001Great, but they don't cut either. It's right there. So, they were out here cutting this morning. [Music] Start. Yeah, I was about to say we'll go ahead and start. All right, it's 5 o'clock, so we'll call our meeting to order. Um, Miss Brandom, did we notify the media? Hey, Mr. Jenkins. We did. Thank you. And I do declare that we have a quorum of five of seven board members present and we will need action to approve our agenda. I make a motion to approve the agenda. I'll second. Thank you. Any questions? All in favor of approving the agenda, please say I. I. Any opposed? All right. Now, we'll turn it over to Mr. for our our budget discussion. Thank you, Madam Chair. Mainly just going to hit the changes that we've made since first reading.
002I believe every you've been provided a copy of it at your copy of the entire document and I think last week you got over the weekend you received a copy of the revenue and expenditures uh schedules individually. Um the main change that has occurred since the first reading is that now we have a balanced budget. Um mainly we'll go over the changes that have been made to achieve the balanced budget, but we're currently sitting at $61,659,000 of both revenues and expenditures. So it again it is a balanced budget, but it does include a millage increase of 4.9 mills. looking at the revenue schedule on page six. So, I want to make sure I understand that. So, you're saying we only get a balanced budget if we if we increase the millillage. This budget is prepared
003with a an estimated $400,000 impact associated with a millage increase. This this document factors in a millage increase, I believe. Ma'am, did you prepare one? that is not approved. Well, it's $400,000 is what was added to the budget. So, we know that if we if we don't pass it or if Clinton doesn't pass it, we'll have to probably come back with a new document that can be passed with the difference of the 400,000. Okay. Uh so, as we were just discussing, uh the number one top line of the revenue schedule was includes $400,000 increase from the first reading uh for advorum taxes. That is the impact estimated impact of a 4.9 mil increase in operating millage. The only other changes to the revenue side was a decrease in the uh education funding model of 75,000
004and that is split between two line items. the education funding general fund and a separate line item for uh health insurance. Uh last year that was presented in a single line item. Uh the department of education has started separating those items in our projections. So we have separated it. Um so the what you see for 2425 for the current year budget that's kind of an estimate of that allocation split out um just based on a percentage basis for comp comparability purposes. Uh but between uh first reading and the when we were going with an with our own estimate of the funding model and then once we actually received uh the projection from the department of ed, we lowered those two com two line items by combined $75,000 uh and increased the line item under other
005revenue, the transfer from special revenue funds. Um we increased that by $13,000. total revenue increases between first reading and second reading is $338,000. Again, that does factor in a $400,000 impact from a 4.9 mil increase in operating millage. So, a vote yes to approve this budget would be considered a vote to approve the millage increase. Flipping over to page 12 in the expenditure schedule. Can we ask some questions here about this first before ma'am expenditures um on the um the interest on bank accounts? What was what was dramatic in that we went from a $50,000 budget to an $8,000 budget? Uh number one is with the the most significant impact is the decline in interest rates on that we were making on our account. Uh but also just the balance that we're carrying in those
006accounts now that we're no longer pedalling in the in the federal funds for ESSER and you know some of the larger loans program where we were carrying some more sizable uh cash balances even though it was kind of an in and out. we do make money on those while we're there in our possession. Okay. So that that with those balances being decreased, the bank balances are not paying near as much in interest. Okay. And then under the um the reimbursement from 56 and then this uh district 56 mill uh that the budget was 46,000 now it's 60. I noticed on the last actual update that we received. It still had zero at both of those. So, is that actually money we are receiving or have we not been receiving? We do actually receive it. It
007comes after the end of the year for the prior fiscal year. It is supposed to be tied to the value of a mill uh somehow over all of eternity that has become locked at $46,000. and they have reimbursed us to the tune of $46,000 a piece for both of those problems programs, not problems. Uh for each of those programs, we received $46,000 uh for as long as I can see records. So based on the value of a mill, we estimate that that it should be closer to 60. Okay? And each one of those programs is claiming half a meal. That's why that's a little bit different. So it's not a whole meal per program. It's half a meal per program. So that's 120 is closer to the amount of a meal. Yeah. Okay. Okay. Thank
008you. Okay. Any more revenue related questions? So turning over to page 12, the expenditure schedule. Uh between first and second reading, we have lowered salaries by $400,000 and social security and if retirement associated with that u or a combined 130,000 total just for the value of those associated with the salary cut. uh that is a result of beginning the process of putting names and positions to the anticipated position cuts. That is an extremely uh conservative estimate of the impact of those cuts. I believe Dr. Finland has shared uh with you all some of the uh anticipated position cuts. We have only lowered this budget for what we know we can sustain and that brings it into point of balancing. However, um we think that the impact will be greater than that once the dust settles.
009Uh but until we have our schools filled next year and all required positions filled, uh we truly won't know whether the position cuts can hold or not. We feel confident that they can. Uh but we have been very very conservative on the budget. uh just to get to the point just enough that we could balance it. Um but that does include some um some changes, some that we would not like to have. Um but we will discuss those a little further. Um the only other changes from between first reading and second reading was an increase in the cleaning services line of $45,000. We had originally projected, we thought we could cut that based on a a proposed contract that we had been provided, but they informed us right after um first reading that they had
010left us one of our locations off of the original proposal and went back and once I evaluated it, they were correct. So, we will be that contract goes to about 1,920,000. Uh but we are nearly fully converted over to all contract and that comes with a much more clean U and known outlay uh the further we get over into contract services versus employee um positions. Um the other changes that we've made were to reduce travel and supplies. We reduced travel by 25,000 and we we're reducing uh supplies by 50,000. And really when we're talking about uh things that we can control, those are the two things that where we can have the most significant impact. Uh there's a certain amount of travel that it would be absolutely required. There are certain amounts of supplies that
011are absolutely required. But those are usually the easiest things when it comes to belt tightening. uh those are the first things to go because they you know if you look at what we spend on utilities we don't really have a lot of flexibility there you know it requires a certain number of people to operate our classrooms and our facilities uh so the amount that we're able to cut is is very limited there uh but in those categories we felt like we could take those down and it's you know you're you're talking about a you know 16% cut in one and I think it was five in the other if you know small percentage in uh reductions. We have in the past had those uh categories be lower than they were. Last year we had raised
012them uh some and I think that uh some of the other changes that we're making operationally will allow us to fairly easily recognize those cuts. So overall we we've changed the expenditure side by a decrease of $560,000. So again, that gets us to uh total revenues and expenditures of 61,659,000 and a balanced budget. That doesn't go ahead. Yeah. I want to ask so I want to go back to salaries because obviously that's our biggest expenditure. Yes, sir. And you know, I appreciate the the effort to do travel and all that, but $25,000 on a, you know, that's a 60 plus million dollar budget is it's it's Yeah, we all know the 90% plus of our, you know, it goes beyond just salaries because if you look at our contracted positions that are lying uh down
013in the uh well, I mean, look at cleaning services, look at our SRO's and professional services line. If you look at the instructional um or the student services and uh function or object 313 sub yeah object 313 those are all people related. Our people are a high majority 90 plus percent of what we do is is people and who's in our buildings. So and that's true with a lot of organizations. Sure. Um, so here here's my question though. When we look at the budget in 2024 25 on salaries to to now, I was under the impression that that we were we've made some significant cuts on personnel across the district. Yeah. The sheet that we were provided with the positions that were reduced and the financial impact to the budget, this reflects a $4 million
014decrease to the budget. But that doesn't seem to be reflected here. So part of that is the increase in the learns um grant. So those positions are in here that we had to remove those from um our budget and also from the initial. But also um whenever you look at this, this is including all the raises, the $1,500 increase for all the teachers, their steps, and that type of things also included in this difference. So just because if we would have stayed with everybody the same, we would have gone up a lot more in salaries just because of the cost of um the hiring. So you're basically saying we cut 4 million, but we're spending 4 million. Well, again, and not all of those positions are are general fund. those some of those positions some
015of those are federal from other other but that's that's what we had to cut because some of those federal programs picked up other people that if you cut a master teacher somebody else may have rolled into that um or if you cut those well this particular document when we're talking about cutting funds out of our budget and we're talking about the general that was created as in total list of cuts that wasn't just general fun so how what portion of this 4 million actually comes out of the general fund. It's not really broken down. Uh yeah, I don't know that. I mean, a lot of it is general fund and a lot of it's um federal. So, I mean, I wouldn't say 50/50, but I mean, I would have to look at that to determine.
016So, this 30 on the 202425 budget or 34.7 million. Is it safe to say that if we didn't have the learns program that would been $4 million more? That would have been more around a 38 million. Ask that again. Learn salaries weren't weren't 4 million. It was I know the months that we had was 800,000 that y'all approved. So yeah, and that was for the remaining. That was just the remainder. Yeah, that was the remainder. So 1.6 maybe two. And then you know we had the and had we retained the learners grant it would have also include performance pay that would have been significantly higher than that. So, a lot of the a lot of what would have been paid got cut out completely with the loss of the grant. And I can reshare that
017sheet once I if we break it down based on a lot of the classroom teaching positions would be general fund. A lot of the master teacher interventionists would been federal funds. So, we'd have to kind of break it down based on that. So, but for the 202526, those master teachers are going to come out of the general. Um, all those are now in a federal. They're in title one, title two, um, funding. So, yeah, I sent that out because you had asked for that a couple of weeks ago. I just want to make sure I understand this 20 348 million because I'm confusing. You're saying all of the the learn stuff that we had that got pulled. Yep. You're saying for 2025 26 that's going to be covered under a federal program. Yeah. So what
018it was was the learns was paying for 18 or 19 master teachers. Um federal programs was paying for a large number of academic interventionists. And so since we lost learns, we took the rest of the federal funds and did about a part part. So we've got some master teachers, some academic interventionists that are in our federal funds now versus all in one or all in the other. So we kind of took both of those numbers and kind of split. So what does this number reflect the 34.8 million? The 34.8 million does not reflect any learns people or any of the master teachers because they are now in a title one title two type program. Um so that would be um you might have to help me on this one Jim. Is that that line is
019that all teaching or is that administrative salaries too or that is every general fund salary? those average general fund salary. So, um the master teachers would not be included in this line. Nor were the interventionists. Um there may be one interventionist, but majority of the interventionists are in a federal program also. And the the 2425 column only included the 800,000 for the learn. So, it was that line item was raised up u back in February when we did the the budget amendment. So again, I'm trying to get my pinpoint my confusion here. So you you've made statements that we made cuts on people. Yes. And so I'm I'm kind of Are those cuts impacting the general or the federal programs? Both. Both. Where we had positions that were covered under the federal program, some of
020those went away. Uh we where we had taken the loans that were in one federal program and had to move them as a result of losing the grant to the general fund on a temporary basis. Uh Amanda Lacrosse and and her and Dr. Pendlean worked to try to determine what positions we could eliminate within the district. Many of those positions were from federal funds, other federal funds. Uh and so as Dr. was saying. So now the most of the the learns master teachers are being picked up in title one which is another federal program. So they've only temporarily been in the general fund. Right. Okay. But we cut that from 18 down to I think 11 or 12. So, and then again I'm trying to relate this number this 34 8 million for budgeted for
02120 526 because what you're telling me our target is actually lower than that. What's lower than the say that again our target for actual expenditures is below what we've got budgeted. We lowered to the point that we were able to we know that we can do this, right? And then there are certain you know if you say for instance if you have like a this particular school has experienced a decline in enrollment and we eliminate or anticipate eliminating a position and then enrollment goes up. You know if you've pushed it and now you know say well we're going to go from where we've had we'll be an example 18 in the class to 25. Well, if enrollment comes in and it's actually 30, well, that's kind of a line that we don't really want to
022cross. So, this is a very conservative estimate. So, you're leaving yourself room if you need to hire some teachers because of Correct. Okay. That and that's fair. I'm just trying to hopefully that's not where we're going to be. You know, we we what what we really want is for that to go directly to fund balance next year. Yeah. Uh you know, whereas people, you know, may request, you know, say, "Well, I've got repair money." available and I don't really anticipate it, but I need these I need these supplies. Can we do a can we do a change? But nobody ever nobody ever seeks to move things from a salary or benefit account. So if we put it there, it's safe. If that makes any sense. Yeah. I guess again my confusion here is we've heard
023that we've made cuts. We've made cuts and then you're showing me a budget that's $40,000 above our biggest expenditure which is going to be salaries. Yes. Where are the cuts? Where are the people? What I mean I I was expecting this to be lower. Yeah. I think that this is misleading and that it, you know, it's misleading and that it it doesn't provide where this lays in whether it comes out of the general fund or federal fund. So, it appears as though looking at this we've we've made $4 million in cuts to our general fund, but you're saying that it could only be 50%. I mean, just looking through and then whenever what's the impact of the $1,500 raise on the staff that was Jody I don't we have we quantified that for the first
024reading and I don't have it in my notes with me today. And so I mean just from a little bit of memory I think that was like 800,000 to a million for the cost of what that increase for every teacher on a pay scale would increase. And then whenever you take everybody else up a step you know that's you know increasing it too. So you know cutting 2 million we basically cut the raises how much it would cost us to give raises to everybody based on the $1,500. And that's I guess that's where I want to make sure when people are asking me these questions we can articulate well yeah but we've we've had requirement here by the state increased salaries that cost the district $2 million right and and honestly we're still reeling from
025last year's increases that this year's increases were more accustomed to it's more like what we're used to uh the the changes that they made to the minimum salary schedule last year were devastating to us financially. I remember that. Yeah. So, you're saying that the $1,500 pay increase is offsetting anything in this portion of decreases that we would have seen reflected in the general fund. That's that's what I've just kind of made the correlation to. Like if we had a $2 million cut here, the increase of everybody's step and also the increase of the $1,500 for um like the required per sale increase um comes close to equating both of those. Well, I would like instead of it being like we think in hypothetical, I'd love to see the number like what what is that increase
026that we're having to take the hit from the state? Um what's the step increase? And then what of this number is really coming out of this budget versus other monies. Yeah, I have another column with names and then I can easily put figure out if that's federal or not. So can you tell me the difference between line item 410 and 411 from supplies to other supplies? What is the difference there? Every one of these categories has a definition provided by the Department of Education. I can't remember what it is that makes up an other supply number 411, but it for some reason my memory serves it might have something to do specifically with libraries. Okay. Well, how did our salaries and stuff go up but yet social security expenses went down? We estimated generally we
027estimate a full 7.65% of salaries for our portion of social security. Uh in trying to figure out how lean our budget can get, we started looking at what our actual expenditure is because not every salary dollar is subject to social security. Um and it's it's more of a 6.6%. So what we are what we are left with is an actual 6.6% roughly of our estimated salary number. And again on this is another example that we've had a budget but the actuals the last actuals that you provided showed a zero draw off of it. And that's the student transportation. That is an we have several revenue items that come in after the end of the year based on what happened during the year. And that's an example of that. It's based on uh it's based on
028bus routes and special needs students on bus routes and how many miles and they don't calculate it until that's why it's so hard to estimate that revenue uh because we won't even know what we're getting for 2425 until July. I think just talking about the expense for student transportation. Yeah. Oh, I'm sorry. It was it was budgeted at 25 last year, but nothing was actually came out of it. Oh, that's a where I thought you were talking about I don't know why I was jumping back to the revenue line item for student transportation which we have received zero on. Um it's uh that the reason that it wasn't in the last projection was that that's mainly field trips. Those come at the end of the year. So they'll that'll show up on later financials May
029and June. But the last actual would have been based on April and a lot of the field trip funds are utilized out of federal first. So that's kind of a last to use pot um for the field trips because they they are allocated some field trip money through their federal programs first. Right. So on the list of uh positions that were reduced, there's it it's kind of all over the place with various teachers at some schools, uh some master teachers, um uh teaching specialists um and based on what um you had shared previously is that it was determined that the master pro master teacher program you determined was more effective to student achievement than our current interventionist who pull students out. Okay. So, go ahead. Well, that's what that's what you said, right? Well, I
030said that it was whenever you're looking at the difference between the two, both are very much needed. That's why we kept some of both. So, um we did not cut all interventionists. We did not cut all master teachers. Whenever we have um looking at our test data, whenever we have um 60 70 80% of our students that are falling below um average, you know, those individual teachers and academic um interventionists um work with 20 30 kids um through that time where a master teacher can have a um an effect on changing the teaching in the classroom. So what we've determined is that there's some basis of, you know, tier one instruction. What happens in the classroom needs to change to help those students not be low as low as they are and not need the
031intervention. And then there's some that need the intervention. So that's why we went with a mix of the two um to have some interventionists and some master teachers so that we're supporting our classroom teachers, but we're also supporting our lowest level students, too. Okay. So, I know based on this list and then um I don't know if we had a conversation about this, but it was mentioned that the principles were in charge of making the reductions at their school like that you had they were consulting they met with Amanda to determine what would go in their federal program. Okay. So in doing that, how how did you decide that because it sounds like that each school is a little bit different now. So you may have one school that has one master teacher and no
032teaching specialist and then you might have another school that has four teaching specialists and an interventionist. How did how did how do we make the determination to be so different across the district instead of making instead of all the schools being more similar. I can say most schools chose to keep at least a master teacher. Um Lawrence Elementary chose to teach their I mean keep their five um teaching specialists because um their structures with their clusters they had very strong leaders that were um working that way in those classrooms. So they kept um five stipens versus one teaching position um which is a little bit cheaper than a teaching position. Um so whenever they're looking at you had to look at the strengths of um the classroom teachers that were the master teachers and versus
033the teaching specialists. The high school um had four master teachers went down to two to support a hundred teachers and then kept one um teaching specialist um that would still kind of come in and out. So there was a kind of a structure of whenever they had that conversation of who they had, what they had, um this is the money you have. We'd already had the number of cuts that they needed to make based on um kind of what we were shooting for and um so they were having that conversations in um their federal planning meetings of which ones they wanted in their federal um budget versus um there. So, but regardless of how the structure ended up, the plan is to still for all the schools to use the learns program. That is correct.
034That's what we have. So, we'll still continue with clusters and um supporting our teachers through clusters. We'll still have um their ILTs, our district ILT instructional leadership teams um to still move our district forward with those um structures in place. Okay. Did we have I haven't flipped back yet to the stipens. Have we do we have those highlighted as to what's actually being paid and drilled that down this year? Uh what is on the schedule is a realloc has a the same funds that were approved last year. We allowed for reallocations. The only changes that I had were in the athletic department for the high school. Uh Mr. Spires provided some a different allocation there. Uh including lowering his own supplement to make it work for his staff and stay within the same number of
035dollars that were approved prior year. And then within the teaching and learning department, the district level supplements for academics. Um, some of those were the the amounts stayed the same. Uh, some of the roles changed because we shifted our priorities and did away with certain programs. Um, but overall there are there's a Z increase associated with supplemental payments. Just rearranging the chairs. Um, and so and to give you all those that are field right now versus those that are not, I do not have that. But, you know, sometimes it's based on do they have a person to coach it or do they have a person to lead it, you know, so kind of based on those needs um that come and go and it may be this year it's filled, next year it's not. And
036um, so but I don't have that list of everything that's not filled currently. Okay. But included included in the the salaries would be a like we said a $1,500 per sale increase in the teacher salary schedule. That's the change in the state minimum. Uh that carries the teacher a teacher with a bachelor's degree in their first year of teaching up to $48,500. Um non-teer employees that are on salary schedules will get a step increase. The size of the steps themselves have are remain unchanged. So there's no changes to the salary schedules over the 2425 levels. Um except for bus drivers where the state portion of their salary of a particular sale was increased by 2%. All other general funds uh schedules besides that one remain unchanged. student nutrition while federal pro while funded by a
037federal program uh was increased by 5% in trying to catch up and make them more competitive with other districts in our area. Again, that is covered under a federal program and not under the general fund. Uh any employee who is not on a salary schedule will not be receiving a pay increase from the 2425 levels. uh we believe that we have enough padding to allow for some small increase. What we would shoot for would hopefully be at least one and a half% which is roughly the value of a step if the steps you know of a step increase. Um and then what we would be looking to do is to resubmit to the board uh permission to do that if funds are available after the day 45 allocation. We receive adjustments to our state allocations.
038Uh if you'll remember, uh we'll start this we'll start the fiscal year receiving state funding based on our current year, day 135. That is adjusted again at day 45. So if we pick up students, we will increase funding. If we lose students, obviously we could go down again. Uh so for the people that are not on a salary schedule, we will continue the same rate of pay until at least that date. uh at which time if revenues are are holding strong, if we still feel like we have the flexibility in the budget, then at that point we may submit for a pay request for those who receive no increase through the budget. Um another document that you sent to us was a reference to our actual fund balance. Um, and this document, you know, we
039know that we had approved a $650,000 dip into the fund balance. We know we approved an $800,000 dip into it in February for the master teacher program. But this document shows that you are now looking for $390,000 $393,000 um an anticipated additional use of the general fund. Is that the millage increase that you're asking for? Can you tell me what you're looking at? I'm not Yeah, I'll I'll you know the two documents you gave me um dated three of this document. So, I don't know if he has that one. Um you sent the two documents um the expenditures as of June 5th and revenue as of June 5th and we came up with a 1.8 um anticipated. Um so that's um what the reference of the 650 the 800 were already approved. Um the additional
040from the 145 to the 18 is the 393 that we were talking about. So that's the anticipated over expenditures for current year right for 2425 for 2425. So this is actual revenue versus expenditures as of to date. Okay. So keep in mind that what we were our state revenues are down over $1 million from what we were projected to receive for the current fiscal year. So for 2425 or a million dollars less than what the state was supposed to offer than what we were projected when we prepared our budgets for 2425. I keep I keep saying it. The new funding model is not very friendly to districts like ours where we are not experiencing growth u because all it does is reallocate the the the size of the pie does not change. If if all
041of a sudden the entire state had an influx of students the still the size of that pie doesn't change. It's just a matter of how it's allocated between the districts. So if you take a district like ours that is stagnant or shrinking and a district that is growing at our original projections based on prior year 135 and again at day 45 and again at the following day 135, we see wild fluctuations in our funding. It makes it incredibly difficult to plan and operate a school district. So yes, between what we were originally projected to receive uh for 2425 and what our final allocations are, there was a 1.1 million dollar decline. Uh and and we had actually budgeted less than what they told us. Um and again there I mean it's it's mathematical. It's not
042like they were lying to us, but you know would but but I I and I hear you, but I I guess my question there because it when they made these increase and correct me if I'm wrong here, the way I understood it was when they said school districts, you need here's the new cost for um somebody that's coming new to your district. This is what what you have to pay that person and then there's a step increase. And I remember it was kind of it was gra, you know, was it was high for for short-term teachers and it got lower, you said, but they provided no funding for that, right? The state didn't. So, well, it's not quite as simple as that. Um, I'm just trying to say that they demanded more. Yeah. And then
043they gave us less. So, is it is it is this a double whammy? Again, it doesn't it's not it's not nuanced to an individual district's circumstances. So, when they say they allocated funding to cover the salary increase, they they do all of their modeling based on the average teacher pay, right? And they create this average that they say is like a master's and and 12. Okay? So, they say, "Well, the average teacher masters and 12 uh it's going to cost this much money and so we're going to fund districts based on this arbitrary student teacher ratio and and this average uh but the changes that they made to the salary schedule for 2425 there wasn't a large percentage to the average the average teacher received an average increase who received a massive increase were the
044teachers at the bottom of the scale if you look at the average experience level of our district and districts like ours, we employ a lot of beginning and first, you know, few years teachers. So, you know, whereas they in our level of funding was increased based on some modest salary increase, our actual outlay increased by a dramatic I mean, these were like eight and 10% raises at the bottom of the scale, right? So, that was what the majority of our a significant number at least of our teachers were receiving. But the increase in our funding was based on a much smaller number. Now, you know, if if we did a better job of retaining teachers and employed more of I mean, if we had more experienced teachers, they would cost us more money. Uh but,
045you know, the the problem we have is that, you know, you you build your budgets based on who you have in place and what you what your resources are. And so we were staffed based on who we had and the changes to the funding model and the and the salary schedule last year for 2425 was a double whammy to us. Uh and then then our student numbers our 135 day number was significantly. It's like 188 our weighted pupil units by like 188 students. Yeah. Well, they didn't leave in one classroom. They didn't they don't depart in a way that's just okay. Well, you can just downsize your workforce. You know, we've got contracted teachers in place and they, you know, it's a few here and a few there and a few here. And so, yeah,
046your classes get a little bit smaller, but our funding dropped by $1.1 million. We can't shift on the fly like that. You have to Sorry. Go ahead. Go ahead. I I I I I do want to tie into because I've gone back and looked at like last month's schoolboard meeting where you reporting our cash flow at and what we've done since April of 30th. And I'm looking here the the difference in what we've our revenues and our expenditures. We're still $4.5 million. So my question then is where does that million dollars that this that we haven't that we were kind of hoping the state would get versus these numbers that you stated in our last board meeting some So just because we're short in one revenue doesn't mean we're short in every revenue. We've actually
047had a pretty good year in our local revenues. Okay. Which serves to partially offset the cuts in our in our state. Yeah. I just want to make sure because I was confused like so Yeah. Okay. And that's fair. And then and then again the right now if you look at where we are and you're you're thinking well how is it that we're projecting you know a pretty sorry year based on that. Well number one we're cutting as we're tightening as as tight as we can to try to minimize that every day. Uh the other thing is our our our local funding gets less and less during this time of the year. It's low. You know, our our fund balance will be lowest in like October, right? We get most of our money and so, you
048know, you look at our year-to- date revenues, um, they're real big and then they start to, right? And I do realize there's a fluctuations there, but and then but when we have during the month of June and July, we have very little local dollars coming in and we that we still have to continue paying our people. We pay them in July. That'll get pulled in. And so what looks like you're operating at a surplus that will can shift dramatically over the course of the summer. Yeah. So in this same sorry in the same document that Cathy's talking about with the 3 93 that will need to be requested. Below it you have that there's a learns claim close out. What is that? Is that the one that did not get approved? So where where we
049are was we just got a closeout letter from learns basically saying anything that you were under contract to keep you could then submit for um reimbursement. So we have submitted and put forth the claim that our teachers our master teachers were under contract with us and we could not just fire them for an employment contract and that we were required to keep them. So we have submitted that claim hoping to get that money back um as part of close out. So that is the amount the 9237462 is how much our final claim was to close out the program for any expenditures that we felt like could go based on the rules that they gave us for close out. So, it may be that the 800,000 that y'all approved for learns to continue on um would
050not have been needed because they have allowed us to close out um claiming those funds. Will we have an answer on that? Um the last claim that we had um came back within like two weeks. Um we submitted that last week, but we have not heard anything. I think we submitted it Tuesday or Wednesday of last week. Um I think it was Yeah, I think I think it was Tuesday Tuesday of last week. So, um whether we'll hear back as fast since it's a closeout claim versus a um just a claim that we had the last time, I I don't know. So, but we're um hopeful, you know, that they gave us a closeout option um to be able to pull down additional money funding. So that's I wanted to make sure that that was
051there too for you. Like like Dr. Finland said, our argument is that you know we had we had obviously signed contracts with every one of those teachers for 190 days that would required us to pay them through the end of the year. So hopefully they will acknowledge that and and allow us to claim those dollars. Going back to your statement of building a budget based off of what we have yet. We are building a budget now on a 4.9 millage increase that we don't have yet because we don't know if we're going to pass it or not pass it. Did it not make more sense to build a budget on what we actually have now versus building one with a 4.9 millillage increase? It was my understanding and the kind of direction I gave him
052was that if Clinton was going to go for the millillage, we were going to go for the millillage to present the budget as a millage increase because we didn't want to come and say, "Well, if you give us the millage increase, then we're just going to be able to do XYZ or how are we going to use the millillage if we could make that budget work?" You know, and it's very hard to make the budget work without the millage increase. you know, if you if y'all choose not to pass or Clinton chooses not to pass, you know, that's something we'll go back to. Um we've already had some discussions of where um you know, we might have to um take a little bit more out of this that pot that pot, you know, just make
053it tighter. Um so that's kind of where we were with that one. So we we we did have a discussion on having a plan B. Yes. And you you said that we would have to come back for um the end of this week to possibly have another meeting. So well in our the the projected revenues that you have shared for 2526 shows that it is an increase in revenue from last year of $2.57 million. Am I reading that correctly? Yes. So if 90% of our budget comes from salaries, we're getting $2.5 million increase based on the general conversation we just had that we're not saving 4 million off those reductions. We might be saving two with a little bit of um a little bit on top of that from having to pay the $1,500. Um,
054it just seems like maybe we could get closer to where we need to be versus um versus proposing the the millage increase. Um, but because that see that increase seems to wash out what you were saying. um that our expected increases are. So, it seems like there may be some I appreciate that we're trying to cushion, but I don't know that we're in a position to cushion. I don't know that we're in a position to not be as tight and as efficient as possible. Well, but that's just and the reason the reason that I would argue for a cushion is that we are right now very closely mo other than rounding we are modeling based on our projection from state revenues since the implementation of the new federal not federal the new state education funing
055model. We have never had a time when they ended up giving us what they projected to give us. So, it's always been less. Oh, well, $1.1 million, you know. So, and this is only the second year. So the first year, you know, yeah, we still got cut, but we had received so many new dollars when they first implemented the the funding model that, you know, everybody else was, all the big districts were complaining about the new funding model. And I said, what are they complaining about? This is a fantastic new funding model. Well, it has proceeded at every day 45 and every day 135 to show me exactly why it was not a very friendly model. Uh so right now we're projecting uh very close to what they what they told us this is your
056projection but that is holding firm uh with us not dropping students us not dropping students relative to the to our position within the state as a whole at some point the growth in our area you would think would have to turn the course and we will start putting more students in our classrooms. Will that happen for 25 26? Possibly. Um I mean we have been on a steady decline of student student enrollment for for a decade. Yeah. And you know and even based on the demographic information that we have, you know, received in the past several months, it still doesn't look as though it's going to give us any large growth numbers. No. And I think and I think the continued decline over years, you know, we should have been gradually making some smaller cuts
057throughout the years of, you know, whenever we lose a hundred kids, is it easy just to say four teachers are gone. You know, those four those hundred kids might be 10 at each grade. So, it's hard to say that you can lose a teacher, but you know, whenever you lose 200 kids over a couple years, 300 kids, then you can lose a couple of positions because, you know, those may not be at the same school, you know. So, um that's why the cuts this year, you know, strategic, you know, we've talked about, you know, not really liking the structure of some of our middle schools because of the way we're having to um either split grades, split content areas, that kind of stuff. But that's due to having to not have 13 in a middle
058school classroom, you know. So those types of cuts had to happen to be able to bring those numbers back up into a more fiscally responsible um way. Um so that that's kind of the decisions and where we've been looking at cuts and where we've been looking at, you know, the numbers and trying to balance them that one middle school's not sitting with 30 in a room and another middle school is sitting with 13. um because the cuts and the allocation just needs to be a little bit more balanced and that's what we've tried to do this year. Um in the information that you sent regarding our fund balance, um I pulled those numbers out and it looks like our current fund balance is around $6.5 million. Is that correct? That was our fund balance on
059June 30th, 2024. So at the end of last year, yes. Right. So at that time, you know, and and just to refresh everyone's memory, um the the audit report, we didn't have a a budget to actual for 2324. um in when we were here in June of last year talking about the budget. Um and of and I realize that's because it's not going to close out till the end of June. Okay. So, I get that. But then the audit report, we didn't actually get that until February because there was a delay. Okay. whatot. And as I was going back and comparing our line items and what our budget our budgeted amounts have been across the years for under line items. Um it doesn't I don't recall ever having been presented this information at the board
060meeting. Um, and it is that we overspent our budget for 2425 by $3.8 million. And I understand that just over a million came from additional revenue that we received, but then we still over spent on our expenditures by 2.7. So, which means from 23, the end of 23, our fund balance was $9.2 million. And then at the end of 24, there was a pull down $2.7 million. So, our fund balance is now 6.5 million. I guess I'm really confused because as I looked at that and maybe I've missed something, but I did go back and look through all of our board minutes and all the documents that you had presented. Um, and I don't recall you ever bringing to the board that we need needed to dip into the fund balance for the 2324 year.
061We approved a budget and it appears as though it was overspent without ever requesting information from the board. That's fair. Um so what I will say was that a million dollars roughly of expenditures that were unexpected and hit us in 23 24 were actually attributable to the 22 23 year. Uh that was a a billing issue. It was in related to SRO's and we didn't receive the bill. So we received half of a year of billing uh in in the other fiscal year. So the the 1.9 million surplus should have been more like 900,000 surplus and that would have made the 2.7 million deficit closer to 1.7 which I want to make sure I understand. So SRO didn't bill correctly. It was to I was contacted by the county and informed that we had not
062paid our bill to which I responded that we had never received such a bill and there they sent us a bill so we paid it. That was But don't we reconcile that? Don't we know we should be paying the county? Well, there was there was some confusion because there was some additional you I know you've seen where the state has talked about how many SRO's they're funding. Um, so when the county, some of our county SRO's we ended up being able to pick up through that and then when they don't when the money goes direct that goes from the directly from the state to the county or city or whoever's providing the services without actually flowing through the city or without flowing through the school district. So, the reason that we didn't, it was a
063lack of communication within our administrative office, but I was under the assumption that we were able to get some positions picked up through state funding. That was not the case. We just hadn't been build for it. So, we had received some billing from the county. It just wasn't complete. Uh, so when they hit us with a million dollars of expenditures related to the prior year, we really didn't have any choice but to pay it. So we adjusted our budget uh for the current year and the year after to to reflect what those are actually costing us. So at what point in there why why wasn't that brought to the board? It should have been it you know that would have been last February I believe was when we received the bill for the prior fiscal
064year. So it was even after the completion of the audit probably should have made note of it. I don't think that every I don't think that every unanticipated item would require a budget amendment necessarily, but uh in terms of you're talking about a million dollars. You don't think the board needs to know about that? Sure. And and you should have been informed. So if a million went to SRO's, there's still 1.7 million that's not accounted. Where did that where was that spent? A lot of it was in the special education uh contracted services. Uh and you can kind of see a trend there where we dramatically increased our budget for 2425. That was in response to uh what was hitting us in 2324. And then you'll see another large increase for 2526 because those services
065are they have to be provided. We don't really have a choice as to whether we enlist somebody to do it or not. But when we made the transi transition over the years from in-house employee provided services to contractor provided services comes with increased cost. If we are unable to find somebody to even do those services in person, it becomes even more expensive because it's not any cheaper to get virtual and it still requires you to have a person on site in the form of a parapro. So, you're really only saving a part of the salary. Um, those were the the two big misses in and then there was still we received an additional million dollar revenue as well. So where where did that go? What do you mean where did it go? So the total
066amount that we over spent was around 3.7 3.8 million because some was we overex we over spent what we said we were going to spend on our expenditures but then we received additional revenues that weren't assigned to any budget line. So where did those monies go? The schedule that is that uh Dr. Finland gave me a copy of that I believe he had received from you breaks it down on the function level where the misses were. You can see that uh 1.3 million was related to instruction. 2.3 million was related to support services. Support services would pick up the um the SRO portion. Um I can give you a breakdown of prior year the 2324 budget to actual final numbers by object which is the how we present and and pass the budget. I don't
067have it with me. I can provide line by line. So when you made the decision were you the only one to make the decision to send the million dollar payout to the county? Did anyone else I mean, we knew that we received the bill late. Okay. Um, and I don't know remember if that was I know it was after the audit deadline, which would have been the end of November. Um, so we couldn't acrew it back to prior year occurred, but why was this not brought to the board? I don't really have an answer for that. And I do want to point out too that was concerning and this is why I was going back through the board minutes and that is um in January um in the minutes you stated um that Mr. Phillips
068the auditor could not be here um they would reschedu but that the district audit was complete and the state department of education found our district to be unqualified which is the highest opinion issued. Then in February when the auditor was here states Mr. L Mr. Lawless and the auditor Mr. Phillips presented the 232 24 financial audit. Mr. Phillips stated the district received an opinion an unmodified opinion which means the district is doing well financially. Um and I do recall Mr. Jenkins specifically asking a question about that and saying okay so we're good. We're whole. we're good. And at no point in time you felt the need to point this out because at that night we didn't have the audit books at our seats. You had them at your table. Well, when when Mr. Phillips presented
069to the board, he did go over the change in fund balance for the general fund and he presents the change in total fund balance which is all funds. Uh he did do that. Now there's a An unmodified opinion doesn't mean that you had a good year. It means that your financial statements accurately reflect the year you had. Uh so I when you ask an auditor, are we good? He says yes, you're you're good. you know, our fund balance isn't a situation where he would consider us to be uh where we would have going concern issues that we can't support ourselves and operate for another year. That's that's one measure. Um so we would not have received an adverse opinion for that. Um, but when he says when an auditor says you're good, that means that
070your financial statements, and this is one of them, that shows this $2.7 million deficit that that the financial information that we gave him that he he audited and that we have the report on is is accurate and accurately reflects their financial position and the results of your operations. So, um maybe there was a a misunderstanding in terms of when you ask are we good and he says we're good. That's different things. Um potentially. Well, maybe. So, um, at the end of the day, it is very concerning that we over spent by 2.7 million and not one time was any of that information brought to the board as it should have been. Um, and and really we overspent more than that because you spent the additional million dollars in revenue that came in. So it concerns
071me that our fund balance is now 6.5. We had such a dramatic change in 2324 that again no one came to the board about and then we've already approved a 650 and we've already approved the 8 approved the 800,000 to come out and now we're kind of in a position where you either need 400 more,000 or we need to have a millage increase. Is that the gist of it? Yes, ma'am. I think that uh and Dr. Finley and I have already had the the conversations on uh providing additional information to the board periodically uh beyond uh what we present on a month-to-month basis uh whether that be quarterly or semianually. That's kind of why we were saying that we wanted to revisit some issues at day 45. you know, that was probably the biggest failure
072was that we should have revisited the budget when we received the the change in allocation. Um, you know, the hope is always that you'll make it up somewhere else. That doesn't necessarily materialize. So, uh, what we were proposing would be to provide more detailed information when we receive our allocation changes so that the board would be able to make changes on the fly. The kind of volatility that we're experiencing the last couple of years is not it it's really unprecedented in in my experience. So, I think that we have to evolve with that and and what you're pointing out is a failure to evolve to the changing conditions. Well, the just it's it's deeply concerning and fiscally irresponsible for these type of changes in our budget to not be brought to the board. Sure. Um
073and honestly, it just makes me want to ask more questions. So now, you know, at this point, you know, I hope the whole board would agree. If if not, so be it. is that I think we need to see budget to actuals on a monthly basis because really the information that you provide on a monthly basis just with the cash flow it doesn't um it doesn't provide us with enough detail I think to to ask relevant questions about what's going on. So the the budget to actual information that we provided um the schedules that you had kind of made some notes on that is something that can be fairly readily produced and given on a monthly basis. That wouldn't be a problem. Yeah. And I just want to echo I I don't think there was
074anything malicious going on here. I just think that when you when you encounter these big, you know, a million, you got you got to turn around and write a check to the county for a million dollars. That's got to come to us. I mean I and and it's really for your protection as well as all of us. We don't want you to be out there, you know, in the in the community think that someone's writing a check for the sake of writing a check and yeah and I don't think and again I think the budget the audit showed that and that's why I was saying is it good? Maybe I should have said, "Are we healthy?" And and that would have probably have sparked a a different line of That would that would have been
075a different conversation. Yes. And because right now it doesn't feel healthy, you know, and in the conversations that I that I've had with the auditor himself, I mean, you know, we talk about the sustainability of a course. Yeah. Right. You know, and obviously it an organization like this cannot turn on a dime, you know. you you extend your you extend contracts and they're 190 days and you do it before you you know before the start of your year. Uh so you're you're obligated, you know, on your on your people cost, which is your 90 plus% of your budget. You're obligated before you ever start, you know, before you really start receiving um any kind of revenues or even any kind of outlays. Those are you have contracts and you're obligated on that. And you know,
076things happen that that you don't foresee. U we control the things we can control. I think that the changes that we're making for 2526 kind of reflect an acknowledgment that we are operating in an environment that is different than what we're accustomed to. U the kind of uh the kind of changes that that Dr. Finland is is is making or or meaningful changes. They're not it's not 25,000 to to travel. When we're talking about uh when we're talking about position cuts, you're talking about taking a workload and and and spreading it. You know, it's a heavier burden on everybody that's left. Uh but that's re that's where we are. You know, we don't really have it's not like we can go out and generate additional revenue. We don't have the ability to sell more widgets.
077You know, we are allocated funds from public sources and we have to spend them wisely. Uh and if the the funding doesn't materialize, that hits us in a way that hurts. If if an increased expenditures, whether it be through, you know, losing a person, having to replace them with a contractor that comes at greatly increased cost or, you know, the the SRO billing is is that was just a failure. We we should have seen that. Um but you know think things happen that that you fail to real realize or are or or are beyond your control. Uh you know but I think that the changes that we're trying to propose for 2526 acknowledges that and and kind of charts a different course going forward. So what's the percentage of the general fund that we have
078to have bas is based on our expenditures. It's roughly one month of your one 12th of your annual budget or 8.3%. Uh it doesn't so which would be right at close to 5 million. Yeah. So for us if I have been told you know there's not an automatic uh there's not an automatic fiscal watch scenario that comes from dropping below that number. It is a major factor in putting a district on fiscal watch. Uh I was kind of told by someone who was in position who was in that position at the department of ed at the time but is has left since left the department of ed that you know given the given the things that have happened in our district that are beyond our control that the department would likely give us some grace
079in terms of our status as long as we could demonstrate that we were making changes that would put us in a position to build it back. Um, you know, at that time it was, uh, the conversation that I was having was related to the loss of the learnings grant and the impact that that was going to have. Like I said, man, you this is this is something we didn't foresee. Uh, you know, we're already in a with a budgeted deficit now. We're going to have to amend the budget. We're adding another 800,000. And he said, well, it doesn't necessarily put you at fiscal watch if you drop below that 1112th. You would need to demonstrate the district would have to demonstrate that we've made the necessary changes to not stay there with your projections to
080the end of this or fiscal 2425. Could we drop below 5 million? Yeah, as soon as we Yeah, we're already out 1.4 million and we're at 65 now. So, yeah. Yeah, it'd be right at five short. I mean, maybe just right there at it or a little bit low for 25 26. Um the budget that we approve, if it comes closer to the end of the year and you need to dip into this general fund count, then does that not come before the board before you do that? Just like the learns with the 800,000 and the is that not are you not required to bring that to the board before you dip into it or No ma'am, there would be no legal requirement. I think that what you're seeing with the fact that we brought
081the learns change is kind of an increase in involvement of the board um beyond what is a requirement. You know, we could have operated at a deficit. Obviously, that would have been a bad idea. Um you know, because that's kind of what happened with our 2324. Uh but you know where we are with our fund balance and and it and our lean condition I think that you know it doesn't benefit the administration board or anybody in our district to not have everybody on the same page and aware of the issues that we're facing. I'm just coming to board meetings. I never remember anything coming back to the board for a change in budget like those three years that were there um starting in 18 that went negative. I don't remember that. I don't Mr. Carer,
082I know you've been here longer than but I don't remember that coming back. I know that whenever some stipens or some bonuses were given, it was more of just a notification that was happening that it might be a hit to a general fund, but it wasn't an approval. So, um, in my years experience, I don't remember the budget coming back. But I mean that's definitely with a month um expenditure revenue, you know, that would be something we could definitely see going forward that if there felt like there needed to be some changes, we would be um providing more information to ask questions about and kind of see that ahead of time. Yeah. And Dr. Finland and I were discussing earlier today. I don't recall obviously during my time of employment here or even in my
083previous role that I had with the district, I don't ever remember being presented with and voting on an amendment to the budget. Occasionally there are line items whether it's to enter into uh authorizing expenditure for a study. Right? So you're off essentially you're saying this is you're recognizing that this is an unbudgeted expenditure. Right? So when we you know we we've done that in the past we've enlisted contractors to do a certain study for the district. uh when the board votes on that, you're essentially saying that this is not something that was planned and we're authorizing you to spend it anyway. But I don't ever recall a scenario where we've pre presented an actual budget amendment until this year. So that um in my experience, that's the first one I've seen. All right. Um you
084know, I'll just say this. I just I a budget is approved, that's the budget that we stick to. If you go outside of that budget, it needs to come back to the board. I I I don't I think that's thought that was clear. I don't know. Maybe that was just my opinion on something. But um and $50,000 or $100,000 is one thing, but 2.7 million that was a that was a brutal year. Um all right. Does any I want to respect everyone's time. We're way over and I know some want to have a break. So, uh does anyone have anything else? Okay, with no further business on our agenda, I will end our work session. Thank you. Thank you.