from last year okay great >> again this report is a summary of last fiscal year. >> That's right. That's right. Yeah. And I didn't want that to get confused because um we the board deliberately did a 4% increase um to make sure that we were well above the average teacher pay in the state. And I wanted to make sure that um that that was not that people understand that this is a report for 24 and that in 25 we have we have um um a higher teacher
032salary. Yeah, this is a report for fiscal 25, right? Yeah. And then >> Right. >> Yeah. >> Correct. Right. >> Thank you, Mrs. Benson. >> Um, I concur with President Davis that these numbers are super small and since I can't really look down, it was a huge struggle. Uh, I do have a couple of quick questions though. So when I look at revenues on the actual report, um hold on, let me get my under other it says government property lease excise tax 1980 and it's uh this is under revenues I believe. Yeah, that what what is that exactly tied to? And it's a it's got when we have an it under all other funds it's about 75 and a half million dollars. Is that something that is ongoing? Is it a one and >> I'm
033take that question and and bring back an answer to you. I can respond via email. I don't have that off the top of my head right now. >> Okay. Thanks. And then a couple when I look at uh some of the detail on page two um as I mentioned earlier I was more interested in looking at comparisons uh and totals from last year and this year. So under on line 11, we have about a 49% increase in student I think it's student or school sponsored athletics I think is line 11. Um from 2024 to 2025 there was about a a 50 close to a 50% increase in funding for that. Do we know why that was? And is that going to continue? >> Yeah, member events, I can speak to that. So that a lot
034of that is some accounting. So we we are doing better at identifying those. Um so line 11 is the on the actual AFR forms is um and that's page three is the school sponsored athletics program code 620. So we are doing a better job in the in our county department of identifying and tracking those expenses to that program code. Um that is just some accounting practices that we continue to improve upon from an ongoing that's not we didn't 50% increase our spending and um school sponsored athletics that is just us better accounting for those dollars by using that particular code that they want uh the the auditor general wants us to use to track that expense. So, >> okay. So, is that the same case when I see the close to $3,000 3,000% increase um
035two lines down? >> Yeah. Yeah. To 6,300 um other instructional programs. Yeah. >> Um and the same is that the same on line 18 as well when I see a 36% increase. Is it is it predominantly that uh it's a it's a realignment of accounting using proper codes to make sure they're in the proper place >> generally from year to year. Yeah, these are every expenditure is reviewed by our team and and if we have new staff, we have a new set of eyes on accounting records. Oftentimes we're evaluating that and making sure that it aligns. But when we get new staff, we may be seeing something a little differently or somebody may be questioning something and saying, "Hey, it may be better suited here in this account code." And the account code book in
036the rule book sometimes is not as black and white as I would like it to be. There is some gray to that. And so it can be a little subjective. And um a majority of our spending um does get approved by our auditors. And so these accounting codes uh that fluctuate, I can speak to them. Like I I know a lot of these are just accounting practices that have been changing. >> So it's not necessarily that there's actually been an increase in the amount that we've spent necessarily. It's that we're putting it in a different spot on this form. >> Correct. And I will I will follow up on each one of those lines though with you um in a followup as And I I don't know if this is the appropriate uh time or
037place to ask the question, but um when we're talking about capital and capital funding, I know there was a um court case that was just decided that will impact, I assume, money that we received for capital from the state. Is that accurate? Is this is the an appropriate place to discuss how that might impact our AFR going forward? I know this is for last year, >> but we have to be considering this current year and years going forward. So is I assume that it's going to benefit us that the results of that court case. So do we want to hold off on that conversation or >> I can just make a couple points though that that member that that lawsuit has been in place for or that it's been ongoing for what five seven years?
038I mean >> seven years. >> Yeah. >> Y >> and so the the ruling is is a is a big first step. Mhm. >> There was no funding appropriated with that ruling. There was no >> there was no immediate resolution to that. So, and I know it's already been appealed. Um, and so that ruling is just basically in favor of that Glendelv. Um, I forgot who was V, but um, it was just a ruling in the favor that said the capital funding formula is deficient and is not adequate to fund schools at the current level that it is at. So, I I'm happy. a missatic that that ruling is in place. It's probably going to be another 3 to 5 years before we see any funding associated with that. And I I don't want to
039hold my breath on on that ruling and and and say, "Yeah, we're going to be fine next year." But I I do it is an important uh win for public education, but I think we're we're years down the road before we see any funding for that. And I don't think we can at this point in time plan for that lawsuit to support us in the future right now until I until we see some actual funding formula changes with that with a future ruling. So I hope that answers >> Okay. No, that totally answers it because I um hadn't realized it was three and uh three or five to seven years in the making, but it is assuming it goes through and we get an appropriate funding. um mechanism in place that will benefit our capital
040needs. >> Correct. >> It should. Yeah. >> Yeah. Okay. I don't have any other questions. >> Thank you, Mrs. Benson. Excuse me, Mrs. Walden. >> Thank you. I just had a question on the the key takeaway capital expenditures exceeding the capital budget. You mentioned using carry forward. So like in the prior years, if we go back to the the slide that shows the state capital budget in the yellow bar and then the red bar where we're exceeding that and in the prior years was that bond money that covered the excess uh the excess capital budget that was bonds and then but in the key takeaway you're talking about the carry the carry forward. Is that are you is that like a step down from the bond where you have the capital projects that are exceeding
041the budget? So we're talking two um member >> those are two okay >> yeah we're talking two buckets of funding right and they both they both help one cause which is our capital um expenditures but how they were leveraged can be completely when you have bond funding and capital fun how those are leveraged and and paired together to fund a capital plan for the district is is completely different when when you have those funds and then when you don't have those funds. And so my point on the slide as a takeaway is now we don't have those funds >> and I know Mr. the next presentation will kind of highlight that again. Um so now the only capital funding we really have outside of getting you know school facilities grants and some of these other
042things that we'll continue to to strive for and and um apply for is this car is is their capital budget and our carry forward. And we were living in a world with bond funds and our capital budget. And um and the presentation next, I'm gonna skip ahead, but we spent $19 million last year in bond funds. If we were to spend that plus the 30 uh 32 million we spent last year, you know, we're talking $50 million, we would have had $10 million in carry forward in our in our capital budget would have been completely depleted. So my point on the going into this 26 year you our only other reserve for capital projects is is our carry forward and that can go in a blink of an eye at $29 million. >> Yeah. And
043and I appreciate you bringing up because we knew we know we have federal uncertainty just with funding and so there may be opportunities to have to dip into that carry forward to replace programs or funding that might be lost. But I I guess my question is, you know, with the capital budget then are there there would have to be discussions about how to bring the capital budget in line with the actual dollars where we're not trying to spend more than what's allocated. >> Yeah. And I'm uh working on bringing the 27 budget. I know we're talking 25. I'm working 27. Um, and I'm I'm uh working through conversations with our with Tracy and our department leads and I hope to bring forth a presentation at the board talking about some of the recommendations we have
044to more the conversation is going to be defer some of our capital needs to align ourselves with our new budget reality. And so that's a future conversation that uh will be in front of the board pretty shortly. Go. >> Oh, all right. Thank you. That's all my questions. >> Thank you, Mr. Walden. Mrs. Jaffy, >> Mr. Moore, thank you for talking about like how you have built up the M budget balance and this carry forward through efficiencies. Can you talk us through some of those things that you've looked at to create some efficiencies and better accounting practices? >> Yeah. So, a few examples include um looking at one example I think Dr. Trump has already highlighted in the board is is our print shop, right? Our print shop was seeing uh was expending dollars or
045sorry, excuse me, receiving revenue uh in a cash controlled fund, not in M. But we were the district was supporting all their expenditures from M. That was to the tune of about a million dollars. And so that was an easy win, just moving their expenditures to the fund where their revenues were being collected. And so um they are now a self-operating entity. And that's just one example. Another example includes with our um CTE funds. Um so our CTE budget 596 uh we had some capacity with regards to our um supplement versus plant uh worksheet which is prescribed by the um auditor general. And so we have capacity of about $4.5 million in there um to move additional funding. So, we receive funding from EVIT um via a fund 596. Uh that funding is intended to
046support our our teachers and our supplies that our career and technical um classes need. Um we in my experience that that funding has been utilized almost, you know, all or entirety to support those needs on on a yearly basis. And so there's about $4.5 million in in capacity that we can move M dollars that we are funding teachers um CED teachers from M into that 596 bucket freeing up about $4.5 million in M capacity which increasing our budget balance carried forward. So those are two examples. There's some other smaller ones um but those are two examples for you. >> Thank you. um going into next year, what are some areas you think that we as a board should be aware of? And are we going to get a chance to get kind of that overview
047of cash grants that we've talked about at some point? Maybe not every single grant, but maybe getting a little bit deeper dive into some of those. >> Yeah. Some things to keep aware of is I just the I guess the uncertainty. Um and uh you know I I hope to bring um some of the initiatives that uh Dr. Strong has tasked me with is is bringing forth and sharing some of the choices that Mesa public schools makes with regards to budget and and maybe these are choices that are historical in nature. Um such as um our choir program, right? Or what is no str I >> but our herper right that that is the Mesa, you know, kind of historical um program that has been here forever. I'm I'm not familiar with it, right? just
048being new, but that is a choice we make to to fund that program. And so, just bringing some awareness to the the variety of things that we fund on an ongoing basis um that we may or may not receive state dollars for or they may not be um receiving cash funds for. And so, those are just choices we make um that are just annual. And and so I'm hoping to um as we go through this declining enrollment and evaluate some of our um expenditures uh bring forth some of those um scenarios that we are funding and and have those conversations >> with the board with regards to um do we want to continue to fund these or you know and just have those conversations um as we again navigate this declining enrollment environment and looking
049at our expenditures and trying to live within our new kind of budget reality. So, >> I don't know, Dr. Tom, you want to >> Yeah, member Chaffy, just because Mr. Moore was not with us when we talked about the cash controlled funds and grant funds, we went through an extensive process last year where we analyzed every cash fund and every grant fund with the grant man managers and the cash fund managers and we had that process pretty dialed in in PowerPoint presentation form. So, if the board's interested in understanding how we're spending out of, let's say, fund 291, that's Medicaid, or uh fund 596, that's CED, or 570, that's indirect cost. If they're interested in that, the hard part is if we dial in every one of those, there's like 90 funds, we'll be here
050forever. So, what I would advise what I advise is if you're interested in like two or three funds this year and we go through those with you uh in an experience, whether that's during a board meeting or whether that's in status in a video kind of form, it should be pretty easy to put together. So, if that's something you guys want to do as a board, we can certainly explore that and tell you kind of here's what we're here's the title one grant and here's how we spend our money out of the title one grant. we spend it on these people, these initiatives, these things because we have that process dialed in. The other thing I'll I'll tell you as we prepare this year's budget, remember we're on current year funding, so we're living in
051this year's budget. Uh ADM collection is something that uh is uh currently of interest to us. We're monitoring the data uh this fall on ADM collection and uh we're cleaning the data at a fever uh fever pace to make sure that we're collecting all the ADM we legally can. uh we don't want to misreport because what happens if you misreport is two years from now the AD comes back and gets their money but we want to make sure that we dialed in all our numbers and as those numbers get dialed in we uh will set up time with every board member to discuss the ADM portion uh of where we're concerned right now with ADM collections. So >> one followup, Dr. Stum, at the January 28th meeting, you weren't the superintendent then and we were
052all brand new. We talked a little bit about how having this report for 2025 would give us some insights into how block schedule at the three high schools we were running at affected our ADM. Will we have an opportunity to discuss that in those check-ins and and get that information? >> Uh most certainly. Uh and that is the ADM uh thing that I'm uh issue that is primarily impacting our ADM collection at the 11th and 12th grade right now. So, we'll check in with you guys in individual board meetings and then likely uh if we decide to bring a December budget revision, that's still up in the air on whether we'll need one or not, but if we decide to bring a December budget revision, we'll have some information for the public on uh kind
053of the impacts of of those uh items. >> I just have one other question. Um Mr. Moore, can you help me understand the difference between the instructional improvement fund and the classroom site fund and how that plays with pay for performance? Yes, I'll start with the instructional improvement fund. The that fund also known as as Indian gaming is a revenue source from um uh revenue from the Indian gaming. So um that fund has a kind of two restrictions both those funds have two different level of restrictions to them. Um the Indian gaming or instructional improvement fund um has a 5050 obligation 50% correct me if I'm wrong Mr. Alexander, but needs to be used for a tutoring or dropout prevention. And then the other 53% is kind of discretionary in in in some sense. And
054so um that's how that fund is set up with the classroom site fund. I don't know if I can off the top of my head list all the new statute uh rules regarding that fund, but in general the fund is intended for classroom um use and and now it has some new layers to it. It can be used for instructional support professionals um and it must have a performance pay plan associated with it. I can tell you how most districts are using this fund is having a small performance pay piece to it and having a bulk of it um in the base pay of a teacher or those eligible staff um on the support side in terms of instructional courses etc. Um maybe Justin can speak to how we're using it as well. But um
055that's the two difference with those those two funds. The instructional improvement fund and the classroom site fund both have supplanting clauses to them. So important to note, we can't just take an M expense and move it in there um if we've already demonstrated that we can fund it from M. So that is why I mentioned as we look through this redesign, anytime you have um new positions or an opportunity for new jobs, those are considered an opportunity to evaluate the funding source. So it's a new opportunity to move those positions into a cash controlled fund and not um have the risk of supplanting. So do you want to add >> I was on pay pay for performance the classroom site fund it's only for certain roles or positions as Mr. Moore stated we do provide
056we're unique in Mesa public schools we do provide and have provided it for a long time administrators and classified with pay for performance that is not from the classroom site fund that is primarily from M. >> Thank you that was super helpful. >> Thank you. I was going to also touch on the classroom site fund. I think you touched I I just know that as we go into bond and override discussion that will you know when people see this amount of money that's a big question like what can what are you doing with that and I think the biggest thing is to understand that there is lots of restrictions on these funds and I think the more we can educate each of and myself included can be educated on how these funds can be used
057the better it will be as we move into this um new age. Um, any other questions as we've gone around? Thank you board for your questions. Um, and thank you all. Thank you, Mr. Moore and Mr. Alexander. Again, I think Miss Kirby, we're ready for a vote. With a vote of five yays, we have approved the 202425 annual financial report. We will now go down to our information items. And I'm going to turn the time back over to you, Mr. Moore. You're on the hot seat tonight. So, um, and information item, uh, Mr. Wing, you're on timekeeper, so it's all Are you good with that? Thank you. All right, Mr. Moore. >> All right. Thanks, President Davis. Members of the board, I'm gonna start this off, but I'mma call for Mr. Alex Mr. Alexander to
058help me through some of this presentation. Um, another report uh that we are obligated to make um is is our bond and override report. Um again, I mentioned our AFR package. A lot of our reporting is tied to statute. And so, again, why do we why are we here presenting this information? Um this information again is is tied to statute and uh outlines um our obligation to report this in a public form uh and have this annually presented um those two statutes. I'm not going to read them but basically highlight um the bond obligation and the override obligation for us to present these uh this uh information tonight. And with that I'm going to hand it over to Mr. Alexander to go through uh first the bond uh expenditures for fiscal 2025. >> Thank you
059very much. I'm glad to be here and I'll let you use the clicker so if I forget anything you can always slow it down and add some stuff to it. So um so bond um this shows our what we spent our monies on in fiscal year 25. Those are the three categories that are authorized per the bond. So you can see we spent just over 199 million. I'm happy because you guys talked about half of this presentation already. So um $19 million worth of bond monies uh last fiscal year 11.8 in the construction renovation with 7 million in um technology. We didn't do any transportation vehicles uh last year but we did it in previous years. So overall $19 million. >> Yeah. I just want to emphasize again this is right this is how we
060this is a luxury to have this bond funding in addition to our capital funding prior year. Right. Um and so that 19 million was on top of the 30 million that we had um spent in in total capital funding for fiscal 25. So some of the highlights of what that $19 million got us last year um lobby and security improvements at nine schools. We also did HVAC projects, intercom replacements, almost 7,000 laptops at the junior high, and quite a bit more classroom technology and AV upgrades. So this is sort of a messy uh summary but I presented this every year to to give an overview. Um as you can see on the far left that shows the three categories just like I had mentioned earlier. The next column shows the approved bond amount that was
061in our bond pamphlet. So 167 million on the repair, renovate, etc. The next column over it says revised allocations. uh per state statute, we can spend up to 10% uh of bond proceeds on other capital items that may come up or for cost overruns on construction. So you can see right there we spent $186 186 million of rather than 167 and we pulled from a couple of the other um sites there. The next three columns just show how much we spent during those fiscal year spans. So 19 through 24 and then the fiscal year 25 of the 19 million and then the next column shows the total we spent from fiscal year 19 to 25. The key takeaway I guess from this one is the far right column. You can see remaining authority how much
062money we have left in bond to spend and it is zero. You guys have already been told that. I'm sure you've already heard this numerous times and and talked about the implications of that. So again no money left as of 6:30 of 25. So right now all capital things are basically on our DAA capital fund. Just want to give some highlights again. Um renovations make up the largest percentage that uh corresponds with what uh was authorized in the bond. You know renovations cover a lot of things. Construction, remodeling, architecture, engineers, flooring, lighting, HVAC. I can go on forever with some of those things. um security um hit sort of both renovations and technology because we sort of used both of those but we've sort of tracked those separately to see how much security uh items
063were in there and here's where we identified the buses. We purchased 300 buses with bond funds over the years that really helps maintain our fleet. So that was very important. So um outside of the 52% we show for renovations and then security you know we have um the other items there. So, we spent these bond funds over the life cycle of the bonds at 102 different schools and buildings across the district. So, it it it hit a variety of areas. Largest renovations were at Mesa and Mountain View high schools. Uh I know the board's been presented lots of information on those renovations and updates on those. The pie chart there just shows for the items that we uh allocated to schools or or documented schools. 59% um were at the high schools primarily to do
064the large renovations at the high schools, but 27% were at the elementary schools. We have a lot of elementary schools and the the 10% and 4% are for the junior high and then the choice and success schools. Mr. Moore. >> Yeah. And again, we've talked about this. I just want to continue to emphasize um what we're doing for future capital funding plans. So, as we evaluate um our f as this bond has expired, we're evaluating our future capital funding um looking at potential future bond or capital override um to support our ongoing needs. Um I've highlighted um I've already done one presentation, but we are looking forward to our next community budget meeting where we look to uh bring forth some of these line item um capital needs that we have ongoing and and kind
065of task our our community um to kind of look and and prioritize some of these and get them more involved in in that process and kind of understand the why um these funds are needed. uh and I think oftentimes people think it's easy to allocate or um build a budget within these limitations but um I think some people get surprised uh when you start having to cut or reduce from areas u and so I hope at that December 3rd meeting uh everybody can community can join me at 5:00 pm where we will continue to discuss and evaluate our future capital funding needs uh alongside our community and I'll transition to the override. >> So, the other piece we're talking about is override. Um, in fiscal year 25, our override dollars equaled $63 million. We passed
066that in November of 23 at the 15%. And those bullets there show uh what we were going to be using the money uh for to retain and attract quality teachers, competitive salaries, school safety and security, preparing students for workforce and college, and uh critical staff throughout the district. So, how is this making a difference? Just to put it in perspective, that $63 million is equivalent to about 731 teachers based upon average salary uh and benefits. So, taking that into consideration, if we weren't able to fund those 731 teachers, all class sizes would go up by about six students, which would be a big impact to our operations and our our schools. Overall, the override uh funds about 15% of all M salaries and benefits. Um and this has helped us to have better than average
067teacher pay than the state average according to the otter general's office. We talked a little bit about that um during Mr. Moore's earlier presentation. So retaining highly qualified staff that was again one of the items um for the override. This is the otter general's report showing the average teacher salary. Our numbers are there on the top of the bar graph there going across. So you can see we are higher than the state average which is the black line that goes across there. Uh one thing to note we did have a drop according to this graph from 23 to 24. Again it's average teacher salary. Uh the main reason I believe is the auditor general's methodology and how they're calculating this. They've changed it from year to year. Um there's a lot more accounting codes that
068they're looking at and requiring us to uh account for in fiscal year 24. A lot of those co codes weren't required. they are required now. Um so a lot of it was trying to do the best we could to categorize all the different teacher pay um which led to a slight uh decrease there. There's other factors that go into that too. Um one-time monies that are stipens that go in and then aren't there the next year could impact it. Experience level of teachers. If you have a lot of 30-year people and replace them with um people that aren't making quite as much then that could impact it as well. So there's a variety of factors that do that and we do anticipate that that number may still continue to drop mostly again to the accounting
069practice that they've changed at the auditor general's office. Another item there, the last item I wanted to cover is security was listed as one of the items on our override sheet there. So you can see on the graph there um our continued support of um security and putting money into security. You can see we're just over a little over three million uh in 20 and we're up to about $6 million. Most of those monies uh are for salaries and benefits for MPSO MPS staff or contracted SRO's and we've also used some of those funds for security camera monitoring. Again, just to continue to show that we use uh M funds that are supported by the override funds uh on the security area. With that, any questions, discussion? >> Thank you, Mr. Alexander. Mr. Moore, appreciate
070it. Mrs. Hutchinson, we'll start with you. >> Thank you, Madame President. Um I'm Thank you, Mr. Alexander, for mentioning um particularly um the impact that the override and the bond monies have on our on our district and in our community. Um I I'm not quite sure that folks understand that um the state only pays for half day kindergarten and that um the the district picks up the other half uh for full day kindergarten in Mesa public schools. Um in the um financial report um I noticed that there was no monies um provided for gifted education. Yet we know that Mesa public schools is known for gifted education and we have um expenditures in in that area. um that they override um one of the reasons why our community supports is because they want lower class
071sizes. They want a more intimate experience, a more relational experience between teachers and students. Um and then um security was huge. And so I really appreciate you mentioning um the the SRO's, the the cameras, the um and and I and I but I wish that we had mentioned the schools and the front offices that are much more secure um because it's through the front office that someone can get into the school. And there's a huge difference um between um a Lehi and a Whittier and a Roosevelt in in in the in the front. and how and how you can access the school. Um we have work to do in in in that respect in that regard. Um so I really appreciate appreciate that. Um um I would I would just like to make a suggestion
072that when we talk about how we spent capital monies um that we do talk talk specifically and name schools. People need to remember that their neighborhood school was impacted. The furniture, the library renovation at Whitman, for example. Um, as I mentioned, the the the office at Whittier that they're very proud of because it's a welcoming environment and yet it's a safe environment. um the performing arts um facility at Mountain View. It's it's now become a community space that that people are are very proud of because it is a place where the community can gather, but it's also a very beautiful place and and people feel welcome there. and and I think the way that the the community at Mesa High was elevated with the renovations and the care that that that campus received um it
073was it was huge in in board meetings um monitoring that progress and and but I think most importantly we need to state the impact that it has on the learning environment and the way that it impacts kids. So, if if we could do that, I would I would greatly appreciate um making it maybe a making the um impact of not only the override dollars, but the bond dollars on our kids and in our community, but most importantly learning and um so that's that I really don't have a question. That's just my comment when we have I know another community meeting on December 3rd. >> Thank you, Mrs. Hutchinson. Mrs. Vincent. >> Um, well, for a point of clarification, we do get funding for gifted from this. I'm not quite sure why it's it's probably listed
074different differently on here. Um, in order to provide gifted ed. My question would be um can you give us and I don't know if Mr. Alexander if this goes to you or to Mr. for more. But we have on the um future capital funding possibilities the uh notion of either a bond which historically we uh Mesa has done versus capital a capital override campaign. So, we kind of know a bond uh as it it ends up being um because we have a debt service, we end up having to pay for that. So, could you I my understanding is that my minimal understanding is that there's a slight difference in that. So could you share with us like if we were to go present a capital override versus a bond proposal, how would that be more
075advantageous for the community? Would it be what's the major difference? >> Is that >> Yeah, exactly. >> Yeah. member member, I can speak to the two differences as right now we don't have the district doesn't have any recommendation on either one of these items but we're evaluating both of them but the general difference of a bond versus an override the bond to your point right is a is a debt mechanism so it it um authorizes the district to sell um bonds to uh investors and then um that is a a transaction that incurs interest um there's a principle and interest payment that the district is obligated to make. So, for the past bond, there was $300 million approved um in 2018 for the district to spend. And I think um I don't know what the
076interest was at the end of the day on that, but there was um several million dollars in interest associated with that $300 million authorization. Um bond mechanisms are typically used to fund like large projects. Um but they also um support all you know all capital needs, right? their their mechanism to approve um support capital funding in general. A capital override, this district, I've done some research, has never done a capital override and so it operates much like a Mino override with a little different restriction. So it's a seven-year authorization. It's a 10% cap on um the RCL on the capital funding formula. So that would equate to about $40 million a year in additional capital funding. And that is a straight tax on uh this the property tax um residents of Mesa. Uh no interest
077on that is a straight tax. It would equate to about a dollar um per $100,000 of assessed valuation um on on current numbers right now. But um those are two different mechanism on the bond. I want to note you typically Mesa has my my short research has done 10 right 10 year >> uh paybacks yeah those can go up to 20 years most districts lay yeah layer that debt over 20 years I know Mesa has had a history of shortening that debt which incurs less interest when you shorten that debt cycle but um you still incur some interest on paying back the >> okay so for clarification uh an override. We're not paying any interest on it. It's used in so the 40 approximately $40 million per year over a 7-year period of time would
078be $280 million of which we would not pay any interest on versus the $300 million bond that we paid several several million in interest on over the duration of our payback which we've not finished paying back yet. Correct. Yeah. >> When I look at debt service >> Yeah. And if if we want to talk taxes, typically the bond has a lower tax implication than a straight tax on an override. So there's there's that to consider as well. Until we bring forth any recommendations, I'm just kind of spitballing now. >> Yeah. I just think it's good >> for us to know like um as we as we move forward to discuss these things that I think are I if we're going to be potentially looking at an override I think it's very beneficial to our community
079to know what are the two differences um which would be better for funding uh in order to get um our capital needs met right uh so that's the only question that I had um but another perhaps with Mountain View's spectacular um auditorium and performing arts center. Maybe they need to really be looking at renting that out to generate funds. So with that, I'll go on. >> Thank you, Mrs. Benson, Mrs. Baldin. >> Yeah. So, I I don't have questions, but a couple of comments. Uh I I would like to see I think we could do this in a future meeting where we could have some board training on the state facilities board because I I want to make sure that we are maximizing our our use of the state facilities board and then I'd like
080to see the data on what what applications we are requesting and then what applications are being denied. I know there's some districts and board members have bragged to me that all their applications are approved. So I don't think that's happening for Mesa. So uh if we could get maybe a study session uh to have some training and then also I'd be interested in knowing uh opinions on what kind of reform would be needed for the state facilities board. I imagine it's something that probably hasn't been addressed in a really long time. I personally I'll take a personal point of privilege real fast. Just feel frustrated that we have we have a lot of uh there's billions of money in the state land trust that's earmarked for education and and it's just being sat on. I
081think there's probably so many better ways to to fund things out there. We have no control over it. The school districts have no control over it. But I think the more educated the board can be on these issues, the more that we can work uh in behalf of the district and the community to try to make changes or lobby for changes that that uh would help schools in a way that's I think more fiscally responsible than what's necessarily happening. And I don't mean that there's fiscal irresponsibility on the district, but I mean the state as a whole where we're sitting on billions of dollars that can only be used for education. And why is that not being used for education? And that's where I think we've had to rely on communities to fund education when
082the system was set up to do that in the 1800s. Um, so that's the kind of stuff I feel like I'd like to look at. And I know that's not going to solve our problems today, but getting very educated on the state facilities board would be I think very helpful for us as board members. Um the other comment I wanted to make too is I know that u Mr. Moore, you know, you're looking at different options. So is this correct? There's there's three types of overrides. We currently have an M override, but there's a special override that you can do for things like full day kindergarten and then a capital override. So yeah, >> so I think uh you know when we're looking at what kind of funding the district wants to re present to
083the board, we mentioned the capital override, but Mrs. Hutchinson brought up the full day kindergarten and the state's only funded for half day. Have we looked at doing a special override for for kindergarten? I think those are considerations like what you know if we look at all of the different override options are there considerations that we should be looking at maybe to fund kindergarten or funding arts and music. The override is it's all property taxes the bond and override but the override seems to be like the cheaper option though because you're not paying all that that interest. I personally don't I just personally don't like bonds because it's it's my property taxes that's paying interest to somebody. So like a pension fund will buy school bonds and it's secure and they get a rate of
084return. But that rate of return isn't really a return. There's no profit. It's just my property taxes. So I'd rather just take property taxes and just pay it to the school than have to pay interest to to somebody. Um but I know that the bonds are really based on the purpose. These overrides don't allow you to spend money the same way as bonds. And I I do understand that. But I think if we're, you know, looking at all of our options and we want to be as transparent as possible, I would I would really appreciate and it would help me in my decision making and trying to be fiscally responsible that we look at all the overrides, too. Maybe there's instead of funding kindergarten from one fund, maybe maybe full day kindergarten should should be
085an override. And that I think gives parents the chance to vote on that, too. People don't know that the way funding works for education. They don't realize that the state doesn't give us full day kindergarten. Um, and it's really popular. Like I'm surprised. I I wanted half day and I was like in a very small minority of parents that wanted half day. It's really we've really gotten to that point where our community, they want and expect full day kindergarten. I think that's most parents now. And I'm I'm an outlier there. And you know, maybe that needs to be funded with a special override rather than how we're funding it now. Member member Walden, two things. First, I I really appreciate uh the thought behind your comment on the Arizona State Land Trust. Representative Gres down
086at the state legislature has been working to figure out solutions on the Arizona State Land Trust and how to best use the money. One of which of his ideas he proposed last year was centered on teacher pay. And I just appreciate, you know, there's been reports out there about all the money that school districts have in dead cash, which is cash we really can't use as a school district because we don't have the budget authority to use it. And so pointing out that there's other places in the state of Arizona that have funds available in the corpus of that fund to benefit public schools is something that I think we all need to be aware of and hopefully Representative Grass continues to make progress on that at the state level. And so educating on behalf
087of SFOB and what's happening there is something that we certainly can bring back to the board uh because I think that helps uh the board better understand how limited the grants are from the state right now at $200 million. I will tell you as someone who has been on the operations side in another district, we used to get a little upset at Mesa for their high acquisition rate of schools facility board uh grants. Uh so it'll be pretty easy to draw up the data and show you exactly what proportion of of school facility where Grants Mesa public school is getting. The second thing I just want to mention really quickly the combination. So we are exploring any Mr. Moore has done a wonderful job of bringing us fresh set of eyes on things. Uh and
088uh we are exploring any and everything we can do to try to try to to try to make uh our facilities in Mesa public schools live into the fact that the learning the learning for students improves when facilities are proper when facilities are up todate. And uh a capital override is something we continue to explore. We'll have some stuff in front of you in the spring. Uh that's what we're planning out here. But the M override and especially override can go no more than 15% in combo. So that's a rule in state legislature. So we're already at a 15% capacity on the M override. So a specialty override would not be an option for us because we're already at capacity and that's why the capital override portion is what what's intriguing to us. And then
089please remember that capital dollars and M dollars can go back and forth. We can line item them. Most financial people will tell you you never want to take capital dollars and move it to M. But if you need to relieve uh uh capital by moving M to capital, that's a lot better off. So that's another thing that we continue to deliberate like should we start moving money from point A to point B. It's a tough conversation to have when you start to limit have limited capital dollars in the district. >> So it's I see. So it's 15% total out of the So there's three types of overrides but the total cannot exceed 15% >> on the M >> out of the two of them. >> Yeah. >> The cap the the capital override can be
090an extra 10% but between the two specialty and M that can add to no more than 15%. >> Oh okay. I see. Thank you. I I appreciate that. So, um, on our emo override, the 63 million, that's what's being collected a a year from property taxes, it's 63 a year. >> Yeah, that was for the last year. So, this year, um, we have to look at the budget to see what that calculation is. It's based upon, uh, prior year average daily membership and funding factors. >> Okay. And then just remind me, uh, how how long is that override in place until? Do we know? >> It was voted in 23. So the first year was 24 25 26 26 27 27 28 28 29 full funding and then in 2930 it goes down by a
091third if the voters don't reauthorize it and then reduces by a third every year until it's zero. >> Yeah. Unlike the capital override capital over would be seven years fully funded. The M override has a for some reason a five-year fully funded stipulate and then it has a phase down. Um, so you have to it really you have to renew if you want to continue that in year four or five. Um, I love Arizona rules. >> What are we currently funding kindergarten out of? Is there any special fund for that? >> M. It's just coming out of M. So I mean we could account for the override being something that brings in monies that helps us on the M side to pay for full day >> but ultimately if you want to look at a
092formula like whatever excess we have we're using to supplement the lack of funding that we're getting from Kinder. So, um, if we were fully funded, maybe that would allow us to lower our class sizes, but because of the situation that we're in, just an example, we have to put one more student in each class to help supplement the lack of funding we're getting from the half from the from not um getting funding for full-time kindergarten. So, but we we pick it up in the budget. >> All right. Um, well, that was all my comments and questions. Thank you. Thank you, Mrs. Walden and Mrs. Jaffy. >> Those are some great questions. Thank you, Member Walden. Answer lots of my questions. I have just a couple more. Um, how are we looking at redundancies in technology?
093I know that when we had ESER funds, we invested a lot in onetoone technology and our kids have access to Canva and Google Classroom and all of these different softwares. What are we doing to evaluate where we have redundancies? >> Yeah, that that is a part of our ZBB or zerobased budgeting process. And so, um, as I've stated earlier, we're looking I'm I'm working with departments, including, uh, someone to my right who has a lot of software, um, and I know she has, um, we've already talked about, you know, going line by line and reviewing those on an annual basis and whether we're continuing to use those. I know her department has already done that in great lengths because I've seen um, just from year-to-year budget savings in my evaluation. And so, uh, we continue
094to do that, um, on that ZBB, zerobased budgeting methodology that we are now utilizing on a year-to-year basis. So, >> thank you. And then I just had a comment. I do I have seen the how the improvements on our campuses have really helped. I remember walking into the Mountain View choir room and a student saying, "I feel so lucky. I feel like someone cares about me that I get to learn in a space like this every day." And I just want to remind our community that we have schools that haven't been able to be touched. I talk often to Red Mountain parents who are like, "Yeah, that'd be great, but we didn't get it yet." And so I think as we have these conversations to engage the Red Mountain community and make sure that they
095feel heard and seen and know that we do want their students also to receive upgrades. Um I know it's been a a great benefit to many of our campuses, but we have a lot who are still wanting updates. And for HVAC updates is great, but anyone who has walked the campuses during back to school knows that we have a lot more updates to make in our HVAC systems. They take a lot of pressure in the Arizona summers. And so I I think it's definitely important conversations to have with our community and and help our students to feel seen and known and know that we want them to learn in beautiful and safe environments. >> Thank you. Thank you board members for your questions. Really quick, um I know we keep adding time, so thank you
096Cameo and Mr. Wing. Um, uh, on the capital override, are there restrictions as far as limitations of what projects can be done with that? Like, >> no. Uh, President Davis, like it falls in line with the, um, definition of use in capital funding. So, it can be used for building renovations, um, FFN, furniture and equipment, technology. The pro the problem comes about when when you're only getting 40 million a year, right? That typically is not enough to rebuild a school unless you're going to allocate it all to one school, which with our technology needs, our curriculum needs, right? You start adding those in there. Um that funding solution is is oftent times a great solution to keep a onetoone device initiative in place, to keep um a curriculum replacement schedule in place to refurbish playgrounds.
097But when it comes to rebuilding schools or or talking that conversation, right, we're talking uh 50, you know, $60 million and and so that that funding mechanism is typically not adequate when it comes to those conversations. Um so I just want to point that out in my experience. >> Perfect. Thank you. Do you think looking at our campuses and needs, do we have buildings that are in or campuses in need of being rebuilt? I I will say with I've been here a little longer than Tyler, not although I don't have maybe Mr. Alexander's uh years of experience in Mesa public schools. I will say with certainty that there are certain schools in Mesa public schools that are probably approaching the end of useful life. Um there is an initiative at the SFOB, this will be
098in the education process to come up with how does the state fund building uh scrape and replaces when they get to end the useful life and how does the state fund that? because right now the state only funds districts who are at capacity and want a new school. Uh but in Mesa public schools, I can tell you there are facilities that we would consider applying for if the SFOB has an end of useful life uh uh element to it. We would apply tomorrow for some of our schools to move into end of useful life and garner state funding to try to rebuild those schools. >> Great. And I do think that a study session or some sort of education on the SFOB would be fantastic. So, we'll put that in. Um, really quick, how many
099do we know off hand of our schools have not had the uh front office uh remodels done? >> Do we know that? Sorry, I don't put you on the spot. >> A little over 30. Um, but don't quote me on that. >> Okay. >> So, we still have quite a few that have not been >> quite a few elementary. Okay, that was what I was just So, there is a big need for some big projects to go on and I'm sure this rain over the last weekend did not um help with any of the accentuate those needs in some of these. So, um well, we appreciate the information. Board members, we do have a spreadsheet. If you think of other questions or have other thoughts, um if you can put those in on the spreadsheet,
100you can link that in board docs. And that brings us to the end of our uh meeting. Do I have a motion to adjurnn the meeting? >> So moved. >> Do I have a second? >> Second. >> Any discussion? Seeing none, Miss Kirby, will you please take our vote? [Music] With a vote of five, the meeting is adjourned at 6:23. And thank you all for being here tonight. Have a wonderful evening.