001Let me go ahead and call the meeting to order um here at 8:06 a.m. Um things we're trying to discuss are we need to take a vote on the Q2 budgets um report to affirm kind of the reallocations so that's ready to go to then go to full school committee uh next week we need to we can give an update on the FY27 budget the select board had some presentation the town administrator shared some updated kind of numbers some things we've been working with them on and so we can share that and talk about next steps of that and then Katie put together some slides um just kind of part of that I think but put together some slides on the surf breaker account. Um and so and then we have a proposed meeting date
002for the um meeting with the select board finance committee uh on the 4th. So those are things we need to cover. I guess I'm delaying a little bit in case Amanda got here, but uh if it's all right with you, Nathan, maybe I'll share just the update from the select board meeting on the updated number. So then we can >> Yeah. >> Okay, >> that'd be great. >> Vote the uh >> Yeah, we can vote the Q2. Why don't we go ahead and vote the Q2? That's a good point, John. So I will make a motion to accept the Q2 budget report from the school department. Um, is this >> I'll second that. >> Um, okay. Uh, all in favor, roll call votes. Uh, Nathan, >> yes. >> And I am a yes. So, we
003will have that then ready for um the next school committee meeting to accept. Uh, all right. Now, the FY27 budget timeline. Uh, so let me share my screen a little bit because I tried to like just type this out this morning based upon their call yesterday. >> Um, can you see this? Yes. >> Okay. I know you're driving to the subse or in transit. Um I'll I'll talk it all out, but again, this is information I just tried to put together so we could like look at and play around with it a little bit. um coming out of the select board meeting last night. The numbers have still been moving around a little bit because chapter 78 came in, but essentially um again our FY26 budget is this number here, 72,873,000 extra. Uh our level
004service budget, right, was 5.2% increase um of a 76,663,000. The initial town allocation was a 2.38% increase, $74 million, $68,000. That was the kind of 2.12.05 uh million dollar kind of u funding gap that we've been talking about. uh the town last night with and I'll go through kind of the things that have changed, but with some um revenue changes and some other kind of cost changes are updating the school and town department percent increase from 2.38 to 3.29. Um, and that brings our updated FY27 allocation from the pound to 75,271,000. So that means our gap is about 1.4 million for level service. Um, which is an improvement of about $663,000. So that is that is what has changed over the last kind of again three three weeks that we've been uh talking to the
005town. Appreciate the town's work on this. Uh so that's definitely an improvement. As we've said from the beginning, we didn't see any way the town was going to fully close this. Um but this is a positive reduction. Obviously that's a lot of FTE. I did try and put this number into kind of the FTE. So we were originally talking about 26. It's still with an average FT of 76 which I think is the number can't 76 or 78. Still about 18 FTE. So it's not it's not a small gap. I'll remind anybody listening like we're not it's not going to be all FTE that will cut this. There will be other things you will look at as John has shared previously but that's just kind of a rough order of magnitude. Um to share just
006what has changed with the town. >> Can I ask a question? >> Oh please. Yeah. >> Does that Excuse me. Does that conclude um the non Does that include the savings the different places where John and Katie talked about having that were not >> this number here? >> Yes. >> No. >> Okay. >> It doesn't include this is just the allocation from the town and then you know the things we've talked about will >> close that gap like the 2.1 gap. Uh so the things the town has shared that they they have done uh they're increasing the operating budget stabilization fund usage uh by another 235,000. So that'll go from 700,000 to 935,000. They're also depositing a million dollar free cash into that account uh to help build that up over the next several years.
007And so they're drawing down portion of that for next year. Um so that's that's part of it. They're doing a debt service reduction essentially. I think it's the Cunningham fourth floor that they're not going to start the debt service on that this year. They're going to wait for FY28. So that's a $230,000 savings for FY27. That number is going to hit us in FY28. So um but that at least helps us in the short term. Uh the savings from the school department taking on the health insurance of food service staff and pulling that into the food service budget saved the town uh $274,000. And then the net of state aid the town got we got some updated information from the governor's budget uh which is usually in indicative of kind of a new baseline funding
008for state aid uh especially for schools. And so that is an additional 225,000 I'll note the way the town looks at state aid is that it is a common pot. So the majority if not I think all of this is really chapter 70 state aid. The town does not view this as school funds. It views as town funds that then is distributed across all departments. Um so just naming that and any future change to state aid uh chapter 7 school state aid is is treated the same. That's how Nick has has done it in the past as well. So alto together this is, you know, a little south of the million dollars. And then I think there's a couple other things that are happening. So it brings us to like a the 1.1 about a
009$1.1 million change. Um, which brings the entire gap to about 1.5, which the schools are taking on 1.4. So things we've asked the town to do to address our costs is uh increase use of operating budget stabilization fund. They are doing that. We also asked them to look at the division of the revenue gap. Um they have not done that. The town administrator talked about that last night. Received no push back um from the select board. So it appears that they are not interested in talking about uh allocating kind of more proportionately the funding gap. So you think >> he the town the town administrator said that historically the schools in the town both get the same percent increase which I think is not true. Uh we didn't get the same percent increase in the
010override. We didn't get the same percent increase in my first year on the budget. Uh and I'd assume if you look back over these years all departments didn't get a 6.44% four 4% increase in 2023 or a 7% increase in 2017. So I that was and I want to be clear because I I've heard other people make statements about what I said which isn't always 100% accurate. So I want to be clear that is my understanding of what he was saying. I could be wrong but that is their approach is they are giving all departments the same percent increase as how they originally gave the 2.38. So they are allocating the the funds and the same percent increase across all departments. Um >> Mark, could I ask a question on that one? >> Please. >>
011I just want to make sure I understand your your understanding is that the logic behind the equal allocation of reductions is because that's how we've always done it. >> It's the equal allocation of revenue. >> Yes. Yes. >> Yes. And yes, that because he's saying that is what we've has done historically, I believe, is what what I recall the quoting. >> Okay. I guess you know, just for the record, if if that is the logic, I would just go on the record as strongly disagreeing with that logic. I don't think it really um I don't think it really withstands scrutiny. um if I mean the the thing that's challenging with all of this is that um with with this particular point is like at least I personally I don't have any insight into what the
012the economics of any of the other town departments. So, if the town administrator came back and said, "Hey, look, we're facing X, Y, and Z budget constraints over on public safety and DPW and we really need to share the burden and there's benefits of school." Like, I could get behind that. Um, but it's just like a it's a black box and I don't know what's in there. So, it's hard to understand this sort of justification for allocating revenue. >> Yeah, I I totally agree. I feel the same way for Yeah. their revenue projections, which again we've gotten a bit insight, but also their costs. I I can almost certainly guarantee that across the various departments within the town side, every department is not getting a 3.29% increase. I just I wouldn't recommend the town administrator
013do that if he was like that each department is different. And so I assume the funds he's taking he's diving up across council on aging DPW fire police uh you know all all the library all the other ones cemetery and they're not getting kind of various percent increase again I to your point it is a black box I don't know >> that's not kind of our realm that's select board's realm but I I think the >> the overall point I was naming is just what what we have asked the town to do and the select board and town administrator to consider and again they did one of them In terms of the operating budget, they are not apparently uh interested in doing the other uh they did find some other places to do some savings.
014The debt service uh being kind of the primary place. These other ones are more kind of school driven. uh this 500 >> asked about the so chapter 70 is not >> so why would it be town >> the way the town administrator views all state aid is that is a collective money that then e utilizes to balance the budget or to develop the budget they do not and I don't think I think this is true the past couple years I've been on this uh they do not say hey we're getting an extra 150,000 in chapter 78 the school's giving up for 150,000 they are taking that in this case extra again state aid for the schools is actually up and I was trying to do the calculation here Katie I don't know if you have
015it because the new governor's number is 150 I think the town was originally holding 70 or 75 >> they were holding 30 minimum aid per pupil and the governor's budget is 75 >> okay >> and then typically like last year what had happened was the governor put 75 and then the house and the senate increased it to 150. >> So it chapter 70 there's chapter then a movement upwards. >> Yeah. >> So is that >> so that that's >> typical though like I just I guess it's like if if state if state if chapter 78 is supposed to be for education. I just I guess I don't understand why it doesn't go to education. >> Yeah. Yeah, I mean I don't want to speak for this administrator. I mean there are other costs that hit
016the shared budget, right? There's like the our costs actually went up slightly. I think for what we have to pay the state for NBTA with the NBTA like fee we pay. Um so some costs actually went up. Our rural state aid again went up at a greater rate. But no, I I don't know what other towns do. Um >> I think I think it's a um historic uh tension between towns and schools as to how chapter 70 gets uh distributed. I think there is it's a it's there is there are districts that put it all into one part as the town administrator does here in Milton. >> There are places where um they budget on a certain number and anything over in excess of that number. So they might say we're all going to agree
017to 2% in November and December and if the governor's budget comes in in excess of that like we have today and sometimes there's discussions about that excess money going directly to schools. So I think that's it's a common discussion point I think in most I ask a question. So the reduction to schools I think I had the wrong number is 1 million 391891. What is the actual dollar value with the challenge reduction? uh the dollar value of the town reduction didn't put in here but essentially um again I think it was about 1.5 >> so we're taking the 1.391 reduction in the town >> yeah our percent of the reduction is actually grow so we're taking the proportion is we're now at 90% >> so I just want to make sure we can have for
018the for the viewing public what the dollar value is of that because it was 440 when we were at 2.1 Yeah, >> assuming that's proportionally gone down. >> Yeah. No, we're again, we were at 8416 split. It's now the the town the schools, I'm sorry, the town department level service request was 3.5.458. Um >> 3.58. >> And so, right, they're now at 3.29. So, they're they're pretty close to what they were asking for at this point. So, that means their reductions are quite minimal. our reductions are still not you know 1.4 forward is again way better than 2.1 I want to be clear but still significant. Um so yeah there the overall gap I think is 1530474 >> reading his chart right >> and that was updated to reflect the state aid numbers. >> Yes.
019>> Yeah. So if we subtract 1530 and then we subtract 1391 >> yeah we're at 91% of the >> in the doll of the rough doll the value of that is $139,000 in the school side I mean on the town set roughly 140,000 >> yes >> that's just a very a 70% split would have the schools at a million town at um so yes again that's a place that I think we can continue to talk to but they the town administrator did directly address it last night at the select board meeting and said he's not interested in that um and again the select board members were all there none of them pushed back on that at all. Uh Nathan, >> I um I want to I have a question and a comment on the debt
020service one. If I if I heard your interpretation correctly, Mark, there's like 250,000ish in debt service for um for the for the Cunningham Kolycott renovations, which we should start paying in FY27, but somehow we're able to delay it a year uh to to that that initial payment until FY28. Is that right? >> Yes, that's my understanding. Do we um do just a clarifying question is by delaying it for a year are we sort of absorbing additional interest or penalties onto that debt? >> It's a bit beyond my expertise like I'm not sure we haven't talked directly with sound administrator about the debt service uh piece of this. I I haven't um so I don't want to be on my skis here. Uh I'd assume all he's doing is just >> he believes within the town's
021current budget he can kind of pay all the the costs until we hit July of 28. And at that point he'll pull down some debt to kind of recoup some of those costs. And so then we'll start paying the interest at at that point. That's that's what I I assume he is he's doing. Um >> so I I don't think there'd be any it's a one year as we >> I guess I'm wondering on that particular thing like I I of not having to reduce our budget by that amount this year. It it feels like, you know, as far as we can tell, next year we're going to be in a very similar situation >> and it could even be a more difficult situation. Maybe not financially, maybe the numbers are kind of the same,
022but our options are going to be much slimmer. Um, and any reductions are going to be more painful because we will have already cut into the bone of the school system this year a little bit. and a $250,000 cut um next year just could feel worse. Um I'm sort of like I was I was sort of wondering like should we just take a little bit of that hit this year to um to make next year's hit a little less painful and it'll be it'll hurt more this year but it'll hurt maybe less next year. >> Yeah, it it is a good point, Nathan. um as it relates to like how any of these things impact next year as you said the debt service soon as one it's not something we can do next year moving
023the food service it's not something that's going to save us you know when we have the $1.5 million gap next year uh is not going to be able to be 11we pull next year obviously we will always hope state aid grows at a greater rate operating budget stabilization fund I' I'd assume this is again given they're putting million dollar free cash in there. This is an amount that they can um utilize next year, too. So, there's some some of these things can be pulled next year, but guess some we can't. I don't know if this puts us in a worse spot next year with the debt service or not. Uh or really, I'd assume what it does is like 30 years out, instead of paying this in 20, you know, finishing the payment in 207,
024right? We're now finishing payment in 208. I I assume that is what it is. And so the difference between FY27, FY28 of like starting at FY27 or starting at FY28 will have minimal impact on FY28 itself. Um but again I've it could be on it. It's something I talk to to I think your question. We could talk to the town administrator and make sure we're we're being clear that we are not looking for them to make the situation next year worse. So it reminds me of the topic that we're talking about two things at the same time. Uh and we have been over the last month of this work. What is the short-term work we can do to sand the edges down for the FY27 budget which you know we made almost a million dollars
025of progress in that. And then the next conversation is the long-term conversation about whether or not the town and schools a should have the same percentage and b whether that percentage should be anywhere less than 4%. We we as a school district and I think we showed the data last week that we that school districts across the state grow at between 4.5 and 5.5 or 5.2 and um I think Jay Funding the head of the war committee had done some uh quick research on that and found similar data. So uh ex the next level of discussion related to FY28 and beyond I think really begins after we finish this FY27 conversation. we need to really focus on the long-term percentage breakdown of what the schools in the town should be looking to use as a
026guideline uh to ensure that we provide town services because keeping it at 3% is to me is not an option for the Milton public schools. So that that's the second half of that right. So I and I think Nathan if you're if we're trying to figure out what do we want how does how do we use that information moving forward to inform what we do in FY27 um it's you know we we have to be thoughtful about how how do we want to reduce and how do we want to keep positions based on the fact that we're we're going to see continued strain on our budget period moving forward even at 4 and a.5% that will present a problem. So even if we win that long-term discussion to go from 3 to 4 and a
027half, we will still be in some thin lean years moving forward that we should be thoughtful about now um and thoughtful about obviously next year when we get into that next level of budgeting. >> Yeah, I do think the historical piece, you know, 3.29, say again, way better than 2.38. That that increase is great. love to keep talking with them about how we adjust that further. 3.29 brings us from the lowest uh percent increase in the last 15 years to the second lowest percent increase in the last 15 years. Also just want to put that change in perspective only FY20 um was lower so gets a little closer to alignment of these other ones but again even as we said a half percent increase uh change which gives like the 3.7 that's save us $400,000.
028Yeah >> $400,000. So that get us down to that million which again would be around that kind of more proportional split that 70% 7030 split of the town's revenue gap. So I think we can continue to have that conversation with the town. Um I think a question two things coming out then we'll jump to the the meeting schedule with the select board finance committee of the town administrator in a sec. I do have a question on communication with families around this change given the town administrator has given us this updated number. Is this something that we think we would similar to what we emailed last time when we had the 2.1 million we provide like an email update to folks to say this is the new number as of >> we emailed last week uh
029to staff and they come out of the Thursday notification over the weekend. There was a blur over the weekend, but we will send something out. Uh we would prefer to set I want to send uh items out that are timely and accurate. >> Uh and also be able to indicate whether there's going to be any shift in that moving forward. So we're trying to give the question that we're always trying to answer is what did you know and when did you know it? So whatever we know and we know we have our family and our community and our staff know. So yes, this this would be a new thing that we can send out this week and we could talk to um Stephanie O'Keefe. We can do this as a standalone. Uh and uh would
030I would want to make sure that I have clear guidance from Nick about if there's still room for us to move on this because um I don't want to say anything that's final, but I do want to get the community update um that goes out. They did get an update this weekend. I think you got a community email and did you get it this did you get it Sunday night Sunday night? >> May there may have been a budget update in the family version of the newsletter. We sent one to the staff and usually it's the same. So, >> so we did give an interimm update last weekend, uh, which feels like 3 weeks ago given the snowstorm, but it was I think it was out there and we will provide whatever we know by
031Thursday. We'll put in the Thursday announcements as well. >> But yeah, I would definitely leave yourself room updated number still working with >> good change. Um and and we will so when we talk about numbers and I know that uh we want to talk about special education as well. These numbers also are coming in with the town still making available $500,000 to put into our special education reserve accounts. Whatever we can figure out as a vehicle to make that happen. In addition to the reduction in the gap that we've gone from 2.1 down to 1.4, they are still committed to, at least with Nick last night until the select board meeting, willing to provide another $500,000 to support the gap in our reserves for special education, which is a which is also welcome in and
032uh I have I'm grateful for. But we will put that into a into that account that we're trying to put aside for the upcoming years. Uh again, that account has $4,000 in it and it should have $3.1 million. So, we are a actively trying to make um that a priority with the school committee in the administration this year. We we plan on making uh inter um gradual deposits over the course of five years. That $500,000 would go a long way in shoring up that amount. That amount is very very important to the stability of the general education budget that we're talking about now. Uh so when folks say I don't I'm not sure what that is. Why do they need that? That is an essential part of our uh balance sheet as an organization to
033make sure our revolving accounts have healthy balances in order to um make sure that we don't have to go into our general fund uh if anything happens within that the ranges of our revolving account budget lines like special education, transportation, athletics, etc. So u uh that'll that that's going to have to be part of our story as well to let the public know. >> Yeah. Yeah. And that transitioned us u well into I think some slides Katie put together on the circuit breaker. >> Uh before that I just wanted or jumping down a bit I guess into next meeting dates but I think everybody got the email that um the select board Nick Milano is looking to schedule a meeting on the 4th next Wednesday. Uh John had already raised that conflict at our normal
034time next Wednesday. So, we're not going to be here um next week at 8:00 a.m. Uh but they offered 4:30 4:30 to 5:30 which is obviously close to our we do have school committee that night at 7. So, just raising that here. What is folks availability or pretty like board finance >> and this would be we would would we still have the finance committee meeting in the morning or this would be in lie of that? >> It would be in lie of that. >> Okay. >> Yeah, John we can't we couldn't have that anyways. as we were talking about meeting a different time but I think we'll just have this in lie of that and then the 11th the following week is when we expect to have the first next draft of the budgets um
035based upon kind of the changes um it it partially works for me I I need to I need I I can't fully answer right now if that time works for me I need to check something Um, but if it works for others, let's let's block it in. And I I I like I I I know I can make part of it. I just don't know if I can make the full thing. I need to confirm something. >> Okay. All right. I will email Nick Beck and reserve that time move forward in next checkin so we can talk about some of these things and see um >> if we pushed it back, would it ability? >> Yeah, but that's a good question. Is there a conflict more on the front end or the back end? >>
036Uh the front end I have something from four to five which again I may be able to move but that's that's what the conflict is. >> I want to take a look at our um our agenda for that night. We already posted something at 7:00. >> Oh just have them join the school committee meeting. Yes. Right now from February 4, we have community schools student service update and district curriculum update. So we could actually put them on put them on at 7 o' >> Oh, all right. I can offer that. Um >> that might be Yeah, just a way to get a time. >> Yeah, that's a good idea. I think the other members will appreciate that. >> So that's a good idea, John. All right, I will offer that. Uh, anything else would y'all
037talk about with the town or any other updates on the overall kind of SY27 budget before we jump into Katie slugs? >> Yeah, I I I uh did not watch the select board meeting, but I can say that um we have been communicating with Nick and Amy. Uh Katie and I have been I'm thankful for this reduction going from 2.1 to 1.4. I'm thankful for the $500,000 for special education stabilization uh andor circuit breaker funding for for that work that we have been doing uh by ourselves moving that that those values higher in those revolving accounts. Um and uh want to continue to advocate for what's the the needs of the schools and in any way we can balance this process. But I appreciate Deck and Amy's work uh answering calls and meeting uh regularly
038over the last few weeks. Um it's just me. Okay. Great. Um share All right. Can you see this, Nathan? Slides. >> Yes, sir. >> All right. Um words from that just >> um so I know there's been um a few questions that have come up because there are different areas that we receive funding in order to offset some of the expenses that we see within the school department. So, I think I just wanted to be able to kind of collect some information and then share it with you all so that we can then share it with the public just in an effort to provide more information hopefully clarify some of the questions that have been reurring questions. Um, and this is huge part of the process of the budget process. not only was it a
039huge part in previous years, it there's a major uh implication for this year and it will continue to be a huge part of the budget process for future years. So just um again in an effort to just put some information um in a centralized place around special education funding specifically um circuit breaker funding and the special ed stabilization fund. So um special education funding expenses are funded through a combination of sources. So it's not just the oper operating budget for special ed. We receive federal funding, state funding, and of course local funding. So the local funding is the funding that we receive from the town of Milton through um the tax levy and also through other local revenue sources. So this is just information on some of the federal funding sources. There are two major
040grants that we receive funding uh for special education. It's the special education IDA grant or 240 grant. Um and then also the early childhood grant, the 262 grant. So those are the federal grants that we receive. um those are entitlement grants, meaning that we receive them on an annual basis. Um and these are subject to any of the changes that we may see at the federal level. So, it's really important for us to just keep an eye on what's happening kind of with the federal budget, if there's any impacts there, because it then could impact um the grant funding that we receive. We also receive state funding. So, we already talked a little bit about chapter 70. Um, chapter 70 provides general education aid. Um, meaning that the funds are not specifically earmarked to special
041ed, but there is a part of the chapter 70 calculation um that provides more funding for special education students just in the overall calculation of how much funding that the town received. And then the other piece of state funding is the circuit breaker funding. So that's the funding we've talked a lot about um that is a reimbursement program and that provides financial assistance to schools to offset the cost of special education services. Um and that is when we are reimbursed for expenses that we paid for specific costs um in the previous fiscal year. So there's just more information on both of these state funding sources um kind of a reference to finance regulations in the mass general law and then the local funding again the operating budget and then um another piece of local funding
042is the special education reserve fund. So the special education reserve fund and the circuit breaker funds are two separate funds. Circuit breaker being funded by the state special education reserve being funded by the town circuit breaker. We that is the account that we've talked about that the $8,000 balance at the beginning of this fiscal year. Special education education reserve fund was established last year. So it exists but it has zero balance. So that I just want to make sure that we're kind of clear on the differences between the two. Um so this is just a summary the FY26 summary of what the um the MLS are for each one of these funding sources. So you can see for IDA and 262, those are the two federal grants. Those are the allocations for fiscal year 26,
043we use um the IDA grant to offset the cost of um out of district tuitions. We use the 262 grant to offset um a portion of a cost for one employee um that works with our preschool program. And then we also have the chapter 70 state aid. Um and that was our fiscal year again fiscal year 26 allocation. And then the circuit breaker reimbursement that we received for this year. For the local budget I just pulled the piece of the operating budget that is under the special education cost center. So that includes the cost of teaching staff. Um it includes our out of district tuition costs, transportation costs, instructional material costs. So that's everything for special education that's held within that cost center in the operating budget. And then the other local piece is that
044special education stabilization fund. It's established, but the balance is there's no money in that account. So um there are impacts. So anytime there are changes to federal and state funding, it does impact local funding and the kind of the pressure that is put on the um municipality in order to cover the expenses. And so any reduction in federal or state funding, which we often times refer to as revenue offsets, could have the same impact as an increase in expense to the local budget. Um and so anytime we talk about fluctuations with circuit breaker, we talk about fluctuations and impacts of what's happening at the federal level, we talk about those and we focus on those because um it could potentially put more pressure on the local budget or on the school's operating budget. So, it's
045always important to um to just keep an eye on those funding levels at the state and uh federal level. So, this just shows if you have $5 million in expenses and you get you receive $2 million from the federal and state, then the operating budget would have to cover $3 million. However, if there is a reduction, so if your expenses are $5 million, but you only receive 500,000 from both federal and state, local funding has to pick up more. So, the local funding has to cover that additional million dollar. And so it's really important whenever we talk about how much circuit breaker money are we going to use um how much are we receiving kind of the whole process of making sure that uh the balances are established at the level that we think that
046they should be. We always just have to keep in mind any impact that it would have to the operating budget. So some of just this slide just outline some of the key differences between the circuit breaker account and special education stabilization account. There's differences with the source of how they're funded. So one being state funded, the other being locally funded. Um the purpose of the accounts, the cap or the limits to the accounts. So circuit breaker is uncapped. Um the best practice is to have the to retain the previous year's reimbursement. The stabilization fund is cap by law at 2% of the district's net school spending. Um the usage timing is a little bit different. circuit breaker funds are received for costs incurred in the previous fiscal year and the stabilization funds can be used
047in the current year and really the intent of it is to handle immediate cash flow issues. So if you have an unanticipated unexpected cost that wasn't in the budget, that is the intent of having that stabilization fund so that you can pay for that expense and not have to impact the rest of the school's operating budget. Um in circuit breaker, so just the reimbursement type, I'm sorry I keep moving this around. circuit breaker covers um so we're reimbursed for the cost of tuition transportation stabilization funds are more flexible so those can cover any unanticipated or unbudgeted costs including in district or out of district services so I think sometimes we talk about these kind of interchangeably but there are a couple key differences so um just wanted to kind of call those out just to
048keep in mind um what the differences are as we talk through kind of the budget process and how we can use both of those funds. I'm doing a very bad job at um I'm sorry displaying but like just moving things. Um so just some information on circuit breaker. Again the best practice is to retain one year of circuit breaker reimbursement to be used to offset costs in the current fiscal year. As the payments are made, those funds are retained to be used in the next fiscal year. So the payments are made on a quarterly basis. And um the practice that we want to get to is that as those payments are made, those are just we don't spend them right away. those are put into the circuit breaker revolving account so that they can be
049used um in budgeting and in administration of the upcoming fiscal year. So for fiscal year 26, if we were utilizing that practice, the balance in the circuit breaker account should have been about $3.1 million, which is the previous year's reimbursement around amount. But as of um July 1st, 2025, the circuit breaker balance was $8,000. Um so that is we've talked about again we've talked about that a lot but that is just something that um when we look at the budget when we look at the operating a budget and some of our other funding sources sources knowing that the balance was only $8,000 something that we knew we needed to address um in the process. So to address the low balance and to ensure budget sustainability, that was again as a part of our um budget
050philosophy for this year. A huge piece of it was budget sustainability and looking at what are we doing in our budget practice to ensure sustainability for future fiscal years. We um reduce the circuit breaker utilization in the current fiscal year so that we can retain some of that reimbursement. I mean to reestab reestablish the fund balance. Our goal was to reestablish that balance over the course of three to five years. So, we knew that we couldn't just do it here because again, that would have put a lot of pressure on the local budget and it would have impacted the school's operating budget in other areas. And so, we said that we were going to try to lessen the impact to the operating budget by um by uh re-establishing the balance over the course of multiple
051years. And the target was to retain from 750,000 to 900,000 in reimbursement funds per year again to iterably build up that balance. So you can see this is just a snapshot of the actual numbers. So we started for Serb Breaker with 8,000. This is the reimbursement amount 3.5 million. That's the amount of money that we're receiving this year. This is the amount of money that we'll have to utilize this year to cover our expenses. And so we're projecting that this is going to be the balance at the end of fiscal year 26. Again, the goal is to get to 3.1 million. So while it's not $8,000, it's also not $3 million. So we have to just um continue to follow that practice year over year until we get to that balance. So the way that
052the fiscal year 27 budget is currently built is saying um we're projecting to have $1.1 million as the starting balance. We are making the projection or assumption that our reimbursement will be similar next year as it is this year and that we'll you we will have to utilize $2.6 million of that reimbursement to cover expenses for next year. And so at the end of fiscal year 27, the ending balance will be almost $2.1 million. And then it's the same process for fiscal year 28 starting with 2.1. We're assuming that we would receive about 3.5. We would have to use about 2.6. And that will get you back to the ending balance closer to the 3.1. So that's that is just outlining how we're projecting out or how we're trying to budget not only in current
053fiscal year, next fiscal year, but in the future so that we can um get back to that ser breaker balance that's so important to be able to offset expenses for special ed. So if we utilize more of the circuit breaker funding, so if we cover more of our expenses on an annual basis, it just simply means that we'll be able to keep less year-over-year and it's going to take us longer to reestablish the funding balance. So if we're able to retain, you can see if we're assuming that this is our reimbursement. This is just shows you how much of the expenses that we could potentially cover. And this is how much of the balance that would be retained. And that's how long it would take us to get back to that $3.1 million. And so,
054um, I think ultimately thinking about why this matters, um, just knowing that a reduction in federal or state funding, which there is a very real possibility that there could be fluctuations in federal or state funding, it um will have the same impact to our operating budget as an increase in expenses. So very similarly, if we increase our utilization of our state or federal funding, um there would be a corresponding decrease to the local budget or the amount of money that we need to utilize from the operating budget. If we increase the use of circuit breaker funding in fiscal year 27, it will just take us more time to reestablish that fund balance. So instead of um reestablishing that and having a fully funded circuit breaker balance at the end of fiscal year 28 may take
055us until 29 30 31 32 and then the fund balance ensures stability and funding for special education costs which can be variable in nature and that's something that we've just struggled with in previous fiscal years. Um, we've talked a lot about this when we talk about the utilization of free cash. Is free cash going to circuit breaker? Is it going to the specialized stabilization fund? What happens if that free cash goes into that fund? Um, and is there an impact in the operating budget? And so, a lot of that is kind of it's can be confusing because there's several accounts. They're funded in different ways. So, I really just wanted to be able to kind of provide a little more information um just in the hopes that even if it kind of like answers one
056question or provides a little bit of more clarity on kind of the buding process that we're using in order to offset some of those special ed costs um that we have it. Um, and I think this is something that we'll have to just update kind of as we move forward, but just some more information kind of in the context of the conversations here with the gentleman. >> Thank you, Katie. And it also will be on the website. So as a resource standalone as a resource and if the numbers need to be updated we can update them in into for the viewing public um specific to our district and how we use certain breaker. These are bills that have to be paid. Yeah. These aren't choices. These are actually bills. >> So we're trying to organize
057our financial um planning in order to make sure that we can pay our bills first. These are bills that need to be paid first. Thank you very much. Have >> you seen any um just knowing all the changes that there have done education? Have we seen anything positive about that already? I mean I know like IDA funding is always is already not even yet. So >> have we seen any effect yet or is that like >> um not yet. What I've heard is that it would be level funded. And so, um, in the past, we've seen our expenses increase year-over-year. Typically the grants will increase even if it's just a small amount. But there is somewhat of an increase year-over-year, but from what I'm hearing, I believe that the federal funding is going to be
058level funded, meaning we'll get the same amount next year that we got this year, which because of the increases that we hear your that we um in year result somewhat in a reduction at the federal level. Nathan, >> thanks Mark. Um Katie, this is great and I think it'll be I'm glad it's going up on the website. I think it'll help people understand why saving in this way is important even when we're in a even when our operating budget is um not where we want it to be. Can you um I two questions about about the goal we're shooting for here, which is uh forget the exact number, but in the $3.5 million range um for for a target balance in in in for John and for Katie in your prior experience, um have you
059seen in other districts that they have consistently been able to maintain whatever the balance is needed? um year-over-year. And I'm I'm I am curious if anyone knows when the last time was that Milton Public Schools had the right target balance saved in the um in the circuit breaker um fund. And I'm asking both of these because I think, you know, it's it's the other side of the coin for for having this conversation at all, which is um how aspirational is this goal that we're setting? Is it achievable? Are we putting ourselves at a higher standard than other districts might? Um and I'm wondering if you could speak to that. I'll stop by saying it's it's not aspirational as much as it is um healthy financial guidance from the state. So when we look to you
060know what to save and what that account should look like, the state gives us guidelines on what a healthy school district's balance sheet should look like and that's keeping whatever reimbursement you get in this fiscal year. you hold on to it so you know you can budget for the following fiscal year knowing that that that amount is uh within your budget. So um most districts who can maintain that kind of a healthy environment um which is what everybody's target is is one year's worth of circuit breaker. Uh that might go up and down maybe $100,000 $200,000 from year to year. Uh but it should never go down to $8,000 as it did in fiscal uh 26 here in Milton. Um it should never be zero. It should always be a healthy balance. Um and the
061guidance from the state is one year's worth of circuit breaker which is 3.5 for Milton. And um right now we're just trying to reach that 3.1 target um in order to kind of get as close as we can without um overchallenging our operating budget as well. So, um, other districts, I think that that is the practice, um, that I've seen and kind of tried to bring to the other districts that I've worked into is just having that full year um, of circuit breaker reserve. It just helps with the budgeting practice. That's why I think I was um that was always a priority for me coming to Milton and talking about budget sustainability is um that's a huge piece of being able to to create a budget um just because those expenses are um can be
062variable in nature. So, um I always thought it was really important to make sure that the balance was appropriate. Um and again that it's similar in other communities as well. Like that is the target to have your full year of circuit breaker. >> This was a a slide that we shared with Warren Committee and select board last year during the U override work and committee pulled together the history of the circuit breaker account. So to your question of has Milton achieved this, the answer is no. At least going back to FY 16 um or maybe FY 15 um that means that we shouldn't be achieving this. there are a lot of other things that build historically wasn't doing that we you know identified weren't good and so we are now doing better of um I
063do think of again an f closing out FY24 when the account was fully closed out if this had been at the $2.5 million mark right the $700,000 we needed to go to the town to ask for we wouldn't have had to go to the town to ask for the next year when we had the $2 million gap, we still would have had uh you know an extra million dollars. That gap immediately is hald. And so all the work we did to essentially cut that $2 million gap to a million dollar gap. We now with the circuit breaker reserves would have been able to fully close that and would have had no pressure on town. So I just think like from the last two years and the circumstances we were push put in by not meeting
064the state guidance I think clearly shows the importance of grading this um because again I think the feedback we got clearly from the town was you need to be able to manage your budget uh internally and so this is a little bit why like when we get some push back from the select board on our goal of doing this I'm not sure Why? Um because I think it's a extremely important goal for us to meet kind of that expectation that I think is very reasonable which is we need to be able to have mechanisms where we can address funding issues again out of district placement costs going up 12% whatever it was that year that kind of really put pressure on FY24. Um we need to have this in place and $5,000 doesn't do that
065currently. >> That was your question. >> Yeah, thanks for that everyone. I mean, I I completely agree with all of this. Um, and I mean, the slide you just showed, Mark, is um helpful context to sort of demonstrate that at least over the last decade, Milton has not had a culture of sort of financial culture of saving for saving appropriately for these expenses. And so, there's some inertia that we're also fighting against there. You know, it's hard to it's hard to change that behavior. I do want to be clear that to anybody watching, the money, the goal of rebuilding circuit breaker was stuff we talked about during the override process last year. The schools received a $700,000 cut tole service through the override process. Even with that, we cut further in order to embed within
066our operating budget this ability to kind of start to build this back because we knew this was an urgent priority. This is adding 0% to the school's level service request for next year. It has zero impact on the revenue gap that the the town is experiencing. So like I I think it's right that we look at everything within our budget, but this is not a budget driver in in any way um as it relates to kind of what the issue we're dealing with and now the $ 1.4 $4 million gap that we're we're needing to to address that's not being caused by this at all. Um I do think the question of in front of us is timeline like what is a what is a reasonable timeline what is too aggressive timeline kind of given
067the current pressures have what's too slow of a timeline because as you said we have unknowns around >> um future federal funding uh you know as you say we can have a super expensive kind of out of district placement come up at any point at any year because if a kid comes in front of us and needs something, we we need to provide that to the student regardless of cost. So, I I know we were at 9:06, Nathan, and I think you might have a a harder stop. Um, I did have a try to have some of this out a little bit. And I I think the other piece I was I was wondering is you we said 3.1, but as Nathan said, like the current number really is 3.5. And I think we talked
068about within our policy having whatever we received last year that is what should be our bank account. We really we shouldn't be using any current year. So really the new number if we're receiving 3.5 million this year should be 3.5 is that >> for next year the year and re that's the reimbursement I think last year was >> I believe it was 3.1. Yeah, it was 3 3.1. So, it is it is growing, right? >> And we anticipate our expenses continue to grow. Hopefully, our So, I tried to do a little bit of modeling here, too, which I think was connected to kind of your stuff, but it just allows us to play with it. So, as you said, our current circuit breaker utilization, what we're carrying over next year is kind of the $900,000
069gap to help us build that back. We said that would get us kind of there. This our current gap I sorry this is our current circuit breaker funding that we're receiving in the current year. This is what we anticipate the back gap being as you said. This is all year numbers. I'm just double checking um or restating kind of what Katie said. We are expecting the town uh said they were going to do a 500,000 deposit into this which is fantastic. That should help us kind of meet this goal uh quicker or or slower or adjust this number. But so this is the remaining gap going into FY27. And so if we have $900,000, then essentially that would take a little over two years to kind of get there. As we say, our costs are
070going up. So I tried to take into account some like I just put 4%. That's a total guess. Um I don't know what that is, but that would assume that after two years the actual number is 3.8 eight um with a 4% compounding uh rate of growth. Um so that still gets us like 2.2 if we adjust this number. You can see how these things adjust they still keep us in. So I think the question for this as a committee is like is three years the right plan? I think one of the select board members said five to seven years. That to me feels too far out. Um, >> vulner I mean that's it sort of feels like it's not doing anything if it's five years. Do you know what I mean? Like it's you're
071you're so vulnerable. >> And it seems like if we if we if we put the target out to seven years, we're just going to be chasing that annual increase the whole time, too. Which, you know, if history tells us anything, it's probably more than 4%. I don't know. I don't know what it is. >> Yeah. I think something you named too, Nathan, and John came up to is I we also given our projections for FY28, the gap that the town is going to have us >> uh experience again. And again, we're hoping we can have conversation with the town to address that and shrink that. But I still won't see a circumstance really based upon kind of the conversations the board have where we're going to I think we're still going to have several hundred,000
072gap at minimum if not a $ 1.5 million gap which I was projecting. So I think we are going to need mechanisms as we move forward to think about how we shrink that gap in the out years until the next override. Um, and so if we were to do something where say, "Hey, we want to get it to four years. We're going to cut this all the way to $500,000." I don't think that would be like four and a half years. I think we, in my mind, we want to keep it under four years because I think we need to get this done before the next override. Um, but if we do that all this year, I think that doesn't help us. It doesn't give us any other levers for future years. So it like
073helps FY27 and FY28 were rough. >> We we can't cut it further. We've already cut it to the bone. Um and so that's another thing I'm trying to keep in mind. >> In my mind, >> there'll always be a healthy uh tension between what we want to do with our staffing and our operating budget and how do we want to maintain the level of these revolving accounts in order to provide the security that we need to protect the budget year. that going from 3.1 to 3.5 in one year, that's a $400,000 increase. That itself speaks to point to make sure that we're dedicating uh revenue. We're not always going to have the town's ability to give us an extra $500,000. Uh next year will be a slim year, I think. However, we can solidify that
074that line in our budget, but as at fiscal 27 would provide us the best flexibility moving forward for uh trying to reach our goal for a period of time. So, I I I I think, you know, I know that this is a dotted line to some of our community members who don't really understand it and I respect that. Uh but this is a very important balance sheet for for the history of the schools since 2015 or 16. to only have 350,000 in that account was a real gamble on the uh administration side to hope that nothing was going to pop any one of those years. Um in in moving that money around to make everything work, you you know, you leave yourself very vulnerable. So to Nathan's question earlier, is it best practice? Yes. Is
075it state guidance? Yes. to have uh roughly one year circuit breaker and does it create a healthy balance sheet so you can protect the other, you know, $70 million worth of budgeting that you have for your general ed functions? The answer is yes. And that's what our uh our sustainability piece of wanting to be able to have a district that's sustainable moving forward, I think, relies on not only this revolving account, but there's a couple of other revolving accounts we want to shore up. transportation, athletics, uh clubs and activities. We want to make sure that they are robust enough to be able to withstand uh any bad year over the next few years. So, um uh this this is an important discussion and it does have we will ask be asked questions. Well, can't you
076only take 400 of that and just add back that FTE or when is the right time to have that discussion? I think right now um that we've been able to reduce the amount from 2.1 to 1.4 for um that that gives us a lot better scenario in order to be more uh thoughtful about keeping as much in the um circuit breaker account as we can. So uh that will we have an 11:00 meeting with our principles to go through what those reductions are showing the new numbers. Uh again, trying to be thoughtful about what the next two or three years looks like and how we want to prepare each of each one of these lines in the budget in a more sustainable way. And um we have a couple of years of sledding uh moving
077forward while we try to convince the town that a 3% goal is not to be uh will not result in a a school system that the taxpayers want. and we really need to work at collectively as a town uh increasing that percentage on an annual basis um uh moving forward. That's that's the next the next big piece of work I think we have to do. >> I have a quick question. Um the I totally agree that we continue advocating strongly for the town to you be thankful for the movement and keep pushing. But my question about this whether we are talking about three year goal to fouryear goal would this sort of be something the school committee should vote on as an intent or a plan because even with a three-year goal I mean part
078of my concern and why I feel very concerned about any which I don't think anyone here want talking about a sevenyear goal like it's quite possible none of us around this table will be here in even three And I really want to make sure that there's uh follow through on this plan and that um I'm wondering if the school committee were to I don't think it's possible or wise to set a policy that involves like numbers, but could there be a a way to move it beyond just a conversation to something that has been memorialized as um >> guidance? in w in which a future school committee if they were not following the guidance for whatever reason you know justifiable or not but they would not be in a position to just disregard without is
079that something >> so I think what we talked about here is um with the revolving counts policies trying to create a policy that names having the one year of circuit breaker in the rears as being a fiscal policy that needs to be followed by school committee and school department and again to draw below that would require some voter approval by the school committee. So that again going back to the situation to close that by 24 that just happened like that just doesn't fully utilize that account without any necessary approval or conversation about doing so I think is the concern and and so that there's at least more purposeful discussion of like hey we're dropping below this recommended threshold we need to do that I think with your naming in addition to that is well I
080think what we talked about a bit within the policy is like that we would say if he drops below like then what is creating a plan for how back there what is the the getting back there which is consumable at this point. >> So if that policy is in place then it just really requires an annual conversation and approval for each year that we continue to build up. >> Yeah. Until we get that >> threshold. Okay. I just want to be like super clear so that it this can be carried forward in the institutional knowledge of like >> what's not um a like someone's desire to do. >> We're on a path and >> and and that can then be communicated to the war unit, the select board as a structure >> just like the
081select board and the town is exploring policies for their reserve accounts. mean they've already paid off uh if I'm correct the the pension funds. >> So they set a policy and wanted to reach that maximum amount in saving. So they they were aggressively paying that off. So this would be a similar one for us. We're trying to aggressively get to that point or we're trying to moderate it a little bit given the circumstances, but the town is trying to create policy stabilization accounts. We're trying to do the same thing because they give you guidelines on how you need to budget and where the money needs to go and why. Um, and I do believe that it should be some sort of a vote if it's ever going to go below going to go backwards in
082any should be a very clear uh public conversation about that because the the impact of that in later years is so vital that it needs to be a public conversation for sure. >> Uh, want to be mindful of the time here. Um, so appreciate everybody. I think my my takeaway is we might have some flexibility within the circular utilation utilization carryover number at 900,000. May maybe that can go down slightly, maybe not. Again, there are negative effects throughout years in terms of what that means and flexibility that provides us. But I think as y'all are figuring out now how to address this the new car number 1.4, I trust y'all as yall have that in number in your head and think about the other positives and negatives around the are decisions that will need to
083be made soon decided to shrink this slightly or decide not to shrink this and fail. That's greatation >> within the context of the whole budget presentation >> and we also need to solidify the mechanism by which the $500,000 can be appropriated to the schools from the town. >> Uh we would prefer to be in the operating budget format. uh there might be some complications about it going into circuit breaker from a technical perspective that we need to explore Nick um and whether or not it's not as flexibly available if we put it into the town stabilization special ed because you can't get it unless you have a vote of the select board of the school committee. So we're trying to figure out what the best way is to receive those funds. Um, and I would
084also say back to Nathan's point earlier, there's some one-time chunks that were that we were able the town was able to utilize onetime chunks to get us from 2.1 to 1.4. Whether they're available next year or not is a very big question. and whether we can scaffold this conversation to go from a 3% increase expectation to a 4.5 the more money that we can shore up this year for circuit breaker moving forward because we might not be able to make the same deposit next year going into 28 as we thought. So um trying to kind of keep uh that in perspective as well. So, uh, we'll be coming out with a rationale for that for the school committee to consider to point >> Mark. Honestly, something I was thinking about with the, um, $500,000 reach
085allocation is some of the other needs we talked about on capital side of the the lights for the field. That's around $480,000. But, so they weren't utilizing free cashache for this. We were still just doing the process we had talked about and planned on to be used for there are lots of needs within the town. So lots of demands on free cash. Um, and just for Amanda and Lizzie to know, we voted the Q2 earlier with Mark and being a majority of the great finance subconsc if They say they cannot join full school committee at 7:00 our backup 4:30 slot. And again, Nathan might be delayed in joining. Okay. Uh and then we have our meeting on So there's no 8 a.m. meeting next week at this time. Next meeting at 8 a.m. here will
086be on the 11th with the um second round of the draft budget for FY27. Uh also, sorry, I just want to give an update. I I did meet with the warrant committee subcommittee school subcommittee. There was three folks. Um good conversation essentially went through the slides, the FAQ slides that we shared at school committee. Um, >> Julia and >> Oil. >> Mhm. >> So, they are um kind of just now starting to get caught up and look at some of our meetings and things like that. So, they said they would um we have two other meetings scheduled with them. one next week I believe and one right when we get back from February break. So um we will I I need to post those and so we'll talk to Charlie about that today mostly just
087kind of giving general information. No particular questions or concerns coming out conversation. Um great. Anything else to discuss before we adjourn? Okay, then I will take a motion. >> Is there a second? >> Second. >> Uh, all in favor, roll call. Nathan. >> Uh, yes. >> Yes. >> Thank you everyone. >> Thank you. Thank you.