001confirmation of notice to the media. We do and with five out of seven I'll call them. Um can I get an approval for the agenda? So move. I second. Thank you Mr. Long. I'll turn it over to you. Well, good afternoon everyone. I like to welcome everybody to this first budget works cup from the budget. This will be sort of a high level overview kind of give you an idea of what we're seeing come in as far as information from the state at this point. kind of go over some of the challenges and issues that we expect to face. And and then of course at any given time if you have some feedback, some ideas want to throw back, please uh interrupt me and uh chime right in because at the end of the day,
002this is this is your budget. This is the board's budget for the district. Sorry, I'm late. I was in another meeting in the back room. So, we were just getting Sorry, Mr. No, we're good. U So, just looking at some some of the upcoming dates. At this point, the House and Senate have both prepared their own versions of the state budget. The Senate passed it last week on Wednesday, and it'll now go back to the House for further amendment. Then from there, it'll go back conference committee um which is either next week or June depending on which uh which newsletter I read but I think hopefully it'll be during May uh they'll iron out any differences between those two versions of the budget before adjourning the the session the last day of the legislative session
003die is on May the 8th which is next Thursday as we're looking at our 2526 our priorities our challenge is going into this season. Uh first is to absorb the loss of the learns grant, the likely loss of learn grant. I guess we haven't given up hope of that. Um but you know, we had built a staffing model around that grant and having those funds available for another couple of years. Um so that has us have you know we have to look at make some tough have some tough conversations and keep our pri on which priorities what's uh what positions do we keep who may need to be moved etc. Um you know the direction going forward you know we know the grant was going to come to an end but we wanted to be
004able to work through that model see what was working and what we thought we could change or improve. But now that with the potential loss of the grant, uh that kind of brings that issue right to the forefront. Um secondly, we already had a deficit budget going into this year, we know that we can't continue to do that. So that was clearly something that we've got to rectify in this budget. U third is that we need to actually build our general fund balance because as the size of the general fund grows, the size of the required general fund fund balance uh has to go up with it. Um in order to stay off the state's fiscal watch list. We have to maintain a fund balance of 8.3% of our general fund expenditures. Uh to stay
005off of that, they do have some flexibility. You know, they kind of reached out to us when we first lost learns and said, "Hey, you know, we we saw you lost this big grant. You know, it's not a hard and fast 8.3%, but that's certainly not a line that we want to flirt with." Um and then fourth, we want to be able to provide cost of living increases to all of our district employees. Um you know, reward their hard work, their dedication to their job and to our district and our students. Uh but also we have to compete with the private sector. You know, we're not the only employer in town and most of our people have options. Uh our own timeline here in the district. Uh the first step is here tonight. This preliminary
006budget workshop where we will provide a high level overview of our state funding and lay out our priorities. Again, uh you have input that you would like to provide, things that you would like to see included or potential changes that we could make to the budget. Please feel free to chime in and and offer those suggestions. I've got my pad here ready to jot down some notes. Um and then on May 19th, we will have our normal um budget work session and also give first reading. Uh I'll point out that that's 11 days after 11 calendar days after the the signing die, the last day of the legislative session, and then 11 days later, we're making first reading of our budget. That's only six business days. We it's a it's a crunch time for me
007and my department, primarily me uh during this time of year. And then on June 23rd, we will have our uh the public hearing at 4:00, which is directly before our board meeting. And then we will seek final approval for the budget at that time. And just to add a little bit to that budget timeline, we did start back in February having conversations with um our principles and then whenever we did lose learns, we had conversations with them about creating kind of their federal budgets also along with their local budgets of looking at staffing requirements, um class sizes and have kind of gone through that over the past couple months too. So to get ready for this also just Where is the public hearing? It's here. It's here. Yeah. Um, yeah, we you I I'm here.
008I have a copy of the budget available if anybody from the public wanted to come in. It's available for viewing and to answer some questions. Um, generally isn't well attended, but we are we do we hold that hearing each year and are prepared to make a presentation at that time. How are they notified for the public hearings? It's posted on the website. It's also posted in the Lawrence County Advertiser summary of our budget to just total general fund expend revenues and expenditures for the year and the change from one budget to the next. That's a requirement by law posting of that. Thank you. Would you say it's not not widely a wide participation? Generally, it's not. just like everything else. Uh, next kind of want to go over some of the state revenue projections. Like
009I said, at this point, both the House and the Senate have passed their own versions of the bill. The only projections that we have received thus far for 2526 is actually the the projection that comes out of the House Ways and Means Committee. Um, you know, we receive after those versions of the budget are passed, the South Carolina Department of Education makes the calculations and provides the information out to the school districts on what our proportionate share of that budget would be under that scenario. So, the the only one we've received so far is the Ways and Means Committee. Um, but again, this is just a projection of those revenues. Um and also we have given comparative information of our current 25 2425 budget as well as where we stand currently with our allocation for
0102425. Um so those you we pass our budget those our original projection is changed at day 45 based on those student counts and then they're changed again at day 135 based on final student accounts. So what we're seeing for the 2425 is what we will end up receiving on those line items for the balance of this uh current fiscal year. So you can just kind of get an idea of where we stand now compared to what they would expect for us next year. Um, I'll remind you that when we prepared our 2425 budget that we actually took the projections that we had been given and rounded it down into a more conservative figure and you'll see that we still ended up taking a cut. Um, even still, uh, w with all of the the conservatism
011that we put into it, you see there's about an $800,000 drop between what we budgeted for state revenues and what we will end up receiving for 2425. Now, fortunately, we have had some increased collections in our local revenues that we hope to kind of have enough to offset all of that. We'll just have to see how those finally shake out with our June 30 numbers. Um, but I just show that to point out the struggles of of the way education is funded and how difficult it can be to operate when you really don't know what you're going to receive uh until you're really deep into the year. Um but given that with the additional revenue that they're planning to put into the funding model, currently we're scheduled to receive an increase of 1.127 million over
012what we are receiving at our current allocation level. So that's kind of a an apples to apples of where we are now uh versus what they anticipate next year. Um that sounds like a lot. it really doesn't go very far once you get into the mandated increases and expenditure. Um, but we'll have to assume how it, you know, everything comes out in the end once the House and Senate finish hashing out their version for the budget. In the House budget, um, they increased the state aid to classrooms, which is the large line item, by $112 million. and that was mainly to fund uh a $1,500 across the board salary increase for teachers. And the minimum pay for a teacher with a bachelor's degree and zero experience state minimum would be $48,500. This is based on
013the house version which is like the first bite at the budget. Um, and you can see from this graphic that they also have a quite a few line items that they have to consider. And it's not just the ones that that we concern ourselves with in terms of the discussion over the general fund. Uh, you know, the state has to consider education, but also many other areas of state government, but education is probably, I believe, the largest portion of the state budget. That's why they usually go over those items first. Uh what we focus on generally is the general fund because that's what the board approves and it's uh what funds the lion share of our district operations. But you can see here that even in the realm of education outside of the general fund
014budget, they fund programs like and first steps and a lot of time this year has been spent focusing on the education scholarship trust fund and how they're going to fund that voucher program u potentially. So, but what we generally focus on are those general fund items with that come to us in an unrestricted fashion and we are and this board is tasked with prioritizing those resources and putting them to good use. Um but again, so we'll focus mainly on those two top items. It's the 1500 salary increase which uh generally with by the time you include not generally by the time you put F taxes and retirement benefits on top of that 1500, it comes out to closer to 2,000 um per per teacher. Uh with over 400 teachers in our district, uh we estimate
015that would that salary increase with benefits would cost us around $830,000 to fund those teacher pay increases. That's not to mention any other district employee. you're looking at an increase of 1.1 million and you already have 8 830,000 of it just going to the teachers. So I'll make sure I understand. So we're about to face the state approving or or requiring districts like ours to increase the salaries, but they're not right now. We don't know if they're going to they're going to provide any budgetary relief for doing that. Well, the 112 million that they've increased, they they have added a specific $112 million to the state's general or to the state's education budget to fund that increase. Okay. So, we can anticipate that with this increase, first line, first bullet point, that the state is
016going to fund that, that we're not going to come, we don't have to consider that a deficit. If you go back to that first graphic, that u the the 24.6 million is the is the state a classrooms. That's where that would reside. Great. Thank you. Uh and that they also mandate an increase in the bus driver uh pay. That's of an increase of 2% of the state portion of our of all district employees. Those are the ones that the state kind of mandates. You have to pay this position this much. Everything else is kind of up to a district's discretion. But for teachers and bus drivers, we are required to meet a minimum salary schedule that they publish each year. Like I said, last Wednesday the Senate passed their own version of the budget which
017was primarily in agreement with the House version of the budget. The main point of differences will be in how to handle the increased cost of the state health insurance plan. Uh the House version um increases the employee share of the health insurance premium for the first time in many many years. It's been locked at the same rate for a long time. So, the House was saying that they were going to increase that by about $441 a year. It's 30 something dollars a month. Um, but you know, they man, you know, they get a $1,500 raise if you come in there with a $441 in health insurance premium uh increase that really kind of eats into that. Um, so the Senate version added additional funding to cover an increase in employee employer share, excuse me. The
018Senate would have the employer share growing, which is really what we normally see on a year-to-year basis is they give us a percentage increase in the employer portion and then they theoretically provide the funding to cover that. So, right now, I think it's a 4.3% increase. that the Senate is proposing uh in the employee share of health insurance and then they would provide the funding at through the state aid classrooms or as as a separate line item to cover that increase. I've included a draft schedule of the 2526 teacher salary pay schedule. I don't know if you can read it on your slide. It's very small, but it is it's across the board $1,500 increase. U so that would bring it's 1,500 per sale. So that would bring the minimum pay for a bachelor's with
019zero years of experience to $48,500. Uh teacher would also receive a step a step increase based on an increase in experience. Um, we are also planning to maintain the bachelor's plus 18 salary schedule, even though the state is eliminating that that certification on their salary schedule. So, when they say they're increasing all teachers $1,500, um, in reality, if you're a bachelor's plus 18 and they eliminate your schedule, they're going to push you back to bachelors, which means a $1,000 increase. There's a $500 difference between uh at the bottom of the scale. the bachelor's and a bachelor's plus 18. So, we are still anticipating maintaining that schedule so long as the we have employees that are on that schedule. Um, and it is assumed that if the state eliminates the pay scale for bachelor's plus 18
020that the department of education will likely stop certifying that. So, right now we have teachers whose certificates say that they're certified at bachelor's plus 18, which means we have to pay them on this salary scale. Uh, At that point, if they quit certifying it, then there's no nobody else would be added to that schedule. We would still maintain that schedule, provided we still had our own employees. I think we had 20, we have 20some teachers currently that are paid on the bachelor's plus 18. And it's just a, you know, it's a intermediate step between bachelors and masters. And I want to make sure I'm perfectly clear on this. This is govern this this table is governed by the state. Well, let me be really really clear mostly yes that the the schedule that I've included
021is our salary schedule. Okay. So, we take the state minimum salary schedule and then we add a local supplement to that. Okay. Um, but the the increase from where we were last year, our district's salary schedule, and the one that I provided is just a $1,500 across the board increase, which reflects a no change to the supplement amount and an increase in state portion. So, what you showed us in this this slideshow is our what you've added, correct? Okay. That is that is an across the board 1500 increase over 2425. So if a current teacher is working for us, they'll get $1,500 plus a step in their scale. So they would kind of go down a row and plus 1500, right? U I would point out that our funding is not dependent on how many
022teachers we have or how much experience they have. We are funded based on student numbers. So u weighted but What drives our funding is is the number of students in our classrooms. And then we have to determine how we're going to staff that school to provide the education for them. What's that cost per student? Right now, there is no base student cost. That's what they eliminated. So now they say if you've got 5,000 6,000 kids based on this model that has an average teacher salary and an average studenttoteer ratio. We're going to give you this much money, but within that, it's not just funding the students in the class, I mean, the teachers in the classroom. That's also that's the funding for the entire district. So, it really it's a model that caps what the
023state puts into the funding model. Whereas the base student cost model, if if if the districts picked up additional children, the state would have to fund additional money education. Now, with the new model, they define what they're going to put into the education funding model into the aid classrooms, and it's just a matter of how it gets divied up. So, it's just a matter, you know, we're just vying for our slice of the pie. So, you take a district like ours that is in a non high growth area, right? You could grow a little bit, but if you don't get if you don't outpace the average growth, you could actually receive fewer dollars because what goes into the education funding model uh you know you know we're not this isn't Ory County or Greenville County
024you know we we anticipate some growth but we're not a high growth area and that is really what drives that that volatility in that state aid state aid to classrooms. That's why we're experiencing an $800,000 increase despite budgeting less than we were projected to receive. How many students do we have? We hover right around 5,000. So, is it our plan to maintain the M's plus or excuse me, the bachelor's plus 18 as an ongoing program or is that just going to grandfather in those that are currently in it? It would we it would be grandfathering in those that are in it. If the state quits certifying it, right now a teacher certificate says what what their level of certification is. So, you know, it might say either bachelor's, bachelor's plus 18, masters, masters plus 30,
025or doctorate. And we that tells us which schedule to put them on. If they eliminate bachelor's plus 18, there will be no additional certifications for that. So, no one at that point would be added to the bachelor's plus 18 schedule, but the ones that we already had on there, hopefully they're working toward their masters and would eventually get bumped up, but it should just be fewer and fewer actually on that schedule until eventually that's unnecessary. Okay, thank you. So, as you can see, our jobs aren't going to get any easier. You know, we still have a lot of challenges ahead of us. We have to match up all the resources that we have uh to a seemingly endless list of demands on the state side of our funding. Really, our hands are kind of tied.
026There's nothing we do that can increase that number. It's wholly driven by the students in the classroom. Um, again, you know, if if unless we have growth growth that outpaces other districts in the state, that number is not going to go up. You know, we don't we don't have a final number from them yet. But when once we get it, it's just kind of it is what it is. Uh, on the local side, we have seen some increases in our tax collections and our just our local property tax revenues. Um, that is somewhat within your control as a board. Um, you know, An option that we have not utilized in 12 years is an actual millage increase. If the board chose to do that, it has to be done in conjunction with district 56 because
027we have to have a uniform operating millage. Our current operating millage is 167 and a half operating mills. According to the revenue and fiscal affairs um office, the state says that we can increase you have this board has the ability to increase that millage by up to 5.6. 67% which would be nine a 9 mil mill increase in our operating millage. Last year for 2324 at the end of the year the value of a mill was $120,640. Uh the auditor's office provided today that so far this year a mill has produced $135,94. That's not not final. Uh but if you estimate that at $130,000 a mill a maximum increase the most that you could do would provide nearly $1.2 million to our general fund budget or to our general fund. U of course the board
028could approve anywhere from zero mills which is what we've done for the last 12 years up to a total of nine mills. So in saying that this 1.2 2 million potentially if we were to increase something nine mills. What does that mean for taxpayers? Because that is that is not taxes that a homeowner would pay. That is on rented properties. That is on businesses. Help clarify some of those points um as far as who would see an increase. Sure. So your your owner occupied residents. You ever look you pay attention to your bill. It has a tax on there for education and you see a credit on there, but you also get a credit, right? So, it it's actually in everything. We just don't we don't receive it. Um, so what what that primarily falls
029to would be nonowner occupied residential, uh, business property, business personal property, equipment, uh, vehicles, any other property that is taxed by Lawrence County would be subject to those to that. at their assessment rate. Okay. Thank you. With the project Oh, keep No, no, please go ahead because I was getting ready to move to a different topic. No, that's okay. I didn't have any other questions on that. So, you may answer my question and I don't even have to ask it. So, probably not. I'm getting ready to go to capital items. So, if it's about operations, we probably need to go ahead and hash it out. Well, it's really about the overall budget. Now's a good time. Okay. So based on projections um that we that you've seen out of the House and the Senate and
030what they're putting in front of you currently, what is our what's our budget right now? If we were to take everything and roll it over, what's our deficit? What's our positive? What where are we? We are actually too early in the process to actually even give you that. The only projection we've received is out of a committee. So it takes by the time the the House passes a version of the budget or the Senate passes a version of the budget and then the South Carolina Department of Education runs through the calculations and they're the ones who actually give us our projection. So I think that the house budget is fairly close to the and so what we're looking at right now is an increase of 1.1 million over where we are currently which is needed
031but that is still less well it is more than what we budgeted for 2425. So we've got operational decisions to make that are we're not going to fix our issues with state funding. They're not they don't seem inclined to to to up what they're doing. U you know on the on the county level we do have some some ability you have some ability in conjunction with their neighboring district to that you can drive some additional revenue but primary answer is going to be in in in in on the expenditure side. We know that we have to balance that right. Well, I know that some districts I know even where Scholes put out this week an article and they estimated so far to the penny what they think their deficit's going to be. So, I was
032hoping that we would have some sort of number tonight um to to look at, but it doesn't sound like I'm not I don't know. I assume they just used the projections that were coming out of the It would be a wild guess. You know, we at this point we're still determining how we're going to staff our our buildings with the loss of the learns grant. So our our our total number of people is likely to change between now and and next year um until we finalize that staffing. I mean it's pretty easy to you know once we know you know teacher wise um you know we So that that 1500 increase is going to cost us. We know where we can place somebody on a salary schedule and obviously teachers are the biggest part of
033our employee base. Um but it's you know there's still a whole lot of other moving pieces. I I dare say that if someone did a a projection now that it's a wild guess. Um so the house still has to meet and approve. So after the and correct me wrong that's supposed to be made the possibly May the 8th. So yeah. So the Senate the House has passed a version. The House has so the Senate has passed a version also. So that version goes back to the House where they can concur with the Senate version or make their own changes and then any differences that they don't iron out will go to a conference committee. The conference committee I think consists of three House members and three Senate members. they come up with a compromised version
034that then goes back to both houses, gets passed and goes to the governor. Uh the b the biggest bone of contention, and I don't think it's contentious, but the biggest difference is in how we're going to handle health insurance. Uh we've seen pretty well a lock on that $1,500 increase and how they're funding that. So that $112 million that they're adding into the model to cover that is is I think that's probably pretty pretty much what's going to happen. The question is that other line item for the health insurance portion obviously if the Senate uh gets their way in that line item would go up for us but it goes with the cost of health insurance. Um, honestly, if the house gets their way and that cost goes to the employees, then we have a
035more difficult conversation. Um, because every we would have the knowledge of knowing that every employee in the district that is on the state health insurance plan would be absorbing 400 additional dollars a year. In many cases, the the raises aren't much more than that. No. Um, you know, I mean, in the case of the teacher, you know, it it sounds bad enough to say that you increased them $1,500 and then took away $400, but many many of our positions don't make near as much. And is it a percentage wise? Brings to my next reason I was ramping up to this was is it safe that by by May, can you get us some real numbers? Oh, we will have we will have real numbers in May. Okay, that's what we need because we need to
036make some decisions here. Um I think it would we need some solid percentages. I mean um some values about what we're going to anticipate here. Yeah, this isn't the beginning of the conversation, but this is really the I guess we're we're entering into the brass tax phase. You know, obviously we we either need to decrease what we're spending or increase what we're bringing in. I mean, that's the two ways to fix this. I guess my question to you then, have you done any analysis to look and see the feasibility of or combination of decreasing our expenses or increasing our revenue? Is there a recommendation coming from me from our CFO? Don't put this on my shoulders. This this particular CFO prefers to be more of a a scorekeeper and stay in my lane. how to
037prioritize our spending. So what we have been doing is we have been meeting with principles and knowing that we were cleaning up our teacher allocations based on class size. So we went through and put a class size ratio on all the schools that um may have had very small ratios 14 15 in some middle school classrooms. um to kind of realign those with like a 22 25 kind of class size reduction. So we've gone through and kind of pulled back some of those allocations based on class size. And so doing that we looked at also with the learns um kind of going away. We knew we were going to have to kind of try to absorb about 10 positions prior to losing learns. So, we were trying to um kind of scale that on up
038to um in the 20s. So, we've kind of gone through and looked at about 20 positions that we could either collapse, you know, combine or um try to um kind of increase some class size in some areas that way. So, we've done that. We've looked at utilizing some of our federal funds in a different ways um to be able to instead of hiring a couple of retirees, you know, put that to a class class teacher versus interventionist. So, you know, we've done different um things. It's not been a one only swoop. It's been several bites to try to get to um the 20 to 30 positions. So, one thing Oh, go ahead. Question. Um what is being looked at at a district office level as far as those positions and higher paid salaries on some
039of those um jobs potentially being? you know, we've looked at um looking at, you know, we've got several positions um posted right now as retirees. Um looking at if any of those positions could be combined um reduced and looking at how we can roll some of those positions together. Okay. So, we we are looking at some of that. Thank you. Um, so back in October, and I've mentioned this a couple of different times, I had sent you the information um that I had learned through the schoolboard association, a presentation I attended regarding starting your budget from zero and um and it the person that presented um the information sent me the whole file how to go through that process. Have we start have we gone through that process? Um we have been working on um
040revamping our I just lost the name of it. The um position control which then takes us back to zero to actually start adding those positions back in to positions and looking at those positions growing what's required at each one of those schools based on teachers with our class size. So did we say everything's down to zero and put it out? No, but we have um the teaching positions is one component of that. Then we'll go through and do the same similar thing with um supplies on and m I mean which I know and M falls in a different but you know um contracted services and that type of thing. When's the last time we've gone back to zero and built our budget up? Never. I mean, and see, I think that's a problem. And I
041think that when you keep just rolling over and rolling over and rolling over, you tend to lose things. We all sat here, well, not every one of us, but a handful of us sat here a couple of years ago when not one person in this building could answer my questions on stipens for athletics. And I realize that is a very small portion of our budget. I get that. But no one could answer the question. And so I thought that it was very important that we start on a clean slate and build our budget from ground up, from zero up. Um, so I'm a little bit surprised that we're here and that we we really haven't done that. Well, I I think that maybe there's a little difference in understanding We we justify major pockets of
042expenditures. Uh there are certain things I mean you could go back you could take it to zero but you're immediately back to what it costs. Uh for instance energy consumption, electricity for instance we we know what that's roughly going to cost us and we take every effort we can to minimize that. So, I don't we don't have uh I don't believe a scenario where someone looks at it and says, "Oh, well, I have this much money available for electricity. I'm going to leave the light on tonight." Um so, you know, there there's certain things that we can't just drive to zero. Um the point is you're making when you start fresh, you are laying your eyes and thoughts and review on everything. And I can say that we have looked at every single line of
043a 80page budget. Um going through and saying, "Do we need this much? Do we need that much? Can we take 10% off of this out of all these supplies?" You know, we we worked very hard last year um in the spring to come with a budget that whenever we knew we were bringing to this board a budget that was $650,000 in the red, we looked, we dug, we looked at everything um as a line that how much does it cost us the past couple of years, how much do we need to budget this year? And so we did that line by line looking at those expenditures. Um so when you know it's going to cost you X, you don't have to go down to zero. You can just put X. And I feel like that's
044more of our mentality of how we have built our budget on each um activity. You know, are there things that we can do away with? Yes, and we have. You know, are there some um pockets that needed to be condensed? Yes. Did we take all the oi reports and take all the um food funding that we had used out of 15 different pots and put it in one? Yes. So, we tried to pull all those together to try to look at that. So, I hate to say we didn't go back to a zero, but we went back to knowing what we have spent and then looked at what the requirements were. Did we need to keep spending it and then budget based on that. So, Yeah, I don't feel like we have like we carelessly
045just say what did we have last year and we add to it. We do we don't do that. Uh but we but for instance we we fund our our schools equitably right? So if we uh when we're allocating various supplies be it instructional supplies or on& and supplies to a school it's going to be based on that school's needs whether you know a lot of things are kind of allocated based on uh enrollment for instance and then we give the teachers or we give the principles the flexibility on how they're going to spend those funds um you know you take on and m related supplies you know some of that's based on the size of the school some of it's based on the age of the school so you know where a board or gray
046court is going to need more or less than a than a than a waterlue for instance but we do we're very careful to go line by line like Dr. said and and and justify those dollars. Just don't literally take it back to zero. But I think that the board should feel comfortable to know that that is that we certainly scrutinize the budget that it's not just an assumption that we're going to continue on. We know that there are things that we have to that we have to shave. um you know and and and everything is on the table. You whether it be a whether it be a position uh you know we don't want to have people in our district that don't have a function that's that's valuable and contributes to student success uh or
047whether it be you know the supplies we uh purchase. You know we try to make good use of the dollars. you know, with with uh especially now that we've hired a procurement director, we've started really competing a lot of the expenditures. Uh there's we're doing they're doing evaluations of proposals for the copier contracts this year to try to drive those costs and hopefully see a little bit of savings. We've uh taken a more of a district-wide approach to bidding out landscaping, you know, lawn maintenance services and things instead of where in the past we've, you know, allowed this school to do theirs and this school to do theirs and this school to do theirs. You trying to leverage the buying power of the entire district uh to come up with with uh some savings in
048those areas and and that's, you know, Brian's major function is to go through and drive those things. And so, uh you know, We're certainly not perfect and you know profession will probably never be obtained but we certainly try to get better and better each day and and evaluate how we're using our funds. Uh at the end of the day it doesn't benefit any of us to have waste in the system. Well, I don't think perfection is the goal. It's just being fiscally responsible. Responsibility is certainly all of us. Yes. Sure. Yeah. And I and I hope I don't wasn't combative. I think that it's just um I think that we are making efforts and doing the types of things that you're encouraging, literally taking a budget back to zero and building it back piece by
049piece. No, we haven't done that, but we we have made cuts where we've been able to make cuts and we're continue to look for additional ways to save and cut. Are we saying one of the ways that we're going to cut is the class uh room size? I think the average now is about 14. You're going to increase it to about 22 maybe? Well, it's based on grade band. So, the early childhood classrooms will stay smaller. So, we'll shoot around 15, you know, when we get into upper L, you know, 18 to 20, middle school 22 to 25. So, it'll be based on grade bands. more questions on the operating side of our budget before we move on to our capital items. The other area that we normally discuss as part of this project is
050our capital projects. Each year, uh the district issues a general obligation bond uh that is paid off within the fiscal year. The first portion of that goes to cover the payment of the lead corporation debt for 2526. That'll be 3,113,163. We know that because it's fixed. Uh but what's left over after we borrow what we're able to borrow under that debt 8% debt limitation, uh approximately 3.8 million, but that's to be determined and we really won't know until we do the bond issue. But that gets allocated out to our capital projects and we present a list of projects to the board each year for your approval. Um, like I said, right now we estimate that to be about $3.8 million, could be more or less. Interest rates have dropped somewhat. We did a second bond
051issue today, which just covers the interest portion of the lead uh debt, and it actually uh came back at like 4.39%. I think last year, the same time it was over like 5.1. So, we've had a decent drop in rates and anytime the rate drops what we are able to buy increases in relation to that. Um this current year uh we had $1.6 million that we allocated toward the cost of the Sanders project um to build the the classroom addition there. So obviously that project will come off. It will not be included in the 2526 budget. I don't see that project was covered by esser funds is primarily under esser funds but it was there was not enough available in esser to cover it so we allocated $1.6 million of our capital bond issue to
052cover any overages right now we're doing well I don't think we're going to need all of it so we'll probably reallocate that to another project knock on wood but um but that is that that was a big chunk of what we did last for 2425 was to make that we didn't have a an inability to finish that project. The master funds had 4 million written into it for Sanders. Okay. And the the 1.6 um is there a time frame that that has to be spent? Does it have to be spent within the calendar? No. The fiscal year? No. Okay. Well, just generally speaking, it's not good to borrow it and not use it. So, Right. Right. But no, there's not a timeline. It's not a grant. This is money that the district has borrowed uh
053for the purposes of capital projects. So, as long as we use it for capital projects, we're not in violation of any kind of laws. Uh once we conclude the Sanders project and know how much is available, we'll probably come back to the board uh with a suggestion on what project to allocate those additional funds to. Okay. Gotcha. So that could be used to say resurface tennis courts or roofing or something, whatever. Yeah. Okay. That's just the most recent plug that someone gave me. Some random. So there you go. We were all out on the court the other day looking resurfaced the con floor. Yeah. Uh yeah, anything within the within the realm of our capital project list, it could be reallocated to that. Um, so like I said, hopefully so far that project has not
054gone over budget. As long as we're able to maintain that here in the finishing stages, there should be some funds left over that we would be able to allocate to something else uh in addition to this 3.8 million probably that we'll be doing for 2526. Okay. So the 3.8 million you're saying would be remaining to fund the property purchase a classroom, a portable classroom at GCO. Um, and then upgrades, HBAC, things of that nature. So, that one's kind of a a catchall, but how 3.8 million doesn't seem to cover all of those things or will it? I I think whenever you get the final budget, and I think when it whenever we look at the old budgets, it's got more of a line item that says roofing x amount. It'll have HVAC updates X amount.
055And so it'll be more of a line item for all that 3.8 to show you how much each one of those is allocated for that. Okay. Um and so what we were thinking of the 1.6 was that it would be able to break out to cover the Anderson Drive to cover the portable portable classrooms and then have a little bit leftover for that. So, um to be able to push out um some other areas, but that's a lot of what we have done in the past with those funds is just kind of allocate so much for some of that general upkeep that we have to do. Okay. Yeah. If you you know, if you look back, it seems like every year we have some large line item. This year, for instance, it's the Sanders project.
056I think last year it was $1.4 million for the high school roofing. Um you generally it's generally it's roofing that that kind of Yeah, HVAC is uh gonna hurt us a lot. Also, um you know, and we're exploring some additional options on, you know, some arrangements that might allow us to utilize some of these some of these dollars to make the payments on another arrangement that may allow us to do some bigger ticket items where where it's hard for us to to budget for something like half a million dollar worth of HVAC units for one building, for instance. uh that might may or may not be a real scenario. Um but it seems like every year we always have some sort of large project that we're trying to budget for for and then you know
057this year it was Sanders. So next year you know these are the ones that we've kind of identified at this point. Uh and there will be others. We'll have a list for your approval when we present the budget in in May. Uh but we certainly anticipate, you know, this board voted to uh start the negotiations on the Anderson Drive property for the bus lot. Um those those have been good discussions. I think that that will likely move forward. Uh we do need some do have some space issues at Grey Court and with um moving students from some classrooms in order to allow us to get in those rooms and hopefully do some work and bring them back up to where they need to be. Uh so like We're looking at affordable classrooms at GCO. Um,
058you know, we've got uh and every year we always budget. You know, you remember seeing a line item called building upgrades. That's where it's like we don't know exactly what it is, but something's going to come up and we're going to have to do it right away. Um, and so there will be those normal line items as well, but those are the big ones that we're looking at right now. Now, would the portable classrooms be able to be moved to other school locations if there was a need for them in the future? we would own them and then we can just move them and set them up in other places based on um kind of connectability and all that kind of stuff. But I will point out I think it's important for you to know
059that that we're committed to making this work that Dr. Pendland's vision of a building a fivestar culture of excellence permeates everything that we're doing here as a district. Finance is part of that. Fiscal responsibility is certainly a part of that and every of has a job to do. Uh contribute, you know, our small part towards the ultimate goal of student success, uh satisfied staff and uh and a and a community that that supports what we've got going on here. So, those are the challenges. Those are the what we're seeing right now. Just kind of wanted to make sure that you guys were up to date on what we're seeing as we enter into this challenging bud budget season. and thank you for your time. Thank you. Anyone have any more questions or comments? All right,
060with no further further business on our agenda, I will adjourn our meeting. Thank you. Thank you. Appreciate