001like to call this meeting to order at 605. Sterling, will you lead us in the pledge of allegiance? Do it. Yes. To the flag, United States of America to the stands one nation under God and justice for all. Thank you. Can we say our mission statement together please? Our mission is to empower our students to reach their full potential through their opportunities and experiences a diverse and collaborative environment. Roll call, please. Trustee Anderson. Trusty Dyro. Trusty Belttowski present. Trusty Sterlin present. Trusty Stevanovic present. Trusty Wall present. Trusty Wless present. Miss Dyro did let me know that she would not be in attendance this evening. Moving on to adoption of the agenda. Be it so resolved that the board of education accept the June 11th, 2025 agenda as presented. A board member may request an item
002be moved from the consent agenda to superintendent recommendations. May I have a motion? So move. Moved by Trusty Wall. Support. Supported by Trusty Sterlin. Questions, comments. Seeing none, roll call, please. Trusty Anderson, yes. Trusty Sterlin, yes. Trusty Steanovic, yes. Trusty Wall, yes. Trusty Winless, yes. Trusty Belttowski, yes. Motion carries. Moving on to superintendent recommendations. Letter A, 2024 2025 public budget hearing. The board board of education as required by law will hold a public hearing before adoption of the post 2025 2026 budget. Mr. Klein, take it away. You bet. So, thank you. We'd like to welcome Dr. Getser to the podium. Um, she is our CFO, takes care of all the finances for the district, is I call it um she is has her pulse on public school finance, does a great job with it, and
003we're lucky to have her. She's going to present the 2024-25 final amended, the 2526 projected, and then the the key part of the budget hearing is the general operational syncing and debt levy levy non-homestead tax rate request L429. Dr. Gatsinger, welcome. Good evening, board. Thank you for having me. Um, let's begin with exhibit one. This is the final amended budget for 2425. You recently approved the midyear amendment. There hasn't been a lot of changes in the 2425 budget since the mid-year amendment, but let's just hit the highlights. We have our revenue going from 36 million to 42 million, which is a $1.8 million increase. The breakdown is on page three of exhibit 1. if you'd like to take a look at that. Just a small bump in our local revenue, a small increase in our
004state revenue, mostly due to Mipers's adjustment in one of our categoricals, and our federal revenue is a small increase as well. And mostly in our title grants, our title grants are reimbursement style grants. If we don't spend the money, we can't ask for them. So even though you see more revenue, you will offsetting expenditures on the expenditure side. And we're projected to end our fiscal year with a fund balance of $8.1 million. It's at the bottom of the middle column under 2425 final budget. This is the only place in our board book that you will see our fund balance. You will also see it on the approving resolutions as well, but I just wanted to point that out in case you're wondering where we're planning on ending the year. On page four is a breakdown
005of our expenditures, and it's how we spent them. whether it is what area instruction instructional support general business and so on. We are anticipating an offsetting additional increase in our expenditures of 1.8 million. We have a balanced budget. So if our revenue goes up then our expenditures will go up accordingly. And so there's a breakdown of how where it is spent on page five. So, the same $46.9 million, but as you can imagine, we're spending more on salaries and benefits than we are on anything else because we are in the people business. And pages six and seven break that same $46.9 million down by function and object code. So, at the end of page seven, it shows you how much money we are spending on salaries, benefits, purchase, service, supplies, and capital outlay. Our overall
006expenditures are just wondering what's happening. Our overall expenditures are 77.8% our salaries and benefits of our total expenditures. And so that's tracking along with the majority of school districts in the state. is again like as I had mentioned we are in the people business so most of our costs are tied up in salaries and benefits. Page eight is your food service budget. Again not much of an adjustment there. Um we have a spendown plan because we have too much money in our fund balance and so we just got that approved by the state and that is reflected in these numbers as well. We're not allowed to have more than three months of operating expenditures in our fund balance. And so food service just small tweaks there. That's running very efficiently thanks to our food service
007director. Page nine is our student activity fund and this is the money we transfer from because of Gazsby 84 from our trust and agency account into the special revenue fund. And it's anything that's student related that is a curriculum relationship. And so we transfer that money from the student internal accounts into so to speak the district's books which is special revenue. Page 10 is the debt fund and this is where we pay down the long-term debt of the district. The majority of the revenue from that from this fund comes from property taxes and the expenditures are the principal and interest on the district's long-term debt. You can see we have about $263,000 of fund equity in that fund. And again, you don't want to keep a lot of money in your debt fund because then
008you're overleving property taxes. So that is a nice cushion in the event that we have a a change in our market values in our property in this district. Page 11 is the syncing fund. Some of you sit on the sinking fund committee. We're planning on spending $2 million in the syncing fund this year, which leaves about a million dollars in reserves, which we're rolling into next year. When we get to the 2526 budget, you will see that million dollars rolling forward with plans on how that will be spent in 2526. Page 12 is the capital projects fund, and this is the money that the board has agreed to set aside in the event that we have capital project outlay that is an emergency or a long-term planning for future in enhancements of our infrastructure. Um,
009it was a transfer that we made in the 2324 school district and we haven't spent any of that money. It is doing nothing but collecting interest. So, that $2 million that we transferred has now collected $29,300 of interest income as it sits in the bank. And that concludes uh the 2425 amended budget. And I'm not sure how you'd like to proceed from here. Questions about that? Do we have any questions? I do. Mr. Laney, um, refresh my brain. The capital project funds on page 12. So, we we end up putting 4 million in there, but at the end of the day, it looks like we're only moving 1.9 million. Repeat that again in 2425, but we just didn't have enough reserves to be able to do that. So, this is the original 2 million that
010we put in there and it's just collecting interest. I said that. Sorry, didn't click. Thank you. See none. Okay. 2526. Let's roll into 2526. Again, a small repeat of what you just saw. I am on exhibit two, page two. We're anticipating that our general fund revenue is going to go from 42.3 million to $43 million. There is a handout at your spot about the budgetary assumptions for the 2526 budget. It looks like this. And so I just wanted to apprise the board of the factors that we used to create the budget for 2526. There is not an approved budget at the state level. So there is a fair amount of uncertainty of our funding for 2526 and in the school finance circles people are saying that this is an extremely difficult year to budget because
011of the uncertainty and they've never seen this much uncertainty as we're heading out to close out our 2425 year. So this is our best estimate. We can't even begin to anticipate where the legislation is going to end up. But let me just hit the highlights of some of the things that you know because we have to put a budget forward. So these are the assumptions that we made in this budget. The governor has put forth a $10,000 per pupil increase. The house said $10,8 and the senate said $10,25. This budget is built on a foundation allowance of $10,000 of people which is the lowest amount. You know, you can see they're all kind of very close to each other. and our current foundation allowance is $9,68. So that's a $392 per pupil increase. We're also
012opening up our school of choice window for a longer period of time than what we had last year. And we're seeing um applications for our school of choice students increasing. So we've anticipated a 50 student enrollment increase based on our early application for student enrollment. And again, there's a lot of uncertainty as far as how our grants are going to be funded, but we've built in a 25% increase in our at risk funding in this budget. So, we're waiting to hear if any of these assumptions are going to be materializing and in the event that they do, they'll be reflected in this 2526 midyear amendment. So, again, I just wanted to emphasize the great deal of uncertainty that is in the funding for 2526. Yes. Excuse me, Dr. 25% increase in at risk funding. That's
013not title funds, correct? No, that is not title funding. We've kept our title funding flat and we're actually anticipating a reduction in title fund. So, which I heard is about 25% of it's a much smaller pot of money than our atrisisk money. And we had about a million dollars of at risk funding in 2425 that was carryover from 2324. We've spent that all in 2425. So you won't see that carryover in 2526. Correct. Go ahead, Mr. Mr. Klein. No, that's good. So, so the 25% I actually have it in writing this 25% title reduction. Mhm. So, we went to work about 3 weeks ago on making those reductions and we were able to do that by by not making major staffing adjustments because this board approved the the title one purchase of technology. Remember when
014you guys did that a few weeks back, right? So, there there's money set aside in those title grants for technology. So we were able to reduce that and then we got word this is how crazy everything is. Then we got word that oh no the 2526 is for the 20 the the 25% reductions for the 26 27 school year school year but I couldn't get that in writing. So right okay I'm sorry. Thank you Dr. I just wanted to clarify that page three is a breakdown of the revenue on a more line item basis. Again, a lot of the fluctuations that you'll see is the changes in our grants, but also too, there's been a fair amount of changes in how they're either charging us for our retirement plan or funding us for our retirement
015plan. And so in 2425, there was this one-time deposit that you won't see carry forward until 2526. And they've also increased the contribution rate that districts have to pay by about 5% which you'll see that in the offsetting expenditures. So the major fluctuation in the state revenue from one year to the next because you know we're we're counting on a foundational office increase and an increase in enrollment but you'll you won't see that as a pure number because you'll see the reduction in the mipers are retirement categorical. So, we're anticipating u a $53,000 decrease in in local revenue, a $1,924,000 increase in state revenue, and a $1,517,000 decrease in federal revenue. And the majority of that is coming from our ESSER money. So, I you know, we when COVID hit, schools got lots of funding
016for COVID related things. This is the very last time that I will have to stand up here and talk to you about our ESSER grants because we spent the last ESSER grant on September 30 of 24. So, it's reflected in the final amended budget for 2324 and you see it in the final budget in the first column here on page three. But going forward, those grants now drop off of our financials and off of our books and we don't have to talk about those anymore. So, that's the biggest reduction in our federal dollars. And then also too, um, we had a grant to fund our nurses and our health resource assistance and we are no longer getting that grant either. So, we've had to reduce that revenue as well. That's about 346,000. So, again, we
017have a balanced budget. Our revenue matches our expenditures and we're hoping that these things come to pass. We are going to be watching the state as they do their deliberations through the budget process. Their fiscal year starts October 1. So they have until October one to have a state approved budget. It is June. So we still have they're still months away from their actual deadline. So again, we'll be watching them very closely and I'm sure Superintendent Kleinhance will be updating the board on their progress as they work through the budget at the state level. So, I'm project I'm projecting $ 8.1 million in fund equity to end the 2526 school year, but again, it's, you know, we're very early. These numbers could change significantly by the time we get to our midyear amendment. On page
018four is how we again break our revenue down, whether it's instruction, instructional support, or so on. You can see that the blue piece of the pie is the largest and the purple on the left is the second largest which is you can imagine is instruction instructional support. We spend a majority of our budget um in the classroom which is what we're looking for. And then on page five is how it's spent salaries, benefits, and so on. And again, the majority of the funding is in salaries and benefits. Um, on page six and seven, though these are not labeled, this breaks down the budget. Well, page six isn't, but page seven is breaks down the budget based on whether it's function or object code. The bottom of page seven is the $43 million that we're planning
019on having to operate the district next year. And it's about 85, the salaries and benefits are about 85% to your total expenditures. Rolling into page eight is the food service fund and again um we have a approved spendown plan and we're hoping to get that revenue spent down so that we have a reasonable fund balance. We have the budget from our food service company. We're not anticipating major changes in our food service program. So this is just a reflection of those operations. Page nine is again the student activity fund. Um there is no correlation to how this is spent as far as how you can project into next year. So I just use the same numbers because a numbers any number is good because who knows what's happening on the student activity level, right? So
020whatever activity is going on over there is going to get moved into here. So we this is just a projection. Page 10 is the debt. Again, the major revenue source is property taxes, and we're we have about $700,000 of principal and interest that our community members support the school with paying our property taxes for our long-term debt. Page 11 is our syncing fund. As you recall, when we were in the 2324 budget, I said we have about a million dollars left that's going to roll into 2526. We are planning on spending all of that money and have about end the fiscal year with our syncing fund having about $29,000 in it. All of you sit some of you sit on the scing fund committee so you're well aware of the plans to spend that money
021as far as district improvements and we're targeting those expenditures to be about $2.1 million for 2526. So that will um take our fund balance and our syncing fund down to not much 29,000 but then we start again with 2627 and planning our infrastructure improvements going forward. Page 12 is that capital projects fund we were just discussing and again no new incoming revenue into that fund other than interest income. So again, that fund balance continues to grow in the event that we need it for emergencies, if our boiler goes out, if our roofs need to be replaced or anything that could um need to be improved, an emergency type situation. And again, that ending fund balance is about $2,88,000. So that concludes my 2526 projected budget presentation. Do we have any questions or comments? Uh, Vice
022President Sterling. So, for the pupil transportation, does that include athletics? It does. Okay. Do we happen to have a breakdown of what we spend on athletic? We do, but it's not in this report. It's in our system and I can get that for you. Okay. What What are That's not much. Okay. It's mostly just athletics and travel and stuff. It's mostly our special ed and homeless transportation. We don't transport our general ed students. Right. Right. But I'm saying like going to baseball games and all that, that kind of stuff. I mean, just off the top of my head, it's like 45,000. I mean, it's not That's good. That's good for me. Okay. Thank you. Um, Treasurer Wall. Yeah. So, uh, one of the questions I had on I don't have the page, but on the
023breakdown and the expenditures for the proposed 2526, uh, code 231, Board of Education. Yes. So, I did see um, it did go from 310 to 362,000. this past year. Yep. Um but now we see 362 we're going down to 160. We are not anticipating the level of legal bills that we have. Thank you. Okay. I was just trying to figure all that. Thank you. We will have in 25. Let me keep our fingers crossed. I was wondering if it was all these uh potential out of state seminars and I'm like or conferences. I'm like wait a minute. So okay. Thank you. That's all I wanted to know. Thank you. You're asking that question and clarifying it. That was my thought too. Yeah. Well, how are we conference? As you know, we've had some legal challenges
024that we've had to account for in our budget. So, we're not anticipating that rolling into 2526. Okay. Thank you. Anybody else? Mr. Kleinhan? Yes. So, um thank you. Just uh my observations about this budget season and Dr. Getser is correct. We've spent um many Wednesdays and some Mondays and Tuesdays together putting together these documents very challenging not just from the standpoint that the unknowns for which make it very difficult. Um, even as late of this morning, the House released their version. And if their version goes through, we're going to be back here because their version demonstrates significant reductions in state aid to public education. A matter of fact, they proposed a 1 million $1 billion withdrawal from the K12 fund to higher ed. So now I don't I didn't bring that to here to say
025that to alarm everybody, but just a caution. So now we're at the point where the Senate, the House, and the Governor where those three come together and they hammer out a resolution for the budget. So that's where we're at. They couldn't do a thing though until the House released their budget and they did that this morning. So, um, I did send to you, um, the latest update that all of the educational organizations, MASB, MASA, all sent letters to Lancing saying, "Please get us a budget." So, cuz all schools have to do this before July 1st. So, very challenging. The other thing that you're going to see especially the impact on the grants the 25% and we're not even you know we're we're estimating because we have heard and been told that they they don't want
026to mess around with that risk but um the reduce the reduction in the foundation allowance if that comes to fruition and there's a concept out there that they'll just take the categoricals and move them into the foundation allowance which means this is money we got this last year. They're just moving it and they can come out and say we gave schools a huge increase which would not be the case because we had that money in the previous year. So very challenging. I think you'll see u many schools that are moving forward. We're already hearing there's one school north of us. It's in a major deficit situation. Um I've been told that some school districts are going to spend down their fund balance. Um, and I would recommend that we not engage in that behavior. And
027here's why. You just from a you wouldn't run your home your home budget paying the everyday bills out of your savings, right? I mean, I just just kind of put it in that kind of context. But what happens is, and Dr. Dr. Gatsinger and I have had a lot of discussion about this is if you spend down one year in your fund balance, you know, you could take a little bit out, but we're we're hearing that school districts are going to $12 million to cover it. The problem with that is that that compounds, right? Especially if you have other issues and you don't get additional funds, that compounds in the budget, number one. And then number two, once your fund balance gets too low, then you're put on a state list. you're mandated to make
028reductions. You're really what you're doing is you're kicking the can down the road. You'll have to make those cuts eventually. It just makes for a tough spot. And then you have the month where we do not receive state aid. And if you don't have fund balance, then you got to go into the school bond loan fund. And when you're in the school bond loan fund, you're paying interest from your foundation allowance for that money. So it puts schools in a tough spot. Um so in talking to Dr. getser and putting all these documents together. We need to do everything that we can here as a district to not spend down fund equity. We want to keep that where it's at. Um just so that we're safe. We don't want to go into the state receiverhip.
029We don't want to get into the state of Michigan here every single day looking at our finances. Um and that's what happens when you get put on the list. And we certainly don't want to get into the school bond loan fund and have money that that we get for the kids go to pay interest on notes. So, thank you. Anybody else? I just want to be clear on something if that's okay. So, looking at the budgetary assumptions, you're talking about a possible $392 increase per pupil. However, because of the way they are doing the mispers, we're not really seeing that increase, will we? Well, that's right. Thank you. Anybody else? Nope. Moving on. Sorry. Exhibit three. Number three. It's the only thing that stands between you and your dinner, right? Talk fast. Take your time.
030So, this is your L4029. This is the whole reason we have a truth and taxation hearing is so that we announce our rates that we're levying, our military rates that we're leving on our community members. And so, we do this every year. Um, you can see that we have, you may recall, we renewed our operating millage with a little bit of a Headley hedge, two mills of a Headley hedge. It is subject to the Headley roll back if your property values are expanding beyond the rate of inflation, which in this year it did. Your property values in your community are growing larger than the rate of inflation. So, we had to roll that hedge back a little bit. So, we're planning on having 18 mills on all of your non-homestead property. And what that is
031is everything that's not a residential facility. So if you have rental property or commercial property, they're levied 18 mills and we do a half summer and half winter levy. The next levy is the sinking fund. This was voter approved. It is getting ready to expire in 2025. So we will be asking our voters for a syncing fund renewal coming up here shortly. We currently levy 4.0876 0876 mills of syncing fund and you saw that in the budget as well in the sinking fund. And then we levy 2.7 mills of debt for our property tax owners. And that is about roughly the $700,000 of principal and interest that they that property tax owners pay on our long-term debt. So it's 2.7 million. And so if we just need the board to approve this so that we
032can have our municipality get these tax millages on their tax role for summer. Thank you. Any questions? I just have one quick one just just for clarification. So the sinking one expires in 2025. Will that be on the November ballot? That is the plan. Yes. Thank you. Okay. Anybody else? Thank you, Dr. Ginger. Yes, thank you. Nice to see all of you. Nice to see you as well. At this point in time, we'd like some audience input. Do we have any input from our audience? Okay. Thank you. Thank you very much. Um at this time, we will call um adjournment at 6:33 p.m. May I have a motion? So move. Moved by Trusty Sterlin. Support. Supported by Trusty Windless. Any questions, comments? Seeing none, roll call, please. Trusty Sterlin, yes. Trusty Stavanovic. Trusty Wall, yes.
033Trusty Winless, yes. Trusty Anderson, Trusty Belowski, yes. Emotion carrots.