001Roll call attendance. >> Mrs. Sashin, >> present. >> Mr. Sunero, >> present. >> Mrs. Barnett, Mrs. Staller, Mr. Nielsen. If we all stand for the pledge of allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. We're going to have a moment of silence. If you haven't silenced your cell phone, this is a perfect time. Okay. Item number five, welcome and introductions. even numbers here. join us also Madame President, members of the board, Superintendent uh Lefit, I greatly appreciate and I'm humbled by the request to speak before you today. Um I'm a big advocate of public education. It's something that I find passion in. And I started doing this recently. I recently pre uh presented to
002another group and I started as I've gotten older I've been more willing to share a little bit about more on a personal level about myself and I'm going to share that with you today because I think it gives you insight of what drives me. Uh my dad was born in Mexico and as I remember the story he became uh a brasto which was a seasonal farm worker in 1959 and went to bitcorn in Nebraska and you know over time he ended up living here and became a resident here and by here I mean California. We then moved to Arizona and then my mom had four kids of her own. uh she came in the n in the mid uh 1970s and with four little ones and she met my dad and in the mid 90s
003we moved to Arizona and Arizona has truly been my home. Uh my wife does what I do at a at another district like you. She's an elected governing board member in the district in which we reside in. Public education I think is an important piece of our society and we've tried to advocate for that as Dr. Lefit mentioned from a Glendel uh perspective leading that lawsuit. Uh you'll see here that uh part of my involvement was not only a deposition testimony but about four to five hours of courtroom testimony um as it relates to capital funding. And so we're definitely pleased with the court's ruling on the outcome. We've always believed that the Constitution was being violated and the judge ruled like they did in the 90s when it was that lawsuit which which was
004the Roosevelt versus Bishop. And so I tell everyone that this lawsuit is really the Roosevelt versus Bishop 2.0 because history is repeating itself. Um, I've held uh many positions throughout the state, whether it's the Arizona ASBOs's uh board president. I've been on the ASBO International board of directors, um, vice chairman of MA Valley Schools Management Group, which is a volunteerbased uh, position. And, uh, and currently, interestingly enough, I more recently became co-chair for Guppy on the business council. and the first meeting was here at your district office. So, um just really pleased with some of that. I actually told folks that uh I wasn't going to do more, I was going to start to do less. Uh and somehow, um that's not the case anymore. I committed to Guppy Mack and I'm happy to be
005here before you. I am going to Yes, absolutely. >> As we go through this board, um you don't have to save your questions until the end as things come up. If you have questions that things that peique your interest, feel free to chime in, ask a question. We'll do our best to answer it if we have the available information. Thank you. >> Yeah. No, I I encourage you feel free to, you know, just ask away. Even if I'm in the middle of that presentation, I want to make sure that your questions about school finance are addressed and and love to just have that dialogue throughout this presentation. the so really basic. We're going to go some high level. Um any specific questions about the district's finances, I'll defer to the superintendent and and his team.
006Uh but we wanted to provide you just a an overview of some timelines of the financial reporting. So what you have before you is just uh time critical timelines. For example, July 1st, as many of you know, is the beginning of the new fiscal year. July 5th by statute the governing board has to approve a proposed budget. July 15th the adopted and so forth. We believe that those dates uh is something that we just wanted to highlight. And then of course depending on scheduling between your staff and the auditors uh that final audit could occur sometime in late October or early November as I understood it. Generally speaking, there are two big um categories within the school finance. You'll hear a lot of us and I'm sure in your own conversations the maintenance and operation.
007That's where you have most of your uh salary and benefits. You have your utilities and your supplies. And then there's unrestricted capital or capital. And that's going to be any renovations, textbooks, instructional aids, some of your school buses, your furniture and equipment. uh and any equipment that goes on your property such as or on your roof such as an HVAC. Now, please know that this this formula is somewhat simplified uh because it can get a little complicated, but as long as you understand those basics, I do believe that this is going to be very helpful to you. There's a $5,113 amount that everyone receives as the base. Depending on every district's um situation, there are um additional weights that will go that are factored into that whether it's an elementary school, a high school or
008rural school. In addition to that, you'll get additional funding. The we in school finance call it the group B weights. Think of your special education. There are several categories within special education that school districts do receive additional weights for those students with those disabilities. And there are others and I've provided some examples of that. There's also the teacher experience index. It's a formula that depending on the uh level of experience of your teachers compared to the the state average gets factored in. and and if you hit that or exceed that threshold, you could be receiving additional monies uh that in the end increase that base support level. You also get uh funding for transportation. It is a complex uh calculation and so you'll see there that I just I've oversimplified it, but it takes all
009those factors into consideration. Yes, please. Yes, >> that's correct. >> Uh Madame President, uh member Nielsen, uh that is correct. The funding that you have uh or that's outlined, everything is really decided by the legislature. uh and every year uh there is a legislative process that generally speaking at least on paper should be a 100 days. We all know that over the last several years it has exceeded that but you are correct and just um for our folks listening on YouTube uh make sure when you speak or ask a question so that they can hear speak uh into the microphone. Thank you. There's an additional component to that and that is the district additional assistance for K8. It's $549. Just some background. I believe it was in 2013 the formula changed. It used to be
010back in the day it was called the soft capital allocation and there was a dollar amount for that and then there was the what was called the coral and then there was a dollar amount for that. and about 2013 they combined those two and now it's called the district additional assistance. Now for your high schools that amount is slightly greater than the K8 and it also has a textbook component to that and you will see or at least you'll hear me talk about on the high school they're generally going to be receiving more on a per pupil basis because it's high school but also on the any new school construction. So if you're building a school, a high school will get more per square foot than an elementary district. The sum of the base support
011level and what's called the transportation revenue control limit. The sum of those two become the revenue control limit. any portion of that revenue control limit can be budgeted in either M or in capital and there will be an exercise that we'll go through so just bear with me um I believe it's an important piece of the budgeting process the district additional addition district additional assistance amount can also be budgeted between the M category and the unrestricted capital category Yes, please. >> Um, thank you so much for for being here and joining us. Um, I wanna just like for overview for our viewers listening. Could we like explain maintenance and operations kind of like where that money is from? It's like not a part of the main general budget from the state but through local property
012taxes. We just get like overview what DA is. >> It's a combination of both. We're going to get through that a little bit towards the end of the presentation, but it is addressed um and maybe I'll somewhat address that uh maybe in advance. The the M and what's called capital and it's going to be really around that revenue control limit and that district additional assistance. One of the things that's probably missed in Arizona is I do believe personally that Arizona has an equitable funding mechanism. There's a portion of that depending on a district's property wealth would will determine what the state pays versus what your local taxpayers or you the board who reside in the district are paying uh on an annual basis but I will talk about that a little bit more in towards
013the uh the end of that presentation. Um, Madame President, members of the board, I believe in your handouts, you'll have these long legalized pages. And it's going to be a little bit counterintuitive, but the first page that I'd like to walk you through is page seven of eight. And it'll look like this. Obviously, what's on the screen won't do it justice because it's very tiny and it's a very long um document. zoom in just a little bit online. >> Uh we attempted to try to to make it as as visible as we possibly could. There's just a lot of information being condensed on a slide, but if you'll if you see if you're on page seven, you should see 42,712 uh $712,343. Do you guys see that amount? You take all your you take the
014calculations that I just mentioned and you plug it in these worksheets and it generates that amount of money. And then there's a column A and a column B. Do you guys see those there? The district depending on the needs of the district will decide of that 42.7 million how much of that it wants in M. In your case, you've put all of that in your maintenance and operation category and zero under the capital category. So far so good. The reason I think it's important to bring that to your attention is this page in particular is what drives everything else. So I'm going to take you to the next page. You're going to see behind it is page one of your expenditure budget. So on the bottom right it should say one of eight. Do you
015see that there? And if you could maybe have it side by side might be the most helpful way to look at this. So we're going to kind of go to page seven and eight and we're going to have them side by side. The other piece is the DAA amount. So I'm on page seven, you have 3,57,197. And that amount can also be budgeted between your maintenance and operation needs and your capital needs. In this case, the district has decided to put that $3 million figure into capital. You take column A and you come up with $55.8 million by formula or per the formula. That is the most that the district can spend and those are the monies that it has available to them in the M category. So, let me take you to page one
016and it's going to be really in the end the far right column budget FY25 and we are working off of last year's budget. You'll see that the district did budget the full 55 million 88,843. I bring that to your attention because I I do believe that it's important to look at these pages side by side. And if you look at page one, right below it in that bold italic, it says the district has budgeted amount in M fund equal to the GBL or the general budget limit. In other words, you're maximizing the budget that you have available to you. I came from the department of ed. I was there in the mid 2000s. So I would see a lot of the school districts that would not budget to the amount that they had on page
017seven leaving monies on the table and not maximizing their budget. That's why I do believe it's important to bring that to your attention. So you always want to see that page one is equal to page seven or vice versa. And the same thing holds true for column B. you'll see the $5.4 million. And I do recognize that you also have what some call the capital override, the DAA override. You have uh $2.3 million that the voters have agreed to support you with. That concept also applies to that second set of documents. So if you look at the legal page eight, it's another set and it's page four. The concept that I just walked you through applies to capital as well. So on page eight of eight, the district has $10.3 million available to meet whatever
018capital needs you have. Page four of eight. Do you guys see that there? the column that says budget FY2025 far right you see line 10 has $10.3 million budgeted so the detail matches page eight and so you're also fully maximizing the dollars that are available to you. And so that's important to to highlight. Are there any questions? I know that's a lot. I know that's a lot of information there. I'd love to take a pause to just get any thoughts or comments or questions from the board. Madame President, members of the board, there are a lot of acronyms in school finance. That's going to be a reference to the free and reduced lunch. Several years ago, through some of the school districts, there was an effort to receive additional funding for what I would say
019maybe kids in poverty. Uh but the term that was used and coined was that free and reduced um percentage that is a reference to you know the food and nutrition program. There are tons of acronyms. I'm sure that the staff can provide you with a list of those. ASBO does a great school finance manual that provides all the terms and what those acronyms mean. I hope that answered your question, ma'am. We Okay. So, I kind of really addressed the next three or four slides in that conversation. So, interestingly, I did provide a little bit of some of those uh the terms Not all, but just some. Um, Mr. Vice President, >> um, so for the unrestricted capital budget limit. >> Yes. >> That's not from the DAA budget or is that a continuation of over
020like carryover funds from each fiscal year? >> It's it's all of that. So your DAA, whatever you did not use, assuming that it's always in capital. Any monies that are left over will be added together to get to that $10.3 million. Great question. And that concept truly applies for M as well. So depending on what you're putting from your revenue control limit or some districts do use their RCL and their DAA into M. So it's a combination of what you just said. >> For example, for broke at one of our schools, we can use that money. I'm sorry. Can you say that one more time? >> So, for example, if like a roof broke at one of our schools, we could use that money to repair that roof at the school. >> You could use
021the monies that are found on page eight of eight. >> Um, which is going to be everything that you have from that DA in this case. Um, any unused carry money, uh, monies from last year into this year. And then if you had bonds, you could also use bonds. And really depending on how that $10.3 million has been allocated would really answer the question that you've just posed. I would say that if hypothetically assuming that there were monies available, yes, you could definitely use part of that $10.3 million to address a new roof for a renovation so to speak >> because that's money we have not used. >> It's monies that you can use. And so when you start the year, every year you're going to more likely be using that. So every year whether
022and you'll see that in your vouchers, you'll see that I'm not sure who's responsible for we call it board clerk um whoever looks at your vouchers on a you know weekly basis. You'll see some of those by fund um as you look at those at those vouchers. Uh and you'll know how much is being spent or your staff will know how much is being st uh spent. Well, then I guess my question would be how much of that money have we used so far this year? Have we used any of it so far? >> And it just as remember this information is based off of last year. part of part of the conversation is to use last year's information because you are going at some point uh before or the staff will present the AFR
023and it will make hopefully smooth understanding between the year that just ended and when your staff provides you with the AFR for approval. So it is based on last year. >> Okay. Thank you. >> Yes. Uh m uh madame president, members of the board, I did try to provide you some acronyms and maybe perhaps how those uh that revenue or that category is being generated. Uh so again, just a small glance at some of those and I'm just going to kind of go through those. If there's something that catches your attention, please feel free to to ask away. So that you have the revenue control limit that is a combination depending on the property we w of that district. Um there's a component that is shared by the state and the local taxpayers and that
024concept applies with the DAA as well. There's the building renewal grant which is a competitive grant that you as a district your staff would apply for additional funding. I will tell you that's another area that we've been heavily involved with. The need or the request that school districts have put into the state far exceed the revenues that are available. And frankly, that was part of the lawsuit was that the legislature is not funding its capital needs adequately. It's a competitive grant. I know that they just received, you know, July 1st their 200 million plus allocation and that's already being spent on prior year requests. So, they don't have enough money to keep up with the demand. Debt service is a term that's used. When the district sells bonds, as a district, you have to pay
025those back. And so, you collect um monies from your taxpayers through the county and it's recorded in what's called a debt service fund. And then the county actually makes that payment to um to pay for those bonds that were that were sold or authorized. Adjacent Ways is another funding component. Interestingly enough, that is funded through you, the taxpayer, but you have to get approval from the state facilities oversight board for any request above 50,000. Anything below that, you just got to let them know you're doing it. But at 50 or above, you actually have to get their permission. But yet, it's being funded by your local taxpayers. Something I've not understood. uh districts receive federal and state grants and that's going to look different for every district. I'm going to highlight several that perhaps might
026be a little bit more common. >> Yeah, please. >> Um and this is mainly for the Littleton staff. When was the last time we received a building renewal grant from the school facilities board? president. Uh, I'll hand that one over to Miss Pñena and Mr. Corey. >> And if you don't know now, just in an update or something, let us know. >> All right, Madame President, members of the board, um, we can come back with that information. It has been a couple of years, but um we can certainly come back with more definite information. >> That'd be great. Thank you. >> And then to the debt service, I believe the last time we did a bond was 2021 2022. Uh Vice President Senos, I'll hand that one over to Miss Pñena, Miss Cor. Um, Madame
027President, members of the board, thank you for that question. 2020 was the last year that we issued our bonds. Yes. Any other questions? Otherwise, I'm going to go to the next slide. Title One is one of the biggest grants on the federal side that school districts received. uh you'll see what um you know what it can be used for, the purpose of that, but the idea is really to ensure that students in lowincome uh areas um that their needs are being addressed and that we close that achievement gap. Title two is uh the improvement uh improved teacher and leader quality. you'll see um some of the allowable uses there. Title three, title four, and these are some of the more um state grants. And you can see some of the grants that the district um
028is a recipient of. >> And Mr. Bergen, I'll I'll chime in a little bit. So, just so that the board has an idea of what we've been spending some of our title dollars on. So, just to give you an idea, title one, we've currently been spending on staffing. That's where the the bulk of it goes. Staffing, student support, professional development, parent family engagement, instructional materials, private school services. There's a set aside we have to do administration and indirect cost for a title two. We've spent dollars on recruitment and retention, professional development, travel uh materials and indirect cost. Title three, staffing, professional development, instructional materials, family and community engagement. Title four, well-rounded education. So example of some of the things we do with that are esports for some of the coaches that we have. We pay
029for that. Uh but also effective use of technology and safe and healthy students. And then for IDA, that one is special education. So that's been spent on staffing, professional development, student services, instructional materials, equipment, and field trips tied to students IEP goals supporting those. And then some of those other grants that are listed, uh the dyslexia training grant, that's teacher specific. So teacher training is supported through that. School safety grant, that's where we pay for several of our social workers and the safety officer that we have in the district. SEI supports some of our teacher salaries as and then the ATSI is listed up there as well. Uh support staffing professional development materials and then PDG is our preschool grant and that supports staffing professional development student support family engagement capital outlay and curriculum. >>
030So Dr. I could I could not write as fast as you were reading. Um, so my question is on the presentation underneath it says like allowable uses. Everything you just read is that what is that there? >> Yeah. So, Madam President, so everything that I've listed are what we've spent our dollars on which ties into those allowable uses. We haven't gone outside of the scope of anything allowable. >> I wasn't thinking that. I was just request if it didn't match that you put that in an update so that I could come back if someone asked me and said how do you spend title two I I had your email but if it's the same thing here that's fine >> perfect yep thank you >> thank you Dr. for the summary. Um, this could be in
031a board update or if the information is on hand, could we just get a summary of each title? It could be previous fiscal year. It doesn't need to be this fiscal year of just a title one summary of where the money was spent, how much allocated, and where it was spent for each title. >> Yep. Uh, board president, uh, vice president senos. So, we can answer some of those questions this evening. So, if you can, uh, Mr. Mr. Delesio, if you can just share some of the expenditures from our title dollars just by category would be great, >> Madame President, members of the board. Thank you. Uh yeah, so I do have the uh expendit or actually the budgeted expenditures for FY25 broken down by um by grant. Um I'm I don't think it'd be
032uh effective to read the entire thing to you, but um I have that. So that's something that we could definitely share. Um was there a specific question that you had? Um >> if you can just do a just a highle overview of so for title one, what are some of the items and what is the expenditure? So I will start with what was the the grant award and then just either how much or percentage. >> Perfect. Okay. >> A couple of items. >> Thank you. Um so so title one the um the initial allocation was um just over 1.4 million. Um but then when we um take into account our FY24 carry forward uh that actually pushed that amount to um 1.75 million uh for FY25. Um of that 1.4 4 uh million was for
033salary and benefits. 86,000 for professional services which um typically fall into professional development. Uh 11,000 in purchase services. So that could be in the um form of uh say hotel travel. Um typically a lot of that doesn't come out of title one. Um and then 143,000 um for supplies. So a lot of that um is at the school level where they're purchasing supplies to support um all their students. Title two, the initial allocation was um 236,000. Uh after the FY24 carry forward, that bumped that up to 354,000. Uh so of that 354,000 150,000 was salary and benefits. Uh 105,000 was for professional services and another 57,000 for purchase services. Uh title three uh initial allocation was 145,000 with carry forward was 189,000 and majority of that went to salary and benefits. So 127,000 of that
034uh went to salary and benefits for our um our ELLL TOSA. Title 4 is one of the smaller ones. Um initial allocation was 82,000. U looks like we didn't have any carry forward for that one. And um almost 60,000 of that was for supplies. And so title four is used to um fund our esports program that we started I think in our third year now. Um so that pays for the stipens for the coaches uh purchase the Nintendo Switches, the games, those types of things. uh idea looks like our initial allocation was uh just over 1 million and with the carry forward uh 1.1 million of that 200,000 was salary and benefits and the biggest expenditure was under purchase services in the amount of 768,000 and that is uh to cover our private placement for
035special education students. >> Does that also cover like speech or services >> that we purchase? We can't find our own or whatever. >> I might have to turn that over. I think >> correct. So, so yeah. So, so when so I I guess to be specific with that question, Mr. Dellesio, um, uh, contract agencies, where are we funding our contract agencies from? M, grants, combination. So, I'll, yeah, I'll hand that to you or Miss Pñena. >> Madame President, members of the board, we are covering a majority of those costs from our M budget. Thank you. >> And thank thank you for sharing that. And one thing that's important to understand about uh our grants and grant dollars and I I think uh Mr. Beran is going to touch on this a little bit. Really, we
036want to look at maximizing our dollars. So, we want to look at what is more restrictive, how can we use that, and what is more flexible or less restrictive, and how can we use those dollars? And so it's important that as we're using our title dollars, because those are some of our more restrictive dollars, they have to be used on specific things, especially when you look at IDA, for example, uh for that, it has to be utilized on our special education population. There's only a certain percent that you can utilize for your early uh intervent intervening services. So you can't go past a certain threshold for your general ed students. So, it's really knowing that what these dollars are, what they exist for, what can we use because as other things come up, uh, we
037want to make sure that we have dollars, accessible dollars that we can use in case of emergency. So, let's say I'll go back to Vice President Senator Sos's point of, okay, if something happened to a roof, what could we use for that? We want to make sure that the dollars that are more flexible are available to use where we can use those dollars. To Dr. Lefit's point, my philosophy has always been use your more restrictive funds first and then protect those funds, whether they're grants or any other funds that the district may receive that have flexibility. So, if you are experiencing, as we are, a declining enrollment, it gives you breathing room as you try to figure out what decisions need to be made to ensure that that we're financially solvent. So my philosophy and
038if you ask my staff, they'll tell you address or use the restricted funds first and then always protect as much as you can those funds that have the most flexibility so that it gives you breathing room as you may have an unnecessary or um an unforeseen expenditure. >> Please. >> No. Um thank you Brian for all that information. It was super super helpful. Um if we could just get just a copy of that and a board update of what you just stated, summary of each of those that'd be very very helpful just to have on hand. Um and thank you for statements. >> Um board president social vice president Senator Sos we can do that >> special education before I even well let me go through that presentation and then I'll give you just some
039of my thoughts there. um you know, special education. I'm just going to kind of go back and not necessarily read every slide uh word for word, but Congress back in the mid70s had agreed to fund special education. And at that time, they said they would fund about 40% of that need. And you're going to see here, it's going to vary slightly by by state, but you're looking at truly they're funding anywhere from 14 to 16%. Special education uh is at least in my district, so you have salary and benefits and then you have insurance and medical, our special education cost is greater than what we spend on medical insurance, on dental insurance and that amount keeps growing. The reason I point that out, um, I had the opportunity last year to go to Congress, um,
040and try to advocate for additional IDA funding to try to move the needle slightly from 16%, you know, towards that 40%. Um, not only is that not being funded to the extent that they had agreed to back in the 70s, but also you had Miss Buna talk about in here in your district that you're using a portion out of your maintenance and operation to provide special education services. Special education both at the federal level and at the state level are not being fully funded. And so what it's doing it's it would create financial pressures even if you're growing because if you're only getting let's split the difference 15% of what was supposed to be allocated in the 70s that means that you're using more of your M to offset that need where where if they
041were funding it you could be redirecting those funds to other priorities of the district. So special education both at the federal level and at the state level are not being fully funded bonds and overrides statutes depending on the district you'll look at an elementary or a union district u it takes and I'm going to oversimplify this um I don't know who you guys use um I don't know if it's or u piper Sandler for some of your bond needs or override needs They'll specifically walk you through the calculation for your district, but think of it this way. They're taking your district's property wealth and there's a formula that um is calculated that is then used to go to your voters for bond authorization. And so it needs to be fairly accurate. You cannot overstate that.
042Um and then it's up to your voters to decide whether they fund that or not. for a unified district instead of 10% it's 20%. So you'll see that difference there and depending on every district's need. The what's on the pamphlet will vary. For us uh in Glendale, we decided to talk about new school construction schools because that's an important issue for us, but you might need it to replace your HVAC roofs, um you know, renovations, whatever those might be. Uh you know, furniture and equipment. So bonds would be available to you and there's a formula for that if your voters approve that and if the board's willing to ask the voters. But there is a big discrepancy there or disparity there which was another issue within our capital lawsuit. So those property wealth wealthy districts
043they can ask their voters and have a source of revenue that really meets their needs. In my district, it's not possible. Our voters are very supportive, but we can't generate enough revenue to meet all of our capital demands. And that was another uh point that the judge ruled in the capital lawsuit. I believe there's going to be a question. Yes. >> Well, more of a statement. >> Okay. >> Question. Um, this could be in a board update, but for our last bond, what was the amount that we asked from the voters, and I'm assuming that was used to build Lincoln, majority of it. Leto money from it. We did it separately. >> Presnik, uh, Vice President Senos, I'll hand that one over to Miss Pñena, Miss Cory. >> Madame President, members of the board, that
044is correct. We um built the uh school 8 Lincoln and so there is no um bonding capacity at this point. We are down to about 500,000 left in the 2020 bond. >> Uh the maintenance and operation and or the DAA override. Again, some of us still call it the capital override. Uh the Mino override again is something that the board would have to approve. Um typically it generally happens sometime in May. usually don't want to go past that. Uh that cannot exceed 15% of the revenue control limit. That's why page seven in my opinion is very important because you can see it for you for this district. If you take last year's 42.7 million, it cannot exceed 15% of that amount. Every district will have different needs and you'll you would identify that in your
045pamphlet. That is good for seven years, but if it doesn't get renewed in the sixth year, it decreases and then in the seventh year it decreases. Some districts go out in the fourth year just in case if it fails, you have one more year before it has to phase down. So, there's a lot of different strategies there. The DAA override or the capital override can only be 10% of the revenue control limit or a set amount. The lesser of the two, that one does not decrease. That one will stay constant constant for those seven years, at least not because it's required to phase. It could decrease if that revenue control limit decreases. Uh so I just want to be careful how I how I word that. And again, uh, anything that's capital related, you could
046use that DAA override for. So, some of the categories that I talked about in the beginning of the presentation would be an appropriate use depending on what your individual needs are. One of my favorite topics, school facilities oversight board. This board was created uh because of that Roosevelt versus Bishop lawsuit that occurred back in the 90s. uh it went through a lot of different um versions, if you will, until there was statutes or laws that complied with the judge's rule ruling. Uh just so you know, it went to a Supreme Court. It got appealed and then it went to the Arizona Supreme Court and the Arizona Supreme Court back in the 90s concluded that there was a violation of of the Constitution. So as a result they created a board and the name has changed
047and and that has evolved. It used to be the school facilities board. Now it's called the school facilities oversight board but it was really done with the intention of ensuring that no school fell below a minimum standard. They created what's called the minimum adequacy guidelines and funding was then created to ensure that districts needs were being met. And then gosh, it was only funded for several years fully the way that it was intended. And then they started to slowly slowly rapidly uh some might say fast, I some might say slow, but they repealed a lot of what was created and it really put a lot of more pressure on school districts and that really has evolved. And I use the word replace. Uh if you heard our attorney, whether it was at ASBA or any
048of the um presentations he's done regarding the ruling, he would say it was never really replaced. Um so I use that word very loosely after I heard him say it's not replaced. But the po the the point that I want to address is there was a funding mechanism that ensured that no district fell below that standard. And now through a competitive approach that doesn't have adequate monies available to it, school districts have to compete. And it really puts a strain not only on the on the administration but on the students and the staff. And ultimately I'm a big believer that we have a responsibility to protect taxpayer assets. And as the judge ruled uh they failed to do that. Uh a question came up earlier about aortions being paid by the state versus the local
049taxpayers. The state equalization assistance is really what determines that. Every year the legislature I believe through JLBC uh will come up with a calculations called the qualifying tax rate. We call it just the QTR. But the idea is that there's some level of of equity uh on how school districts are funded. For my district, 90% of the state equalization or the funding that we receive for the revenue control limit and the DAA comes from the state. 10% give or take is received by the local taxpayers. If a school district has that much property wealth, it is possible there's probably a little less than 20 school districts. There were 18 when I was at the Department of Ed. I believe that number is slightly increased where they receive no state dollars because there's so much property
050wealth that they're generating those monies through their local tax base as part of school finance. Uh and it's not my favorite topic of of is talking about the primary and secondary tax rates. There are things that go in your primary tax rate and then their secondary uh tax rate. The easiest way that I can explain this is that the secondary tax rate are for things that the voters get to decide. Your bond, your M, your DAA override, um, and I believe desegregation if if you're a recipient of that. the others are on the primary tax rate. And usually at least we present that to our board during the proposed and the adopted uh budget process and we talk about or we illustrate what we think that primary tax rate is going to be. And then
051the county will finalize that and you'll see that on your cover sheet of your expenditure budget every year. Proposition 123 for this school year was absorbed, as I call it, by the legislature, but the triggers are still in place. And what does that mean? That means that if education as a whole is greater than 49% that the legislature may decide at their discretion to not fund it or to freeze it. So there's some uh potential that that could occur in the near future. I think with every year um that gets closer and if there is a statewide effort to do an extension of Prop 123 or something new, addressing the triggers in that new initiative, I believe would be very helpful to school districts. minimum wage uh increases. The reason I point that out is
052that can create financial pressures, especially for declining districts like mine. Uh because you're declining, you're losing revenue, and yet you're forced to increase that pay. That can be challenging. The aggregate expenditure limit is an antiquated formula, the AAL. uh you know that was a formula that was created back in the 80s and a lot has changed whether it's open enrollment school choice and now with ESAs it's completely different and so we need to revisit that. I'm a proponent of the idea that it shouldn't even exist because the legislature are the ones that set the funding amounts. So they've in in essence they've given you the okay and then there's like a secondstep process to this is we gave you the money you said we can you know we're allocating it and then we're going to
053decide twothirds into the school year whether you can actually spend it or not just doesn't make sense to me. Uh I do believe and this is just my opinion that if they were if they did not increase the AAL I do believe there was some economical uh or impact to the economy. Let me talk about that. When you look at the AAL it's usually $1.3 billion that's on the line. Just think about it. One school districts are twothirds into their school year. I can't go twothirds into my school year and not spend $18 million. It'd be very challenging, I think, for a school district not to be in a situation where they've spent more if the AL hasn't been hadn't been increased. But think about it. If they were not to if they don't increase
054it, I believe like a rating agency, a Fitch, a Moody's, an S&P, they would there would be some consequence to that. And I don't believe that that would be prudent. And I don't think that issue in particular is being talked about or even thought of. It's been something that I believe that is a is a significant or could be a significant issue not only for the state but for those individual districts that are in those situations. And lastly, uh and I won't uh talk too much unless you want to spend time there is just the capital lawsuit. I I think that was historic ruling. Um, you know, we had some great partners there with three other districts and some of the alphabet groups. We know that it's going to get appealed. Uh, and I think
055it has a very very highly uh chance to go to the Arizona Supreme Court again and we'll see we'll see what happens. I believe last Thursday we filed um some documents with the courts. The state will respond and then we'll have another uh response to that. And I believe that should all happen by the end of October if I remember correctly. Uh, Madame President, uh, members of the board, Superintendent Lefit, I'm happy to answer any other questions or take it in another in school finance direction that you like to go to school finance. Huh. So, I I appreciate you for being here, Mr. Brian, and going through this. For me, it was important that um for me as I come in to make sure that the board we're all on the same page with our
056understanding. So, I appreciate the questions that were asked because it kind of gives me guidance on how to communicate things, what what's known or unknown. I know sometimes when we throw just letters out, it's what is that? What does that do? Or um what are these funding sources? How can they be spent? What are we spending them on? So for me, I know a couple of items I have to do is provide a grant expenditure summary and also expenditures by category and we'll work on that to get that in the update. But um I think this was a great opportunity for us to try to get a baseline understanding so that as questions come up, we all have have a common understanding and a common language. But I'll open up to board members for any
057questions you all may have. where it says >> uh maybe not necessarily just the short answer is yes it may not be paying or that you have budgeted you know we can't fully staff we're struggling to to fill all of our positions. So, you may have a position that is budgeted. Whether that comes to fruition or not is a different story, but the idea is that you need that many. And so, you're budgeting for that many by line. >> The short answer is yes. Specifically being paid out of M. Yes. That number could be greater depending on some of the other funding source that were talked about earlier, but specifically out of the maintenance and operation, yes, that is accurate. Well, first off, thank you for your insight. It's been very, very helpful information that
058we learned today. Um, I think going back to 25, our bond, um, the bonds needs potentially in the future of the district. Um has there been any discussion or talk that if maybe we need to go out for a bond next year too? So >> right President Social Vice President Senator Sos that is has been a part of our conversations. I know um Mrs. Pena and I are set to meet with um with and I know Mr. Buran mentioned a couple of bond groups. So Steve, we're scheduled to meet and have some conversations to get start gathering information to figure out um some of where we stand with certain things, but also part of it bigger picture. And and another reason I wanted to do this was it kind of leads to that, but part
059of the things that I'm gathering data on are where we at with our capital needs, with our human resource needs, and so on. And so as I'm gathering information, it helps us to make decisions on what should we be looking for, what are the right numbers, because what are the needs overall of the organization. >> Yeah. No, thank you for that. Um, and I know last year we went out to the voters to ask them to increase our DAA by $1 million. Um, so that could be an update of what we see strategically long term of what we plan to do with that extra million dollars, but to decide to keep it emergencies or to buy new buses or things that need to be fixed or repaired in there. So, that' be good information to
060know. Any other questions? We have Mr. Barry said he's available till 9 or 10 tonight if you No, no, I'm just >> I love school finance, so don't don't challenge me there. I'm happy to be here for as long as the board uh would like. >> Um yeah, I think well not a question for you. A lot of it for staff. So >> um I know in terms of our long-term growth of the district in terms of how many students I know you mentioned that you guys are doing a new study in terms of the 10 I think 10-year growth of our students population, >> correct? Uh demographic study. Yes, >> demographic study. Okay. I think that'll be important data to just see how we plan long term in terms of schools >> and uh
061president soik vice president senators part of the plan with that is as we get information what I'd like to do is and one thing as you see that I'm doing is I like to bring in other facilitators uh who are experts in those fields as well because they can bring a different lens that our team can begin to listen to and gather their information. One thing I believe is is uh we should we should have what from my special ed days informed consent right so as much information and knowledge as you can get to make a decision but I think it's important that we use that information to come up with the plans but bring those individuals in. So as we complete those different studies, we'll be inviting other presenters to uh future board meetings
062as well to present. >> And then um help me guide me here, but I know um for gifted services in our expenditures um do you know where that would that would be under in our sheet or is it not on this sheet or is it something separate? instructional programs, >> Dr. Lef. So, yeah, I will I will um that over to Miss P. >> Um Madame President, members of the board, we will have a um comprehensive um expenditure report at AFR time. So that will be the annual financial report in October and we'll be able to categorize um those expenditures and give you an idea as to how much we're spending in um gifted area. >> If there are no further questions, I do just want to reiterate I just appreciate and I'm humbled by
063the invitation. Uh this is a topic that's important to me. I believe in public education. It's afforded me opportunities that I don't believe I otherwise would have had. And so I just want to sincerely thank everyone uh for the opportunity to speak before you for Dr. Lee the invitation. And more importantly, I appreciate and admire your servant leadership. I know the pay isn't great and you still do it and you show up every single board meeting and I know there's a lot of work in between meetings. I live with the board members so I understand that. Um, so truly I appreciate that. I admire that. I appreciate again admire servant leadership. So, thank you. Thank you, Mr. Bargain. Any question? >> Yeah, me just one more thing. Um, for the for the solar loan, I
064know we we did the loan for the solar. Um, it could be in a board update in terms of has the money came in yet for a reimbursement for the 30%. Um, and then if for say for example we can't pay that off through a bond potentially, what's our long-term plan to pay off that loan? And I guess over a longer period. >> All right. President Sonik, uh, Vice President Sinoseros. What our plan is, as was as requested, I think at our last board meeting, an an update on solar. So, what our plan was once we get everything all of construction is done and we have all of um everything has been put in place, our plan was in that January board meeting to come with a a more comprehensive solar update information uh item
065for you guys. Okay. >> Um I this again can come in a board update. It's fine. I don't expect the answer right now. I would love to know how much last year we collected in student activity fees. Not athletic fees, but student activity fees. My daughter is an overachiever and she does lots of activities and I pay a lot of activity fees, but I'm just curious in general throughout the district, how much are we collecting in that? I'm sure it's not a massive amount in the millions of dollars, but I think knowing how much schools are collecting and where that money is going is important. Thank you for that question or for that request. Uh, President Sonik, one thing we are doing is looking at that because we as we've started to have conversation, we've
066started to identify that there there's certain there possibly some discrepancies. So, we want to make sure we have a standard set, but we'll bring that information uh to a board update. We'll provide that. Thank you. Um, if there's no other questions, uh, is there a motion for an adjournment? Miss Stallard, is there a second? >> Mr. Nielsen, all in favor say I. >> I. Meeting is adjourned at 506.