001Good evening everyone. Uh need a motion to convene into executive session. >> I make motion we convene in executive session to review certified recommendations. >> Second. >> All in favor? Huh? text message from one of these people. >> All right. So, we need a motion to adjourn from executive session. >> I make a motion that we adjourn from executive session. >> Second. >> All in favor? I >> I >> a motion to approve our agenda. >> I make a motion we approve our agenda. >> Second. >> All in favor? >> All right. Stand for the pledge of allegiance. A moment of silence. >> Pledge. I pledge algiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.
002>> Thank you. >> Need a motion to vote on executive session action items. >> I make a motion to approve the certified staff recommendation. as discussed in executive session. >> Second it. >> All in favor. >> I >> take it away, Sean. >> Okay. Good evening, Mr. Chair, members of the board, Dr. Nutter. We will jump right into our budget presentation. Um before we dive in completely, the first thing we'll do is just want to recap the guidance that the board policies give us related to the annual general fund budget. Policy BDD states that the superintendent's responsible for preparing and submitting an annual budget to the board for consideration and the board is responsible for adopting an annual budget. Um, policy DB outlines that the annual budget is the financial plan for the operations and
003that the budgeting process should encompass consideration of needs of the district treated equitably with the the available resources within the requirements and regulations of oversight agencies. Just wanted to lay that groundwork and also I apologize if I'm sound kind of not clear tonight, but I I'll try really hard. Um with regards to our budget strategy, um keeping the board policy in mind. Um developing a budget is a balancing act. that that balancing act is not just related to balancing revenues and expenditures, which is a big part of it, but also in balancing district-wide needs um both instructional and operational with available resources that we have um and balancing the responsibilities we have to our students and with with those responsibilities we have to our taxpayers and other constituents. Um just definitely a balancing act. um
004maintaining our physical sustainability and responsible practices while we still meet the growing and changing needs of the of um the district. So that that is just an example of some of the things that as we're building this budget we're trying to balance um and and keep in mind as we go forward. A couple other things just kind of building the framework um before we get started looking at details. Some of the things to consider um from a federal and national level are the fact that there are some of the federal funds currently not in the budget recommendations. So there's the potential that there are some federal programs um that could be eliminated or reduced. um and potentially have an impact to districts going forward. So, we're we're mindful of that and and keeping an eye
005on that. Um and my that could potentially continue. So, that is just something to keep in mind. Um the continued nationwide shortage of teachers um and and of folks going into the profession. Um I think that's something that that everybody's dealing with and will will likely continue for a while. And then just the continued economic indicators continue to shift. Um we've been very fortunate. We still haven't gone into any sort of recession, which is great, but economists keep saying it's coming. It's coming. Um so just keeping that in mind and and making sure that we're we're making decisions that are sustainable through through any change. Um state considerations. One of the biggest things that that I am very aware of and that I think a lot of folks um are are mindful of is the
006shift in our tax base and um the fact that historically we've had a pretty diverse tax base. So the tax base at the state level has been made up of income taxes, sales tax, and then at the local level we've had property taxes. And it's kind of again been a balance. Um but as you've all seen in past years, there's a lot of shifts from to go away from income taxes. We that's evident. It's happening right now. We're we're having decreases in the income tax rate, which is wonderful, but there's a trade-off for that as well. Um, part of that tradeoff is that as as we shift away from those income taxes, I think they are the last I read they were they were initially planning to go down to a 1.99% income tax rate
007for South Carolina and eventually eliminate it altogether, which is great. But when that happens, um, that will result in roughly a $6.6 6 billion annual revenue elimination at that point which represents about 45% of the state's general fund budget. So what will offset that? What what's going to replace that? Um sales tax is where I feel like they they are planning to bridge that gap. And again, while that's great, sales tax are a lot more volatile tax than income taxes. Um, and property taxes. So, to me, that's something that we need to be very mindful of because as the economy starts to shift, I just feel like some of our security with with where those tax dollars are can can be threatened to some degree. Um, same thing with the shift from from school districts
008being locally funded with property tax. That's happened for many many years now and just continues to shift. We'll see some numbers in a little bit showing um a representation of how much we are state funded versus local tax funded. Um, but those continued shifts just I I think are something we need to keep an eye on because they are they are going to put us in a more volatile situation than I think we have been in the past. Continued tax exemptions. Watercraft is a perfect example of this. Every year there's some new tax exemption and not necessarily a replacement for those revenues that are coming to local governments. So that's something else that we want to be mindful of. um enrollment shifts and ultimately funding shifts that are going from traditional public schools to charter
009and private schools. Again, you guys are very active with school boards and and you are very aware of some of the discussions surrounding that, but as students shift over, we are also seeing funding shift with them. Um we've been fortunate. I don't I don't feel like we've had a huge impact from that at this point. there are some districts that are really feeling an impact from the loss of student counts for that where they're going to charter schools and private schools. Um but so that is something else we want to just keep keep our eye on. Um we continue to have changes to the funding formula trying to get that um where it's equitable um as much as possible across the state. So we're we're keeping an eye on that. From last year to this
010year, I think the majority of the shifts they've done have have been pretty positive shifts for public schools. Um, just kind of aligning some things since they have put the charters into that full equation. And then maintaining competitive salaries. Um I I this is my personal take on it, but um I think there are some other folks that would agree that now that the state has hit 50,000 as this coming year they're going to hit with their um teacher entry level salary. That's been the goal that's been talked about for years and years. Um I I I would be very surprised if the next few years we're going to see any significant increases to those salaries. they've hit their mark. I mean, maybe we'll be fortunate, but I don't see next year there being a
011$2,000 increase for teachers, etc. I could be wrong. I hope and pray that I am so wrong and I can come back next year and go, "Guess what? I was wrong." That would be great news. But, um, I'm I'm fully anticipating that there's going to be some shifts there as well. Um, from the local standpoint, we have to always keep in mind um that any of the decisions we make um impact our taxpayers, especially if they relate to millillage. Um, and just being mindful of that and making sure we're good stewards of our of our taxpayers dollars. Then predict predicting future growth um and how we manage that growth, where our capacity is. some of that shifts out of operations and into um our building funds, but there are also operational costs that that are
012associated with growth. So, just being mindful of that um and just continuing to address increasing student needs um for unique services um mental health, alternative options for education and and just trying to be competitive with the charter schools as well. So those are a few just global considerations that you know are in the back of our mind. I wanted to mention to everyone as we go forward looking at the budget. Okay. The first question and y'all seen I know some of you have seen this slide. It's repetitive but I just I think I think some of these are important especially for the for the audience who may be listening. Um just to kind of recap where our money comes from. As we stated earlier, there's a continued shift from local funding um to state funding.
013And that state funding is predominantly um supported through sales tax um which again um is is a more volatile tax base. As you can see, we currently get for our general fund budget, roughly 72% of our budget is funded with state monies where 26% is funded with our local tax dollars that you know 20 years ago that balance was very different. Um so we are heavily dependent on on the state for our revenues and general fund. When you look at the local taxes, again, I know you all saw this slide last year, but just as a reminder, um, local tax dollars are the only revenue source really that that we can have any impact on. And that impact's minimal. The biggest impact is how how we um could potentially change our number of mills levied.
014Um, within that, it is also limited. We have certain restrictions as to what we can raise millage every year, but that is the only um variable that any of us can can have um control over. We don't influence the taxable assessed value, but that is part of the calculation to determine um what our local tax revenue is. Keep it in mind that that taxable assessment only relates to property that is not owner occupied. Um any changes in millillage do not impact us from a revenue standpoint point for owner occupied property nor do they impact the owner occupied um owner at that point um because that is exempted from from these local taxes. Um and then any fluctuations in collection rate um which we we're fairly stable in Lexon County. Um but that is always something
015else that can impact those revenues. But again, the only thing that we really have any control over is that that number of mills levied. I wanted to provide some comparative data. I know that at the last meeting um and I think in past meetings we have looked at where we stand with our millage rate and again you know we do have a a somewhat high millage rate um for hold on I'm sorry when you compare us to the other Lexington districts um so many folks may ask why is our millage rate so high in compar compared to to to these other districts. Um, if you'll look beside on the chart to the right, you'll see that our operating value of a mill is proportionately low compared to the fact that our millage rate is high.
016Um, our mill only generates roughly $33,896. Um, where other districts are generating quite a bit of revenue. um for one mill. Um to give some perspective to that, if we were to determine um how much it would cost to in mills equivalent to um add one teaching position, that would be roughly 2.5 mills in our district. The same number of mills in Lexington one, 2.5 mills there would would generate roughly enough to fund 12.2 teachers. Um, so that's a big difference. Um, and that predominantly has to do with the tax base. Um, and the tax base being more heavier in non owner occupied property in some of these other districts versus our school district where we we have a significant amount of of owner occupied property. Any questions on um that slide or the comparisons?
017The other thing I noted on there, I think um Dr. Nutter had mentioned this at the last meeting. When you look back in tax year 2010, our millage rate was 319.72 and we're at 319.6 now. So, we have been fairly stable in in what that that mill rate has been in this district. Another thing I wanted to show a visual of just to give some perspective. Um the tax revenue base is spread based on taxable assessment. So on the right here you can see per county how that taxable assessment is spread um for non-residential property. So you can see um we are at is that 3.4% I believe I can't these colors I can't really see um 3.4% of taxable assessment countywide when you're looking at the entire county um and we serve 5.8% of
018the total student population countywide. So there is some imbalance there. Some of the other districts you can see even greater imbalance. Um but this just kind of gives you a perspective of the fact that the taxable assessment is not necessarily spread by the number of students and that that particular spread. Okay. Then we have state revenue. Um, as far as what impacts the state revenue, I've noted the variables um that that impact that as you see these X's coming up. That basically means we have no control over any of them. Um, enrollment is one of the the significant drivers of that. Um, one of the things that I want to make sure everyone understands is historically an increase in our student enrollment would result in an increase in state revenue for us. And of course
019that was years ago when we were funded based on a per pupil um student cost under the new formula. Basically, if there is an increase in students in a district, there could potentially still be a loss of revenue because if the state total way um pupil count goes up at a higher percentage than your district pupil count is going up, you could actually lose money. You could be growing students and you could actually lose money. That has been one of the the baffling things about the formula. But the reason for that is that it is based on a proportionate share. So it's based on our portion of students out of the total population. So not only can our student enrollment impact our state revenue, the statewide student enrollment also can significantly impact our state revenue.
020So that's something that's been a unique challenge for a lot of districts. Um, I we're we're anticipating that they're going to fund us based on prior year numbers and not true that up midyear like they have been, which could could help some districts. Um, but that is is something that we are continuing to look at related to our state revenue. um in talking about uh the spread and and um percentage of funding um how how differently each district is funded. I wanted to create a visual where I put local operating tax and state aid to classroom revenues only. This is not total revenues. This is not total revenues in the general fund even. This is just taking the categories of local tax dollars and state aid to classroom which is is is continues to be
021the focus of of funding primary instruction. And I broke that down by by each district to come up with a per um ADM amount for each of the Lexington districts so that you can kind of see some some of the um comparisons of how we fall out. As you'll notice, we are heaviest funded with state funding. When you're just looking at state classroom and local operating tax dollars, we are running at a 69.1% where the other districts are, you know, pretty predominantly in the lower 50s and and it's pretty equal spread. So, that's something that that is it's a demonstration of the fact that we are much more residential than having that business base that some of the others do. Um, and that has impacted funding. And I think it it impacts the fact that,
022you know, when you look at our per pupil amount, it's the lowest around between that and, you know, we've we've managed to to take care of things with um less money, which is great, but this has to do with the revenue side and and and what we actually are generating. So I just I thought that was um was a interesting slide to look at and see the the makeup of what those two two you have question three that I believe that's Batesburg. This is a standalone district. I mean only one school there. Why would they be 12,152? Why would they be the highest of all? Um, are they, let me look at their pupil counts. Are they less students or more students than us? >> They're low, they're fewer students than we are. >> It's
023probably why. And that's what I was like to look at. >> Believe they're 2A school. So, yes, ma'am. I know they're >> Yeah, probably they're they're because remember this is a a per ADM. So, with them having less students, that could potentially be driving that that number up. Does that make sense? >> It will by the end of the night. >> The per pupil number um because there are less students that that that dollar amount um is is effectively looking higher. and and that is something common that we see in districts that have much lower um some of them if they're funded. So, let's say Lexton 3 has a and if you if you looked at that this slide here, you can see what this tells me is or or what I'm assuming from this
024is that their base must have a pretty reasonable spread compared much much like Lexon one, Lexon 2, and Lexon 5. Um, so they must have a a a pretty good balance of of business space versus um residential. Okay. So that's what that that's telling me here. My guess is the dollar amounts they're generating um especially from their local taxes is a little bit higher. um with that when you're dividing out a lower number of of pupils that's giving their per pupil amount it it's causing it to look a little bit higher than others but I'm thinking that's that's the biggest reason for it >> because their local operating tax revenue is equivalent to pretty much Lexington one Lexington 2 and Lexington five and I'm assuming that would be Amix farms or something like that All
025right. >> I got a few more places, too. >> Yeah. >> Thank you, ma'am. >> You're w You're welcome. >> Okay. So, we'll jump into that. That was just a lot of information, I know, but just kind of want to build some framework um and and give a few details before we get into the actual projections. All right, hold on. So, with with regards to revenue, and we're just going to we're going to keep going um on revenue first. Um we have a couple options related to revenue just for you to to be thinking about. Um we will give you our recommendation, but just wanted you to see a couple different options. Um the first revenue option is basically um is basically um a a zero mil increase. The projections are based on the House
026Ways and Means version um of projections that the State Department's given us. While we have not gotten any revised allocations for Senate budget, um our understanding from everyone we've talked to is that those amounts were not significantly changed that where they're being funded may be different, but the total amounts should be fairly similar. So, we we continue to work with House Ways and Means projections from a state standpoint. Um this option one has the that information for state and a no mill increase um revenue reflection under the local property tax. You you see there that the local property tax is projected to increase a little bit less than we've seen in the last few years. That is because a year following reassessment when you look back at trends we don't have a five six% increase.
027it's typically much lower, somewhere between two and 3%. Um, so we have adjusted that um to to kind of go along with that trend and based on the assessment preliminary numbers that we've received from the county thus far. With all those things factored in, um, we're looking at a roughly $912,000 increase in revenues for the general fund with option number one. Option number two is basically the same state dollars. They're not changing any. Um, but this is what our total revenue would look like if we did an 8.4 mil increase, which is the annual CPI and growth cap um that the legislation allows. So this is where um you have some input into what that revenue looks like but you're limited. So um our limit is the combination of CPI and growth which brings us
028to 8.4 mills. This would generate an additional 284,000 little over $284,000 in local revenue and it would bring the additional revenue projected for option two to 1.1 million 97,000. Option three would be if we were to um levy mills to recoup all of our three-year look back. So, as you remember in past years, um the maximum that the board is allowed to increase millage would be capturing the the annual growth for this year and three years of look back for mills that we did not utilize in past years. If we were to do that, that would result in 38 mills available. If we were to levy those 38 mills, that would generate an additional 1.288 million above what option one is. So, our total revenues would be a little over 2.2 million. That gives you
029a couple perspectives of what that would look like if you exercised any of your um rights to levy additional meals. Any questions on the revenue projections and what they look like? Anytime we talk about mills, um I want to make sure that we understand how any increase could impact our taxpayers. So, I've provided an example. All these examples are based on a 100% I mean 100 $100,000 in um property for each of these examples. Basically, the first um block shows what a one mil increase would number one generate in revenue to the district. 33,896. how it would impact owner occupied real property. Zero because any increase in this does not impact the the owner occupied property for vehicles, business real property, and any other property that's taxed at 6%. That would result in a $6
030per year increase for business personal property of $100,000 or any property taxed at 10.5%. it would result in $10.50 per year. I've given the same amounts for an 8.4 mil increase um which was option two. I've also given a 10 mil increase just for perspective and then a 38 mil increase which was um taking advantage of all the look back millillage as well. So utilizing those you can see how much that impacts per year um for those different property levels. Any questions on that calculation? >> Option one wouldn't impact anybody at all. Correct. >> Option one is a no mill increase. No, it would not impact anybody. I'm sorry I didn't list that one on there because yes, that's correct. Good question. And the only way that it would impact you is if your property
031was over 100,000, right? >> Um, no, not necessarily. So, like vehicles, you're going to have vehicles that are $60,000 or whatever, and they're going to be assessed at at the tax rate. Um, the the owner occupied is where that h 100,000 comes in. Um, and it's relate it's related to um basically another exemption, a homestead exemption. Um, and then above that years ago, this would have impacted anything above that 100,000, but now it does not. Um, except for on the bond debt side. Um, so other property the 100 really doesn't apply. I used 100,000 just as an example. Okay. >> So you could so basically you could say um like for so for example 8.4 mil increase in that example business personal property which is taxed at 10.5%. If there was property a business owned
032of $100,000 um that would result in $88 per year increase. So, let's say um it was a million dollars. Then you would have to multiply that by by 10 to get the total increase. Does that does that help? >> Definitely. >> Okay. Okay. So, that that covers revenue and and monies that are coming in. So, now what do we spend our money on? Again, we've seen this slide before, but I think it's important to kind of go back through um in big picture what our budgets look like. Um roughly 87% of our general fund budget is spent on salary fringe and the cost of contract to substitutes. And I include that because you know typically substitutes are a a salary. You're you contract them out, but it's still paying for people. So, I've included that
033as well. Um another 3.2% 2% spit spent on utilities and over 5% on on remaining contracted services. That leaves 4.6 of the budget that applies to supplies, materials, and other needs. Of that supply budget, roughly 51% of it is allocated out to schools for discretionary funds um to help support students and instructional needs. key strategies um when we're considering how to allocate funds. Um always I think it's we're we're looking to maintain effective class size. Um our desire is not to come in and and you know take teachers and and and make our class sizes go larger. So that is always something on our mind um that impacts instruction. So we'll be we'll be looking at that at at maintaining that. um maintaining or enhancing the services that we provide. We're not looking to cut
034any existing services if anything um any enhancements we can give but definitely maintaining those services. So a lot of our budget right now we want to maintain where we are. Um definitely a few enhancements but but a big thing is is maintaining the services we provide. Um, one of the big things, um, expenditure- wise is maintaining competitive salaries so that we can retain and recruit highly qualified teachers and employees. Um, that is a a continuing struggle, competing with locally with other school districts and making sure that that we're competitive so that we can get get the best qualified people. Always keeping in mind that that we want to maintain a healthy fund balance. Um, I know we've talked in in past meetings about why it's important to maintain that that healthy fund balance. Um, just
035a couple couple things that that are that are big, maintaining that cash flow. Y'all have seen every month the chart that we show as we go into October, November, and December and funds, you know, we're waiting to get money in and and that that balance is going down significantly. So having a healthy fund balance helps us pay all of our bills and not have any cash flow issues through those months. Also helps us with our bond rating um and several other um areas. But just wanted to mention those those couple. And then adopting a balanced budget um that aligns with with what our needs are. Um, I know there's always an option to create a budget where you are budgeting fund balance, but it is a best practice to to create a balance budget and
036any use of fund balance to be strategically done during the year um for specific things. Uh, one of the the challenges with budgeting fund balance during a budget process, number one, bond rating agencies, they they ask a lot of questions about that. they want to understand why you're doing that, why you're not presenting a balanced budget. Um but also I think um the best way to ensure that you are not budgeting recurring expenditures out of your fund balance because that would be a one-time pot of money is to not do it during your budget process but to do it during the year um like you guys have done very strategically and in assigning that. Okay. Budget priorities. Um, one of the things that we looked at, um, and and would have to be considered is
037what is mandated, what are we required to do um, based on compliance with federal and state laws. And in the past, I'm sorry, let me get my pages caught up. >> Right. >> Thank you, Mr. If I could one one quick. >> Sure. Sure. In your professional opinion, what is a healthy fund balance for our district at our size? What's the magic number? >> In my opinion, my professional opinion I would say, um, honestly, at least four months of operating expenses. Um, and part of how I look at that is when you are looking at your cash flow from July to December, and y'all saw how our tax dollars came in. Um, you get down to though that October, November, December, those months right there, and you're spending more than you're bringing in. So those
038months, you want to make sure you've got a pretty healthy fund balance. So for me, and I I think the um the GFOA may recommend two months, one I can't even remember exactly what their recommendation is, but because of our tax flow situation, um I'm typically recommend about four months, >> which would pro probably be 11 to 12 million >> probably. I'd have to calculate that. >> Fund budget was 44 million last year, sir. roughly. Yeah, roughly. Um the other thing, um I I do think there is a a a very significant benefit to having that fund balance. Um if if we are to get in a situation where we have an economic downturn, um especially if something happens midyear, I think that districts that do not have that sitting there, it can be very
039problematic. How did co affect us as far as did our general fund balance bail us out of where we >> honestly co benefited everybody quite frankly because everyone had an influx of err funds. So, so that's yeah, you would think it would have had a ne it did not. We really had an influx, but I I do remember past years um I know 2010, but there there have been several periods where there were midyear budget cuts where the state came in and said, "We don't have enough money to to give you what we said we were going to give you at the beginning of the year, so we're cutting it and you're going to get this much less money." Um, I don't anticipate that's going to happen next year. Hopefully not at all, but it
040it could if if the economy shifts and turns. And that is one of the things that I also my professional opinion, the more our tax base becomes volatile to me, the more important to maintain that fund balance at a higher rate because you never know when the bottom's going to fall out. and those sales tax that are now supporting your general fund operations are going to decline. It's just very unpredictable. So all those things I would I would factor in. Okay. >> Thank you. >> Oh, you're welcome. So we'll take we take in account all the things that are mandated um for the coming year. The truly the only thing that is mandated for us to do is the teacher salary step. That's required by law. Um they get their certificate upgrade and we are
041to to pay them based on that step increase. Um we project that is going to cost roughly $188,000. In the past, historically, um, we've also, um, been required to increase our salary schedule by the same amount that the state is increasing their salary schedule. Since this funding formula change and additional clarification, um, they've made it clear that that is no longer required. We are now required to pay at the state minimum or above. So, there are a lot of school districts this year that are looking at at other options. Um, if they are significantly above the state schedule already, they're looking at not necessarily doing exactly what the state did. So, that's something a little bit different. I know in past years, you've probably seen that's mandated. It's theoretically not mandated. I am not by
042any stretch recommending that that's something we need to not do. I I just want you to be aware is not mandated um anymore. Then there's also um basically what I would consider reductions or relief in expenditures. And basically what that is is where the state is shifting dollars out of the funding formula that funds the general fund and they're they're breaking out the career and technology vocational student waitings and they are going to allocate that in a separate fund. Okay? Because they have pulled that out of the calculation that was going into the general fund. they are allowing the flexibility for those funds to be used to cover um career and technology teachers which we have in the general fund. So the way we will budget that is as a decrease in expenditures in the
043general fund. So basically salaries and fringe that we are currently paying for with general fund dollars, those salaries will move over to this um career and technology fund um and relieve the general fund of those dollars. So that's how we're budgeting that as a negative um expenditure to decrease that. Those are really the only two things that really have to be done that that are theoretically mandatory I guess you would say. Um as far as as additional items um our focus would be on maintaining what we have been doing. So, um, again, having a step increase for all other eligible employees, while that is not mandated, it is definitely expected, um, and would be problematic if if you did not give everyone their step. So, that's the top of our our maintain list. That would
044be roughly $161,000. Um, we also uh would put as a high priority increase in the teacher salary schedule by that $2,000 per sale, which would cost rough roughly $662,000. Again, I think that this is going to be an opportunity this year where we may be giving beyond what some other districts are giving because they don't have the funds to do it. So, it's it's something we definitely want to consider. Um then increasing the support salary schedule by 2%. Um that includes the bus driver um salary schedule. This is historically the way we have provided those increases to that salary schedule for all of our support staff. And then increasing the remaining salary schedules by $2,000 per sale. So this would be very in line with what we have historically done that I feel like most
045of our employees, you know, would anticipate based on on what the state's proposing. options to consider as I mentioned earlier and this is where you could potentially come in and make modifications or change some things if you chose to. Um, basically again, you know, we listed the dollar amount for increasing teacher salary schedule by $2,000 a sale. If you were to determine we only want to increase the teacher salary schedule by $500 per sale, that would roughly cost $165,000 instead of the the 662. Um, if you wanted to increase it by a,000, it would be twice that 165. But that I just wanted to give you that dollar amount so you had an idea. Let's say you wanted to give an additional $500 per teacher. that that's a ballpark amount of what that would look
046like if if you wanted to to play with those v variables. Um also gave you a rough estimate of what a certified FT would cost. This is just based on an average and with the full fringe amount which honestly at this point fringe amount is getting so close to I joke and say just go ahead and double it because it's it seems like any day it's going to be at 50%. still closer probably 40ome, but it it's a significant amount, but that is included in that cost. Um, if we were to add the equivalent of an instructional assistant, that would be roughly $45,000. So, just in your mind as you're thinking through anything, just to give you a ballpark of what those those would cost. Okay. So to our recommendation um based on all these
047things, all these moving parts, um we basically would recommend option one for revenue um purposes. That would be a no mill increase. That would be a balance budget. Um we would not be budgeting any fund balance. uh we would be focusing our resources on retaining and recruiting um highly qualified employees um especially our teachers. Let me see if I missed anything. The cost of that would would be able to be funded under the $912,000 in additional revenue we're anticipating. >> Dr. Nutter, would you like to add anything else on the um recommendations? I think that our the work of the board historically over time, as we shared last month or last week, has put us in a position to where we can engage a balanced budget with no tax increase and maximize um if the
048state is adding two grand, if we add two grand, we are maintaining that gap where we are competitive between what the state minimum is and what per teachers and what we are paying teachers and again as was shared uh I I don't believe every district is looking to do that or without a millage increase um and and what we have uh what what the board has done has provided us that opportunity um that helps us remain competitive for uh our most important uh um investment and that is the individuals who are in the classroom every day teaching the students. It also um allows us to continue with uh providing that increase to all classified staff, support staff as well as far as a 2% increase and maintaining uh the step increases and and those type
049things um that have been uh traditionally done. I do know that we have a lot of um unknowns as as Shelley has talked about as far as with revenue, taxes, all like that. We also have unknowns as far as uh the growth of our district as we've talked about as far as the uh future in regard to that. And uh when we talk about fund balance uh one of the additional uh benefits of fund balance is that every amount that we have in fund balance if we have to build add on renovate uh that helps us protect the taxpayers from additional um uh referendums that type thing. uh in the short term and even potentially longer term, right? And next month uh we'll be hearing about our demographic study and in June we'll be hearing
050about our facility study and those type things for the short term and the long term. So that's one reason why our recommendation is option one. It it does not increase millillage but it maximizes our input to our staff. uh keeps us competitive and maintains uh everything that um that um that we traditionally have done. You see on there as well uh where it says uh on that option one we've strategically realigned some budgets repurposed positions and those are for things that the board has brought to us that we have looked at as well as far as needs and we are able to do that without changing tax base um in uh dealing with some things that we've even talked about in the board meeting back in March and then April as far as like with
051our athletic trainer and adding that uh where we went away at USC was not able to continue those contracted services for our student athletes. And then uh a uh mental health counselor uh that is our employee uh at the district level um or or from our district instead of just our relationship with Lexon County Mental Health, which we will continue. But that allows us to pilot and see how we can engage that. And then we conduct that athletic salary study uh at the request of the board. Have done that over the course of the last two months. And uh we are able to calibrate our athletic supplements to maintain uh competitiveness and value for all of what our athletic coaches do. Um and all of that is factored in without again adding millage that type
052thing by strategically aligning uh our operational budget in in that way. So again, that that is a um that is the result of the effective management of the board of the taxpayers money over time uh in this district and allows us that ability to uh meet our needs at the present time uh while we have a lot of instability. Right. So, we're giving $2,000 to each teacher and then the state is also giving $2,000 to each. That's not it. >> No. No. The the state minimum salary schedule uh they are anticipating moving it changing it by 2000. >> So, right now if we take bachelor uh zero which is the entry for a bachelor position, it is currently at 48,500. So that's where the governor had a a while back had said, I want to
053get to 50 grand by the end of my term. Well, we're at the end of the term and we're going if they add 2,000 that's going to put it at 50,500. Okay. This past year we were at 51,500. So currently this past year we were at 3,000 above the state minimum right for bachelor zero. So but that again uh like for example one of our neighboring districts was at 52. So we're we're and we were ahead of some others but it's all variable right there. Um that's where uh as Shelley was saying on that slide about um what is mandated the only mandated part since we're already above the state minimum. We just need to provide the experience step. So, we could technically not increase their pay at all except for the experience step and
054be at 51,500 and we'd be $1,000 ahead of the state. But that is not our recommendation. Our recommendation is by adding two grand, we're moving up to 53500 at that level, which again keeps us with that gap, that competitive um envelope um if that makes sense. >> It does. >> And what Shel was saying is that there are some districts that may not be able to do that to you. >> Well, that that help. Again, we're we're we're all colleagues, but I'm just saying that uh we we want to maintain um uh we want to be competitive. We want more importantly, we want to value what our teachers do, right? Um um so and our staff. >> And for reference, um the salary schedule for all teachers, other employees, certified, non-certified are all on our
055website. So the baseline salaries are out there and I've sent the link for that if you all want to take a look at those salaries. >> Are we still incorporating a sign on bonus? >> Uh we have not engaged a sign on bonus uh for a significant period of time and that again is because our strategy is uh to focus our resources into the salary schedule. uh because that is consistent and over time instead of >> uh those different things. >> This is uh I shouldn't give any of these. This is just some analysis that that uh Shelley has put together as well where it shows with our current salary schedule and then uh the comparisons uh with the other districts. So >> yeah, this kind of gives a snapshot of where we kind of
056we've been looking at the teacher salary schedule and how we could, you know, enhance our competitiveness going forward. Um ultimately determining that that a 2,000 increase to every sale was the best route this year. But this is just so you you can see some of those comparisons. Mhm. >> So that on the left is the current year 2526 schedule. So you see with step zero we're at 515. You see the other districts. Um so in Lexston County just to use that as a measurement this past year at step zero we were at at number two in that list. Right. So that's kind of an example to show you that we we feel like it's very important to remain I mean we we're we're not uncompetitive now but we want to remain competitive. One last slide
057I wanted to go through um and then I'll completely turn it back over to you um or or engage in any questions. Um some of the variables that we just want to make sure um you know that we did not ignore or or you know that we are aware of it. There are potentially increases to utility cost. I think at the last meeting we talked about potential water increase. Um, we're not sure what's going to happen with the watercraft property tax relief. Um, there could be legislation for that mobile panic alert system that that may not be funded. So, there are a lot of moving factors that we don't know for certain that we don't have a dollar amount for. Um, and because they're unpredictable and difficult to estimate, um, that we feel like the
058better approach is for us to evaluate that during the year. If we get in a situation where our current budget cannot absorb or um take care of whatever the utility cost increase come out to be, we would come back to you all and request to amend the budget to accommodate or address any of these needs. But we feel like it's more prudent to do that when we have a better idea of what those amounts are instead of coming up front um and requesting this budgeted amount and finding out six months from now it's not going to cost that much and then we have this amount in the budget that that isn't isn't necessarily needed. So, um, we would really like to to do that approach with us having a healthy fund balance. That also gives
059you the option to to make a an adjustment mid year if you need to. But, so we have not incorporated all that stuff at this point. Um, but wanted you to be aware. We we are mindful of it and and we would be coming back to the board if we we needed to address any of that. That's where uh as Joe said nonrecurring, right? I mean things that are not part of your overall uh recurring budget. So like for example um when we have our demographic stay, but more importantly when we have our facility stay in June >> and then we look at our needs. If there are short-term needs, something in any way they're in the fall, we we can amend the budget to to take from fund balance to pay for something that
060we need, right? Or we can do which helped the taxpayers two times in the last two years. uh where in the fall we we have taken excess from a and put it over from general fund into building fund, right? Because that is called investment in the future of our district when we're in a in a unstable time and anticipating that we may need more um uh schools resources, that type thing down the line. So again, uh, taking the conservative approach, but also we we are doing all this without raising taxes, right? And you all are doing all this without raising taxes. I I don't know of another district where we have had consistent no change in millillage for a 16-year period. So, and yet been able to provide uh what what we provide. So um
061uh though we have these variables um you know again this this budget deals with the fact of every position being filled every day. Well that's not always the case right or an inexperienced person coming in to replace an experienced person or vice versa. So there's always variance and that's why I appreciate Shellyley so much because as you all seen each month she keeps you informed and she uh we we are doing more precision budgeting than than we have right I mean she is doing an outstanding job and the finance team and our administrators and in using the funds that they were allotted purposefully and strategically. So uh we feel very confident that with option one uh we can engage uh our primary uh goals without um without raising taxes and without uh causing ourselves a
062liability. >> Any other questions? Shelley, I'd like to say that um I think out of all my years on being on board, the uh the packet that you prepared tonight simplified the foundations of what we need to know in a way that um was very understandable. So, I want to thank you for that. And of course, um having uh looked at the budget before and having to pass it for the first reading, um I feel like we're going into it with a good knowledge, especially with the board members that are here tonight. So, um I guess that being said, we need to have a motion to accept the first reading if if unless anyone has a question. So, now we will um ask for a motion to receive or to vote on the 2026 2027
063Lexon for general bud fund budget first reading. I'd like to make a motion to accept the lesson for general fund budget for first reading at this time. >> Second. >> All in favor? Huh? >> Better tune somebody in. >> I thought through the He did a little one. >> All right. So, with that being said, we just need a motion to adjurnn. Make a motion to adjurnn. >> Second. >> All in favor? Thank you, Sh. >> Thank you all. Thank you.