April 21, 2026 Budget Meeting

001Okay, good evening. Since it's 6 pm, I will now call the Press Valley Central School District's Board of Education budget meeting. And to pledge of allegiance, please stand for the pledge of allegiance to the flag. Pledge allegiance to the flag of the United States of America and to the stands. One nation under God, indivisible, with liberty and justice for all. >> Oh, video just cut out. >> District's mission vision. As a reminder to all of why we are here, the vision of the Valley Central School District is to become the best rural school in New York State. We will accomplish our vision by providing exceptional opportunities to all learners and preparing them to set and reach their future goals by embedding our core values into the student experience. Roll call. Mrs. Belile, would you please

002take the roll call? >> Tom Broadick >> here. >> Paige Potter Sultan >> here. >> Paul Fenton >> here. >> Darlene Hooper >> here. >> Sarah Coleman >> here. >> Deb Spalding >> here. >> Jason Welch >> here. >> Satie Burgess >> here. >> Thank you. attendees because we don't have any attendees so we don't have to number six Dr. Rick Tim's financial presentation. We are very fortunate tonight to have Dr. Rick Tims with us this evening via Zoom. Dr. Tims is a well-known education finance expert and president and CEO of RG Tims Incorporated. Good evening Dr. Tims. We are delighted that you're able to join us this evening. Where are you? >> Can we just Can we just pause for one moment? >> First time this has happened. reconnect with us. >> Yeah, you

003can't hear you right now. >> Okay, >> I can hear you, but all I can see is a basketball hoop. >> Fixing that right now. Okay. How do we sound? Do we sound good? >> Go for a three-pointer. >> Does it sound good now? You hear us? >> Yes, I do. >> Okay, we're good. >> Good evening. >> All right. Good evening, everyone. Thank you for inviting me. Can you You can see me though. Is that Is that right? >> Yes. >> Okay, good. I will share my screen and let's just see if we can get this uh this piece up. Okay, let's just get a couple things out of the way here. Okay. Can you see my PowerPoint? Okay. >> Yes, we can. >> Okay, good. >> We want to thank you for taking

004time out of your busy schedule to meet with us this evening. We really were interested in uh what you had to say when we met with you back in January and we're grateful that you're able to um give this for the public as well and answer a few more questions. So >> that sounds great. That sounds perfect. Yeah, this is the same presentation that I gave in January just in case anybody's wondering. So let me just review. I don't know who else is in the audience. Uh but I would like to just take a moment to go over some of the things that we researched to do the project. Uh we looked at the SD3 for the district for the last five years. Of course, uh the ST3 is the official documents handed in to

005the state education department. Talks all about the revenues and expense variances of the school district. We also look at the website aid calculations because they are updated every single month uh or every other month depending upon what's going on. And of course, we're all waiting now with baited breath for the uh budget to pass till we actually get some final aid calculations. We take a look at the district's external auditor reports and recommendations to make sure money is properly accounted for, that type of thing. We look at current capital projects data. Now, obviously, you're starting to plan a capital project, but we also look at any existing bond anticipation notes and debt service schedules as they affect your tax gap and your district's financing. We take a look at foundation aid history and potential changes

006there. And of course, foundation aid is a real problem particularly for your district. Uh and the reason is because you are basically a safe harmless district. What is actually helping to keep you afloat is the reorganization money which is great. But even that is starting to decrease over time. So we're going to talk a little bit about that. Going to talk about the rest of your related expense driven aids not limited to excess cost aids. post easy transportation. These are big ticket item aids. They're partial reimbursements for programs and uh things that this is the year that we do. For instance, transporting children to school district services. And excess cost aids are really aids that cover uh major highcost kids who are special needs children. Uh we're going to talk about the types of reserves

007that the district has. In particular, we're going to talk about capital reserves specifically because they are one of the best spend reserves to have. So, we're going to talk about we're going to take a look at the fund balance history of the district and future opportunities or threat. The opportunities are basically right now it exists you have two major three major opportunities I should say. uh you had one that has already ceased now, but you had a good co opportunity there where we had a lot of federal grants coming in yesterday and Harper grants and that helped out operationally. But the other opportunity you have is the building uh the building uh incentive aid which I'm going to talk about tonight because we've got to be using that pretty quickly. I'm going to suggest we

008move on a capital project pretty quickly and we also have the reorganization operating aid which is helping you out. So, those are great opportunities. We're going to take a look at the examination of the tax cap calculations. Uh, for those of you who've known me for a number of years, you know that the tax cap is very important to the lifeblood of the district. Just because you merge doesn't mean you could just do away with any tax levy. You've got to keep those taxes coming in. The idea is we want to be reasonable. So, all we want to do is go to the cap, not necessarily exceed it. We want to talk about financial events, potential financial events that affect the tax cap calculations. So that could be future capital projects, but two of the

009big ones right now are property values for your district as well as inflation. They affect the tax cap. I want to mention from time to time the controller of the state of New York, the office of the state controller OSC, and how his findings relate to the district. I want to talk about the use of funds, particularly the appropriated fund balances, which is the identified difference between your budgeted revenue and your budgeted expenses. There's always usually a little difference and we appropriate some fund balance there so that if we spend out our expenses completely and the revenues don't come in better than expected, we're able to bridge the gap. I want to talk about the unappropriated fund balances which the district has been doing a great job with which are unrestricted fund balances 4% of

010the next year's budget. The district has been doing a stellar job with that as well. I will need to talk about the projected teachers retirement system rates and employee retirement system rates. Now, these are rates for the pension systems, and I believe we're going to see some changes in the teachers retirement system rate over the next couple years, perhaps beginning next year because they're trying to enhance a tier six for the teachers retirement system rate, which is going to probably end up costing the district some money. Now, that rate this year has gone down a little bit, but people got raises. So what happens is that depressed rate is against accelerated uh uh expenses. So that could have a little cost implication. The employees retirement system rate has moved up quite a bit over 6%

011this year and when coupled raises that's going to be an additional cost to the district. Projected contractual obligations of the district although over time you've you have tried to rightsize the district. In other words, other words, you practice attrition and breakage over the last five years in particular, particular since the merger, you still have contractual obligations with the collective bargaining units, uh, which could include teachers and other staff. So, we had to keep that in mind as we did our projections. We tried to analyze what pilot agreements could you do to the school district, and I think we were able to thwart a pilot agreement problem the district could have had. Uh, thank thank goodness. uh your your superintendent and I had a nice talk a couple years ago. You have a community host agreement

012which I believe will help you, but it's really not as as it's it's helpful, but the key thing is is that um it's it's better than a pilot agreement, but it's it's another source of revenue, which is also helpful, but it's not like it's a huge amount of money all at once. It's dragged in over 30 years. So, the pilot extends a long time. Uh and it isn't until the out years really that it becomes a little more beneficial. the district's tax levy history which you've collected in taxes because remember a district is not supposed to spend more than it takes in in revenue. So we're going to look at that the district's revenue and expenditure variance history. Other words to what degree are the revenues really spot on. They're hard to predict right now.

013You know we're also trying to predict state aid right now. We don't even have a state budget. So that is always a dicey proposition but we do the best we can. Expend its various variance history is very important because we do not want to spend out the budget. But the budget must be big enough so that no matter what goes wrong within the district, we can pay for the cost. Should a boiler fail, should something happen in a transportation facility, a lift fail, things like this that would have to be immediately addressed. We want to make sure the budget actually has money in it to protect the district so we don't have to borrow money. needless any recent or pending statute, regulations or decisions of the commissioner that might have implications for your finances. Well,

014one that's coming up right now, of course, I used to work for the commissioner, so I know how this works. Uh the commissioner basically is to enforce education law and all kinds of laws pertaining to school districts. You're facing a mandate starting in 27 school year, 2728 all the way through to the 25 or 35 school year. you're supposed to turn over your entire fleet to zero emission buses. So, this has big implications, but I've been lobbying legislators, and I hope you have too, to move this law back because many districts, including yours, I don't think have enough money. I don't think you'll have enough power uh in terms of electric power, and I don't think you have the wherewithal to tr translate your entire transportation facility into a zero emission bus facility. So this

015regul this new mandate is going to be a real problem for you. Of course coming up in 2829 if the governor uh passes the budget the way she intends it uh there will be a mandate for uh universal prek. Obviously you're using an outside vendor now in concert with the school district and it's going very well. So so far so good. So it's those types of things we've got to be concerned with. Evidence of district-wide long range planning. We've done long range planning with regard to a previous capital project that we uh were looking at. We've done some analysis of a current uh looking at a capital project that I hope will be projected into your near future and also the the the evidence of long range planning in your budget. And of course, we've

016had a number of interviews with your school business executive Hayden and also your superintendent Josh. And I want to publicly thank them for being really good stewards of the district and being very patient with me as I asked probably a million questions as we had numerous Zoom meetings, send spreadsheets back and forth and I had them analyze all kinds of data. So I think we're going to end up with a pretty decent report. The next thing I think we want to go through now is a little talk on state aid. So state aid for the school districts divided into major categories. The biggest category which is basically the biggest number on the page as you can see is foundation aid. Now foundation aid is the is unrestricted aid except for a couple of items. But

017generally if you'll notice back here in you are fully funded. And a lot of times what this did this gave districts a false sense security saying oh boy here comes a whole bunch of money from the state. And what happened was I think a lot of districts are anticipating a greater increase in funding the next year. And as you can see that full funding extended into the next year. You didn't get a single penny more in foundation aid. So right off the bat to me as a financial analyst a little red light goes off saying uhoh I'm starting to see a restrict restriction here on actually some of our uh some of our foundation aid. In the subsequent year, there was some adjustments made and actually went down a little bit. And this year, you're

018slated for about $45,000 increase, which is 1%. Well, if inflation is two to three% and after the last, I'd say four years it's exceeded double digit like 15 or 16% the last four years, this 1% isn't going to be very helpful. So, another red flag for us where now the legislature I've been lobbying for weeks now and I'm hearing from my legislative colleagues that they would like to see this number be 2% which would be double this amount. But let's be frank. Even if this number was 2%, let's just say it was about $100,000. You could barely hire a first year teacher pay for their health insurance, pay for their social security and their pension with that money. So, this isn't a very heavy lift. The district still gets high tax aid from 2008. Now,

019this is an anomaly to be honest with you. I don't see this money going away. So, to me, I think the money will probably perpetuate on. But the truth of it is is this money is just stuck in law. When the law was passed in 2008, there was a major uproar across the state about what districts got high tax aid, what districts didn't. I think the legislature was a little embarrassed by their own formula that provided this aid. So rather than take the money back, which probably wouldn't make much political sense, they decided to freeze it in perpetuity. Hence, your district has gotten this money for the last few years. There is no evidence that you have high taxes and would be eligible for this aid should it be recalculated at all. But I think

020the legislature is of the opinion that they do not want to take money away from a school district. Next comes the expense driven aids. We call it the transportation without summer school or summer school programs if you have one. Building aid, building reorgaid, which you're not getting any of, but we want to get some of that money. So, I've got a plan there. Your operating reorganization aid, which you are getting, but it's starting to decrease. It decreases 4% each year. So, it's on the way down right now. So, your that revenue is declining. Another red flag. your bosses aid which tends to vacasillate up and down just like every other district in the state of New York. Some years it's up, some years it's down. Now the interesting thing about this, it depends upon how

021many kids go to Boseis, how many are in Boseis programs, particularly career and technical education, what programs you buy through Boseis, what services, and each year is completely different. So there's no real trend data to say that this will continue to go up or continue to go down. So that's Bosey's aid. Public excess cost aid is really code words for really high cost special ed kits. and you'll see that your amount has gone up quite a bit over the last two years. Now, it doesn't take many kids to get this amount of aid, but I'll make you a bet you're close to $200,000 worth of expenses, if not more, to get this 165,000. So, when districts experience high cost special ed kids, it does put a challenge to their budget. Although, we've got to say

022as educators, these kids are most deserving of our attention. And therefore, even under federal and state statute, uh we have to put them in programs regardless of its cost, literally. Your private access cost aid, you're not eligible for any aid at this time. Now, your building aid is still fairly flat and level here. Not too bad. It's based on debt service schedules from probably about 15 years ago. So, that's moving along. And your transportation aid tends to move up and down a little bit depending upon what size bus you you do, how many routes you do, how many miles you travel, number of students transported, and your enrollment as well as B by the way your your uh your property values are actually in this formula. So these are what we call spend to get.

023In other words, these are state supported. The state support is not 100%. Each each one of them has a little different ratio of how much the state will support. But the key thing here is is that it without the state support, you'd have a hard time running the district. So, we're very thankful that nobody has suggested a change in these formulas. So, that's so far so good. But, this is a new one that's hit here pretty recently, and that's an escalating cost. The rest, the software, library, textbook, and hardware aid tends to vacasillate up and down with enrollment, but they also change the dollar value per child from year to year. So, it tends to move up and down. You'll notice you do not get a lot of aid here. You're lucky if you get,

024let's say, 30, maybe a little over 30, 31, $32,000 here, but it all counts. All the aid you get really helps support the school district. The next I want to point out is the universal pre kindergarten aid. So, I know you've got an agreement with another uh entity that you helps you work this program. This program, it's in it's in orange because this money does not go into the general fund. and is actually taken care of in the special aid fund for its intended purpose. And of course, it depends upon how you know they offer a lot of aid. Sometimes it comes true, sometimes not. Depends upon how many slots you can fill, how much the program costs, things like this. But by 2829, any four-year-old who presents to the district will have to be

025educated either by the district or with a group associated with the district. So this this could change this could change over time. supplemental public excess cost aid. Uh you've got a little bit here because you actually have this side kit. This this bump up here means child probably is driving this aid up. It's not much but it $3,796 but it does count. Now this is all from the February run which is subject to change based on the April budget. So the governor always likes to add up all the numbers above it. So she's believing you get 1.8 8 million $1.18 million in aid. Your general fund is really running on $6.96 million. We can't count the $219 because that goes into a separate fund. So the big question is what's going to happen to the

026AIDS going into the future? Well, I've stabilized them all. We know that based on your debt service schedule, you're going to have a little decrease in aid in the next year. some depth drops off and we start to see this this decrease here of this special reorganization incentive aid. The first five years you received I think it was this amount of money and then you drop 4% a year and you could see the amount weighing into these green numbers going across gets less and less. So basically, this is would be like a little shot across our bow telling us we've got to find ways to become more efficient and more effective. And I've got a couple of ideas for you and they're buried right here in this building reorganization incentive aid. Though this number is

027zero right now because you're not eligible for it because you haven't done a capital project since the merger. So I would implore the board to move forward on a capital project. I would probably suggest we take a look at potentially if we can get state ed to help us move some data around here. Maybe start looking at this for a December vote or something like that because you are you're going to get about 90% of the eligible aid uh cost. Now eligible aid cost is what we're waiting for from SED to find out how much that is. But I think this aid would help us do a lot. I think one of the big inefficiencies that the district has right now that it's having a rough time grappling with these are still two operating two

028full buildings here. But I think what we've got to do is get down to one building, renovate one building, get it in great shape over a number of building projects and then get more economy of scale and efficiency. It's hard to practice attrition and breakage uh in terms of cost factors when you are trying to operate two buildings, two kitchens, uh dual classrooms with the same grade levels and all that type of thing. So really, we've got to fulfill the promise of the merger and try and get one building operating at peak efficiency. And of course, then we're going to have to handle the transportation facility, too. So this is something I think that we're going to have to look forward in the future. Now, you are safe harmless. They call it save harmless or

029some people call it hold harmless. Now this is a problem too. You'll see you're only getting a 1% increase. That's because according to the state aid formula, you are actually eligible for $2.751 million worth of aid and not really $4.98 million worth of aid. But the governor's gone along with it. Now two years ago, she really wanted to take this aid away from you. Matter of fact, I think I mentioned at the last meeting, she actually charged the Rockefeller Institute Commission to try and find a way to take at least half of this money away from you in the next five years. And they did. They came up with a plan to do it, but it became politically uh uh unavailable for her. So she reiged on that deal because she believes the school districts

030that start losing enrollment or have lost enrollment over the years, not particularly right now, but maybe in the last 5 to 10 years, should not be getting as much money as those that have gained enrollment. So she is after this money now. She's going to give 1% this year. I think you're going to get the money again. But I don't know where this is going in the future years. I don't know if these will be 0% 1% or they're going to take the money back. So that could put you in deep jeopardy. Now, there are districts out there that are lobbying the state legislature to take some of this money back. So, there are districts that are very povertystricken in the state of New York that believe that you're getting too much money and they're

031not getting enough and they want it. So, I don't know if you're aware of this, but you are in keen competition for this money. I also want to point out that even if you get to 2%, as I said earlier, it's not going to be a big windfall for you. It' be another $49,363. So, it's not going to save anybody's budget. Matter of fact, all districts that are in the same boat as you. By the way, twothirds of the school districts in the state of New York are just like you save harmless. So, they're in the same boat as you, which points out the formula is not working very well. It needs major updates. And I want to talk a little bit about those. Now, let's just talk about this reorganization merge rate. So here

032was the amount I pointed out to you earlier when you were fully funded. You're getting $658,838,000 for a year. So what you can do with this, of course, is build reserves for it and operate your district with it to keep your programs going. And because you got both buildings open, these this money is being used kind of inefficiently. But then in a 25 year 24 25 year, it went down by 65,000. So every year it goes down by $65,000. But what happens is it becomes cumulatively. So the $65,000 you didn't get this year, you didn't get it this year here as well and another 65,000 on top of it, bringing the total you're losing that year to 131. So you have to understand that this is really multiplying on you. Other words, this 65 isn't

033here. It isn't here. It isn't here. It isn't here. This is the second 65 that's lost with the first 65. This is the third 65 that's lost with the second 65 as well as the first 65 and so on all the way until you get down to this number which would be in 2034. There will be no more of this aid available. The last year you have any of this aid is in 20 3330 20 3233. So this is becomes a jeopardy. Now I think what people don't understand is how this actually affects a district. Now, I'm talking money here, but let's pretend I'm I'm going to write a story. I'm going to give you a little story that I told in January. And uh I'm going to try and get exactly right, but I

034I'll be close. But the idea is you have to understand that things compound. So, let's just pretend instead of money, this stuff was a commodity and this was your household. You were losing something. So, in this this this year here, for instance, let's just say your microwave oven didn't work. So, your microwave doesn't work. So, now you go out without that year without a microwave oven. Then the next year, let's just say your regular oven doesn't work and your microwave oven still isn't working. And then the next year, your TV quits working. Your microwave's still not working and the oven isn't working. And the next year, your stove isn't working, the TV's not working, the microwave's not working, and the oven's not working. And then the next year, your car is not working right. See

035what I'm getting at? So, these things tend to compound. And I was trying to illustrate that by using this point. Hot water tank maybe didn't work in 2025. You didn't get it fixed. There it is there. The next year, the microwave didn't work, but the hot water tank still not working. Car repair in 27, cars not working. Microwave still not working. Not work. So, what happens is the bad things that happen to you, the diminishment of the money compounds. It's not like you suffer the same problem every year. It gets worse every year. It compounds every year. So that's the thought you've got to have in your mind. So the faster we can uh really uh get one building operated to peak performance based on a capital project and we can then practice better attrition

036and breakage the better off we will be because you are losing revenue that would normally support your expenses. So instead of like getting a raise at your job, your your your boss is taking money away from you and it's compounding it. So this is the dilemma we find ourselves with the revenue. So then I just put the money in. You can see how the money actually works. So you can use the story to get the idea across, but you can see how the money totally compounds. So here we were getting to 657 838 and now we're at a loss. We don't have it. But here you were getting operating in of 1.6 million, but the compounding loss is closer to 3.6 because you keep losing ground increasingly every year. So that's a lesson. But you

037do and have done some good things with your district. You've built reserves. Now you don't have a workers's compensation reserve and that's okay because you're really not eligible for one because you're not self insured in workers comp. So the controller would love that. By the way, you have $70,000 in your unemployment insurance reserve, and that's really appropriate. No problem there. The controller would also love that your ERS and TRS reserves are really kind of lackluster. I wish there was a little bit more money in those reserves, but the key thing is we got to start someplace. So, the truth of it is you can see they have increased over the years. So, there's been an attempt to bolster those reserves up. nothing in the property and liability reserve and a couple dollars in the insurance

038reserve just to take care of deductibles and things like this. And of course, it's moved just a couple bucks. This is fine planning. It shows long range planning and making sure the district is protected. You really don't have any property or liability claims rearing its ugly head. So there's no real reason for these reserve. Now tax certi reserve, you've had some tax circ claims over time. And when we take a look at the tax certiary claims, we've got to keep in mind is that if these things are adjudicated in a court, now a tax certiary claim would be an example would be say for instance I have a home or a business in your district and I get my tax bill and I say, "Wow, this tax bill is out of whack." And the reason

039it's out of whack is because the assessor misassessed me. I'm assessed it too high. I think they overdid it and therefore I'm paying more than my fair share of taxes. So, actually, I take the entity that the assessor works for, usually the town, the court, but I also take everybody I pay taxes to because they're based on that assessment. Like, it could be a village, it could be a town, it could be a county, and it also could be the school district. If I win my case, a judge could give you 60 days, 90 days to pay me for as many years as I paid the wrong amount that the judge determines, and you'd have to pay me cash. Can't owe it to me. you'd have to pay me cash. So, having a reserve like

040this is great, but keep in mind once those those uh cases are adjudicated and there's no reason for this reserve, you must transfer the money back into the general fund. So, having a taxure reserve when you have the claims is a good idea. The reserve for employee benefits and acred liabilities, excellent idea. I wouldn't put any more money in here. I would favor these two reserves over this reserve. just a small modification if I were you, but I would have my auditor tell me how much should be in here and I would underfund it a little bit because it's so hard to get the money out of here. You have used it appropriately from time to time. Matter of fact, if you'll notice, it has ebbed and floated a little bit. So, you're starting to

041tap some of your reserves, which the controller, by the way, would like. This can only be used for unused sick personal and vacation days when employee leaves service in the district. Now, if you had a retirement incentive that said, "Rick, if you retire tomorrow, we'll give you $2,000." You couldn't use this money. But if you said, "Rick, we'll give you an extra $20 for every unused sick vacation day." Yes, you could use that money. So, it's got to be tied to that benefit package. Now, you have wisely, very wisely, created a capital reserve for transportation and maintenance, a 15-year reserve. 15 years is perfect. 10 million. Perfect. Started in 2024. Perfect. So, what actually happens here is you had a previous reserve and you've just built it in the last couple years right in here.

042You can see it updated in 2024. And I work with your previous business official before you emerged on that plan. And I'm glad to see that this is built up. The good thing about this capital reserve, like all capital reserves, it allows you to pay cash for an item that other districts may borrow money for. So, let's just say for instance, it's transportation or maintenance reserve. Say you needed a pickup truck. Say you needed a bus and you were going to buy it. You could take the money out of this reserve and pay cash for those items and therefore not pay a financial advisor to go borrow the money and not pay interest on the money because cash is king. This is evidence that the district has great forward planning is trying to find ways

043to save money and interest can acrue into these accounts as well. The other one you've got is this capital reserve for construction. Again, 15 years, 10 million in 2024. So, we took some big leaps in 2024 and we started building up that reserve. You can see it right here and we've used a little bit. The key thing here is this is why you you build up this money. When you do a capital project, well, say you wanted to do a a $10 million capital project, you could take five million of this, use it for the capital project, and then only borrow five million, not the whole 10 million. lower your interest costs but still get aid on a $10 million project. So these capital reserves are a gift that keeps on giving. My only lament

044is that if we had become more efficient sooner, I think we probably could have had maybe a tech reserve somehow. I made this one up. I put a couple blank ones in here. I made some up. Classroom furniture. We could have had one for. We could have had another one for capital construction. We could have had one just for vehicles of some sort. Uh we could have one for equipment. So there's all kinds of capital reserves you could have. So that's something to consider in the future should you have surplus funds. And the idea is to build surplus funds and then put them in these capital reserves. So this might be something for future uh examination. Reserve for repair. We don't have a reserve for repair, nor is there a real need to have one.

045If we could get our capital project going, I think we would have a real less need for it. I'm not a fan of the reserve for repair because it's highly restrictive and you can only repair things with it. So for instance, when you repair like you put put you repair something, you don't get any aid on it. But if you replace something, you get aid on it. So I like this capital reserve for capital improvement better than a repair reserve. So real no harm done there. Mandatory reserve for debt. The mandatory reserve for debt is if you had well say for instance you do vacate a building and you end up selling the building. not, you know, to an entity or, you know, another a government or a person or whatever. If you owed debt

046on that building, you would have to take the proceeds from the sale, in other words, the money you received from the sale of the building and put it into this reserve until that debt was absolved. Okay? So, might take a year, a couple years, but you're not that you're not eligible for right now. other restricted fund balance. I've got a couple clients I've worked with over the years that actually have nuclear power plants in their district or they have a coal fired power plant and what happens is it might be coming offline or closing or something and they can build the reserve to offset the tax impact for that. So the good news across the board here is look at this. This is perfect planning. This shows me that a district is forward thinking and

047building up reserves after a reorganization, after a merger. This is excellent. The question is where are they going? What's actually happening here is we probably should probably start adjusting a few of these. Right now the yellow represents some movement already in reserves in the 26 year. So some have gone up you know interest earnings and so so on. You can see based on what I told you these were bolstered up. This has moved up a little bit. Great. Here you can see the this one here. Again I wouldn't move this any further after this. This one here we've used a little bit of because we're going to be buying buses and types like that. And you can see now that the reserve is going to be insufficient to keep buying, let's make it up, buses

048for a long period of time. So this is where you would transfer money out of this reserve down into here to start buying buses. So you have the ability to transfer money out of these reserves into these other capital reserves until they're fully funded. Okay. And this money we would want to use all or part of it for, I would say, a capital project. And I'd say by June of 29, that money should be being used. Remember that your your your big aid ratio that you got because of reorganization is only good for the first 10 years. And if we don't spend it by I think June of 29, we're going to lose that incentive money, that extra 30% aid from the from the state. And we definitely do not want to miss that. So

049things are looking up here, still looking good. The key thing though is your capital improvement reserve is 69% of all your reserves and your bus reserve is about 11%. So as you can see here 80% of your reserves are in these two just these two areas. So them you guys building these up a little bit is really a good plan. The other thing too is is that you've got money that's really unappropriated unreserved in excess of the 4%. As I look at this my exam my the controller would be unhappy with this. I'm not totally unhappy with it. This money here, I think we should plan into next year to get it up here into these reserves to bolster these amounts and bring this down to the 4% it should be. So, I think what

050we have to do is revisit the reserve plan for the district. And I think uh that that will do our uh do us well. So I would suggest by the end of the year Hayden and and Josh and I get together and updated a reserve plan to take money out of here and get it up here as it would be appropriate. So that would be my suggestion. The next thing is you have a debt service fund that isn't very big and of course I would start using this in the small way to offset debt and your school lunch fund is actually goes up and down here a little bit but it's on the way down. So I think we've got to keep an eye on the school lunch fund. The problem you've got is if

051you're trying to operate two kitchens, it's almost impossible to stay solvent in a school lunch fund without a donation from the general fund. And of course, good planning would say we don't want donations from the general fund. We'd want a central kitchen only for more greater efficiency and effectiveness. So, I think this is something we want to keep our eye on because we don't want to be feeding the school lunch fund which is supposed to be self-sufficient with the school district budget which is supposed to be used for educational programs. So, we should be trying to keep those separate as much as we can. So, I think this bears further study and if we can get that one building online with one kitchen, this actually might turn around on its own. The long range capital,

052technology, equipment, bus and vehicle plan should be developed to greater efficiencies and diminish costs. That's why I'm saying I think we should come up with a reserve plan. The other thing I pointed out is we've got to move along with a long range capital project and its timing. We've got to take a look at vehicle and equipment purchases into the future, especially if we have a single building. Of course, we got to talk about the transportation facility. We always are looking for technology upgrades and upgrades and replacements. So, there's technology updates, for instance, servers and software, but there's also upgrades in machinery such as maybe laptops, Chromebooks, and things like this. And bus purchases. Right now, I see no way that you could afford the zero emission bus initiative unless they almost handed you all

053the money to upgrade your bus garage and to buy the buses. And of course, that's based on if your public will even approve a vote for the purchase of those items. So, there's a lot going on in this page, but there's a lot of good things going on. But I see some things that that we've got to keep an eye on into the future. Nothing that we do in schools is getting less expensive. You know, I've done I've developed a new trick question and I don't think I used this on you when I was there in January, but I'm starting using it now in all my presentations. So, it's going to be a trick question. I I will not expect you to answer it. So, I'll answer it myself after I asked the question, but

054I think you're going to get a kick out of this. How much is a zero emission bus? How much does a zero emission bus cost? The answer, anything they want to charge you because right now under current law, you're required to buy them. So, we are at the mercy of these these folks. That's why we need this bus purchases for those zero emission buses pushed back 10 years. So, if you get a chance, call your legislator who's working on the budget right now and say, "We don't want more money for these buses. We can't afford to turn over the entire fleet. Move this thing back 10 years." I think would save the district a lot of great. Then we ran what we we call a scenario. In other words, a little scientific experiment here. Put

055a tax increase based on the preliminary tax cap estimates. So this is our preliminary tax cap estimate. Obviously, it's subject to change. Does inflation could change? We could have the tax uh tax base growth factor change. A lot of things could change. But right now, this is what we're doing. So what we're going to do is this is a revenue picture for the district. Right now you are safe harmless with a small increase in foundation aid for only a year. You have variable bow season and public excess cost aid cost for in other words special needs kids. You have very variable building aid based on your current debt service schedule without a new capital project. Your federal med federal aid for Medicaid is very stable. However, in your expenses, we've got to follow your contractual

056obligations. We have no notable changes in staff patterns. Key thing is is that we've got to keep an eye on that. And I think if we could get into one building, we could maybe make some savings there. It' be a lot easier lift. I know by examining the district, maybe that first page I went through that we have less people working for us now. Although we've had to start a new special ed class because of increased enrollment there. And I know we had to get a teacher aid and things like this because of special needs children on occasion. But overall, the staffing patterns are really lower than the original day of the the reorganization. Now we have stable ERS and TRS increased costs. Remember even if the rates stayed the same, the cost would technically

057increase because salaries would increase. It's the rate times the salary that creates the expenditure. And keep in mind, inflationary costs escalate rapidly in school district. In other words, the cost of textbooks is going up more than 3%. The cost of buses is going up more than two and a half%. uh you know the cost of your utilities is going up rapidly double digit for most districts cost of health insurance things like this. So what we're going to do is we're going to test this hypothesis. The idea is if we were to stick to the cap which I believe we should do I think it's a good practice to do because once we fall behind trying to get that money back from the taxpayers is really almost impossible. Let's see if if we have enough money

058to last five years. So we're going to go from 26 to 27. one, two, three, four, five years out. So, if we were to increase taxes at these levies amounts, we would increase taxes by 1.385 million over fiveyear period. State aid is really from the state aid tab. And your state aid is waning. What's actually happening is right now your debt service is going down. Your building aid is is is just going down. You can see it drop down right here. You can see technically transportation a is basically going down just a tad. Not much. But the rest of your aid is not moving very much at all. So we can't count on any increases here. What's really driving this down is that reorganization aid is dropping like a rock. Remember I told you the

059cumulative effect? The cumulative effect of that aid dropping over five years with everything else stable is a loss of $600,000 worth of revenue. So we've got to make hay where the sun shines. Federal Medicaid reimbursement. It's a pittance in your district. We put in 17,000 back in 2025. Right now, I think we're going to roll that money into uh uh interf transfers or something. In other words, it's we're hardly getting any money at all. Your district is very small. Makes it very difficult to get much money. Inter fund transfers from reserves, purchases of buses basically is in here. So, we're moving buses or moving money out of a reserve into in other words, this revenue is your own money. You're using your own money as a revenue source. So, that's what's happening here. Now, the

060good thing about this is that you're going to purchase these buses in cash. Now, normally they're put in here this way, but this is fine. This will work out because on the expense side, we have a transfer and to spend the money as well. So, it doesn't look like we're inflating in expenses. Other revenues, we're getting hardressed to actually get a lot of interest earnings and miscellaneous other revenues. So, I think what we're doing is we're the budget's getting very very tight in the revenue side. So, that's going to be really a stying us. though the other revenues overall at least at where we left off in January. Of course, your budget isn't in your budget proof was about here. We're looking at about a $400,000 increase overall. Other words, taxes are moving, but everything

061else is going in the wrong direction. Now, if we take a look at expenses, which are moving completely different than everything else. What I did is I brought over your revenue side over here. So, you we you could see it. There's your increase in revenue and here's your expenses. So we divide the budget into major categories salaries and other general support salaries other instruction salaries other transportation salaries other and so on. So who's in salaries? The superintendent's office the business office which means everybody works in a business office that gets a salary in the school district. But the major bulk of the people in this code are operations maintenance buildings and grounds. So it's cleaners, custodians, landscapers. People work outside, people work inside to clean the building. They repair things in the building. All those

062folks, we're looking at moving from about $900,000 to over a million, almost a million and a half, million, 58,000, about $163,000 increase. Okay. Now, if you notice, it's an 18.2% increase. But this is what's so important here. This I put percentages down because board members like them, but I hate percentages in most cases. Sometimes they're helpful, but not often. There's a couple good times they're helpful, but not a lot. Look at this. This thing is moving at 18.2%. It's $163,000. This is moving at 2.4 and it's almost 400,000. I always look at the money. I think you should be focusing on the money board members, not the percentages. You can look at them because I put them in for you, but that's really what we're looking at right here. So, the idea here is look

063at the next one. Now, this is other. What's other? This a big part of this is utilities. utilities are are double dipping us all over the place across the entire state of New York. So heat, light, electricity, whether it's gas, oil, whatever you're using, electric, oh my gosh, it's really escalating rapidly. Now, if you'll notice right here between here and here, it's going down. So, what's happened is Aiden has done his best. He's worked very diligently to try and rightsize your budget. In other words, not overbudget an expenditure to make your budget look bigger than it actually has to be. Now, the plus about this is it become makes the budget much more reasonable. The other the the thing that's that we got to be careful of is we don't want to harm fund balance

064which I'll talk about a little bit later. But you can see the adjustment right here. See it right there. You can see it. So there's an adjustment to bring that number and corral that number. Now also in here is Bose administrative costs could be technical technology purchases could be liability insurance your attorney is in here so there's a bunch of other isolated costs in here moving from about 2.2 2 million to about 2.56 million about 362,000 look the percentage is less than this percentage but the number is almost is more than double see what I mean percentages not too helpful in this case now the biggest number on the page is instructional salaries and supposed to be because as I think I explained in January this is the mission of the school district now who's

065in this principles are in it teachers are in it special ed general ed teachers behavioral specialists if you hire them guidance counselors are in here, nurses are in here, librarians are in here, coaches are in here, class advisors are in here. So, uh, all those folks, everybody that works with a kid every single day is in this code. So, this is the people that work with the children every day. This is the mission of the school district wrapped right up in here. Going from about 4.34 million to about 5.2 million, an increase of 99,000. Now, let's stop right here for a second. Notice this is one code. The cost of instruction. See it? 909. Please note that it is a lot bigger than all of your revenue increases. See that right off the bat. We

066can see we got we're going to have some problems here. We got to get in one building and then we were able to rightsize the district more appropriately. It's hard to rightsize it when we're trying to operate two buildings highly inefficiently with low very low class sizes and things like that. The other category, the other category is all the kids you send to career and technical education and the special ed services at Boseies. Okay. Now, the key thing here is it's also the supplies, the materials, the textbooks. It's I don't know equipment for the chemistry lab and the science labs. It's going to be the ball for the PE courses. Okay? All those types of things are in here. So, the copers, the paper, the textbooks, all that business is in here. the business of

067education. What we need is our tools. Staff development is in here through both going from about four 2.5 million to almost three million. 500,000 up. This number alone beats this number right here. So you can see other words we're we're in great shape right this second. It's the it's the comp compounding of numbers going forward as they become more and more expensive. Transportation 418,000 going to about 479. If you'll notice, hardly moving. Hardly moving. Very austere budget here. 61,000. Other in here 606. Notice the right sizing budget. No more extra trips. We got to we got to corral the number of trips and number of routes that we go on. Got to get a grip on this. And of course, we've got some buses in here, purchases of buses. So therefore, we're starting from this

068number. Therefore, what happens? We've depressed it even though we've got the buses in here. So it looks like these two numbers that's what's counting for this 105 down even it ends up at a at 500,000 but you can see we lost 100,000 between this five and this 606. Now we've got employee benefits. Now employee benefits are all tied to salaries right there. People who are have salaries get benefits and they are retirement which would be pension, social security costs, workers comp, health insurance and miscellaneous other on your sick personal vacation days. It could be buyouts for health insurance. It could be uh unemployment insurance. It could be a whole bunch of things that you're paying miscellaneously. A lot of districts have costs here. The biggest of them though, however, is health insurance. And health insurance

069is moving at a really good clip here. And you're not alone. Districts across the state are struggling with health insurance. And I think I described it in January. I said, you know, during CO hardly anybody went to the doctor. If they were sick, they probably went to the hospital because they had COVID. Nobody went anywhere basically. Everybody kind of stayed home. Matter of fact, you sent all the kids home with their own laptop if you remember and staff too. So what happens here is but after COVID what happened was everybody started going back to the doctor. So it put a lot of pressure on the health insurance consortium and school districts that were self-funded. So what happened is costs started to escalate over time. Look at the difference between these two budgeted numbers. Look at

070this. Between last year and your current year. Look at that. $300,000 one area. That's 10% right there. So what happens is everybody gets their knees fixed. They got their hip fixed. They got their eyeballs fixed. They got new glasses. They got their teeth fixed. They got their shoulder fixed. They got their arthritis fixed. You cannot watch TV without watching about 15 million commercials for GLP or GLP1s or something to fix your this that or the other thing. Pharmaceutical drugs are going up. And of course the big beautiful bill with its Medicaid reimbursement diminished is causing AJA for all school districts. Yours is going to move from about four 3.7 million to almost 4.5 almost 800,000 up. This number alone as well is much bigger than this number. So as well as we've done so far

071the world is now changing on us. So we've got to make greater effort. Now, our debt service is basically waning down here and you can see it falling down. So, that's a diminished cost. But the problem is we're getting nothing done. So, we've got to get the infrastructure of these buildings up to date. You know, we're I'm just waiting for our next big event that's going to help us close the building. We got to get going. Buses, you're buying buses here, but the thing is that remember, you're going to run out of those reserves. I pointed that out when I did the reserves. So, we may have to borrow for buses down here, which will add to our cost. Your Bosey's bond interest and percentage. That's things going to be wrapped up here in a

072couple years. So that would be going away. So we haven't diminished there. And you had some interfund transfers that I don't think we can continue unless we absolutely need to. They could be maybe school lunch fund transfers which I think would be a real problem going forward. I'm praying that we can get like maybe we could rectify the school lunch issue. 4408 kids is really code for special ed summer school. If you have any of those kids, some people use this for capital outlay. We've diminished that cost because really you can't afford it. So if we look at our overall expenditures, you can see they're going up about 2.7 million against $400,000 of revenue. So we're going to have a problem here. As good as we've been doing, we're going to have our future is

073getting kind of going to be tougher. So we've got to move ahead on a number of initiatives. What I did is I brought over the revenue picture. Here's that 393. Here's the expense picture right here. So think of it this way. This is the more money coming in in that year. So in 27 we're going to have $120,000 come in more than we had before, but 110 going out. So that's a good balance. That's nice. The next year we got the further deterioration of the reorganization aid and diminishment of building a for instance. So we're actually going to lose some ground. You can see we're losing ground with the revenue even despite the tax increase. But we're gaining expenses. You can see it gaining 400,000. Okay, $500,000 worth of expenses right here. Then what happens

074is more money, 200 comes in, but 689 goes out. 220 more comes in, but more 720 more goes out. 118 more comes in, 649 comes out. So, we've got to start making hay on the benefits of this merger. So, there's a couple things we got to start looking at. One is the budget is getting tighter. Other words, back in 25 last year, as we look at the revenues that came in better than projected andor under spending the budget, we had almost 1.1 million left over. We could use this fund balance. This year, we're probably looking closer to 689,000 or thereabouts. Still subject to change until the end of the school year. And all we're doing is praying that Hayden could come in with that amount every the end of every school year. Meanwhile, you're going

075to be buying buses and at some point praying over here to use that extra building aid. We're going to be doing a capital project. So that's going to diminish our reserves. At the same time, we want to carry that 4%. So this number plus this number, these two numbers together. So let's pretend this is 700 and this is $700,000 as well. That would be $1.4 million. And what we want to do is we want to have about 1.4 for $1.5 million every year that we can work with. Why? Well, think of the calendar of how the school district operates. July one, who's working? Well, central office is working, superintendent's office working, business office is working. Matter of fact, that not only is the business office working, they're ordering everything they need for the school year.

076So, Hayden's busily working, trying to order everything. Order, order. probably praying that invoices and for payments do not come in until probably deep into September because he only has $1.4 million to horse around with here to operate the district that is really a 16.5 million budget. But he's got to kickstart this thing in July. Meanwhile, buildings and grounds is working. They're all working. He could be paying liability insurance. He could be paying health insurance. He could be paying, you know, your attorney. He could be paying some posties bills. Okay, with this $1.4 million. So, he needs what we call cash flow. And anybody doesn't understand cash flow, here's simple. If you don't believe that we should have this money or you think we have too much money, what I need you to do is when

077you get your next paycheck, I need you to spend it all immediately so that you aren't able to pay your mortgage and you can't pay your car payment. Then you'll understand what cash flow does. We need this because we got bills coming in before state aid comes in. Matter of fact, how much tax money comes in in the month of July when all this is going on? None. How about the month of August? None. In the first week of September, a trickle maybe at best if you collect it yourself. Meanwhile, what about state aid? Your other big revenue source. The other big part of this revenue is state aid. What's happening with that? Well, state aid does come in in August, September, and October. But from that state aid check, the state subtracts the pension

078costs for your entire staff, no matter who they are, for the entire year all at once. So you get a pittance. Meanwhile, the last week in August, the kids show up and they start getting involved in sports or going to class or you have staff development days, faculty shows up, you have to start payroll, you're getting those diesel buses ready by the second week of September. Definitely, you got diesel buses running all over the district. You got the drivers driving, the librarian, librarianing, the guidance counselor guiding, teachers teaching, everybody is moving, everybody's getting paid. How much tax money do you have then? A trickle if you collect it yourself. Most of the tax money comes in by the end of September into October and into November. The biggest state aid check the school district gets

079is the month of March. So, you need all the cash flow you can get. So, we cannot continue to drop fund balances in the budget every year. We've got to maintain these fund balances. The next thing is what happens here. So, right now, we've got a totally balanced budget. You can see it for 26. Here it is. Look at right here. Now, this one's off by a couple bucks, but that's where we left off in January. Aiden, I'm sure, smart guy. He's really tried to figure out either how to amilarate this or absorb it somehow. But, let's just use it as our example right now. What's happening here is because we don't have any appropriate fund balance for the current year, if Hayden can come up, we'll say $690,000 at the end this year, what's

080going to happen is we're going to take that uh excess money that was above the 4%, we're going to take it out of there and we're going to build reserves with it. Remember, I told you I want to build those reserves. And he can do that with some of this money and and some of that money that we're going to build reserves with from that unappropriated unreserved fund balance. But what happens here is is the next year he starts he's going to need a little money. It's a pittance. So technically speaking though we're going to be taking money out for the bus. So we're going to lose a little fund balance in reserves. You can see it right here. And we need a bigger we going to need some appropriated fund balance. The problem becomes

081in the next couple years. What happens is the budget starts getting out of balance. So here you'll notice this is 16.3 million in revenue and 17.1 in expenses. they're out of balance. So, if he needs $82,000 to balance his budget and he only has $689,000, he's going to need more money. Where's he going to get it from? He's going to get it from the reserve and his other fund balances. That's what's going to happen. And it gets worse each year as we move along. So, in this next year, he's going to need 1.3 million to balance the budget. The difference between 165 and 17,000 17,800,000, but he only has 690. So then you're really going to tap reserves plus the capital project. So as time goes on, the budget gets more and more out of

082balance. And what'll happen here is it'll be basically unsustainable. Can I get you to 20 3031 perfectly? No. It'll be close. It'll be real close. But unless we start making changes in these years here, we won't make it past 31. That's the idea. I mean, we can keep you barely there, but this is really a guesstimate. And I'm I'm a little reluctant to say that you will be totally safe. And that's our dilemma because I think there's money to be had in the building project. And I think you can become much more efficient and decrease the rate of increases of this budget over time. But we've got to take some active steps. Now, for those of you who didn't like all the numbers, what I did is I put some graphs together. So, I've got

083some major expenses here. You can see here, here's real property taxes moving at the tax cap. Here's your state aid member, the loss of the aid we were pointing out with the that reorganization aid going down. The building aid's flat because we're not tapping any of it that we should be tapping to get that one building up and running. So, our total revenues are kind of ebbing and flowing around, not doing much, but our expense curve is moving up rapidly. And these are big numbers. What we've got here, here's the instructional salary piece I showed you. And this right here is health insurance. Just two big numbers as an example. Now, this doesn't look like it's moving much. It's going from about 662,000 to 7684. So, it's moving at quite a clip. You can see

084this curve is going up. Let's put everything together. Right now, you've been doing a great job with what you got. But now that the state is starting to start to take away some of the merger rate aid, now what's going to happen is this is going to put a downward spiral a little bit here, flattening out your revenues while your costs continue to escalate. So, we've got to make some moves because you're going to need more fund balance to balance your budget and you're just going to simply not have all that money. So, what about your tax cap calculations? Now, you have stated the cap. I think last time I kind of misspoke a little bit. You have stayed at the cap. If you had stated to the cap, it would look exactly like this.

085But what I did is I found out that I think there was a recording error in the day data or the 2122 data from the governor's office or excuse me, the controllers's office. That looks like you did not go to the cab, but we've researched it and I I I stand correct that you did go to the cabin, stayed at the cap. But notice what happens. Let's pretend that you didn't go to the cap. I remember I think I told you the story about all the board members working for him Monday through Friday and I said I pay you $100 a day if you worked for me and you did a good job. And then what I did is I reiged on the promise and only gave you $90 a day each day of the

086week. So that first Monday I gave you 90 instead of 100. So you were behind by 10. On Tuesday I gave you 90 instead of 100. So you were behind another 10 on Tuesday but 20 for the week so far and we kept going so that I gave you only 90 on Friday. So I did everything the same every day. So you were short 10 on Friday but for the week you were short 50. And that's exactly what would happen. So what happens here is if you didn't collect this money you would depress then what you would actually be getting in your levy each year and it would compound. And over time, if you had not collected this money just this one time, only immediately less than $28,000, you'd actually be $176,000 behind in uh

087revenue. That's not the case, but uh because I did misspeak. I did I didn't know, of course, that there was an error in that controller data, but u but the key thing is you can see the effect of not going to the cap. We cannot have that happen. So, please don't even give that a thought. uh right now you've got full values going up so uh I think you're going to be okay. The next thing I did is I pointed about the community host agreement. Wasn't that going to save us? Well, if you'll notice, this wouldn't pay these first four years of this community host agreement. They wouldn't pay for a single large diesel bus if you had to buy one. So, to me, this is not the panacea. It looks like maybe by down

088here it would be great. The problem is, can you imagine how much a bus is going to cost 30 years from now? Oh my goodness. I I make we'll be flying to school. We'll be into Jetsons. This wouldn't pay for a single bit over the same period of time. So technically speaking, a $400,000 bus, we'd have to wait till year 20 to be able to afford the bus. So this community host agreement is not, you know, it's not as helpful. It is helpful, but it's not as helpful as people would like to think. The dilemma that's faced by the district with return regard to this aid business is you have an increasing burden in special ed needs. That's what's really starting that's why you had to start a new special ed cost. That's why probably

089to you it looks like you got more staff than you had before because of these increased special ed costs that you had to do for the new class and all the equments that go with it. But the truth of it is you've lost basically about 347 what they call tapos, weighted students. Other words, general ed and special ed kids over the over since 2278. So this is why the state's denying you aid. And now your combined wealth ratio, your property income values on average are above the state average. So this would means this would signal to the state that you are less deserving of more money because you have the physical capacity in either salaries andor property to pay for some of the education these kids yourself. Hence why we're going to the cap and

090your share of the state ratio your share of the money isn't moving at all. Matter of fact uh you can see that the expected local contribution of your district and the education of these children by formula is going up. So the state would point to this and say, "Look, you've got full value property values increasing there. You have greater capacity to collect taxes. We hope you're going to the cap." You can see the calculation here. Your amount of community poverty isn't really huge. It's 12%. So what happens is uh you don't have a lot of huge homeless kids, foster care kids like this. You may have some, but it's not a huge amount per se. You're you're really you have a good group of you have a cadray should we say of economically disadvantaged family

091that get the SNAP program or program things like that or would be eligible for free and reduced lunch but you're considered a five by the scoring which means you're an average wealth districts. If you look at your pupil needs index though it is high. So you do have a group of kids that are very needy and this is putting pressure on your budget, but your loss of kids over time is actually negating any increase that this would give you. That's a pretty high number by the way, pointing out that you do have a specific need for high needs kids, but the loss of these kids here per child is what's undoing it for you. You've got 243.77 miles in your school district. I have no idea how you're going to be able to afford to

092turn over a zero emission bus fleet in eight years and cover 243 miles with your topography and with your climate. So, uh again, I would be lobbying our legislature saying you got to stop this. Your tax base growth factor for this year is 3.0039, which is evidence of increasing tax base. By the way, this is right from the controllers's office. your your actual selected billing aid ratio is around 70% but we're probably going to get 90 out of it here uh by the time we're done with the reorganization aid. Uh but the key thing is is that if we don't we're going to be back down here at about 70% maybe 60% by it's over because as these numbers go up right here this thing here might diminish. So I think we've got to move

093quickly your transportation aid ratio because you have two hamlets and you're operating two you're actually operating in the states view looks like you're operating two school districts. So what happens is your aid ratio is is pittance. It's terrible. Uh 51.5 is good. I prefer something like 80 80% or something like that for you. Your high cost aid ratio and your Boseis facilities and operating ratio. A lot of these have to do with property values and these are not particularly good. So we don't have an economy of scale here to help us out. So in a summary, your foundation aid, at least where we left it off, was going to be for the current year 4.9 million 36,000. The governor's proposing 4985. Now that could change when the budget comes around, but it's a whopping $49,000

094increase or 1%. It's not a big help. your payable foundation aid. In other words, what the government says you should be getting is 2.7 million, not 4.9. So, they say, "Count your blessings that we're giving you $2.2 million." Uh, your selected foundation a per pupil is $5,817. It has been diminished by subtracting the 17,000 from a bigger number. The only way you can get more foundation aid is if you can find by June 30th 384 kids. It's not going to happen. That's how deep you are in the safe harmless. So really, all the work's got to be on the expense side of the budget. So right now, I'm sure Hayden has been since January and continues to rifle through the budget to make sure he doesn't spend any more money and absolutely has to. He

095has as much carryover money as possible. He he's he's he's really de digging into this thing and he really wants you to make sure that you have good cash flow. So he's doing his best there. the budget process is difficult because we have to extrapolate costs. If you said to me, Rick, you know that insurance amount you gave me for 20 uh 203031, is that the exact amount we'll pay? No. But if we keep everybody that's working, it keeps increasing at the rate it's going considering how much we know it costs now, it's going to be close and it won't be good. So, we've done a pretty reasonable job. But we've got other types of things. We've updated them as much as possible, but no one can actually anticipate every single revenue and cost. We

096don't know over the next couple years who could resign, who might be hired. You know, marriages, I put down marriages, car accidents, and getting sick. I know it sounds a little silly, but the truth of it is I've been in superintendent of a district where I've had people out for a year because they're ill or they have something very terrible happens to them and I have to pay a full-time substitute and them at the same time as they use for sick days. And it puts a drain on the budget. They're certainly entitled to it and and God bless them. We hope they get better, but it does put a strain when people are out or things happen to people. We have to pay double. In other words, the person who's out as well as the

097person who's there substituting it costs money. We have we could have more increased student needs come in the door any time. Still got a couple months of school. So kids could walk in the door still. You might need another class by the end of the school year. Who knows? Interest earnings are waning. We're not sure where theirs are going. Foundation aid, as I explained to you before, is really problematic. So, we tried to be as reasonable as possible, but inflation costs have nothing to do with us, per se. School inflation's different than regular inflation because we don't buy washers and dryers and microwave ovens. The truth of it is we buy textbooks. We buy supplies materials. Three years ago, I bought a district an F-150 pickup truck for 34,000. I bought the same truck this

098year for 74,000. Our inflation costs are escalating rapidly. health insurance costs, salaries, everything. We've got to evaluate our purchase and staff need. We got to look at the possibility of attrition and breakage. You have in the past. You've utilized it in the past. You've got to continue to do it. But you must recognize if you need a special ed teacher, you need a special ed teacher and a story. If you need a certain type of a science teacher, a foreign language teacher, you need that teacher. And these places are scarce. So, you've got to actually keep up your salary schedules and your benefit packages. You're just going to have to be less people because you have to seriously decrease your cost escalations. I'm not telling you to decrease your budget. I'm telling you to decrease

099your costs in the budget because we need more cash flow probably. Health insurance, pensions, salaries, transportation. I hope, you know, I don't know if you filled up your diesel tanks lately. I hope they're filled up now before school year starts. And if they're not, they're going to cost you more than if you had filled them up three months ago. I mean, some of this stuff is getting pretty dicey and it should be addressed in your financial plan and we've done the best we could, but you have severe limitations on your revenues. So, I'm hoping that you don't even think about not going to the cap because we're losing that reorganization aid. Remember, the state's going to have its own fiscal cliff coming up. So, we've got to be prudent. Do not expect the Calvary, the

100state to come in and help you. The feds, by the way, have eliminated all federal grants except for the federal grants, and they're leaving us all just drifting. The next thing I pointed out to you, there's a concern over the financial impact of the needed capital project and the effect on the tax cap calculation for long-term fiscal capacity. You have to continue your educational mission, but you have to have a building that has a sound roof, heating systems at work, that is sanitary, that is safety, taking care of safety. These additional burdens have to be taken care of. We've got to get in one building. We can't be operating two buildings. I mean, it is defeating the whole purpose of the merger. We're getting we're missing now on the economy scale. And we're missing also

101on all the aid we could get for it. I know there's a willingness to pay taxes conundrum. I in my entire career of decades, nobody ever showed up to a board meeting and said to me, "Rick, I'm not paying enough in taxes. Please increase my taxes." But the idea is they voted for the merger. They're trying to save an education for these kids. You're a rural school district. You don't have a lot of options. These kids are you are important to you and your communities. But keep in mind, it goes the other way, too. These kids look at you and you are all they have. You are launching lives daily. Daily you're taking care of kids. You're becoming part of their families. So, this is very important. And so we've got to make sure people

102understand why they're paying taxes. The re you need reorganization within the district. Like I said, the need for multiple elementary schools. We've got to start looking at mandated course offerings. We we got to take a look at what's not mandated. We got to look at transportation issues and greater efficiencies. I think if we could eliminate the mobile elementary schools and get our school lunch working more efficiently, that would be a big help. The goal is to significantly decrease expenses and quickly. Think capital project. district is running out of time before building reorganization aid is no longer available. We don't get to that 29, I think we're going to really regret it. You got to continue to rightsize it. You have been right sizing it where it's appropriate and where you have have the ability to

103do it, which we have to continue to do it based on diminished enrollments, trend data, course offerings, class sizes. You got to keep in mind student demographics and other metrics. You do have a group of high needs students that have special needs that you've got to take care of. They are the most needy among us, deserving not only by state and federal statute your kind attention. It's only the right thing to do ethically. Remember, there's no more of these federal grants running around to help you. So, we can't keep postcoid staff levels. We can't keep class sizes that we had during that period. And the fund balances we can't keep that were there. So, those days are gone. I wouldn't spend another moment talking about zero emission buses other than when the legislature telling me

104they got to move this back 10 years. You can't afford it. It's ridiculous. By the way, I'm sitting with in my car in my car. I have a hybrid car in my driveway right now. So, I'm not opposed to zero emission buses. I just can't afford them. the distance between your revenue expenses are going to grow significantly over the past few years and they have and becomes more magnified because what happens is expenses move faster than revenues. The diminishment of that reorganization wid will have a significant negative impact on your finances at the current trajectory. Salaries and benefits will overwhelm your finances versus almost any potential perceived ordinary revenue gains. In other words, just sticking to if you don't if we don't find a way to economize our expenses, the cap won't be enough. Going

105to the cap will not be enough. Failure to act immediately and over the next few years will make it more difficult to sustain the district's financial potency. So the idea is you got to keep that thing going. You got to keep going. The district needs to revisit all possible options including financial triage. In other words, what was ordinary before may be a luxury now. That one% increase, maybe two. Let's hope it's two% increase in foundation aid will not be enough. Any future increases are totally unknown. You do experience enrollment declines and demographic changes. Your expense driven aids are concerning under current law, which is great, but remember they're only partial reimbursements are not paving the full shot. Absence significant cost reductions in the consolidation of the elementary schools can prove financially helpful. But the yields

106got to be significant enough. If it's not, we got a problem. We've got to have future maybe are you going to have to look at future merger? I hope not. But the key thing is is that you got to stay afloat. You're a merged district and people are looking at you to fulfill the promise of the merger. Monitor the cap. the appropriated fund balance is growing and beware of the political implications of a supermajority which means you'd need 60% of the voters to pass your budget. And that basically was it. So if I could answer any questions I'll stop sharing, get my my mung on the screen and um I will answer any questions you have. >> Well, I'd like to thank you Dr. intend for attempts for providing that very thorough comprehensive um review

107of our financial picture um the future of it the long-term future. Uh I do have a couple questions and I'm sure the other fourers do as well. Excuse me. >> Does he say okay? >> Okay. Um, personally I'm very concerned about the information that you provided regarding the difference between our revenue and expenditures becoming greater each year, especially with the loss of our incentive laid aid, the current trend of declining student enrollment, and the escalating inflationary costs of our expenditures. Your projection of a possible financial crisis by the year 2031 was very alarming to me. You also provided us with a number of recommendations to help alleviate the possibility of that crisis. Do you think that our current budget is doing enough to offset the possibility of a future financial crisis in the relatively near

108future? >> I think you're doing as best as you can with your current budget. I think it was well built. I believe your budget was well built. What I would say is is until you get it down to one elementary school and we get that capital project going that will be the key to I think a continued success. I cannot point to anything that has been a misstep to this date. The problem we've got is trying to operate these two facilities. one in the one that you're trying to I think upgrade is in significant need of upgrade and the plan is very comprehensive and therefore we've got to launch it sooner than later and I think that will amilarate much of the issues that you're facing. Rick, can I um just kind kind of add

109on to that question? And I guess just for clarification purposes, the growing gap between the revenues and expenditures, that's almost like a a set it and forget it model, right? Like if we do nothing about the expenditures, that's what that gap will look like. But if we continue to monitor, if we continue to discuss attrition every chance we get, if we continue to um you know uh hire staff or lower salary than we had budgeted for. So all those little things if we take those steps then those will help to reduce that gap. >> Yes, absolutely. That's in my recommendations. Matter of fact, I said you got to consider attrition and breakage throughout. Other words, it's not a it's not it's not a an event. It's a process that you have to continue. Every district,

110by the way, has to do it. You're not alone. Every district has to look at attrition and breakage now because costs are escalating statewide. It's not just it's not just Pokeet Valley. So, yes, keep that practice out, Josh. I would say yes. >> One more question and then I'll let um someone else um have the floor. How long do you predict that we would be able to afford operating two campuses? I know Dr. Meyer has stated previously that it costs us approximately $3 million a year to keep the Lake View campus open. Um, even with the successful capital project, we are still looking at several years before a new addition could be built. Will that be soon enough? >> It'll have to be soon enough. I think the thing is is that the sooner we

111move on it the better. Uh I think every everything that you do in other words you don't need a strategy you need a series of strategies of which I think the attrition and the breakage would be one as well as the renovation of the one campus and then the building of the addition would be it you'd have to go in stages. Right now you can you can basically you can you can barely make it to 20 3031. I've got a lot of districts that can't make it even that far. So, it's not like you haven't been doing a good job. Okay? But the key thing is you can see the cost escalating rapidly. So, the sooner you can accomplish, the better off you will be. >> Thank you. Anyone else? Any other board members have

112a question for Dr. Tims? >> With all your numbers, Dr. Tim, how much is the incentive? Like I think it's 388. Is that what we found so far? 3,881 in what? Incentive >> aid >> right now. You want to know how much your incentive aid that you're receiving in this year? Is that it >> um accumulate so far? How much overall? >> So I'm just wondering how much of our fund balance was exactly ex like if if we hadn't got an extended our fund balance would be even lower >> if you had not received. Yeah. If you had not received that incentive aid, your fund balance would be lower. Yes, >> you said 3 million something. >> Okay. All together. >> I'm not sure if this is for Dr. Tims or Dr. Meyer, but um

113the reorganization or consolidation aid that we would get if we went into one building, does that start when we go into one building or we approve the project? So, uh, Rick, feel free to weigh on stress about the the additional aid that that that's the aid that we would get from the capital project, >> right? >> So, there's two different Yeah, there's two different aid categories. Let's go over that because that sounds like it's a confusing part and it is for most people. There's two categories of reorganization aid. One's called reorganization operating incentive aid. Okay? And that's the aid that you have been receiving since the first year of your merger. and it was um it it's now decreasing at 4% per year. That is operating aid. In other words, that's to operate the district.

114The one I was also talking about is what's called uh the reorganization building aid incentive aid. And that is an extra uh that would give you up to about 90% of eligible expenses would be paid for by the state if you if you actually do capital projects on your buildings. That is only good for the first 10 years of the merger. After that, that aid would drop from, I think it's uh the 90 down to closer to 70 or 80, I think it's 70 or 60%. So, in other words, you would actually lose an incentive to get the capital project done sooner than later. It's kind of like this. Let me use a colloial example. Uh, if you buy I'm your uncle Louie and if you buy a new car uh uh next week so

115you can keep your job, I will pay uh 90% of the car cost of the car. If you wait for a month to go get that car, I'm only going to pay 60%. >> Is that does that get does that get so if we had a capital project say $60 million we get 90% aid on it? I should have used a better number for math, but you know, does that that get that comes back to the district over the the say a 30-year bond, right? So, it comes back to the district. >> Well, no, it's a little more complicated than that actually. So, let me explain a little bit about them. So, first of all, it's it's 90% of aid eligible expenses. So, one of the things we're waiting for from the state that we

116really got to get a get going on not and we're not holding it up, they're holding it up is exactly how much aid will they give us on a building. So, the problem we ran into in the first capital project was they were only going to give us I don't know like $30 million on a $60 million aid. So, we're going to get 90% of the 30 million instead of 90% of the 60 million because they said your enrollment was so low that they weren't going to pay for a campus that size. So, we're waiting for them to find out what size campus they'll pay for. Now, this the length of the bond is determined by a bunch of factors. If it's a simple renovation, it would be a 15-year bond. If it's an addition,

117it would be a 20-year bond for that portion of the of the project. And if it was a new building, which we were trying to do, it would be a 30-year bond. Uh but the state wasn't interested in the new building or the 30-year bond. Uh so so that's where that went south. Uh but the but the problem you've got is is that unless you can upgrade one of the buildings and build the addition, you cannot consolidate into a single site. So you're actually operating too many school districts simultaneously with major amounts of inefficiency. The other building you could then shutter or sell or rent a Boseis or something like that. So the dilemma it's kind of like I got two houses and I'm trying to keep them both going and I'm trying to live

118equally in two houses. two full kitchens, two full staffs, two full sets of teachers, classes full, right? Two running back and forth with a transportation system, right? And that is the dilemma. >> Yeah, we I think we understand that. My question is how does how does the reorg building a come back or how does that come into the district as revenue? >> It comes into the district as revenue. Okay. So what happens is they will then they will say okay based on how much is aidable and based on your 90% we'll provide you this amount of aid for 15 years 20 years or 30 whatever we end up doing in the project and they simply send us a check. >> Thank you. >> Yep. >> And just to clarify that that has nothing to do

119with the act of getting the two buildings together. It's related to the capital project work, >> right? That is just for building aid work. >> Period. >> Then there'll be efficiencies and operating expenses that we will be able to realize once we actually consolidate >> yes this year. >> So that knowledge of the aid. >> No. So we we need to get and Dr. Tim feel free to correct me here. The question was kind of order of operations here. We can't vote until we know what it's going to cost, right? We need we need to wait, >> right? We have to know two major issues. One, we have to know what the state education department is willing to aid based on your what they call maximum cost allowance. We're waiting for them to complete that

120calculation and send it to us. Desperately waiting. Number two is then we would need to know the cost of the project. And then we could calculate the actual impact and we could actually calculate the reorganization aid. Once we know those two things, then you could go out for a vote whenever you want. Uh as long as you provide proper notice. If I had my brothers, I would like to get all this done so we could vote in December. But it's dependent on other groups, not just us or you. >> Thank you, Dr. Tims. Do you have any that you could get us an answer from state ed any sooner? >> The MCA is only taken what this round seven months. I don't know what we're at now. >> Yeah. What are we at? >> More

121than that. >> Okay. Any announcements? >> Working with state government is always a challenge. >> Yes, that certainly is. Anyone else? Tom >> second. >> No, my question was answered. >> Okay. Thank you very much, Dr. Tims, for joining us once again. Um, we certainly appreciate you taking time out of your busy schedule uh to meet with us tonight. Okay. >> My pleasure. and uh Josh and Hayden know how to get a hold of me and uh and we will continue to work on this project and put pressure on state ed to move forward to try and help out. >> Okay. Do you think if the board of education sent a letter? >> Uh no, that would actually be the wrong thing to do. That would be really bad. >> You know, it'd be like

122calling your mother. It'd be like calling your mother. You know what I mean? The coach never likes you to call your mother. We're gonna get out. We're gonna We're gonna try and do the best we can. >> Okay. Thank you very much. We appreciate it. >> You have a good evening. >> All right. You too. Have a good evening, everyone. Good night. >> Byebye. >> Can we move the buildings out of New York State? >> Okay, I guess we can move right along now. Correct. Number seven, 2026 27 budget discussion. A budget review adoption property tax report card approval. Um, do I have a motion to adopt the proposed budget for 2026 27 school year as presented in 7A A1, excuse me. Do I have a motion? >> I'll move. >> Okay. Thank you, Sarah.

123And is there a second? I'll second. >> Okay. Thank you, Tom. Any further discussion? >> Yeah. I just roll call vote. >> Um, it can be. Sure. Any further discussion? Anybody else like to discuss it further? Okay. All in favor? >> I >> Are we doing roll? >> Are you doing Are you doing roll call? That's right. >> Yep. Um, so we'll start here. Sarah, uh, Sarah Palman, >> yes. >> Tom Brown, >> yes. >> Hey, Travis. >> Yes. >> Darlene Cooper, >> yes. >> Deb Spalding, >> yes. >> Jason Welch, >> yes. >> Paul Fenton, >> no. >> We have six yeses and one no. >> Okay. Motion for item 7 A two uh excuse me one is approved. Now do I have a motion for the approval of item 7A number two? Uh

124is there a motion? >> I'll move. >> Thank you Jason. Second. >> Second. >> Thank you Paige. Is there any further discussion on this? This is for the property tax report card. All in favor? I >> I opposed extensions. Motion for item 7 A2 is approved. Number eight, personnel consent agenda. Do I have a motion to approve item 8A? >> I make a motion. >> Thank you, Tom. Second. >> Second. >> Thank you, Paige. Is there any discussion on this? All in favor? >> I opposed. >> Any abstensions? Personnel consent item AAA is approved. Next meeting number nine, we have a meeting, special meeting on Tuesday, April 28th, 2026 at 8:30 a.m. at the Mountain View campus. This is to be uh we will be voting on the CBEES uh board and it should be

125a very short meeting approximately 10 15 minutes long. also and B public budget hearing and regular meeting Tuesday, May 12th, 2026 at 6 p.m. at the Lake View campus. And C, there's an annual budget vote and school board election on Tuesday, May 19th, 2026 from 12 noon to 8:00 p.m. and that will be held at the Mountain View campus. before you go forward. Um I've noticed that online um and in publications the June meeting says Tuesday, June 11th. It's a Thursday. So I'm not sure which if it's supposed to be Tuesday or supposed to be Thursday >> for which one >> in June. It's the next one after this, but >> okay, >> I've been working on my schedule and noticed that. Thank you. >> It is Thursday for pointing that out. >> All right.

126Number 10, executive session. Specifically, the board anticipates entering into executive session for the following reason. A number six, to discuss the medical, financial, credit, or employment history of a particular person or persons. Do I have a motion to enter into executive session to discuss items 10? Motion. Motion. >> Thank you, Paige. Second. >> I'll second. >> Thank you, Sarah. Any discussion on this? All in favor? >> I opposed. Abstensions. Motion passes. No action will be taken after this executive session. online through table. Yeah.