001Yeah. >> Okay. Well, we're getting a bit into the agenda, so I'll just uh I think it's great. Well, I'll call the meeting to order at 8:06 a.m. Now that Katie is here, um I think John I texted you, but Katie for your Amanda is not able to make it this morning. She had an unexpected um conflict. So, we will loop her in this evening with full school committee. Um but we have a couple things to discuss today. One is uh just final kind of review of the budget priorities. Um we have the Q1 report um just confirming the budget timeline. Um and then the budget coordination committee report which Nathan and John just kind of gave uh given I wasn't there. >> Um anything else just to close that loop. Nathan John, anything else
002to share about about the budget coordination committee? >> No, the the revenue projection was um executed by Nick. It was uh very similar to the one that he provided to the school committee on the uh at our last meeting. And um to uh Nathan's point, there were discussions about revolving accounts or stabilization accounts at the town level that would be discussed further. >> And Mark just um I think the idea is that we will each kind of individually review and provide input on the policy documents. And I think if if we could all probably do a review of the three policies prior to the next meeting and provide some kind of comments, I think that would probably be useful. Although I get the sense that it's going to take it's not like we're going to
003be voting on or somehow approving policies next week. >> So there's a there's a long road in front of us, I think. >> Okay, >> sounds good. Uh all right. Uh, jumping back up, I'd love, I think, to start with the budget priorities documents. Um, and again, Nathan, I kind of dropped made a copy of it and dropped it in the um in today's meeting folder for the finance committee. You know, John, I don't know, you mentioned kind of what changes you were going to make. You've made those changes. So, I don't know if there's any other framing or anything else you want to kind of give, but just want to make sure we open the opportunity. Nathan, if you have any feedback or anything else we should discuss on this before the meeting tonight.
004>> So, so I had two points to make. So, thank you Mark. Uh, one is I want to thank Katie from actually making some edits as well. Uh, they were they were targeted and uh very helpful. So, thank you Katie. Uh, and I want to know what the committee's uh thoughts are on providing the examples on page two or having that does that would that be misleading in any way? uh do we feel that people will take those as examples as hypothetical or do we want to take them off the document for presentation sake? >> Yeah, that's a good question. I was thinking a similar thing, John, in that like we have them numbered there and so almost as if this is saying, you know, under budget priority number three, right? Are we like within
005this saying our number one priority under budget priority number three is the one to two buses? Like I don't I don't know if that's actually what we're saying. So I don't know if changing to bullet points and making that kind of you do say examples pretty clearly, but um that's a fair point that some people might take that as these are the things we're saying we're we're definitely going to do and I don't know if that's 100% true. Nathan, what are your thoughts? >> So I haven't had a chance to Sorry. Can you hear me, guys? >> Yeah, I can also share screen if that's helpful. >> Uh well, uh I'll be I'll be back inside in just one second. >> Um I haven't had a chance to review the most recent document, but I
006I recall this this part of the document. I I would recommend my my perspective is to recommend removing them. Um I think I think they are concrete examples. probably several of them are actual, you know, you know, I I would venture to guess some version of them is are actually things we might prioritize. But even even if you um even if you note that they are examples, I think people can get tethered to to specific ideas and if we're not prepared yet to commit to those ideas, we might as well just take them out. >> Yeah. and and I can always use those verbally as the examples that that um tonight I can just express them verbally and but I can take them out of the document. We can delete those as a draft. We
007can make that instead of a draft uh um you know we can change the version of this but I I I feel more comfortable taking them out because I don't want people to get tethered to them. So I I would agree. >> Katie, anything to add? >> No, I agree. And I would say just like the numbering convention, I think people will take that as, oh, this is your top priority. So, um, if we're going to be sharing this document pretty w if we share this document without having that explanation, I think it's just better to take it out. >> Yeah, agreed. Okay. So, what I will do, Mark, I'll go into the folder, take it out, create a new version of it, um, so I can keep this one on the in the back
008burner and then put it back in the folders. Charlene will do that today and then we'll have it in the school committee folder as an updated one. >> Great. Anything else on the buds priorities do? >> Yep. >> All right. U, moving right along. Um, budget timeline. Just quick review. We are at the 22nd. I still have in this budget doc timeline 10:31 as our school committee warrant committee meeting date. But that's not right, is it? What I can look this up. I also don't want to waste time. I just didn't remember if anybody off the top of their head remembered what date we had picked because I'm not sure if I've >> I don't feel like I um have uh have confirmation on anything right now. I'm going to look back at my calendar
009real quick, but I thought it was Monday the 3rd of November. >> I think you are right. >> Okay. >> Let me see. >> Uh yes, 3rd of November at 7 o'clock. That's northern normal meeting time. So, I can send let me send an email with all of you on it and Jay and just and Charlene um that Charlene can create a calendar invite. Um so, apologies for that. I should have done that after we uh previously confirmed. I will update that. Um, and then, you know, we I think talked about this just very briefly with the town administrator report on the revenue forecast, but I think just uh we have in our calendar kind of a brief check-in on how the town revenue uh forecasts align or don't align with kind of a our
010school expense forecasts. You know, what that might mean as it relates to kind of overall tone of what we're looking at for a budget for next year. But >> yeah, I I think that um this might be a conversation for another time, but I think when we start to think about when Katie and I begin to uh draft the 27 budget, we talked a little bit about assumptions last time and I think one of the assumptions should be >> uh that and I won't it like this on any kind of a document, but in reality uh the guidance from the uh town hall was to uh think, you know, roll over everybody you have plus cola. I mean that that's exactly what Amy Dextra said. It's rolling over your FTEES plus cola would be quote
011level service. She had some comment like that because I asked her that specific question to kind of get a breadandbut idea how we wanted to proceed and I was very happy with that response because that's how I look at it as well. uh because that gives us room within our current FTE and non- salary items to realign and prioritize things that we need to do and demonstrate what we're might be removing versus what we're adding. Um so I don't know if everybody else heard that, but in terms of an assumptions list, that would be something that I would think may be important. >> I heard that too, John. Um I think my and I you know maybe I should have pushed more in that meeting to gain clarity um is the the percentage though increase
012that they were projecting was I I don't think aligned to what that number will be >> correct >> percent increase they were showing was like 2.9% um which feels low um feels like cut budget more than a level service and so on. Yeah. So that is the conflict in my head around that. I don't know Katie what your takeaway is or if there's like a a way to try and get clarity around that. And if mostly and from just from my perspective, this is around like just not wasting y'all's time on um working on budget scenarios that then are garbage because the town's going to say, "Hey, this isn't realistic and you got to do this or that." Or like keep it to a two.9% increase. Sorry, Hidden. >> Um, I was just going to
013say I think our our focus and really um what I would see, you know, my role being in supporting John and you all in creating the budget is to let them know um what the expenses are looking like. And so in Amy saying, you know, the kind of the direction from the town is tell us what your budget is going to cost you next year rolling over FTE and adding in that colon and and kind of um factoring in any contractual increases on the general expense side. And so I kind of think that that that's that's what we should do. I know that the revenue projections are showing kind of like the assumptions baked into that maybe not won't necessarily match what the expenses are, but I think our focus is truly just to to
014say this is what the expenses are. And then I think from the town side, it's going to be up to them to say, okay, we have this operating budget stabilization fund and in order to um make up the variance, we may need to utilize it. That was just kind of my interpretation of it. >> Great. I mean, it sounds like you and John are on the same page, so that's that's fine. I mean, Nathan, any any thoughts? >> No, I don't think I have anything to add here. >> All right. Uh, any other um feedback points related to these old business items, the budget timeline or the budget priorities? If not, then I will turn it over to Katie for the Q1 report. Okay. So, there is a copy of the report in the finance
015um subcommittee folder for today's meeting. I had sent that over to you all yesterday and then I also put a copy of the report in the folder for tonight's meeting so it can be shared with the full committee. So, just talking about the format of the report, this is obviously the first report for this fiscal year um Q1 report. So I really tried to um provide the first part of the report is the memo which provides the context of um what the numbers are showing. The second part of the report is the actual financial exhibit that itself and I tried to um create that financial exhibit. It's a little bit different than the quarterly reports that were presented last year. It's broken up by cost center and then we further broke the information down by
016the DESIE object codes which is just a classification around salaries and general expenses. So you can see that breakdown for each cost center in the financial report. John and I talked before um before I sent you and before I finalized the report and we thought it was important to be able to show the FY25 actual expenditures because we talk a lot about making sure that our budget when we're talking about the budget we're always being considerate of living in the three years past year, current year and next year. And so, um, the FY25 actual expenditure amounts are, um, also included in this report. And I think that's a little bit different than last year's report. And we hadn't necessarily discussed that, but we thought that that would be another important piece of information to be
017able to provide so that when we look at what the original budget was. And then you can see there is an updated budget FY26 budget amount in the financial report. You just have a little more context on why the numbers may have changed. Um the financial report you can see the expenditures that we've incurred up until September 30th and also the incumbrances. And then further down um in the report there is a revolving fund summary. And then there I also tried to just provide um kind of like a glossery of terms because there are some references in the memo and then in the financial exhibit to um class the object code expenditures, what an expenditure is, what an incumbrance is. And so just trying to provide more context around what those terms are and that
018is the last kind of like piece of the overall financial report. Um, so just to go back up to the memo, in the memo, we talked a little bit about the process of looking at FY26 for this year. And a big piece of what we've discussed previously and what we're continuing to look at is just making sure that the budget FY26 budget, the budget that was appropriated to us at town meeting is the budget that we're operating under and that that is that budget appropriation is the maximum amount that we can potentially spend. And so we truly looked at over the summer looked at the FY25 actuals took a really hard look at um now that we know what our salary expenditures are going to be in the cost of living increase for the year
019for each one of our bargaining units. We know what the increase is going to be for transportation. We know what the special education tuitions are going to be at this point in time. And the caveat to that is that is could and will change throughout the year. But with all of that information, we just wanted to make sure that the FY26 budget and how the budget was broken out was appropriate. And so we talked about that a little bit in the report. We all have talked about previously over the summer that we went through the process, a very intentional process of um looking at every single one of our positions. So, if a position was open, truly looking at that, saying, "Do we need to fill it? Could we potentially pause it for this one
020year for fiscal year 26?" Just making sure that we had enough money in each one of our budget lines to be able to appropriately cover the expenditure expenditures that we're projecting that we are going to incur throughout the fiscal year. And so, that was a pretty thorough process. I tried to summarize it kind of shortly in this memo, but I'm hoping that it provides some more context for the actual financial exhibit and I'm a um happy to answer any specific questions about that as well. Um and then in the report I also included just information on kind of where we stand at the end of September. It's very early obviously in the fiscal year. We've only had two pay periods for our teaching staff and we've had um a number of pay periods for our
021staff that works throughout the year, but that's a smaller percentage. So, in knowing that 80% of our budget really is tied to salary expenditures and then you can also see in that report that we have not yet started encumbering salaries. We've talked about that in the past. we will start encumbering salaries for second quarter, but that's a big piece of seeing what is outstanding as far as salary payments are and how are we tracking towards the budget. And so right now in the report, we don't have the incumbrances included just because it it's pretty early in the year, but that will be a piece of the financial report for Q2. Um, all of that being said, in some of what we had talked about last year, the process of encumbering expenses, so making sure that
022we're creating purchase orders and really memorializing the fact that we know that we have expenses that we will incur throughout the year, even though they haven't happened yet, we really need to be able to earmark those funds in the budget so that we're not overspending, so we're not spending the same budget line twice. And so I had made a note in the report at this time. Last year we had only encumbered say 60% of our general expense lines. This year we far exceeded that number. And I think that could be potentially if you were just looking at this report and comparing it to last year, you would say like why why are they spending so much money? It's not that we're spending more money. We're just doing a better job saying we know that we
023will have this expense throughout the year and we're going to actually put that expense in the system as a placeholder so that we know that we'll have that money available to us and we won't overspend. And so that was a big kind of like process systemic change that we're making. And I think when I look at the report from last year and then look at the report for from this year, it's a pretty significant um difference in the amount that we're encumbering or that kind of those expenses that we've already earmarked in the system. And I take that as a good sign because it gives us the ability to really to be able to manage the budget and manage the expenditures. In some instances, we may need to push back to department heads and to
024principles and say, "No, you don't have money to be able to do X, Y, and Z." Um, but that's why that's kind of why we have that process. So, just wanted to make a note because I think that's something I had put in the memo. That's something that you can kind of see in the financial report, but I think it's really important when we kind of just talk about like process and and um budget administration. And then just the last piece that I wanted to note, we did put some I included just some examples of actual expenditures for some of the areas that we have talked about previously, but just to review the areas that um we track pretty closely because there may be some variability. So those areas are special education with our tuitions
025that we have to pay for some of our outofd district placement and the transportation to be able to um get our Milton students to those out of district placements. So there are some there's further information and those budget lines included in the memo. You can see the actual expenditures from FY25, what we had originally projected the budget at in FY26, and that's based off of information that we had um last October and November. So since that time, there's been changes and we really wanted to make sure that the budget reflected that. And then you can see the difference between our original um budget projection and then our updated budget projection. So those areas again are special education which is tuition transportation and in some instances contracted services um transportation just uh yellow bus transportation so
026the transportation that we're providing in district um and then I also provided a kind of a breakdown of substitutes and extra duties cuz that was one area that we found last year because it is um variable in nature and because the budget for FY25 and historically we had been underfunded um in that area and so that's something that we've been paying pretty close attention to. So, I just wanted to be be able to really call that out in the report as well. And that's something that we will continue to talk about um figure out if there's a way that we can be more efficient and um you know, using our resources and using our budget to be able to cover what those expenses will be and then just making sure that we're budgeting appropriately moving
027forward. >> Great. Thank you very much for the report and for giving us the information we were talking about previously around the particular line items and just your summaries are always very detailed and and helpful. Um Nathan, any questions from you? >> Uh yeah uh I do and Katie, thank you for this report. Um I thought it was really well done and um got a lot of great information about it. So I um or out of it. So really appreciate the work that you put into this. Um maybe I I do have I do have a few questions. So I'll try not to hog all the time and I can also save some questions for this evening if that if that makes more sense. Um could you just go like another level or two deeper
028on incumbrances? >> Um and I'll just add just I'll just tell you a couple of questions that I have. One of them was about expected to see salaries encumbered here. It sounds like that's just like next in the work. I assume practically most of our salaries are basically encumbered. Um the the second one is you mentioned that uh because of because of the way that you're managing encumbered expenses, it's 78% now it was 60% last year at this time. Should it have I I guess I'm wondering. So yeah, that comparison is there's a there's an 18 point difference there because of the way we're managing the budget. If we had been doing it this way last year, would we be at about 78% last year? Like is or is there actually a meaningful difference in
029in in some way like this is this is like a tabletop difference whereas like I'm wondering if there's an actual practical difference. And then third question on encumbrances. Um I had it Oh. Um, are encumbered expenses is are incumbrances basically a way to help you forecast the budget or are incumbrances also kind of like fully locked expenditures that we have no flexibility around like contracted like we are locked in and we are going to spend this money even if we get to a tight point in the year we might prefer to reallocate it elsewhere. Mhm. So I'll start with the last question if that's okay. So incumbrances are a combination of both. So with our general expenses, we know that we have contracts that we're locked into for the year. And we encumber those expenses
030for the entire year, although we may we typically are paying expenses after the expense is incurred, so on a monthly basis. So, an example of that would be yellow bus transportation. So, we have a contract for the year. We know that we're going to run our buses the 10 months that we're in school. So, we can cover the entire expense for the school year, but we're only paying it on a monthly basis. So after the month closes, we get an invoice, we pay it. But we want to encumber that entire amount because if we didn't encumber it and it wasn't encumbered in the first quarter report last year, I believe it it almost inflates what we have remaining in the budget amount. And so it makes it harder to track. By having it encumbered, we
031know we're going to expend that entire budget. In some instances, we may be we may need more money. And that was part of that FY26 kind of when we fully looked at it and said, "Okay, we didn't have an executed contract last November. Now we do. We know what the exact amount is going to be." And so we made sure that the budget reflected what the expenditure is and then we encumber it. So the budget and the expenditure should in some instances match. specific to transportation. We also have a fuel search charge that's not encumbered. And so there's a little space in that budget line where we're not spending the entire budget because every month depending on what the fuel prices do, we have to pay the bus company the delta between a set rate
032and what we're actually spending on fuel based off of mileage. And I could go into a lot of detail, but I won't I won't bore you with that. So that's kind of a combination of the two. So another example of encumbering expense expenses that's a little bit more it may change is providing incumbrances or kind of earmarking funding for copy paper. And so what we did typically in the past if someone needed paper they would just reach out and say hey I need to buy some paper and then we would just encumber it when they reached out. The change for this year was we said nope tell us what you're going to just look back in the history. If you got four pallets last year you're going to get four pallets this year. Let's encumber
033it. And then if halfway through the year we're like, "Whoa, you're going through a lot of paper, we can make adjustments, but at least we have the budget earmarked that we know you're going to spend this amount on paper." >> So that's kind of like another example of an incumbrance where there's no contract. Like we don't have to get four pallets of paper, but we just know based off of some historical information that that's typically what we use. So we we do an incumbrance. So, we make sure that the budget is available for it. >> Makes sense. Got it. Um I I I would find fuel searchcharge details interesting because I'm an operations nerd, but we don't have to spend time on that today. >> Thank you for that, Katie. Of course, I could talk
034about this forever and I know that people usually sit there and roll their eyes at me. So, >> happy to provide any information, but certainly don't want to bore anyone. >> You're in a safe space here, Katie. >> Two operations nerds here. Um, uh, I had a couple questions. One was just on uh some of the column titles >> in I think starting on well they're not page numbers on here but anyways starting in your um the financial report summary um it says FY26 expenditures as of 930 2025 in two columns and so I didn't know if one was the total incumbrances and one was the claims against those coverage incumbrances thus far this year but I wasn't sure what the difference between those two columns. >> So I so it's FY25 actual expenditures. So
035what we spent last year FY26 budget original so that was how the original budget was created like in November. >> Mhm. >> The budget updated. So that was kind of like that recast process. So you can see the changes. >> Yep. >> And then it's FY26 expenditures as of 9:3025. So that's the money that we've already processed the monies out the door. Then the next column is FY26 incumbrances. >> Oh, expenditures and I'm just >> Yes. >> All right. I'm sorry. >> That's okay. >> Can't read. Thank you. All right. So, >> no, no worries. >> Yeah. So, the the incumbrances is in that fifth column, whatever that was. >> Yes. Y >> and then >> and that was just the point and that's kind of to Nate's point, too. You can see that there's
036zeros in the salary. So the salaries are not encumbered yet because we don't have the the system the accounting system and the payroll system doesn't encumber for us. That's a manual process and that information will be included in the Q2 report. >> Gotcha. Um in jumping up thank you for reading for me. Um jumping back up uh to the top. What were the uh when you have the table with like special education, transportation, and those >> the three at the bottom, the general expenses, contracted supplies, and other is that under transportation? Is that part of transportation or is that part of a different line item outside of special education and transportation? I'm sorry if you you said that and I missed it in the explanation. Um, I just wasn't 100% sure what that what those
037three lines were. >> I think I I may have I need to double check that for you because I think I may have forgotten a header in that section. So, let me let me >> double check that. That is actually that bottom section is athletics. think I had made a note to um incre So when we talk about the reallocation significant increases or special ed athletics and transportation so I'm sorry let me fix that so that bottom section is athletics it's justing the the header >> yeah that's yep >> um >> great yeah I mean I think the I'm glad we were able to do some of those reallocations is clearly raised places where like it would have been more concerned if we did not do the reallocation. So that's great. Um under special education
038general expenses I know we reallocated looks like we're reallocating even though we the budget was already kind of substantially over what our actual expenditures were last year. It seems like right now we have like 25% more in the budget than we expended last year. And I assume that is because we have some new needs within special education services that weren't needs last year but that are costly. Is that I'm saying you not I just generally want to make sure like that's that's kind of the logic here of like why that large jump by the 25%. >> Okay. So it is um it's a combination of increased um expenses just because there may be changes with students or service delivery. That is a piece of it. It's also looking at the utilization of the circuit breaker
039um funding that we received. So last year for FY25 in order to cover our expenses, we used all of the circuit breaker funding um that we received this year. Um >> we are trying we are being very intentional about not building all of circuit breakers. So all of the circuit breaker revenue into um so I guess the the best way to I'm trying to think of like the best way to say this that makes sense but not building that entire whatever we're going to receive um into the budget as spending it right away. So we are trying to when we receive in the circuit breaker make sure that we are this is year one of us um retaining some of that circuit breaker revenue so that we can continue to create that circuit breaker balance
040that we've been talking about and I think we'll talk about more at a future. >> Yeah. No, no, that makes sense. So the um the expenditures I think the part I wasn't clear the expenditures actually don't include any expenditures that were tagged to circuit breaker. They're only expenditures that were tagged to that. So like our spending last year was the 6.6 million >> plus then the full allocation. Okay. Yeah. Okay. >> Yes. Yeah. Totally makes sense. Great. >> Um >> uh thank you for clarifying. Um the two places in the scrolling back down now to the table I couldn't uh read before. Um the two places that seem like we are over encumbered or in terms of like FY26 funds remaining column >> which I think you hit on briefly was the contracted services for
041athletics and student activities. I didn't do the math. Is that number based on the already the reallocation the like negative 33,000? Is that after the reallocation or is that before the reallocation? >> So that is after the reallocation. And so what we did with athletics because athletics is is one of the accounts or one of the cost centers where we also have revenue that we receive from user fees. And so we haven't with um athletics because we're still in the process of bringing in that revenue. there may be some expenses that are currently assigned to the operating budget that we move over to the Revolve account. And so what we tried to do this year is I think because a athletics is unique in the fact it's a little different from other departments that it
042has the budget in the operating budget but then it also has the budget in a revolving account. um because of the revenue that we bring in, we tried to make sure that we had clarity around which accounts each one of the expenses is going to be allocated to whether it be operating or revolving that's still a work in process. So I think in looking at that report seeing there may be something that we assign to the operating budget as an expense for operating but when we look at our revenue that we're bringing into the revolving account we may reallocate that over to the revolving account you can see in athletics there was a pretty significant increase of one of I believe it's the contracted services line which is originally it was the 95,000 was the
043budget we increased it to 240 that's reflective of the transportation for athletics and so we've always been kind of underbudgeted there. So we really tried to increase that and so if we're paying for transportation for athletics from the operating budget that may free up some money in their revolving fund that we can just shift over that contracted that other contracted services expense if that makes sense. >> Yeah, it does. Um, and then the other one that had a similar negative balance, uh, much larger negative balance was the general expense contracted services under special ed. >> Yep. And so for special ed, um, right now special ed, all of the expenses and the incumbrances should be current for what we know as of 9:30, but I had said kind of in the report a piece of
044that may be similar to athletics covered by circuit breaker. Yeah. But I can't I can't assign that expense to circuit breaker right now because we don't have any money in circuit breaker. So we're still waiting for that revenue for those reimbursements to come to us from the state before we can assign expenses there. >> Gotcha. But we are anticipation of the circuit breaker revenue is beyond that number and then some as we're again trying to work better to pull back some circuit breaker reserves. >> Correct. >> Yeah. Yes. Okay. the when Mark can I just ask a followup on that like um I don't know what what the what is the timing on circuit breaker reimbursement and could we end up with like a cash flow problem here? Mhm. Mhm. So, it's quarterly. Um, it
045we just received the first quarter payment in October. And so, yes, you the the short answer is yes. And that is kind of speaks to why we try why it's best practice to have you really supposed to be working from last year's revenue so you can make sure that you have cash. >> Yeah. >> So, what had happened, we actually experienced it last year. Sometimes the payments at the end of the year don't come in until July. And so if you looked at the year-end financial report, if you looked at the revolving account balance, you can actually see that circuit breaker was overexpended um because we didn't get the payment until July 12th or whatever it was. And so we we have 90 days from the end of the fiscal year to be able to
046cover those negative balances in the revolving fund. if you don't cover them, then um they will deduct whatever the overage is from your free cash balance on the town side. So, it's not good practice to do that. We had done that because we knew that we were going to get that payment in in July and it was going to cover the balance. So, we knew we would have no issues to do that within the 90 days. But, that's kind of something that's a practice that we're trying to break ourselves out of moving forward. I I just want to reinforce that point. It's I think it's interesting uh that that is exactly why we need to create minimum expectations and policy guidance around some of our revolving accounts because the depletion of the circuit breaker account.
047We're sitting with $8,000 in that account and we are already overextended. And if we were a nonprofit and didn't have the strength of the town's cash flow, Nathan, and we were in our nonprofit world, which I was a part of just, you know, six months ago, we wouldn't be able to pay our bills. Mhm. >> So, you know, the the depletion of the revolving accounts uh in FY24 and then further in FY25 have uh put us in a very very hard position which you know is is the underpinnings of why we're trying to not fill vacancies, reallocate funds where we can and and put them in places where we know we're going to have challenges moving forward with the also the understanding that to Katie's point if we can incrementally each year, deposit an additional
048amount of money for three years in a row and be very uh disciplined. The goal is to wake up in FY27 or FY28 with healthy balances in those revolving accounts that we no longer have to worry about this kind of even though we don't worry about cash flow, we do worry about not being in best practice mode when it comes to our financial planning each year. And these are the things that are kind of not on the front page of the times or even in the conversations we like to have. How many staff do we need? How many do we need? We need to replenish those accounts incrementally in order to be fiscally sound and it will take three years. So we have to start this year and we have to set the school department
049up for success. Transportation and if you notice it's transportation because that revolving account was um over exhausted a few years ago. athletics was uh overt taxed a few years ago. Uh circuit breaker was overt taxed a few years ago. Um and even some of our community schools funding was overt taxed a few years ago. So uh we are in an uphill battle despite an override. That's that that's a a very important part of the underpinnings of why we're financially being so conservative. >> Yeah, >> I think it would be a good I mean thanks for that John. Totally agree with that. And just in tonight's school committee meeting, I think we should hammer that message home. Like when you're talking about the budget priorities for next year, like this is a real time example of
050why that is priority number one. >> Um, and just kind of it ties real numbers to the problem you're trying to solve. >> Mark, do we I have one more question on the on the budget report. Do we have time? >> Yeah. >> Okay. Um the the the one piece of data that was kind of missing for me um and I don't know what's standard in in these reports is to know um you know thinking about this as like a quarterly budget to actual report I see we have spent so I can't what what I can't tell um in the last column the table it says FY26% committed. I don't know if that means spent and encumbered. >> Yes. >> Okay. Um I think what either either you can tell me now or we can
051think about this in in future reports like is that what I don't know is like is that are we are we above or below >> where we think we are supposed to be at this point in the year. Um, like I don't I don't know. I don't know if this matches the quarter one forecast. >> Yeah, I can just say from my experience, Nathan, I think it's the point Katie made previously, which is just it is hard for me to to know because if the district department is doing more incumbrances, then these numbers are these percentages are higher than they have been. But that might be for really good reasons, right, that are going to be beneficial later on in the year. But that makes it hard for us to say like well last year
052we were only at 45% in Cumber and so like wow we're way over budget this like that's the I don't know and so I guess I just continue to ask Katie and you know to flag are there any places within this based upon those percent committed that that you are concerned about because you think this is something that's driving you know beyond just the the increased incumbrances but that there's actually an increased spending for some some unexpected season. But John, you got your hand up. >> Yeah, I just uh so when I look at that line, the first thing I think of generally speaking is look at all your salaries are about 8% because we're onetenth of the way through the school year. So you can see that they're all pretty well lined up. Uh
053I I agree that the incumbrances may shade the actuals in a way that might be hard to compare last year to this year, but one of the things I want to make sure that you feel uh very confident in is that if you remember last year when people were asking, "Well, what do you need to finish the year?" and Katie couldn't put her finger on it, it was because nothing was encumbered, >> right? So, this tool in this very uh thoughtful tool is to be able to say we know we have this many expenses and we know we have money to cover those expenses. So, um, we we we can look at how we want to frame that and how we can explain it and unpack it for the public's consumption, which I think will
054be important, but I feel very comfortable knowing that as many expenses as we know we will be committed to making have been encumbered and we have the funds to pay them. And we're telling the principles and other people who spend money, don't don't bring me anything that that's not in your salary line. And do not come to us with someone who who deserves money because they just did something like a translation and you didn't ask permission because they won't be paid. So we have a process now where anything that happens has to be written and approved before the actual action happens. Then the the approval document is in Katie's hands and then when the work is completed, a second document is signed by me saying that the work has been completed and only then does
055it get paid out. But we know we have the money to actually pay that out because we have the approval document uh months before that has been encumbered into Katie's budget. So I it might be hard to explain the incumbrances and the actuals as we move through, but I think the incumbrances we can figure that out because I'd rather have the incumbrances in place because it's more fiscally sound. And >> I guess one of the takeaways I have here from this conversation, I know you haven't yet done the work to encumber the salaries, but once you do that, I'm going to assume that the vast majority of budgeted salaries will be encumbered. You can tell me if I'm if I if that assumption is wrong, leaving us with basically half a million dollars in unencumbered
056funds for the year. Right. Okay. Mhm. >> How do you come up with the number half a million, Nathan? Sorry if I missed something. >> That's the general op. There's $467,000 in unencumbered general operating expenses. Um, so I was just rounding up assuming that there will be some pocket change unencumbered from salaries. Good. >> So, if I can just add, I think the difference um yes, there is a pretty noticeable difference in the incumbrances for general general expenses for this report. I think the the difference just for me um in the difference between last year and this year is um kind of the administration of the budget for this year. So we have shared with each one of the principles their general expense report so they can see every single line. They know what the
057balance is in every single account. And I think John and I have been very clear in this is your budget and we are not going over budget, right? And so even if we were 99% encumbered at this point, meaning that we had earmarked 99% of the budget, that would mean we only had that 1% to spend and that was it. And then if we knew that we had some sort of contractual obligation that would take up that other 1% then we we would just have to freeze the other budget areas. So I think a piece of it is really like the shared ownership between it's not just a business office function. It's each one of the principles and department heads managing their budget knowing that they can only spend what they have and they can't
058go over. um and then us just being very clear about putting the information in the system and then sharing out that information with them. And so that wasn't necessarily we weren't kind of in that mode of doing that last year. So that's I think that's a pretty significant difference when I look at the budget administration for the salary piece. I know it's tricky not to see the incumbrances in the system, but this report and the the budget as it stands, the FY26 budget as it stands now, during the summer, we went through and looked at every single position, every single person. We went through with the principles John went through with Daniel. It was like a pretty time-consuming process of saying we need to know every single person and we need to know every single
059salary and that is what you see reflected in the budget. So I feel confident saying the budget reflects what our expenditures are going to be for salaries from September or August 28th or whatever the first day of school is. There will be some fluctuations in those salary amounts because we may have employees that will be unpaid or um there will be instances that come up that will create a variance from that bud budget to what we actually spend. But I we know that the budget is reflective of what the anticipated expenses were going to be for salaries for this year. So Nate, I do think that it is reasonable to look at this report and say the assumption is that we're going to completely expend the salaries um for the remainder of the year and
060then we know that we have about $500,000 in general expenditures that that budget isn't committed yet. >> Thanks. Thank you. Um we're we're a little bit out of time, but the only other thought as I'm kind of looking through this is is there a percentage of incumbrances kind of at the cost center level where you feel like the the schools have gone through and you know done a good job of identifying what their projected expenses are. I just look at kind of the some variation of like 33% for Milton High School versus you know a lot of the schools are closer to like 70% or 60%. Um >> so again that might be just an operational difference between those schools. Um but that that's the only other thing I was wondering if that is helpful
061as you all look at it of like those percentage encumbrances differences or committed differences. Um >> usually Mark at the elementary level there's a lot of consumables bought. So you'll see like the math director will buy everything for the elementary right at the beginning of the year. Same with ELA. Same with science materials etc. And so the way the so that it's not a surprise that there's a high percentage of their non-sary um budgets being expended and encumbered um because actually in my eyes I I'll probably shut down non-sary budgets sometime in um you know late March early April so we can actually get a good handle on closing out months before the end of the fiscal year and then have them ask us for things that they may need as opposed to them saying
062oh geez I might need to I still have 10,00 000 left. I just should go by. So, we'll pull all that back because the majority of the school spending should be done by halfway through the year except for high school graduation and end of the year things. It's really all materials should be purchased in in place. So, that's what you might see more of the elementary level and the middle school level. >> Anything else on this report before we close this out? I I just want to thank Katie because this is very comprehensive in the the um the charts that we're really going over the cost uh the expenditures versus uh the projected budgeted is a really you know really great start to make sure we know that that very much the detail line by
063line and cost center by cost center and I and I very much appreciate the hard work that it takes to produce this on a regular basis with a narrative that matches and a strategy that is uh continuing to guide it. So, thank you Katie very much. >> You're welcome. >> Yes. Thank you so much. Uh really appreciate both you all your work you're doing. Uh moving down um budget coordination committee we already discussed um discussion next meeting date and agenda. We are meeting next week about the revolving accounts discussion. Maybe you had flagged last week too if um it would be the appropriate time to go through kind of draft warrant committee slides. um which I totally agree with. I think that'd be great. Um so we'll do that next week if that gives youall
064enough time to throw together some slides. In terms of the slides, are there any slides y'all would like our support with or us to put anything together or y'all want to take the first crack and our feedback? Um, I started working on some slides just based off of I think it was actually we had put some notes in the budget calendar just based off of the proposed agenda um that I had shared previously. Is it fair to just continue working on that? I think we had talked about like budget timeline and some of those different pieces. >> Yeah. Yeah, that's great. Um, all right. I can I just flag something for you folks to put on the uh on the back burner? I haven't even uh talked to Katie about this yet. So, I apologize
065Katie for putting something uh uh on your radar screen, but we are taking a deep dive into the MCAST data and the needs of students and the needs of schools. uh and we have met with the principal of the Tucker School who has come up with some strategies that she would like to introduce to uh uh make direct and positive impact on those challenges and not students not making benchmark. Four of her strategies do not have any budget impact at all. It's just rearranging staff uh rearranging some schedules in order to get staff directly involved with certain students. We're working with the union on that in case there's anybody who says that that might not be their job. So the union has been open to that and there also might be several small expenditures that
066we would like to afford her uh to provide extra boosts of support uh to provide the extra boost of support to the students who are meeting benchmark at the Tucker. Um, I'm working with Celeste to create a proposal uh that I was going to give to Katie to find out after this Q1 was done uh what we felt our comfortable level of expenditures were in addition to what we've already been in order to make positive income in impact on scores this year uh with students that we're having in front of us right now. So, um just kind of wanted to flag that as something that I will bring to this group either next week or the following week when we polish it up. Um, and we also do an internal tracking of what kind of
067money we feel that we feel comfortable with at this stage of the year. Uh, committing to that work. We we know it's important and what we have to do, but we also have to be able to afford it. So, uh, just as an FYI, that might be something that will be in front of this group in the next two weeks. >> Right. Uh, I have to jump. So, I appreciate that very much. Can I get a motion to adjour? I will make a motion to adjourn. Get a second. Nathan, >> second. >> All right. All in favor? Uh, roll call vote. Nathan. Yes. Yes. >> Thank you all very much. Appreciate that very much, John. Thank you, Kate. >> Thank you. >> Yeah. Looking forward to that, John. Thank you. >> Thank you.