2025.05.19 GFW School Board Meeting (May, Regular)

001We're venturing out into the rain. That doesn't sound like it's going to end for a day and a half yet. Um, I like to call this uh a business meeting, board meeting. Uh, it is currently 6:02. Um let's on May 19th let's start with the pledge of allegiance to the flag of America and to the indivisible. All right. Approve agenda. Can I get a motion to approve tonight's agenda? Make a motion approve a second. I'll second. All in favor? Motion passes. Okay. Public hearing for a payment bond issuance with time for public comments. Yeah. I'm gonna turn it over to Steve Bumper, our financial advisor with PMA and he also has Corey and now I blanked up your last name. Cory Boyer. Boyer. I almost said Borer. You're not a Senate a national senator. Corey

002Boyer. So I'll have Steve give us a brief presentation on the abatement bar. That's okay. And then we'll leave time for question and answers afterwards. And I'm going to try to pull this up here. Hang on a second. That's good. It gives me time to get the raindrops off my blessing. It's great. Well, um, Chair Miller, board members, and superintendent sis, I'm happy to be here tonight. Again, Steve Pumper with PMA Financial. We act as your municipal adviser. Um, actually as as the district sold the bonds to build the building across the street, that looks like it's making some significant progress. Um and tonight we're um here in front of you we're going through the process um that you've already started um to issue geo tax abatement bonds. Um and so when we look at

003that, Kelly, you want to go to the first slide. Um the only purpose that a school district can use tax abatement bonds for um is to build a parking lot, either build a new one or fix up an existing one, etc. So that's the the only purpose and you can do this um via voter sorry via board. We do not need the divorce for this as well. The authority is issued there just as a statute reference you know on that slide as well. If we look at this um you can see the the blue bonds represent your current outstanding debt um and the red pieces on that would be the additional debt that you would be adding to your existing debt for a for a 10-year period of time. Okay. So these bonds would be

004paid off over in 10 years. And again, I I probably should have said from the out outset that, you know, this is a a,950,000 worth of bonds that you're approved. If we go to the next slide, you'll see the additional tax impact that this would um carry assuming some rates, which would be um existing rates as of April 21st plus a quarter of a percent higher. Um just giving us some leeway. Um actually as I looked at the rates today um they would be 20 basis points and top of that. So you actually have a cushion as of today of 45 basis points almost nearly a half a percent um from what this chart is showing you. And we just highlighted um one specific residential home $175,000 home would have an annual increase of $14

005on their taxes. And you can see the chart for the other home values in a land as well. Um it's important to understand that if we go to the next slide that on Aglland um this still would qualify for the act to school credit. There we go. There's the chart. Um which again means that um for property that's classified as a land um the state is uh paying 70% of the tax burden um for these bonds um based on current state law. And for your district, for the GFW school district, that represents 53% of the total amount would be paid um by taxpayers throughout the state of Minnesota, including myself, through the active school credit rate. So if we put that in number, so approximately a million $33,000 of this total project is really paid

006by people outside of your district. So, um just to give you just some information on that, the timeline, um if we go all the way through this is, um in April, um the district was provided the resolution um on May 5th. This board set the abatement public hearing for tonight. That's where we are right now. It was published in the local newspaper as is required by statute. um some behind the-scenes stuff, a official or preliminary official statement has been distributed um to the district and they're reviewing that um so that um we can actually get these bonds rated. Um tonight we're on May 19th where you're holding the public hearing and um based on how that goes, the board considers the parameters resolution that's in your board packet for um action tonight. as well. We

007have the rating call set for this Wednesday um the 21st that Superintendent Smith will participate on with GMA staff. Um if based on that we'll receive the the ratings the week of May 26. June 4th is the date that we're tentatively um planning on pricing these bonds with the board ratifying that resolution on June 16th and then the funds would be received by the district on June 30th. So that's kind of the timeline. Um later on in the in the board meeting as you consider the board resolution, this is what you'd be approving. You'd be approving to go forward with the the the sale subject to certain parameters. Um those parameters are listed below. Gives authority to the superintendent or the chief financial officer and a school board officer to execute all the documents that

008are needed and necessary to execute as long as the true interest cost is um 5% or lower. you cannot we will not exceed a,950,000 worth of par on the bonds and the resolution would expire on December 31st 2025 should um the bonds not be executed prior to that as well and as I mentioned before the full board ratifies the sale the second bullet point on top which is also part of the resolution just to refresh board members mind it authorizes and you need this by resolution for the district to participate it's called the state print enhancement program it's a free service. Every district um does this. Um what that that means is that should some reason GFW um not pay their bond payments um the state steps in and pays that on your behalf. Um

009they don't want to do that and you would, you know, be subject to having state aid taken away from you in the future. But where that is really beneficial to the school district is it lowers the interest rate that you'll receive from a prospective bond buyers um because there's just an extra set of of security for them to know that they're going to get paid. Um and then the last slide um Super Smith just kind of shows you the next steps. Um so the funds um at the end of June would be available um as expenditures are needed or arrive from there. um we would certainly invest those earnings depending on spend those. So additional interest would stay with the project and then we certainly will help you monitor and comply with value. I'll stand

010for any questions now or you could certainly continue with the public hearing for public comment. Well, while you're standing up there, anybody have any questions for Steve? Go ahead. I would just make one question. So on that ratif when when the bonds are locked and the interest rate is locked superintendent and a board member correct board officer board officer. So that in my past experience that's always been the treasur. So I'm looking at you Amy that day June 4th if I back it up for that right and that's my date to that date could change based on what's going on in the market but if it was June 4th but it could be any officer but typically it's been a treasur so we would just need to be available that day so we could converse

011basically we have to agree that we've stayed under the under or at $1.95 million and under 5% interest rate and if we meet those parameters, we're able to give preliminary approval and then it comes back to the full board at our June 16th meeting. Right. That is correct. And just I'm looking at Amy only because he said you out as treasure, but um whoever does sign the documents on behalf of the board, it's all done through DocYsine now. So it's not like you didn't have to come into the office to sign anything. It's as long as we have an email address for you to to send it to. It's a very easy process. Um it just helps if you're not like in Mexico City somewhere. That's all you know as far as that goes. Um

012so um that's parts part. But to I just want to make sure that the board understands um because this is important. If if you pass a parameters resolution tonight and you stay within the parameters. um nobody wants on the ratification night you not to approve the bonds at that point in time because the people who are purchasing your bonds um are you know expecting that to take place if for some reason you wouldn't um it it's it's very hard for your district in the future to sell bonds I mean to get buyers to want to do it so you know as long as you're within the parameters and we stay within those we've expect ratification I've never seen it not happen that's been ratified but just want to make sure that it's not like well

013we have we have until that next meeting to really make up our minds because you're making up your minds tonight if you take action on the parameters resolution. Oh, so if if an school credit were to go away, is an school on or through the life of our bond or does that leave the day that our bond or that school credit goes away? Well, that would be subject to legislation, you know, to what the legislature does. I will have to say I may tell you a couple different things on that. Um there's nothing that's been in either bills that been proposed or discussed to have the act school go away during this legislative session. It is um certainly a thing that both parties very strongly support. As a matter of fact, not in this legislative

014session, but the session prior. There is even um suggestions in both bills honestly to increase from 70% to a higher number. Um but that's not answering your question directly and the best direct answer I can tell you is any future legislature can do what they want. Um historically um they grandfather in um in this case it would be a district but um so that if anybody had outstanding bonds that were subject to this they would likely keep it but they can change their minds. I mean they could do whatever they want to do but okay question if the ASUS move credit increases will existing bonds be subject to that or not? It so far the premise has always done that. So when they they started out at a 40% active school credit and it's gone

015up to 70% now. All existing bonds have received correct right now we see the 70% credit but is it gonna be the same answer subject to whatever the legislature chooses to do but that's how it be treated. Sure. And Steve just a clarification. I pulled this one up. It's got we have some cushion in your estimated rates for this particular table. Did you say you built in 25% based on April 21st rates, but right now we're at 45 basis points. Yeah. And 25 basis points is a quarter 100 basis points is 1%. So 25 is a quarter%. So 45 basis points which would be the cushion as a day is just under a half percent cushion. Right. Any other questions from the board? publicly. Okay. I'll be here as a resource after public for public

016comment as well. Thank you. Thank you. Yeah, I think Dan want me short. I'm glad I do have my shirt. I apologize. Um, as you all know, I'm Dana Litzau. I'm here with on behalf of the city of Gibbon. Um, I'm the city administrator here. Been here 13 years. Um, once again, thank you guys for your time for representing the school board. We all know that these are tough decisions for us to make. Um, just wanted to go back on a little backstory on how the bond discussion originally started. Um, back when Horton was here, um, we had multiple meetings with Gibbon city council, schoolboard members, um, Dr. Horton, myself, public works and um our bond council had advised us that we should not bond for this for the school district to put in their

017infrastructure. Reason number one being that if the school board decides to pay this off, we have no repercussion on that. All the expenses come back to the city. Um so now I'm looking at I found out on May 6th that you guys had made the decision to do um an abatement bond. So in the last 13 days I've been working on so now what do I do right because the city of Gibbon taxpayers can't be held accountable for the expenses that we are losing on that. So my options are one be here tonight and ask you guys not to do it. Um which isn't going to happen because if you can save money you definitely want to for the whole school district. It only makes sense. Um second option is that we could go through

018a reassessment process. Um, currently our bond is at 3.75%. Um, our assessment policy for the city of Gibbon for all of our bonds, um, allow us to assess up to 2%. Um, above and beyond the bond, which is what it's at. Um, I never had any school board members at any of the hearings um, regarding that assessment process. So, um, we didn't find that it was going to be an issue. Um, we were loud and clear in the beginning that we could not pay off our bond until 2034. So, we're stuck with the bond for 10 years, not gaining anything off of it. Um, my third option would be that um I've heard rumors that we can just take the money and we can invest it. That's not true. We have to hire our financial

019adviserss to invest that. It has to go into a certain account. Um, it has to be monitored. There's arbitrage reporting that we have to follow. So, we can't just take out a bond for a million dollars and turn around and invest it and get 6% on it. like that's not how it works. Um I had Ellers, our financial adviserss run a investment portfolio on that that would cost the city in the end um by the loss of the the percentage rates that ends up costing the city $156,000. Um we would have a loss of $156,000 and then we would have to continue with the arbitrage reporting through that process. Um, we can also do a defeasement proc defeascent process which is um, you might have to help me out in this, but it's like a

020trust. Um, that will cost the city to set up $42,500 right now. That is the city's best option, but um, the bond would basically be out of our hands. They would handle it from there, which less work for me, cheapest option for us. So, right now, that's what I'm going to push for my board, my uh city council to approve if this continues, if this goes through. Um, and then the last one would be that we could in a roundabout way have a capital charge on the district's utility bill. Um, haven't even brought that up to the city council. I don't know if it's going to happen. That's um a final approval would have to be to give city council. No. While I respect the decisions that obviously we want to get rid of debt.

021We want to do what's best for the school district. I just think that the early bond payment was it it was the decisions were made without any coordination with with us as the stakeholders. Um one this is throwing us in a bond. I spoke with Mark Turtle one day um for roughly three minutes and I had expressed to him that he mentioned that there was a possibility that you guys would be paying off the bond. Um, I just said that it would put us in a bind. It would put the city of Gibbon in a bind. It put the city taxpayers city of Given has the highest highest taxes out of the three communities already. So, I don't know how we can lower that, but I didn't get any calls from any other school boards

022and I didn't know that this was happening. On March 6th, Kelly told me I met with Kelly the end of April. On May 6th, Kelly told me that you guys had approved to do this. Um, our discussion in April was more so regarding where we got how we got to the 1.63, what the city has paid, how much the city has paid. I gave you all that information, correct? Yep. Um, so the chapter 429 assessment process does not allow us as a city to hold the school board accountable. Like, we can't just turn around and be like, "Oh, you owe us $42,000." That's not how it works. All assessments can be paid off at any time. It was a mutual verbal agreement with the school board and Dr. Horton that we needed to take out

023this bond because they were unable to take out an additional bond. Um, out of good faith, we did that for the school and now it's turning around on us. I just think that coming together, we all need to start making decisions together to make sure that we can work and we can collaborate. I know we've had verbal conversations with previous school board members and Dr. important regarding snow removal, the city helping the school district with snow removal because it's wide open up there and we're kind of worried about the winds and how that's going to pack in. But that was also a verbal discussion. It makes us not want to do things when the good faith isn't there. It's it to me it's tearing our communities apart by just making decisions without having comments from

024both parties. But in the end, we, you know, we all want the what's best for the students, what's best for the families and residents of our GFW school district. And I hope going forward, we can set our goals together and we can collaborate and work together. But it's going to f we're going to find it difficult as a city to continue to do that with these decisions being made. Any questions for me? Any questions? Your your bar council is here, so they might be able to answer more questions than what I can. I know what I know from our bond council. First of all, thank you. Yeah. So, it takes us to stand up there in fact. A lot of people are listening and watching. Um, any have any questions moment? Yeah. What is that?

025I I'm pretty sure in our April conversation, whatever day I can look back that that I talked about, we were considering the possibility. Yeah, April 29th was our meeting, but you just represented you didn't know anything about that till May 6th. And I want that clear on the record. We talked about that on that April. Yeah, we discussed that. I gave you copies of the resolutions on April 29th was my meeting with you and you brought it and you said that there were there is discussions about it. But also in March, you sent an email to me asking about bond payoff. Yeah. And then on March 11th, Dan, my financial advisor, emailed you back and expressed the hardship that this would put the city in and then also asked how did this change. We were

026told this wasn't an option for the GFW school district back when we bonded in 2024 and we hadn't received a response from that. So, I actually thought it was kind of dropped off the table until the end of April and May 6th is when I got your email um saying that you guys are proceeding. All right. Um I Yeah, I just know we've talked about it before. Um I apologize that you got the impression that it was off the table because it was never off the table and I don't go to the school board meeting. I just want to be clear. It was never my intent or I believe the school board's intent to dump on the city a given, but this is a this is a huge financial decision for us. Um, you know,

027we have a payment of 130,000 a year, 132,000 a year. That's coming right out of our general fund. and you said in your comments that this is about having programs for kids and we want a good school system and that's coming right out of what we can offer to to our students. So, um from from our perspective um it's in in my mind I feel it's it's a no-brainer that it's a right decision for us now. Um, you have some scenarios there. Um, I haven't I'm not in that field anymore, so I can't run those. I could ask uh our advisor. I think there are opportunities to move forward with investments without paying arbitrage and having arbitrage calculations done. Um, because I realize that could be an ongoing expense. Um, so I I think there

028are some things to look at that would hopefully mitigate that um that concern from the city of Gibbon. You brought up 42,500 is perhaps the process the option that you would recommend to the city. So it would cost you 42,500 over the life of these bonds. Basically, you'd have that payment and you would know you're done with it. Correct. Pretty much if you did a defeasence of the bond if we did if we went that way. Right. Absolutely. Can I ask a question? How did you arrive at 1.6 million? The 1.6 million. Yep. The full cost of the project subtract 245,000 that the city paid and it actually was 1.61. Okay. So, what's in the project? What's in the project? Yep. What is all the infrastructure, the water, sewer, the new lift station and to

029go across Highway 19? What goes across Highway 19? Water and sewer for the school. So, not the natural gas. It does not include the natural gas. Okay. Doesn't include natural gas. I have no idea. No, it's just this is water. [Music] So, um, one of your I would two things. I would like you to go into a little bit more detail about what the ask is that you are recommending, but two, one of your requests was you charge the district a utility bill. Yes. So, a utility capital improvements, like a line item on a monthly utility bill. And what's the parameters for being able to allow you to do that? The reason why I'm asking is because if we don't do what you ask, aren't you just going to do that to us anyways? It

030first of all, it's not up to me. It's up to the school board. Um it or up to the council. Um right. So, couldn't the say, "Well, they didn't do what we wanted, so now we have to do charge them on their utility bill." could I didn't run the parameters and I don't know that I've been working with Aaylor's for our team base trying to figure out my different options on what we can do but that is like a capital improvements charge um actually a lot of counties have that it's just like a line item and a lot of times that's you know goes to everyone you don't have to delay it to you know put it towards one property or another. Yeah. And that's fine if a lot of cities have that. I'm just

031asking. So, I'm just trying to get to the bottom. You have an ask for us. And like I said, I would like you to go into more detail about what that is after this. But my concern is that you know that's it's a big decision to make tonight. However, my concern is that if we don't do what you are asking, then you just charge us that utility bill or that we could. I haven't had a schoolboard meeting or council meeting since the day I found out. The email from Kelly was on May 6th. We have council meetings once a month. I don't know if that's something that the council would ask me to look into or if it's something that we would do. I'm just saying that that's always an option for the city to

032put on utility bills. Could you go into detail more detail about what your ask is? Sure. I guess my ask was to not do it and in return I think the city could lower their um right now their assessment rate right now you guys are assessed at 5.75%. And our bond is at 3.75. Do you think that's the best option for the district or for the city of G? Um I guess I don't know why the district is bonding or more than what they owe. I mean, right now the payoff amount is 1.632 roughly and you guys are bonding for 1.9 at a 5% interest rate. So, you're going to have an additional $37,000 $318,000. Um, why I mean, and why wasn't the bonding option available or why didn't the school district bond in the

033first place for this project and run it through the city? I don't think Kelly has the answer for that. I mean, I'm sorry that um I don't think anybody on this board would know that answer. Do you know it's because Carl Sanderson didn't want to touch it because they knew that this would come up? because most most cities most cities get to the property with the infrastructure and they don't charge the school district. That's typical. So now we find this isn't a pickle. What happened is you had to pass a referendum to build a new school. You didn't know where the school was going to be built. You had no idea what it was going to cost to have water and sewer. You didn't know what site. So, how could you include that in on

034the building referendum when you don't know where it's going to be built? That was after the fact. If you pass the referendum, you had to then design the sewer and water to get there and come up with a cost. Nobody knew that going in. Yeah. Well, we weren't we were only supposed to include the the property infrastructure. Anything outside of that was a different ball. So that's and this spot was the cheapest spot for infrastructure. I mean they were originally talking about going all the way out to Coney Road too. That that one. Oh, and then the one on Breezy was cheaper, too. No, because then you had to build roads. Well, the roads, but the piping and all that was cheap. Oh, right. Yeah, because it was right there. But we would have had

035to do the roads separately and then we wouldn't have been able to build like the sports facility and stuff like that. So it would have been a different ball game. But why why did your legal council why can't you invest this money? We did it when we built the school and had the bunny and you got this arbitrage they talk about. But why can't it be invested? Who's stopping you from doing that? Uh laws the federal government. So you can't but we did it. I would like Steve Bumper just to speak to that as a financial advisor in the room just what some of our options would be if if if if the district had $1.6 million and couldn't pay it back for 10 years, what would what would our options be? Yeah, thank you,

036Superintendent Smith. Um, one of the we're acting tonight I'm here, you know, as your municipal adviser, but we also your investment adviser as well. So, um, you're exactly right that the the 70 plus million when we sold the bonds to build the school, um, are collecting interest and you're going to receive over $4 million of interest that you're able to put back into to the building and those are sub subject to the arbitrage rules as well. So, some of the the interest that you're actually going to earn, you will need to pay back to the IRS. U, I want to be very very clear, we are not the city of Gibbons um municipal adviser or the investment adviser. Okay. Um but we did run some of our own numbers on this which would be similar

037to um what elders should be doing and has been doing you know for the city as well and we have not had any conversation with the city or or elders to be very clear about this but based on the information that we have you know the $1.6 6 million etc. of and how that could be invested. Our latest runs um actually show that the city would be made more than on both the principal and interest payments that would um need to be made to pay off the bonds in 10 year actually nine years when the the call date comes up and you can actually pay them off. So there actually would be a slight and again I don't want to over sell this at all a slight surplus that the city actually would receive on

038the investments. Um if you sell the if you put your money into the correct type or should say correct into certain um types of investments you are exempt from the arbitrage rules and you and therefore you would not even need to pay anybody to do the calculations. Um, all I can tell you is if you're working with us as a as an investment advisor, there would not be these $40,000 fees that you'd be paying or you would not be issuing any bonds. You would just be um executing investments and those investments would stay um with a fixed rate. They would not be variable. You'd be fixed to the the um interest payment dates on each of the bonds for the next 9-year period of time until the bonds are callable and then you would have

039enough money um including interest to pay off the bonds at that time. That's what our information is showing. Um but again we are not working with the sig we have not worked with the city directly and I don't want to come across to say that um you know that is a done deal because we you know not necessarily have there might be pieces of information we're not aware of but our assessment is yes that it would be um in this case actually decision be made more than whole um and and what would happen I mean just so you understand in real clear pieces is when these bonds were sold and you receive the roughly $1.9 million of proceeds those would you know 1.6 six of that would automatically be direct go to the state directly

040I mean right away um and then that's what they would use for the investment um to to make themselves whole over the next n it's nine more years before the bonds can be called and that's what you're talking about right so that's what that's what our information shows our portfolio came back at at 1 point or 2.92% over the 10-year period on interest and treasury rates right now are over 4% I mean going out to the nine years I mean so I don't where they're getting a 2.9% rate. It just doesn't make any any material sense at all. Um and one thing just went to clear just as Kelly cleared up, even though the parameters resolution says 5%, we're not selling the bonds at 5%. We're authorized to, but right now, um you know, the

041rates with the with the 25 basis point cushion is a a 4.3%. So again, based on what I told you earlier, you know, the 40 basis, it could it could be slightly less than 4% who we'll be selling these bonds for. That's that doesn't really matter the city so much. I don't mean in a bad way. I just mean that the analysis that we're doing there on investment rates are nothing is lower than two and a half%. I mean the money market right now over the 10 years. Yeah. But over the 10 years, the longer you go out, the higher rate we're actually doing. I mean our treasury um is over 4%. For a 10 year treasury. Okay. So, how much interest are we saving by doing a 10-year rather than 20-year assessment? So, I

042know we're at 5.75%. So, that ends up being 1,91,947, right? Over the 20 years. That's the interest. Amy, I'm sorry. I did run that so I can't tell you if you ran that. I mean, I I'm certainly going to trust your numbers, but Yeah. I believe. Yeah. Actually, we'd be paying [Music] $1,91,947. This would be given over the 20. Yeah. And and the and the number right now would be just to sell you less than 500,000, right? Of interest. Isn't that what you were It was that your rent because I did run that. Yep. Yep. So, it's a half million. You're saving over a half a million just in interest. Yep. And the city of Given bonds were sold over different years at different percentages. the highest one being 4%. And so over that period

043of time, the city of Given's cost would be $435,820.81. So the difference that I think they're losing is $656,126 by us doing the bond. And I well I'll just piggy back and I think that's one of the offers that Dana made is that instead of the five 75 we lower it to 3.75 council would have to approve but we go through something you you suggested and I I just want to say lower the that would help us from the amount of interest we're paying but it doesn't solve our general fund problem, which is the main reason that we're looking to do this is we're looking to get this out of our general fund and into into debt service where we again we are able to spread it over the entire district and the state of

044Minnesota as well as picking up over half of that bill. So, um, I I can't answer it. I don't know if anyone here can answer why the district said at the time that we couldn't or wouldn't bond. I don't I don't know what what the right word there was. Um, but obviously you were told that. Um, we even made the bond longer. Usually they're a 10-year note when you do infrastructure like that, but the school district wanted us to take out a 20-year bond. Yeah. And knowing it won't be paid off in 10 years. Jeff didn't want to do it because they just had to go for it to school. We didn't think it would go over very much for more money. The timing that certainly makes it certainly makes sense. Yes. Yes. So, so

045I think that, you know, we started going down this road and one of the first questions was, is there a penalty to pay it off sooner? We can't charge you a penalty. We pay it off soon. But so, we have this November 8th letter written by you saying that there is no penalty, right? Yeah. That's what I said. We can't charge a penalty. We can't charge you a penalty. It goes by the chapter 429 assessment process. We can't make you We couldn't make you guys sign a contract saying you're not going to pay it off early. That's not how the assessment process works. Yeah. So, I just the literature doesn't allude to that. Uh it bas it took, you know, for a layman like me to come and read it. It says you made any

046time prior to certification assessment paid it off. That's how the 429 assessment process works. We can't hold you accountable to pay us anything to pay it off. And there's no written contract either. Correct. No, we can't do that through the 29 assessment process, Dr. Horton. Right. I'm just collecting facts here. Yep. Um, so at the end of the day, this has to get paid for one way or another, right? We have a gap in in scope that requires money to fill. taxpayers ultimately are going to pay for it one way or another. So, what's the best route to get from A to B. So, what's this? Tell me more about this $42,500 cost for a trust business process. Yes. Um I just have the portfolio out my office. That's what they told us to start

047it, right? But you can be that we can throw some of that yield. Um, unfortunately my financial adviserss are crammed on time too, right? So, they need to go through that process more with me, but it's almost they expressed that that would be the best for me as far as time and basically you hand it over into a trust. They manage all that. They take care of the bond payments. I would never have to write out a check for a bond payment again. Gets handed over to a different party and it's all handled through them. So, but the original setup fee of it is $42,500. Okay. That's just to get the ball rolling. So, there's additional cost on top of that. No, no, that's just the initial to to get it all set up. It's

048like essentially a trust. Okay. That it gets transferred over to. So, that's what they would charge to set up the process. I don't I don't do that process. That's what they do for us. It's kind of like you pay a bond council to like like you pay a a bank for closing costs, right? You pay a bond council to do the process of bonding. So, this is just we want to write this bond off of our books for the city of Gibbon and we want to hand it over to someone else. So, I don't know if you want to call it like a transfer closing costs. I mean, in our regular residential terms, that's what I would refer to it as. So other than it costing4ome thousand dollars, what would you need from the district

049or that's nothing? Nothing. Like I can't hold the district accountable to pay us anything. It's I I would need for the bond to be paid off by December 31st so that it could be transferred. And actually, they would need it, I think he said that we would need it by December 15th so that we could get the ball rolling on that transfer process and to go through that process so that it's done by the end of the year. But you're going through this assumption that you can't reinvest it. So, no, I'm not going through an assumption. That's what I know from my bond pencil. Oh, and not what I mean. It's part of our invest invest you're not going down that road. It's two different processes. And by investing it and I mean in a

050normal in a normal day the city can't take out a bond for a million dollars at 2%. And then turn around and put it in an investment fund and make 6% on it. You can't you can't make money on taxpayers dollars. They have to have an intermediary. Well, that's accurate to a point. Yeah. And um I don't know. We we could debate the nuances of this all night, but I would maybe say this. I mean, and and Steve rightfully said he's not had any contact with Ellers because that's not their job. They're here representing the school district. But what Steve laid out is what I always assumed the city would do this to the board and that it would not cost you anything. Um, I shouldn't say anything. It would cost you minimal and certainly

051less than $42,000. Um, so I I guess I would en encourage your advisor to look at it again and see what options see if have they looked at investing with um with slugs which state and local government securities um because by doing that you get away from the arbitrage requirements um and I think that's the that's the option that PMA has brought forward and Um again says you you're at least held harmless and maybe make a little bit in that process because it is not given who was a good partner in bonding for this when the district asked for that for whatever reason. Um the district did city of Gibbon obliged and did it. We're not looking to hold you um to hang you with some extra expense. I don't think anybody wants part. Um

052and I think there is an option that allows for you not to be hung with any extra additional expense. So um I don't I don't know how we if we can have Ellers call PME. I don't know if would they make that call. I I don't know. But um I apologize. Ellers couldn't be here. I know they were planning, you know, we had the link that hopefully they were going to be able to make it and Monday nights are busies for city councils. I'm sure they're spread spread thin like everyone can see. And I can only go off of the numbers they gave me. So yep. So I think to add to your point, Kelly, it's absolutely important that the city given and the school district really stay har in harmony. And I think that's

053we're Dana is going to continue to try hard here extending the the olive branch too. It's absolutely critical for all the communities given Fairfax and Win to keep in harmony with the city of Given and the school district. I think some of the questions can be resolved over a little bit of time. I think that there should be a meeting as to the closing terms of the payoff and those terms could be discussed both with the school board and to give it city council the terms of the payoff. Is it going to include $42,000? Is it going to include some of the things that were mentioned by some of the other schoolboard members? The other question has who owns the improvement at the end of the day? The city. Who does the infrastructure? The infrastructure.

054The city. the city will still own it. Okay. What about a maintenance agreement then? If it breaks under Highway 19 on the 4th of July, the water main breaks, who's responsible for the maintenance of the system? Probably should be addressed in the same type of closing agreement. And so things like that. I think there's a little few things. I think we got into a spot here because we didn't openly discuss between the school board and the city and the city council to get the best ideas documented and put down in the first process. If we could learn from that process going forward on the closing of the payback of the loan to get a meeting of the minds, things documented and recorded and agreed upon in a simple agreement, a closing agreement or something like

055that where everybody understands the boundaries and the cost. Some of the costs that we're discussing here could be, as you suggested, Kelly, could be lowered. Dana has some ideas. It could be a meeting of the minds to just put it together, but it should be put on the paper black and white so that everyone can approve it and understand and totally go forward and keep the community going and growing. Just just a bump in the road and there's ways to smooth that out. Smoothing that out. I have one question. In the original planning for getting the infrastructure out there, you guys had five different routes to get there. Why did you choose the most expensive route? It was not the most expensive route. That was the second most expensive route. That's how the city came

056up with the $245,000. We paid the difference from the cheapest route to the route that that it went. Now, the cheapest route required a completely new lift station, which we have two lift stations in Gibbon and we only have two full-time city employees and we can't when we get large rainfall, we don't have three people to sit at lift stations on large rainfall. So, we did not want three lift stations. That's how the city came up with the $245,000. Okay. But the numbers I have like just say option A was751,000 construction cost estimated total project is 9.4 and we end up with a 1.6. So 924 would be your construction cost just just construction. And that was without a lift station. The lift station had to be um had to be larger because the current

057lift station couldn't handle it. And then on top of that, you still have engineering fees and you have all the other fees. There was engineering fees either way. The way you guys put the pipe in past the old football field, you put infrastructure in for the city of Gibbon and you're charging the school district for it. The school district is not being charged for that. There was a change order for that. This is in the ground. Why are we going backwards? Yeah, I I didn't bring those routes and I didn't bring those numbers. I wasn't even had months ago. We had it. It didn't happen the way it was supposed to explain all that. Maybe your world. [Music] Thanks for your time. It's different being over here. So, I'd like to just make some statements

058for the record. First, during a work session in summer of 2022, Jason Hos asked Dana if she was able if the city of Gibbon was able to provide infrastructure to the property, if it was a selective property along the north end of town. She didn't say yes, but she said Given would do everything in their power to get the school built in their community. Fast forward to summer of 23. School had the opportunity to run its own route with infrastructure new school for approximately $800 $900,000. Jeff Horton urged the board to take the longer, more expensive route to the new building with given taking up the difference in the extra cost. Initial estimates were just north of a million for that plan. In the end, with all the extra installs and equipment, it came to

059just under 1.7 million. The district got stuck with that extra cost. At this point, should be thanking the district for the extra half million handout, but it sounds as if they don't want to pay the additional interest in a not so welloughtout bond maneuver. It's time for forgiven to take the opportunity to do what they have to to pay off what's going to be additional if anything. And I asked these things to be put in writing by Jeff Horton and Dana Litzo. And neither of them responded to my requests. I tried my hardest. We could have dug our own well and installed a great drain field also proposed by Bolton and Mink. That cost would have been similar at this point. Balden Mick said it would have been very doable and that's that's where I

060leave it and I think uh the school district is doing the right thing and trying to feather the costs a little bit better and uh sounds like there's opportunity to make some money with his ideas for the city of Gibbon and it shouldn't be that tough. It might require some more phone calls and some shopping around and shouldn't be a problem at all. You know the way you explain it. So, thank you for your time. All right. Something that was a little Oh, great. I'm sorry. Is there any more public comment? So, I understand how you're feeling and it is my understanding that you can reinvest those somehow. I think there is conversations that have to happen and I think that was all of our understanding is that he'll be able to regroup that or

061at least come out even, right? It shouldn't put him back. But I I guess I can't speak to that. What I can speak to is the difference going to be made for the district, the whole district and the school. So the interest that's going to be paid to given over 20 years is 1,91,947. The principal is $1,541,275. for a total payoff over 20 years 2,633,222. If we bond it over 10 years, we are going to save $672,810. We are going to save 1,33,500 because of the egg to school credit because we're moving it and putting it in a different place. So the total savings for bonding it versus paying it off is [Music] $1,76,310 and that's with the additional amount. That's with going with 1.95. So I think as a board we owe it to

062the communities and the taxpayers to reduce that amount. I mean it's taking $131,000 out of the general fund every year for 20 years. And that's a lot of things that we can do for kids. It's a lot of opportunities for them to have different programs and more people, right? So, I guess I just wanted to be clear on that. And I would just echo that from the general fund standpoint, $131,000 is a lot. the district. I'm sorry. We just can't afford to pay that every year or we are going to have to do other options that cost a district that could be voter potential that we don't get and then we have to reduce further and we have a new school that I don't think we should be looking and considering that at this time.

063But Amy, I appreciate all your comments because they're very good. Great. And so we don't want to lose programming because then we're going to lose enrollment and then we're going to lose our funding. And so we have to look at the long term and the city of given doesn't grow then either. We don't have anything to provide kids other than a building, right? And the the bonds that the city of Given sold were not all 20 years. There was almost equal amounts sold over a three-year bond, 6 years, 9 years, 12, 15, 18, 20. So you don't have the entire debt over 20 years should be paid off, but calculate that's that's a technicality. Yes, that's the way the bonds are sold, but effectively they're paying for 20 years at the same level. So that's

064just the way bonds are sold, but they mature at different years. Um, so I just want to be clear that city given on the hook for 20 year well for 10 years because they'll hit a call date when they can pay him off. Yeah. But um, just want to be clear on that. Yeah. Yeah. Just speaking as a school board member, I'm pretty sure I'm probably speaking for all of us on the school board is we have to look out for the school district ourselves. It's not that we want to put down the city of Gibbon or make more debt for anybody, but us as a school district, we have to watch where our money goes and try to save where we can when we can to try to get as much as we can

065out of every dollar we have. We're doing the same thing for the city. We're both giving jobs. Yeah. Okay. Well, I think it's our intent to save what we can hear, but we're not trying to dump on given. I mean, I think if you work with your legal people and and finance people, there sounds like there's a wave to come out almost even with this. It's not going to cost you anything more, but yet the state's going to pick up 53% of it. So, I think you guys got to look at more options with your finance people and and Kelly and maybe, you know, our our financial people and see if you can't get this worked out for it. It doesn't cost you any more money. We don't want to do that to you either.

066So, it it I think it'll work. You just have to do what we're studying. Could you summarize then? So, the the payoff so I understand um we do the bonding. So the city given could be paid off if I heard it right around the 1st of July. Yeah. But they have to pay assessment. They have to pay interest until the end of the year. Okay. Thank you, Dana. So the interest that the school district is paying given for the first year is just over $88,000. So they are giving that for interest. Yes. See things like that should all be lined item into a payoff agreement. So it's black and white so that everybody understands. It's on the assessment. Yeah, it's on the assessment. I mean there should pay off agreement in in the agreement it

067says that if we elect to prepay that we will be responsible for interest through December 31st of that particular year that we decide to prepay it. So we have we've already made one payment uh to the to Sibly County and we have another payment October 15th that we will make. Um um and and then we have the payoff amount of yeah just under $1.6 million. So um that's all spelled out there and uh um and our timing was yeah I I I had mentioned that we would pay off by early July or whatever. Um so you could start earning interest on it right away. So, we're not making money on that, but you're making money on that. So, so you're not left with any any cost for this is is our hope at the end

068of the day. Um, so yeah, Dave, to your point, we need to maybe write some of that down more in layman's terms so everybody understands that. Um, but a lot of it is said in here. Um, uh, so That's where we're at. Back to Dave's point of like who maintains. So if the city owns it and the water line breaks in the middle of July or whatever, that's maintain it up to the property. Up to the just like any other water line property, that's basically where city maintenance ends. Yep. Same with the sewer line and Y. And so the first route when the the station was going to be on the other side of the road, then it would have been owned by the school district. And then the school district did not want to

069do that because then they would have maintained it. They would have had to get the cleaning done. They would have had to do they would have had to hire um someone that had the water and sewer licenses that would have been a mess for the school district. So that's why it's on our property. It's our baby if it needs to be maintained. And we up. So one of your lift stations did get upsized then. Is that accurate as well? Yeah. So we still only have two lift stations. No, that makes sense. So am I wrong in saying this worst case scenario if you go the trust route and uh don't reook into investing it. It's going to cost the city $42,500. Is that our worst case scenario right now? Yep. So that's what I would

070push our council to approve. and and we're paying $88,623 in interest to them for this year. So, we are covered. Well, don't don't say that, Amy. I think that's inaccurate, so I don't want that in the paper. Sorry. Um, yes, we're paying interest, but part of that is interest to the bonds. Got 2% extra that goes to the city. So, that might be a couple thousand dollars in this first year. So, I I just want to be accurate on that so that's not misrepresented. Um, and again, the document says we need to make that assessment payment in May, which we did, and again in October, which we will. Um, so, so is it out of line for us to either cover that for them if it's is such a true burden where they can't invest

071it like they think they don't know any they have to do. So, I'm just what I'm just spitballing ideas here because we all have skin in the community. That's all I'm doing here. True. But I think those conversations will have to happen after this board meet or it correct? But that's something we could talk about. Yeah, be conversations going forward. I'm sure. I think that's a very valid comment, Cherros, that we said from the get-go. This is not an an effort to dump on the city of Gibbon. It's a effort to relieve us of some general fund debt. And we believe the city of Gibbon can be made old if and let's have conversation as we iron out fair details sooner and faster. Right. And I'd say if that's worst case scenario, that's not that

072much money to deal with at some point. So, do we have what's the penalty if we don't approve this thing tonight and we do it next month? Um, there really isn't. You're delaying the sale. Um, so you're only subject to market risk. And I mean, so if the market were to go up, it's going to cost you more. If it go down, obviously, you'd save more. So that's what you're substitute. You'd still you would delay getting the funds by a month. Let's say you've waited another another month. We'd have to reschedu the um bond rating. Um so that doesn't take place. Well, actually, we wouldn't have to as long as you um were willing to I'm sorry. The only cost that really is going to be your cost um if you don't end up selling

073the bonds is a bond rating. So, if we were to have that this week, which is scheduled and you choose a month from now not to sell the bonds, you still would owe um um the cost for the bond. Yeah. And if we approve it tonight and we then could talk about how we still make our souls right with the city, we can we can work that out later and that doesn't matter, right? We can biggest heartache at the end of the day is when this is their worst case scenario for $2,500. That's nothing compared to the 1.7 million that we're talking about, right? Y. So, I think we know which direction and I I just make a comment about why why the rush to do it because superintendent is gone and I wanted this

074on me rather than the new guy coming in and dealing with this. Um, so frankly, that was my directive that we get this done by June. um you'll have another month of interest. So the sooner we do it, the sooner they can start collecting your interest, start getting that income. Okay. All right. Any other comments? Um everybody spoke up. I mean, it was the conversation was a hard conversation. It's, you know, we have a job. City council has a job. It's it's hard. So I I think there's middle ground to be found for sure. Okay. So, we can uh we ready to move on to number five? Yep. Effectively close the public hearing and then we'll move on to number five there. Thank you for everybody that came in and spoke and uh hope to

075see you at the next meeting as well. Thank you, Steve, for for being here the resolution. Yes. All right. Move on. Uh let's see. Can I get a motion for recommending to approve resolution related to proposed property parking lot improvement project and granting the pavement attachment? Move to make it a motion. Okay. Second. Second. All in favor? We need a This one doesn't need a roll. Okay. Yeah. Roll call. Sorry. My bad. Roll call. Who? Um, Kenny was first. Pardon me. Kenny Kenny first. Amy second. Yep. Okay. Have to get the correct resolution. Amy, yes. Mark, yes. Yes. Emily, yes. George, yes. Russell, yes. Thank you. Thanks everyone. Appreciate it. Thank you very much. Nice to meet you. All right. Is there recognition of public comments? Anything further? Not. No. All right. Uh, can I

076get a motion to approve the consent agenda? Motion to approve the consent agenda. Thank you. Second. I'll second. All in favor? Great. Thank you. Good question. Second, Linda. Yes. So, we have a hire for a second grade teacher. Now, if I remember correctly, we lost a second grade teacher. So, we will have three sections of second grade. Or is it two sections of section? Okay. She's Oh, sorry. She's the resation. Yep. Okay. That was my only question. I just go down our list. Yeah, I'll just make a comment on there too on on basically the retirement. I was gonna say that I had to look. He is pop on the seniority list right now. This is year 36 with the district. And uh um so just want to thank him for all those years of

077service and in a variety of positions with the district, but primarily math and science teacher. He was he was probably the school's foremost humorist. Okay. On a daily basis. All right. Yeah. So, just want to recognize that as well. Yeah. Congratulations to a long career for his is my future. So shortly um any discuss any other further discussion on the agenda items? Dr. Smith, did you have anything? Um no, just my only other we've got u policy revisions on there and policy committee can confirm it was like one word changes or statute change. But uh so I just wanted to mention that. So they are on table with consent too. Yeah. Same old same old policy statute thing state doing state stuff. Yep. Okay. Uh give me a few minutes because you're up next. Yeah.

078And I'm trying to stop my screen share. So I think I got it stopped finally. Huh. Well, I switched screen. Oh, thank you. Thank you. All right. Sorry about that. Um, yeah, just so some quick notes. Uh, yeah, it's it's a busy May. Uh, tonight we have, uh, National Honor Society induction at 6 followed by the evening of excellence with the scholarship awards and so forth. Tonight, we had a comment in our meeting earlier that we've got to change that. Um, so it's not on the same night as a board meeting. Especially next year, we're going to have three board members with kiddos participating in that in some way, shape, or form. So, um, dually noted, we'll talk about making sure that isn't on board meeting night. Um, lot going on. We had elementary music

079program last week here and then middle school high school talent show Friday night and and Saturday night along with art show by uh by art students as well. So um great attendance on Friday night when when I was there. Um and then suddenly it's graduation May 31st at 6 o'clock. Thanks to Russell and George who will be representing the board. um seniors had their parade at the elementary and last day of school on the 29th and uh suddenly that's uh was 10 days away. So hard hard to believe. Um and then I just wanted to say we received notification of the ASIS grant. Uh we did receive that which was uh very welcome email to get. um is that funds part of eight positions for the district. So very happy to be on board with

080that grant program again. Um and then uh Julie put at each board station, I think, uh a series of board workshops that are available for board members this this summer. So if you see something on there that interests you, we'll certainly get folks registered for that here. So, um that's all the comments I have. All righty. Um thanks again for the time next week. Yeah, there's a lot of there's a lot of work. Sorry. Very important for the public. Well, it's it's 700. Yeah, the total total expenses but what's coming to us benefit to us is like $450,000. So um all right we have middle school high school you kind of kind of just cover that. Uh the dasher update was basically they're fully staffed. Not much to report um this month. Uh student council

081update. We don't have student council here. How about probably at night of excellence? Yeah, they're all at night of excellence. Yeah, it's in your packet, too. Um yeah, I did see it in here. Um we'll move on to the riverbend, but they Okay. Well, first of all, their their programs pretty much full for the next year as I understand it. But I got a letter from a parent that was addressed to Doug Hayen, the superintendent at Riverbend. I'd like to read it especially in light of the fact evening has been a bit contentious. Think you'll enjoy it. It's quite uplifting. Doug, I wanted to reach out and share my appreciation for some of the Riverbend staff who have supported our son and our family over the last several years. We are so grateful for Alton

082staff who have helped him grow into the man he has become. His first experience with Riverbend was the imprints program. Mr. Wave and Miss Nancy were an incredible team and did so much for him. Our son had many struggles, but they showed patience and a genuine interest in getting to know him as a person. They allowed him to share his interest with everyone in the classroom and even allowed him to build a solar system to display throughout the room. I can't tell you how much it truly meant to me as a parent to see other adults take an interest in my child and cherish him for who he was. Eventually, he mainstreamed a sleepy eye and we were eventually blessed with having Emily as his case manager. She helped facilitate this next Riverbend experience at

083the Pays Lab, another acronym. I know you understand how the program works, but as a parent, I thought it was fantastic that this program allowed my child to try out various skills so he could better learn about his own strengths and weaknesses. I honestly feel this should be something that all students get a chance to experience. Jen was wonderful about giving us feedback and guiding him as he explored the various tasks. She eventually recommended that he explore the work program. Miss Cronin and Heidi have been incredible with their child. They allowed him to explore a variety of jobs and pushed him to reflect on the experiences so he could continue to grow and learn. They helped him learn how to work with others toward a common goal and helped him learn new hobbies was huge

084for a young man who likes to spend his free time on his own and has a narrow range of interests as he has been. Cronin has helped facilitate connections that will allow him to continue working at one of his work sites. She was always willing to help when I had questions or was unsure of what the next steps were in supporting our child. Miss Cronin has gone above and beyond so many times for him and our family. And I wanted you to know. So often in life, we hear about the negative things happening in the world. I wanted you to know that our experiences with Riverbend and the staff supporting our son have been positive. They changed his life and helped make him. I hope that you will share this letter with each of them

085so they know how grateful we are. I thought that that was worth hearing 100%. So good things being done. Yes. Yes. And for somebody to take the time to write, they're kind of very well written. They're very passionate about it. So anything else you want to share about Riverbond? No, it's just I said those filled in are just quite know. Yeah. Uh policy committee just went over the one word changes um talked about in the future when we're in one building that we'll have to review a couple of them just because of the sticks. Yep. Otherwise, not much. Anything to add? No. Okay. FF LRP. You just met tonight, Mark. Well, we we met with two different bus contractors to kind of look if we're going to go that route or not. Pretty interesting. Found

086out a lot about what they're charging and just got a different, you know, a feel of both companies. So, and then we talked about u business manager hiring business managing services and a little bit about food director service. So, okay. So, good things to come. Yeah. So, there's some things that more paper and make some pretty soon. Okay. So, a lot of the questions that were asked uh for the bus contract um was mostly how it would affect the employees and would it stay the same for pay and benefits and things like that just to see if it was some kind of move that would be doable. So, there's a lot of conversation. Well, you have a lot of moving parts too. Yeah. Yes. with logistics and garages and buses themselves and employees guys. Yeah,

087it's so important. No. All right. Well, keep up those good conversations. Uh community engagement. What's uh what's happening? Nothing. We didn't meet postponed that meeting because of the FFRP meeting. So, we got booted out for this month here. I guess exponent. Okay. Okay. And then Emily, how about executive committee? Um, most of what we talked about on executive committee is our agenda tonight. So, thank everybody's right there with us on what we meant about on executive. We knew it wasn't going to be an easy night and glad and thankful for the folks that showed up, community support, you know, all the voices may be heard. Okay. And then um the student council uh they had spring fing spring fling last week. Uh national honor society induction started at 6:00 tonight. Thunderberg Greenhouse plant sale was

088May 8th through the 10th. Sounds like they uh sold a lot of plants and it was successful. uh graduation details both uh balorat service and senior breakfast parade that uh Dr. Smith all touched on. Evening of excellence is tonight and high school reward day. Uh 9th through 12th graders have a reward day where they choose to attend Miss Zoo twins game on May 21st. So um do they get to do either or? Yeah, they they were able to choose. Yeah. Yeah. But if we have half the kids going to the zoo and half going to a Twinsky. It's it's probably three and a quarter zoo. Okay. But they are doing both. Yeah. Um Okay. On the action items, recommendation for approval of revised open ed contract for 25 through 20. Can I get a motion

089for approval? Okay. Discussion. Need a second. Second. Discuss. Second, first second first. Okay. Oh, second. The second. All right. Now, discussion on it. We've uh talked about this already. They're the final contract on the three years. Yes. It's the same contract as the other two schools. Yeah. Dash. No. Ste. No. you anything more to add to it? I mean, we've this has been exciting for us for a while. Also, we discussed it before that essentially we're signing the same contract other two districts in Minnesota have signed. Our attorney had suggested some additional revisions that their attorneys had not, but um the company is only going to deal with one contract in a state. So, um, how quickly do you think we'll So, if we if we approve it, see it from them in the next

090few days. So, yeah. Yep. And, uh, and as they said, um, we're probably move to where we would start accepting students second semester. But, yeah, I I will hear from them very shortly if they're ready to go. So, okay. Any other discussion? Okay. All in favor? All right. Item B, recommendation for approval of business manager services contract with school management services for 25 through 26. Can I get a motion for approval of business manager services? I'll make a motion to approve business manager service contract. Okay. In a second. I can move. Okay. Any discussion? Yeah, there probably wasn't a lot of detail in any board packets, so I should give you some detail. We talked at FFLRP. I did did receive two proposals for business manager services. Um, one from CISO, who we currently work

091with uh for communications and HR. Um and uh and that was for 13 hours a week and was $97,600. And then we received a second proposal from school management services. They go by SMS. Um and that was for 16 hours a week um for $75,000. and they they will have somebody onsite um for a minimum of the two board meeting nights of of a month. [Music] Um both companies would have put reputable wellproven business managers into the district. Um, I've known of SMS and and their owner for 25 plus years. Um, so they're both good companies. It really came down to the price and I I think SMS caters more to smaller rural school districts than CISO does. So, it's my recommendation that we go with school management services for that for that contract. We

092talked about that at the executive meeting too a little bit of proposals coming in. Okay. Um All right. All in favor? Six. All right. Motion passes. Um item C, recommendation to approve 2526 budget assumptions. So we've uh talked about this that lang you give me authority again you trust me with that ability to drive here that um so yeah we've had these budget assumptions in front of you for three months now something like that so um should be good see if I [Music] There we go. So, these assumptions haven't really changed since we started talking to them. Um, just again, history, maybe this is a preference of mine, but I historically have always had the board approved these assumptions. So if suddenly the state says we're going to take away your 2.74% uh general ed

093increase for the year, it it is documented that we approved a budget based on an assumption that we were going to get 2.74 and then something changed after the fact. And the biggest one is obviously enrollment. We're making our best guess for what that enrollment is going to be next year, but we've got a number of other things that are our best estimates. Salary and benefit increase. We have our teachers and our classified um and our non-exempt employees or exempt employees up for contract renewal as well. Um, and then transportation is certainly a you know a question mark, but we're basing it on a 5% increase in transportation cost. And uh so that's a list of assumptions. I would ask the the the board to approve that list of assumptions so we're all on the

094same page as we move forward. Um and again uh Lindsay started work on this and when this is with on the expenditure budget and when this is finalized she will wrap that up and I hope to have that um proposed budget to everybody by our first by our work session in in June. Hard to say it's already June already, but um and for approval at that June 16th board. Will Lindsay get time to spend with the our new business manager service contract? That's our hope here. Yes. and and proving this tonight will help that. I know. Um and I would mention uh uh Todd Netsky is the is actually the owner of school management services and he will be the person that's our business manager at least to begin with. Okay. Um Todd is currently

095working with Sleepy and is a native of Sleepy. So he's very familiar with our area and uh and has 30 years experience as a business manager. So, it's going to do very well for the district. I believe good to hear. I recommend uh Well, we already this a motion to approve this. Got a motion to approve. I'll make a motion 256 budget. So, George, we made a motion. The second I'll second it. Okay. Any conversation? Yep. All in favor? All right. Pass. All right. Uh, item D, recommendation approve budget reductions adjustments for 2526. Can I get a motion to approve budget reductions? So, we open up for Y discussion. All right. Y correct. Yes. about the issue. Sorry. Whoever you Sure. Kelly, I want to say I really appreciate all all of your work on

096this and everything um that you've done throughout being our interim superintendent this year. I have to express that I we put the teacher teaching and learning coordinators in their position last year and I just am not finding the value of keeping them just for moving into a new building. That's where and that's my concern as well. I just think that there is a that's a $100,000 position. I think that money could be much better spent and allocated perhaps another $20,000 to lure in excellent quality teachers, you know, to provide more something like that. But, uh, again, that's just been a year position. It's like having two principles. I think principal can handle her position and this idea of assessment and curriculum updating and all the rest of this going on and on and on. It'll

097get done about another 100,000 and if necessary the new superintendent may have to step up on it. That's my feeling. Just don't want that 100,000 going out the door. Okay. It's a very expensive role for our size of district. George, I'm going to go by his recommendations. He's in the schools every day talking to teachers and principles and I just think he's got a better handle on we do sit near the table. Okay. So, so far all comments are well stated and appreciated. When Aaron spoke to that the last time we brought it up, she did indicate that it was a huge help to her and she was grateful for having that during the transition. I guess I don't know all the details because I'm not in there and the government don't have them, right?

098So we can't know the value of that position. All I can do is go by what Aaron said that AI position. Sorry to bring it up again, but I I worry about the burden on Wade. that in place. Um, so I I agree with your comments sharing your opinion and yours and yours. So, um, and it's a hard decision. Um, I think my opinion though is uh I'm not I'm not boots on the ground. I know there's opinions formulated throughout the school um staff um that we know there has been, but we also have Mrs. Zar, was it 14 new teachers this year and six from last year? Uh, or it was 14 the year before and six this year. So, I think we have less new features this year than last year. Okay. Yes.

099So, it's still a lot of new staff that's still being brought up to date. I don't and I take a lot of weight in what uh Dr. Smith puts in u because they are all boots on the ground. Um, but I would definitely say um that second position would be scrutinized over the course of this next school year after we're in the school. Um, but I I lean on your expertise. You see it day in and day out. Um, I don't see it as a personal assistant to anybody. I see it as they are doing there's a function that they are performing and it's benefiting us. um you know if I if I had the time to go into school and watch then maybe I have a different opinion but right now I have to

100go with the opinions of the people that are in the school. So that's that's where I'm at. Um by respect for sure the thought process because we all did question that was the biggest thing that jumped out was this is this was not a thing two years ago. What was it called? It wasn't called a thing because it didn't exist. So why do we have it now? I mean, if we didn't put that in two years ago, we wouldn't even have the option. I mean, we decided on that after we decided on a new school building. So, keeping it just to facilitate into getting to a new building. Is that true? Yeah. I I think that's mischaracterizing. And if I came across as saying that, I apologize. Um, but what I intended to say was

101I I think it's that second position is certainly up for review every year. Um um but we have and I forget the numbers. Half of our staff are still probationary. So we have an inordinate number and twothirds of them are at the middle school high schools. So that's all thrown on a a new principal who I think is very good. Um and we want to hang on to her. Um so she has had some support and there has been a curriculum implementation that hasn't been happening um perhaps at the pace that it was expected. It was so they were brought on to help help that. I think some progress has been made this year in part from the AI person as well who who has really helped with all of our software connectivity and uh

102um but also with these positions. Um and again based on my observations, um if I ask teacher A or teacher B, do you you think this position has value? Um you may get a no. Part of it may be because they don't like somebody else telling them how to develop their curriculum and get that put in place. Um, so it's it's always really difficult. Um, I learned early on as a superintendent I never asked staff what they thought should be cut because I only heard one answer and that was the superintendent position. Um um because nobody wants to cut that other person who who is bringing value to the district. Um, and uh, but I I really think there's value in not just getting us into the new school, but that transition into a new

103school does add some more administrative hassles to our staff for this coming year. And the fact that it's going to happen midyear, um, and the fact that we have as many probationary teachers as we have. So, we've got to keep that evaluation process going. I just really think there's there's value in that position for one more year. And I will tell you, if I was here next year, I would be looking at that position next spring to see if that value is still there for the district. Um, and and right now, I believe there is value to that even though it's a high high cost position. Sir, I I've heard from different superintendants, principles, moving into a new building is a big process and if you don't do it right, you could have a mess.

104So, I think this person would help our teachers to transition into this new school because it's that first year is very important. It's what I'm hearing. And we Yeah, it's a little bit different, too. It's it's not just moving into a school to me. That sounds like the act of going from win to given everything organized the flow of the school and everything. So, yep. And uh everything uh curriculum wise for the full calendar school. Um like I said, it's uh it jumps out. Yeah. Like it could be a cost that big should be cut, but we have two Dr. Smith things. one's still valid. Um, my intel is both ways. You're going to never get it, not both ways, from the people that you trust. And when I trust multiple people, I hear it

105both ways. Well, then we kind of just got to make a educated decision. And to me, it says, you know, get rid of one, save one if you have two for and reevaluate it next year. But that's just another So, a clarification. So we have 14 new teachers. So I understand that these teaching or coordinators are helping them develop curriculum. However, our current staff also mentoring and supporting our new teachers. Is there any of that happening? They're normally a veteran staff member who is assigned as a mentor teacher. So on a day-to-day basis if they have questions or you know they can consult that person and we're doing that or not. I believe that is still happening. Yes, even with these people here, we aren't I I think at times those positions have been paid

106but it is not h they those mentor teachers are not being paid. It's volunteer um right now. Um so yeah, I do believe that's still happening, but it's volunteer and it's not a paid position. I think that's typical that if you go to a new position, somebody helps you get up to speed. So, yeah, I don't personally feel it should be a paid position. If you have the same prep time, if you have time to discuss, hey, we're struggling in this area. Can you help me provide any insight? I think that's very valuable compared to a teaching and learning coordinator as well. And I guess has nobody expressed to you that that is or isn't happening? I mean, you know a lot about the teaching and learning coordinator, but not really sure if mentorship is.

107Yeah, I'm just not sure how how act, you know, what kind of interactions on a daytoday or weektoeek basis happens, but I I do know that there are mentor teachers that work with our newer staff. I just don't know how. And a lot of that is based on the new staff, how much they're asking that mentor teacher questions about classroom management or what whatever the case may be. I got to imagine once the mentorship gets so much easier once you have a established staff throughout the years. I think back when we were in school, most teachers were home for a long time, but we have such a high rotation. them in and out. A lot of uh um born teachers where they don't have enough time to get their feed. One year isn't enough in

108my opinion for them to even understand living here completely, let alone trying to make a living here. So, I can see the mentorship being easy where no, they shouldn't get paid like you said. Um but it should be a lot easier at that point too once you have a room full of established teachers. We're just not at that point. Um, in my opinion, it seems like it just be an awful lot of work for that we're going to ask of. We don't want to burn down one person. We have we have two on the table, one one for sure and we can reevaluate in a year. Seems like the socialable answer. So if you put together our budget that's presented in June and we're short or we just approving a short budget because we approved

109these specific reductions. Um well I I think I have shared with the board it could be that we have a deficit budget this year. Um it could be. I don't know that for certain yet. Um we're, you know, frankly, we won't know that until we're all done negotiate, you know, negotiating for the full picture of what's happening for next year. Uh but based on our assumptions, I I suspect with the $450,000 in reductions that we are looking at, it's should be pretty close to break even. I just can't tell you that that's where we're at right now. So, could you bring that up at that point in June? Yes, we could bring that up again. Um, that would be your prerogative. I I would absolutely not recommend that at that that time. We we haven't

110been fair to that staff person. Um, but there would be your right to do that. Have to cross that bridge if it happens. How would you have been unfair? Because I think I think we owe it to a staff person that we're going to let go to tell them early enough that they can find a new position in terms of timing. In terms of time. Yes. Yes. Good clarification, George. She said you had something but you weren't ready yet. Still not ready. Well, let me just speak to Amy brought up AI and that's that's certainly point of discussion. George brought that up last time as well. Um, so what does it look like with the stipend? Like how much time is he going to spend teaching versus helping out the So yeah. So the stipen

111there were two things. One was a an over what we call an overload which is right now we teach high school middle school high school teachers teach five classes out of a seventh period day if we ask them to teach another class that's called an overload. So they get paid 17th of whatever their contract amount. So we would be paying him an overload or one section. So, 1 hour a day and then um and then we have a stipen for extra time in the summer to really the majority of the prep is going to be for getting us ready for a new school year. Thank you. Um so it was a total I think did I say $15,600 something like that between the overload and the stipen. Can I see the chart you had up

112please? Yep. Did my computer die? Oh, sure. Yeah, I'm dying there. Budget cuts are 464,193. Right. Right. Can we add more to this since we have $14,193 over the 450? You could certainly make that motion so that he could either a little bit more in the summer especially August or he wants to free check. Yeah. Can we do that at the next meeting though see the budget? Yes, that that would probably be a good compromise. So when we see the actual expenditures, we could see what the numbers look like in men or we're improving this to men, right? You could learning coordinator you could like like just like we could technically come back and eliminate the teaching and learning person in June. You could also come back and say instead of um whatever the the

113total was 15,00 overload and the stipen you could increase that 20,700. Do you want to make a note to put it on the next two people? What's that? Can we make a note to next to Y? Not that I want him to work 247, but I No. No. And and I'm going to go back to my initial statement when we started talking about reductions. None of these are really easy, you know. Well, the easiest ones are when you have a retirement and it's an area where you, you know, or we had a retirement in special ed. We think our numbers warrant that we can do with one less teacher. That's a no-brainer. We're going to take advantage of. But all these other things we wouldn't have put in place if we didn't think there was

114some value to them. And that's what makes it tough. You know, with the AI position, we're certainly trying to maintain somebody working on that so we don't lose ground. I think we're ahead of a lot of districts because of what we've been doing this year. Um, I want to stay ahead and that's going to be important. Yep. Yep. All right. Well, um, time to vote it. We already put it. Well, we we we don't have a motion yet. Have we ever discussed it? Can't remember any. Um, okay. Well, we we did have one and it No, we never got one. We just started discussing to see what the concerns were and we'll try again after we talk. Uh a recommendation to approve budget reductions, adjustments for 2526. Can I get a motion? I'll make the

115motion to approve the budget reductions and adjustments. Okay. I get a second. I will second. Okay. All in favor? All right. Uh thank you again though for all the good conversation for sure. Okay. Item E, recommendation approve resolution reducing and discontinuing educational programs and positions. Talk about that before we Yeah, it it essenti um and I I've had conversations with Julie because she's the historian here who knows how this has operated in the past. Um, in all my years as a superintendent, I I was told via MSBA that when you go through a reduction process, there's a series of formal resolutions that you should take. The first one being the one we passed in February that directed administration to look at reductions and discontinuing programs. Um and then the second one is this one here.

116Um which is the resolution reducing and discontinuing educational programs and positions. Now this year I would say you maybe could do without this resolution because you pretty much just did that in the last action. But in a year where you're actually making cuts, where you have a teacher who's a tenure teacher, this resolution is an important kind of part of the legal process because this sets in motion. That's here. We have one FTE special ed teacher and I'm here to make that one an example. Let's say we didn't have a retirement and we only have tenure special ed teachers. um our reduction just says we're going to eliminate a special ed teacher. Now we need to go through the formal and legal process of who is that going to be who's going to be placed

117on leave. So you look at who has a lenture in special ed and then you look at your approved seniority list and low person on that list would be who. So this document is just one more we support action that supports taking that action. And again, this year it really is not a big deal, but I'd like you to get in the habit of passing this re resolution because it could be a big deal in the coming year if you have a a tenure teacher that you're trying to place on leave. Without this resolution, that teacher could come back and say, "Well, wait a minute. You never discontinued 1FP special ed who you going to get to teach that spot and this document makes it official that you do it here as a that's a

118safety net for us. Yes. Yes. Yeah. Anything further on it? Again, what you do next year is up to you, but it would be my recommendation that you do that do that just as a safety the protect the district thing. All right. Well, can I get a motion to approve the resolution reducing and discontinuing education programs and positions? I'll make a motion. Second. Second. Okay. Truly. Roll call. Miller. Yes. Breeze. Yes. Rosa. Yes. Spare. Yes. Turtle. Yes. A. Yes. Thank you. All right. Item F. Minnesota State High School League 2526 membership resolution and that is exactly what it is. We just received this last week in the mail. Um it's a resolution that's done annually. We would join the Minnesota State High School. Um, and just a note, I have an electronic document that is

119in my mailbox waiting to be signed and once I do, it'll go to our clerk as well, right Julie? So, Emily, maybe you've already got an email. I don't know. But you'll get a you'll get an email to sign it electronically as well. I will be on the lookout. All right. Can I get a motion to approve it? or make a motion to move approve of the Minnesota State High School League membership resolution. Okay. A second. Second. All right. Yes. Rosa, yes. Breeze, yes. Miller, yes. Avery, yes. Turtle, yes. Thank you. All right. On to item G. uh donation resolution. So we have uh Peggy Jones, $250 for community bus. L and Pat Shriner, $100 restrictions TCA. Sharon Carrian, $100 community bus. Laura and Jason Hosprung, hopefully I said their last name right. $50 for

120elementary uh teacher appreciation, $50 for elementary books for Sharon Bon's room. I get a motion to approve uh donations. I'll make a motion to approve donations. I get a second. Second roll call Miller. Yes. Yes. Turtle. Yes. A3. Yes. Thank you. Just a quick comment on the donations. Um, wonderful to see the donation. Well, all the donations and thank you very much. I think it's Hawkurn. Hawk correct me if I'm wrong. Um, but also the donations for the community bus just I don't know if any of you have seen it when it's parked in one of your communities. That is really very popular and just thank you to $350 in donations toward that. Uh we get a lot of other donations that don't get monetized on here. To stepped into the next room, you'd see

121things that are probably going to be on the community bus, but it's it's just got more and more popular and people are continues to grow. Yeah. Yeah. So, kudos to Tanya and her crew that has got that thing going. It's just a really valuable asset to our communities. All right. Um great job tonight. A lot of hard discussions. Um, I get a motion to adjurnn. Make a motion to adjurnn. Have a second. I'll second. All in favor? Right.