001Jason, just testing. Can you hear us okay? I'm not hearing you, so I'm going to look at my cell phone. Will you text me if you can't hear us? Jason, can you hear us? One more time, Jason, can you hear us? >> For those of you who are listening, we have about 1 minute until start time. I'm just trying to text check and make sure Jason, our board president, can hear. Jason, if you can hear us, we cannot hear you. You could text me and tell me if you can hear us or not. Call the meeting to order. Please rise for the Pledge of Allegiance. Okay. Um May I get a motion to approve the agenda? >> So moved. >> Second. >> It's been moved and seconded to approve the agenda. All those in favor?
002>> Aye. >> Agenda's approved. Okay, so um tonight we just have one discussion item on the agenda. Drew uh here to talk about the 2026-2027 budget. >> Okay, if we can just wait just a moment until we have it ready to go. Can you put it in presenter mode so the people can see just There we go. All right. >> Can you guys hear me? >> Uh green light need to be really close to you. >> Can you hear me now? >> Pull it closer. >> That's better. >> Yeah, we because it is recorded, we want to make sure anybody who's listening to it later can really clearly hear you. >> Perfect. Okay, so tonight we're doing our first budget workshop with the board. Tonight is around enrollment and revenue. Um so just a couple
003things I want to kind of mention that Kim and I have had a lot of conversation about. Um so as we're drafting the 26-27 budget, we're looking at this framework model that that Travis Balyle has done over at Richland School District. Um and basically based on some metrics and whatnot, we're looking at trying to spend 97 or 98% of our revenue as all and budgeting to do so. Allow Doing this will allow us to try to build back some of that fund balance. And then, you know, if you do this multiple years, we kind of get back on that right path. So, um I've been working with Travis a lot on this. We've been talking a lot about kind of his framework and the metrics he uses. Um cash on hand, um that tells you
004how many days, you know, you can go and and actually pay bills or how long you can actually make payroll, how many months you can actually make payroll. Uh we've been looking at the SAO financial health indicator tools as well that are out there. Um and so >> SAO standing for State Auditor's Office. >> We Thank you, Kim. Yeah, we really want to try to stay at 97 or 98% of our revenue in spending. Um and as you guys know, enrollment drives our revenues. So, as we kind of get into this, uh feel free to ask questions as we go. Um Um >> So, Drew and I have worked really hard to have a dialogue. So, while he's sitting in that seat and I'm sitting here, there's no disrespect when I interrupt him or do
005whatever. What it is is to be able to make this as informative to our public that are listening now or listening later, and making sure that um we're being as thoughtful and as clear as all possible and not getting stuck in acronyms or language that maybe the general public who might come back later and listen. So, just really understand it's a dialogue between all of us that have put this presentation together. So, interrupt. It sounds weird. Normally, we try not to do that as professionals, but we do need you to interrupt and say, "What does that mean?" or "Why?" or whatever your questions may be right in the moment. >> Yeah, please do. Um And so, we're going to kind of start Next slide, please. So, here's our agenda tonight. So, we'll kind of go
006through what the budgeting process looks like. Um I know that you guys have been on the board a while. You guys know the process, but I just kind of wanted to touch on how I do it. Um We're going to go through enrollment projections. We're going to look at a historical enrollment review. And then we're going to go through what that means in terms of revenue. And then kind of look at historical revenue and then kind of talk through why some of the categories look a little different than in the past. Um and then just a few items to note, and then we'll kind of touch on what we're going to talk about next month as well. So, uh next slide. So, the budget development process. So, as we go through the budget, um there's
007quite a few things that go on. Um so, typically, what happens is you are projecting out your ending fund balance for each of your funds um for the current school year. And that kind of gives you a starting point as you look to your 26-27 school year. Um and then we do what's called an F-203 with the state. And so what that is is we're going to project our our enrollment and some special revenue items for next year. And that tool allows us to see what our state revenue numbers are going to be as well as how many, you know, positions you're funded for and those kind of things. >> Hey, could you do me a favor? Will you pull that just a little closer? >> I know it feels like I'm eating it. Okay.
008>> for recording purposes for the people who are listening. >> And so as we get through the 203, it kind of will give us, you know, our lab number. It'll give us what our general apportionment, our basic ed dollar amount is going to be. Um and we can kind of do a couple different models with this. So I've done three different ones already kind of on my own. We're going to just go through where Kim and I believe enrollment should be projected. We're going very conservative. And the reason being is come So you're funded from September to December based on your budget amount. If you come in, your enrollment comes in under that projection, you then are owing the state back dollars essentially for the remainder of the year and your apportionment's going to be
009less. So we are very going very conservative because we have seen a decline in enrollment this year. Hopefully we're going to see either not as big a decline as we think or we see actually uh you know, a growth in enrollment and that'll be more dollars in your pocket come January next year. So we've worked really hard to kind of you know, look at these numbers, look at each program individually and go through this. Um and then from there we started projecting out our federal revenue. Not as easy because there's not really anything out from the feds right now. We got our title one um application or estimate the other day, but we haven't got any other program estimates at this point. Those typically come out by the end of June as a preliminary and
010then the finals come out in August. So >> If you remember last year, remember we were talking spend a lot of time talking about migrant and some of those programs and we didn't even get those preliminaries. We were If you remember, we were cutting positions and then the money came in in like Sep- well, August. About >> Yeah, it was late August. Yeah. And so we're from everything we're hearing, those revenues are going to be pretty similar to this year. So we're not projecting a big increase or decrease. We're going to keep things pretty status quo. Um the other thing is I'm looking at a couple of the programs like title two and title four, for example, where we're going to have some carryover from this year. You guys need money in your pocket. So
011we need to either recode something to this year if there's something to recode and be able to claim some of those dollars or we need to have a true plan to how to spend them next year. Um because you likely already have expenses to go with those. You may just have to do a budget revision, you know, with the grant to make sure you can actually claim them and and it's allowable and whatnot, but there's just some of those grants you can budget for all the revenue you want, but if you're not actually producing the expenses or coding those expenses, you can't claim the dollars. And I've kind of seen that in a lot of districts where they budget for 500,000 in title one, but they're only claiming 400,000. So they're shorting themselves 100 grand.
012They probably have something to recode. Now some programs like to carry some money forward, but at this point with the district's financial position, we need to claim every dollar we can. Um along with the budget, we have to do the four-year projection. Um it's not my favorite thing in the world because it's very hard to predict one year, let alone 4 years out. Um I just don't think it's a very good metric to look. And so, a lot of times business managers will look at it from a percentage increase. So, they'll say "Salaries are going to get a 2.5% bump every year for the next so many years." And then they're going to say "Well, our material supplies and operating costs are going to go up by maybe 4% and we're going to go up
0134% each year." And then revenue is going to go up about 2.5 to 3%. So, you're constantly seeing this big decline when in reality it's it's really hard to project. So, we're going to do our best through the 4-year projection. It's just one of the pieces that we have to do, but I want to be up front with you guys that it's it's very hard to project the first year, let alone the next three after. So, and then from there we'll hold, you know, the formal budget hearing, um public hearing here for at a board meeting. So, that's kind of the budget process we go through. Um obviously, there's a lot more conversations involved and whatnot and um a lot of time spent, but we really want to do this right um and that's why
014we want to get an early jump on it this year. Uh next slide. So, first off here, we have our K-12 base enrollment projection. Um This is based on we take your current enrollment and then we roll everybody up a grade. And then we kind of look at historical, how many kids, you know, have you been losing kids at certain grade levels? And so, we start taking some kids away like we'll see maybe from eighth to ninth grade you lose, you know, 2% of your enrollment, maybe we've seen historically. So, we take some kids out of that enrollment. Um you have a larger senior class graduating. You have a pretty good kindergarten size class though, too. But we also know kinder numbers are low right now, currently enrolled. So, we've had I've had years in
015other districts where we were consistently at 100 to 100 and then the next year we just had an 80 all of a sudden out of nowhere for kindergarten. So, it's very hard to project. So, we're going at 150 to be very conservative. Hopefully we get more. >> As of this morning we had 101 registered as of all. So, we Um it's less than typical, but in the weirdest way it's typical. So, between now and the end So, let's start backwards. A normal kindergarten classroom has 17. Okay? So, we traditionally right now are two traditionally are two kindergarten classes short. So, between now and the end of school we normally register approximately 17. And then in August we get the oh my god, I forgot to register my kid for kindergarten and so we get one
016more classroom. If we were to get 17 and 17, right? And we're at 101 today, that still puts us at 138. And we're at this point right now. Now, that may change before August, right? Before we do our final budget, but right now we're guessing at 150. Um and then when you look at the other grades, so like if you look at in first grade this year, I think we have 171, but if you look at second grade next year we did 168. So, we always reduce it by two or three in the elementary until you get up into 11th and 12th grade where you have pull your numbers for um running start and those other programs, right? So, then it adjusts accordingly. And you can kind of explain that a little bit more. >>
017Yeah, so those FTE we budget in another category, and so that's actually on the following slide. We'll will of go through this, but um >> I guess that's why you see 202 in 10th and 168 in 11th. >> And that puts that like closer to like 190 kids currently FTE. And so, there's a big drop because of going to running start and whatnot. Um so, I feel pretty good with this number. I think it's very conservative. Um and we'll kind of get further into this, but I'll kind of you'll see the current numbers and kind of see why I think it's very good. Uh next slide. So, then we have our other enrollment, kind of like we were just talking about. So, you have your ALE students, your your open doors, your running start. Uh
018TK is now in its own program as of a couple years ago, and so we budget them separately. >> Okay, let's talk about that. So, if you remember we were talking up about two a board meeting or two ago, the TTK cuts, right? And we technically were funded for 51 this year. >> 52, sorry. But it's really like 51.89 or some crazy number. So, 52 and it's 47.09 or 47.19 or something next year. >> So, with TTK, the state with the legislative changes they made, it reduced TK slots between 2,000 to 2,500 slots for this next year. And so, some districts saw a bigger cut than others. Any district who had less than 20 students in TTK did not get a cut. Um overall in our region, I think we had about 80 slots cut.
019So, for you guys to only have five is is pretty good. Um >> We're still going to fund the same number of classrooms that we have um this year, and then those five or six seats will be funded through um other programs. Or basic at >> Yeah, and there's still a chance you could receive more TTK funding for those students next year. At this point, it's unknown. But for like for the 25-26 school year, OSPI looked at everybody's TTK slots that they were allocated at the start of the year. And then they looked and said, "Okay, who used all their slots and who didn't?" And they actually reallocated some different some slots to districts who didn't who needed it because they had more kids than they originally thought. And then they took slots away from
020districts who didn't need them. And so there's there is a chance that they can do that again next year. There's no guarantee, but at this point we'll be funded for 47 students. And so >> What is ALE? >> Um alternative learning experience. So online another is another way to think about >> two different versions? >> Yeah, I don't know what your versions are exactly, but >> we have two different versions. We have um Okay, I always have to slow down. We have alternative learning, which is where the student is not being successful in a traditional day program and their families come to us and say, "We would like to do online school." The student is not behind in credits, they're not um in any of the other categories. So we have our online students. And
021then we have students who are um taking classes at the high school and are also taking an online course for either credit retrieval purposes or whatever. So we have a kind of like a full online student and a partial online student. And then open doors engagement program. This is where a student is not on track to graduate or they've dropped out and we're bringing them back. It's like opening a door for them to get back into school and get them. So, those are those two different numbers. And we don't have very many ALE at the middle school, but we do have think have three. So, we do work with families in working those situations to allow those options. So, that's where the 25 come from. And then the open door is the basically and please
022out of all respect I say this, this is your dropout reengagement. Now, sometimes they haven't physically dropped out, but they're saying, "I'm not being successful in high school. I'm stopping." And we say, "Oh my gosh, don't stop. We'll offer the open door program for you." >> Yeah, it's another option for students. And the funding for that comes in through the district, but then is paid to the open doors program, which is typically through the ESD. >> Yeah, and so you see that's our big huge checks to graduation alliance. And in 2026-2027, you're going to actually start seeing three different warrants. Right now you see one warrant and it's very difficult to show you what students are our online students, what students are our credit retrieval students, and what students are our open door students. And
023so for 2026-2027, we're going to have three different codes so that we can track who are we helping to stay in school, who are we helping to graduate on time, right credit retrieval, and who which students are open door students. So, we wanted for 2026-2027, my I'm committed to you seeing it seems a little extra work for accounts payable, but you'll see three checks so that you can see the difference with the three different programs. >> And then, could you just explain why these categories are broken out separately from our K-12? >> Yeah, and that's and it really comes down to how we budget it and and the model that they how they ask for it, too. Um and then this is also how it's presented on the website when you actually look at the
024um budget report that's posted for the public to see. So, I wanted to break it out the same. The funding's a little different for it, too, but really I wanted to be if the public were to look at your budget, they could see these all broken out in the current areas, so. >> Do are all of these funded in a different model than your typical K-12? >> So, the ALE, Open Doors, and then Running Start all come in the same line item and basic ed, and then TTK's in in its own program. >> Is it Is it the same dollar amount though for for these numbers? >> Yep. >> Except for Running Start Vocational. >> Yep. Running Start has a little bit of an enhancement on the vocational side. >> What's the difference between non-vocational
025and vocational? >> You mean the um You want to take that one? >> Yeah. So, I'm going to just use an example. If the apportionment was $1 for Running Start, Running Start Vocational gets 1.10, $1.10, because those classes cost us more from the Running Start model. Running Start charges us more. If you're taking a welding class versus an English class at Running Start. >> It's kind of like CTE essentially. >> How our CTE programs billed, uh we get more in apportionment for a CTE student. So, let's pretend in a um seven-period day, a student takes two periods of a CTE course, maybe an FFA and an FCCLA course. Those classes are funded at more. And it's It doesn't seem like a lot, but it's like 1.026 or something. So it's more per student because those
026classes cost us more to operate. Because of the supplies and the materials. >> Yeah, it's really you get the bump in the materials and supplies cost. That's really where it comes in. >> Where does Tri-Tech fall? >> Your running start. >> Good. >> So in total we're going to budget 2,330 students. Um and then we'll kind of get into >> 2324, right? >> What's that? >> 2324. >> Four students. 2,324 students. >> Uh 2,330 in total. >> I'm looking at the PowerPoint. Ours on this piece of paper is a little different than what you have up there. >> Oh, I think I updated it. >> I'm like, I only see 2,324. Okay. >> Yeah. Cuz I think what I had I had the TTK sitting at 41 and not the 47 to start. >> Oh,
027yes. That is correct where it's different. >> And so next slide. Here's your uh per pupil funding rates. And so for basic education you are getting $10,000 $684 per student. And then for your basic ed special ed students you're getting $10,601. >> Can you explain to them why they're different? >> Yeah, it's based on the number of students you actually have and then they look at there's a piece of it that goes to actually just special ed and so they're basic ed student first but part of that allocation goes to special ed and some of it stays in the basic ed portion. >> So often people think we So can you explain the $70 what $3 less or $80 less? per >> there's some calculations in the background that kind of do a lot of
028that but it's really um I don't really know why it's more, but >> for sped, and then we get another line item >> Yeah. >> that brings it above for special education. And you'd have to look at the whole apportionment report to see where the special education money >> So, yeah, so you're it's different line items, so the this is really for your So, there's two line items, the 4121 and a 3121. The 4121 is they're just their sped funding per student. And then the 3121 is just their basic ed portion, and that's what brings it above. >> basic ed portion, not the 4121, which is And by the way, when we say 4121 or 3 Those are account numbers, and we just use them as as a terminology. So, this is the basic ed,
029and when you add the 4121 to the 3121, it becomes way larger than the 10,684. >> Yeah, now, most districts that's still enough not enough funding, and that's why >> it's not enough. >> That's why most districts apply for safety net funding, and we are going to apply for safety net funding again this year, so. Um >> So, overall, a special ed student is not being allocated less than >> No. >> a non-special ed >> No, this is just their basic ed portion, so. Yeah. >> I think this is a misnomer, also. Um sometimes that you'll hear in the state, "Well, we give you plenty of money for special education." Well, if you really look at the basic education for special ed, they should at least be $10,684.92, plus the extra. But they pull that
030little bit off and then add more, so the amount that it looks like you're getting is bigger, but it's really not as big. And it doesn't sound like 70 or excuse me, $83.82 is a lot times per month times I mean, like it's a lot when you have >> It adds up per student, yeah. >> a month. >> or 300 students, right? >> Yep. Next slide. So, this is kind of a current snapshot through April of where the district's enrollment currently is versus what we're budgeting. And so, on the K-12 baseline, you're currently at 2,227 students. We're budgeting 2153. So, that's a 74 student difference. You guys have lost right about 30 students this year. This is very conservative. I don't think you're going to lose another 74. I'd be very surprised, but I didn't
031want to even get close to that. You know, if you lose another 30, that's a lot of funding. And so, we're going to we're budgeting very conservatively. Um ALE's five difference, Open Doors is seven difference. Um and then TTK, we kind of talked about why that one's different, but that's about five students. >> not a 41, so it's only a difference of >> Five. Four, four, not a >> And so, overall, it's about a 92 student difference from this year. >> So, when the general public hears me say we're budgeting for 100 less, okay? This that's where that the number comes from, right? It's actually we're budgeting for 90 uh 286 less. So, anybody who's listening or coming back and listening at a later time, generally if you hear me talk at Rotary or at
032Chamber, we're budgeting for 100 less, it's actually 92.86 less. Cuz if I said 90, that means I'm or 100, right? It's no matter how I do it. And if I say 92.86 and it ends up being 94.17, somebody's going to say I would So, we just use a round number. >> And something else with this, if we are we are able to see some more students come in, that's more funding back in your pocket. So, if we can build the budget around only spending this 97% based on this current budget or 98%, that's going to only help your fund balance in the end. Cuz that's money that you guys can get and come in and you know, have come in and then you have actually stuff to cover your costs and the insurance increase and
033whatnot. So, um I'm hoping we'll see some more students, but we're going to be very conservative on this projection. Any questions on the projection? Okay. Uh next slide. So, here's a historical budget to actual of kind of how the district's done um in previous years. One thing I want to note is this doesn't include TK for years 23-24 through 25-26. And the reason being TK's in its own program. Before in 21-22 and 22-23, you did budget your TK enrollment in your kindergarten numbers. So, it's kind of hard to compare the actual overall budgeted number, but you can kind of see that the district's consistently budgeted in a good manner up until this last year. And sometimes it's unpredictable. I mean, it's hard to project enrollment year to year, but overall the district's consistently come in
034over where they've been projected. >> them to owe us money in January instead of us owing them. >> Yes. Okay. Anything on the enrollment side before we move into revenues? Kind of what this means in dollars. >> Can you just explain, you know, looking at the historical budget to actual, we have 4 years where we budgeted under what our actual enrollment was, and then we have this year where we're 30 >> Mhm. >> over. So, what happened there? >> It I think it's a combination of things. I think across the state we're seeing enrollment be down as a whole. Um I'm looking at 17 of my 23 districts in the ESD region are below where they budgeted this year. So, it's not just a processor specific thing going on. There's more homeschooling that is more
035you know, people are moving out of Washington state, too. Um so, I think it's a combination of things. Um it could be estimating some grade levels to not lose kids and then they end up losing kids, too. So, I think there's a variety of reasons. >> What year came in I don't remember the month and you spent the time and we said our graph was incorrect on enrollment. Remember that meeting? That's where this also comes in. We had um numbers in wrong categories and I think that was part of the problem, also. >> Yeah. >> It seems like it's all the more reason that we do be conservative if the trend is going that way. >> Yes. >> I think that's >> That's very wise. >> And your neighbors are seeing similar trends as well.
036So, I think we got to be conservative and then we we hopefully, you know, see some more kids come in and and the dollars start to rise a little bit, too. So. Uh next slide. Okay, so this is um our revenue projection. So, we can kind of spend some time on this and I gave the board a one-page document and this is a breakdown of the revenue categories. >> And so, for those who are listening, this will be added to the minutes. This document will be added to the minutes if you're coming in and listening later. >> And so, I like to provide this cuz sometimes it it kind of gets lost on what the categorical dollars actually provide. Um and so, I'll kind of go through this. So, your local property tax dollars fund
037the items that your levy was for. Um athletics, uh student services, security, substitute costs, maintenance and grounds, and teaching and instructional support. Uh your local support non-tax dollars, this can come from testing fees. Um it can come from fees and fines. So, a student um doesn't take care of their laptop, and they have to be, you know, worked on, there's a a fee for that. Um maybe they lose a library book, those kind of things. Um it could also be from like staff meals. And so, um this is normally not a very big categorical revenue for you, but it is something to note. Uh state general purpose, this is where the largest amount of your revenue comes, and this is based on the enrollment. Um and this is where your those dollars come in through
038apportionment. Um also in here is your local effort assistance funding from your levy. And so, your your state match dollars that you receive. Uh state special purpose, this funds programs like special ed, lab, bilingual, and high cap, as well as your bus transportation, that's where that money comes in. Uh federal special purpose, this comes in through your specific programs like title one, migrant, um title two, you get some food service, you get quite a bit of your food service revenue from them, too. And then in the other category, this is really your non-high revenue. So, districts like Patterson who don't have a high school, when they send their students here, they actually have to pay you a fee to send them here because they don't have a high school. And so, that's that revenue. Is
039there any questions on kind of the categories? >> So, when you hear us talk about um the LEA, the local ever effort assistance going down, that's an example of it falls under state general purpose, but it's a line inside that. And so, when that goes down, I think our number was 234 thousand is our >> Yeah, and I'm going to kind of expand on that later because um there's some shift coming for future years too that we need to be aware of as we plan. >> So I just I mean so sometimes we're talking about state money, but there's like I hate to say this like many many lines inside that, and even though the number seems close to the same, it's dropping down into different areas. >> Well, like your state general purpose, most
040of that 26 million comes in on one line item, but it's for your whole basic ed program and and CTE. And so it kind of all comes in on one, but there's so many different areas that it affects. Um and so our total revenue >> class size come in there too, right? >> Yep. >> So we need to touch on that. >> Yep, so your K3 ratio and then your PSES compliance are both in there, too. So the K3 ratio um you have to be at 17 teacher to student ratio for those grade levels. And that could be it you count the teacher, you count their specialists, a piece of the specialist time that's spent with those students, um piece of special ed time, and then um it's TK as well. And so it's that
041ratio, and when you are above the 17, the state takes some of that funding back. >> So even if you're 17.1, like it's a mathematical equation 17.1 or 17.4, every time you're over the 17.0, they take money away. >> And there's times where districts just it's not feasible to get to that 17, they may be losing $40,000. As you know, we can't get a teacher for 40 grand. So it's cheaper to just eat the 40 grand than to try to find another teacher, you know, for 80 90 grand, whatever it is. So um then the other piece of that is the PS social emotional compliance piece. So it's your counselors, your other support staff, um it could be your safety and security people doing crosswalk. And so they fund you an allocation per building for
042those and then we report those staff members. There's a supplemental report for contracted staff that we submit to and that could be for behavior, it could be for speech. It's a variety of items that fall under that and so currently the district's in compliance with both of those, which is great and so we're not losing any funding. But we're being cautious of those as we budget for next year too and making sure that everybody's coded correctly cuz that's basically it's it's how you code them is really what it comes down to. You may have the staff in place but if you don't code them correctly and report them correctly to the state then they take money away. And that's kind of what happened on the January report when we lost some money but we were
043able to get it back in March. So overall we're just under we're projecting revenue at just over or just under 45 million. Which is less than last year. But there are a couple things in the budget that I kind of want to talk about in these areas. Can we go to the next slide, please? So this next slide has a graph broken out in each of these categorical areas going back to the 22-23 school year. And so there's some stuff I want to kind of touch on on each of these areas. Your local tax money is going up and that's thanks to your voters because they're approving your levy and your levy amounts have been a little higher. Your local support non-tax is significantly lower and there's a few reasons for this. One reason is
044the state and well actually it's at the accounting manual level. They've changed where your e-rate money is, which is what Shawn fills out every year and she gets whether it's switches or something technology related and they pay for 80% of it. Um they change where that revenue goes. It comes into now the federal uh special category. So it moved from one category to another. Well, a couple years that was $118,000, 120 grand. So that's significant money that's moving from there to there. Um there also was some insurance um recovery money that came in in a couple of the years. So maybe you had somebody you know had damage to tennis court and um insurance ended up covering that cost. Well, that money's coming in. So this category is very low overall in the scheme of
045things, but that's I just wanted to kind of touch base on why it's much lower than the previous years. >> Through the local taxes category actually has decreased a little bit from last year. Do you know why that would be? >> Uh part of that is I'm projecting so there's a other local tax item. So there's a line item in the budget and this it's varied the last 5 years. So it's gone up from 2020 to to 2025. It's gone up every year significantly from it started at I think 150,000 and now it's up to like 400 something. Well, this year again it's gone it's starting to go down. And it's one of those things in talking with our bond council and and some other people it's something that's a number that we don't really
046know where to target at. And so on that side I'm being very conservative. Um it's looks like we'll probably have close to 350,000 this year and so I'm budgeting at 250 for next year. So that's just a line item that in the past it's been 400,000 a couple of the years. So I'm budgeting conservative. >> Um sometimes we see a difference um in delayed payment of taxes. >> Yes. >> I just know my taxes haven't gone down, so >> Yeah, but the Yeah, in the county you can ask them about this. Like I've asked them like, "Hey, what where should I budget?" And they're going, "Well, it's really just a floating number." So, it's really hard to say like >> And when we spoke with Ken this last week, right? >> Mhm. >> Um 2
047months ago, wasn't it? They talked about the date. Remember it went from the 28th to the 29th? Yeah. Or it's from the 29th to the 28th. >> Mhm. >> Oh, what day of interest on the money is a amount of difference from year to year on that money that is collected on the taxes. So, your taxes are due I am more of a mortgage person like myself, right? So, my mortgage is paid and it has my taxes included in it. My payment goes in on the 2nd of each month. But the house taxes aren't paid until October each year and then April each year, right? So, they collect the money, they sit on the money, they earn interest on the money. And if if they um bank X, doesn't matter what bank it is, they
048collect that money on the 2nd, but they don't turn it into the county until the 28th or 29th. And so, we just heard our meeting and he said, "Make sure you pay your payment on the >> the 28th. >> 28th, not the 29th. And so, those in these big of dollars, those also impact that pay. >> Yeah. Um that's a good question though, because it is for next year going down. Um we're also being conservative on the LEA side for next year, too. So, moving on to your state general, I'm being very conservative, so there's a tool that OSBI posts to help kind of look at your levy revenue, but also the local local local effort assistance funding and it's taking like a 9 or 10% assessed value growth in there. What we're hearing from
049the counties it's probably going to be closer to five. So that'll actually mean more money comes in because there's less growth. Um but we're going to keep it at the 10% growth for the budget. So that could be another 100 to 200,000 that comes in. Um also in the state general Let's see what else we got. State State general. So that's basically based off the 2153 students as well. So if we have more students come in, that number will rise. Um state special purpose this one I have a couple things on here. One So looking at the budget, this is less than last year that we're budgeting by quite a bit and the reason for it is I found a line item in the budget last year where it says fund balance and it was
050$650,000 in one of the programs state program. Well, there was no expenses to offset this. So it was almost like it was a placeholder for revenue, but there was no actual revenue tied into that. So in taking that out the actual funding levels are pretty similar to what it is this year. But we needed to take the 650 out because you're not like actually getting that. Um and then with your reduction of TK2 that's about $50,000 that you're going to see less next year in TK. And so that's factor in that number as well. >> Can I go back real quick to the state general purpose? >> Yeah. >> Um that includes LEA and I can't recall what is changing about that this year, but isn't there some change to the LEA funding? >> Yeah,
051so for calendar year 20 Let me get my Yeah, calendar year 27. Um originally when the legislature passed, it was not this session, the session before, calendar year 26 was going to get a $150 enhancement per student. And then in calendar year 27, there was going to be an additional 250 per student. Well, they ended up backing out $100 of that 250. And so it really was only a $150 enhancement that was passed. And so that's about $230,000 that you're not getting for calendar year 27. So it crosses the two fiscal years. Um but that's money that's lost by the district. And that is factored in here. Um thinking about calendar year 28, the enhancements go away altogether. And so there's going to be a huge cliff for LEA funding. So I'm projecting 1.7, almost
0521.8 revenue for 26-27 for LEA, but as we look at 27-28, it's probably going to be closer to 850,000. And so it's it's going to be a huge drop to the district. That's about a million dollars. So it's just something else to start thinking about as we plan for the future because realistically, we're not going to get a huge chunk of money next year from the legislature anyway. And then you're losing another million dollars that you've been getting. And so that's where we wanted to We're talking about, you know, we have cuts to make this year, but we also are going to have cuts to make the following year because of funding losses that we're seeing, too. >> And we would hope that those would be for those who are listening or listening to a
053recording. We are We are hoping that those would be more of a natural attrition. Those who retire, we wouldn't fill those, right? Cuz we're really right-sizing really strongly this year. And so we would hope that natural attrition would help some of that for the following year. >> Certainly. And it doesn't mean the ledge can't do something this next session. I just don't It's not promising at this point. So Um we've got a state budget crisis of its own. So I just don't see K-12 getting the help that it really needs at this point. Um especially in that area. Did that answer your question, Michelle? >> Yeah. >> Okay. >> Yeah. >> Um let's see if I have anything else on federal. Oh, yeah. So the federal special purpose um it's a little higher projection for
054this next year. Part of it is your food service revenue was budgeted very conservatively this last year. Um and you're actually going to probably get 300,000 more than you were projecting in that category. So I bumped that number up a little bit. Um and then obviously like in the first couple years, that's when we had COVID dollars. So that's why there's such a drop from year 7 million to 4 million and now it's 3.4. And a lot of that's the COVID money. >> So previous years from before that, it was very similar to what it is now. >> Yep. >> Yeah, and we're and like I said, we're not going to be seeing big increases to title or migrant or any of these other programs. So we're expecting to kind of see a flat and
055it's not for just this year, probably moving forward too. It's going to be pretty flat on the on the federal side. So And then we touched base on the other revenue, which is really your non-high. Um any questions on any of the categories, any of the data points? >> Why was that other revenue so high in >> There There's some transfers and stuff that were in there from other funds. So it's a lot of the transfer activity. It probably could be removed from that really if we just wanted to look at just the >> That was their high school contribution that we'd waited so long for the track. Remember when I first started it we took >> Okay. That makes sense. And so 25 26 on here is your budget number. It's not actuals just
056to clarify if anybody's listening so um 25 26 and 26 27 are budget numbers. Any questions before we move on? Okay. Uh next slide. So we've talked about a lot of these already, but these are just some items to note. We talked about TTK slots being reduced. We talked about the LEA drop. Um if we're looking at spending the 97% of our revenue that is right about 43 million 634,000. To give you context, we're close to 46 million for expenditures this year. So that's quite a big difference. That's where I think we probably need to go 98% cuz that'll get us a little closer and I know we we've been able to make some cuts, but I just don't it's going to be very hard to get to that number. >> So so far on
057my savings projections which are is uh Some of them have names on them so I have to be careful. It is a document that could be shared with you or if need be when we do our our our expense pieces we can do it. >> kind of talk about it. >> Um we're at a pot 2.591 as of this morning. Right? So we're close to where we need to be. Um however, we have some raises and some different things that are coming in and I just I just want everybody to understand that this is an all in this is a systemic system wide I said systemic system wide situation that everybody has to be in the in the process for. Today a couple things came about that I'm thinking we may be at 2. maybe
0582.7 it just kind of depends on where some of those changes happen. And when I'm cutting I can only estimate what are whatever the cut is what the cost is of that this year. So you know with the raises and things we have going we have to take that into consideration so Drew and I are hopeful that we're at a solid 2.4 to 2.45 even though my number that I have on my spreadsheet is about 2.8 because of those salary increases. >> Yeah with the salary increases it does kind of eat at some of that which we know I mean that's that's normal business um but yeah I think Kim's right it is it takes everybody in the district I've been a part of as you guys know working with Prescott on their situation and
059it took everybody even you know the community stepped up and so we're hopeful that you know all the unions will work with us and kind of hear hear us out that this is a problem. We want to keep as many staff we don't want staff losing their job and so we're trying to do this in a two to three year fashion where it's you know less of an impact to students cuz ultimately that's what we're here to do. I don't know how to teach students. But I know how to manage money and part of my thing is I need to you know work communicating with Kim like you have this amount of money and we need to stay within that. >> He's really good at telling me no. >> That's part of it yeah but
060one of the things is, you know, we can put this budget in place and this is something I've been thinking a lot about is this budget's yes, we're going to put a budget in place that, you know, hopefully it's 98% of revenue. But then it's up to, you know, we got to follow it next year, too. And really be on top of it. We need buy-in from the from the buildings, from the departments. Um and just everybody that >> Each of the unions? >> Like if your budget is this, we need you to stay within that. Not a penny over and it takes everybody to do that and this thing will will turn around. It really will. Um it will take time, but like everything else, you know, there's abs and flows in in finance
061all the time and right now we're in a low point, but we can get back to a point where things are stable. So um I'm hopeful with this plan that we can kind of get there. Um but like I said, it's going to take a couple years of it's just going to be difficult. Um and we just kind of have to put our head down and and get through it. So uh one thing that helped me in Prescott was we were able to get our teachers union to not spend any of their teacher dollars that are in the contract until January on supplies. Um that's something that they were and it's a lot smaller scale, I understand, but um you know, that was just an example of something that really helped. Um it's just making
062sure we're not spending unnecessary items. >> I think the reason he has January, right, is because we know what our enrollment will be. Right? In January? And whether we have budgeted conservatively, so we have more revenue coming in or not, right? And so it it really is a partnership and it's built on trust and um transparency and um I I think the other part when we're working off of revenue, it's um making that the proper funds are in the proper places. >> Yeah, because I think often, you know, we get stuck on well, of our budget, you know, salaries and benefits are 83%. Okay, but your budget number is different from what you're actually receiving. And so, doing it off of the revenue, we can keep in mind be mindful of actually we're only getting
063this much money. We have to stay within that framework. And so, hopefully that'll kind of help as we plan for this year and in the future as well. >> I think the other part Drew brought up kind of at the beginning was making sure we're using all of our grant money and coding correctly. So, that we're not cash flow wise it doesn't really impact it, but in the actual end result in the budget and not having carryover and using every dollar to the best of our ability. >> Mhm. That too. And I I want to say when we look at some of these savings in terms of cuts or, you know, through attrition, whatever model it is, we don't see the salary savings to until the end of the year, really. It's saved over the
06412 months. So, we might be saying, yeah, we're saving 2 million, but we're only going to we're going to see it over the 12-month period. It's not going to be right away. So, that's something to keep in mind. The cash flow doesn't really improve right away. It's only based on what you're getting. So, any questions? >> Drew, I think it's uh it's a good plan. Uh I guess my my question is like, are we are we going to make it the next year without going into binding with the state? >> No. And we are probably going to >> Say that again. Can I say that again to the public? Everyone needs to be prepared that no later than August, possibly July, we will be in binding conditions. >> Thomas says >> Yeah, and so when
065we do when I come to you guys probably in July or August and we do a budget extension, we're going to project out what the ending fund balance is going to be. When the state looks at that and says, "Oh, you guys are going to be in the red." They're going to have then have a conversation with Kim and I um and go, "Okay, why why are we here? What's your plan to get out?" And so I feel very good that we have a plan. What this really does in the first level of binding conditions is really more meetings for Kim and I. Is really what it is. OSPI is going to meet with us monthly. Um >> Kind of like how we meet with the county. >> And deter you know, they'll determine how
066severe they think it is. They're going to be watching this budget very carefully. They're going to want a cash flow projection for next year as well to see, you know, are we going to be able to get out of it by the end of next year? And if not, they're going to put some benchmarks in place and they're going to say, "Okay, by the end of the 26-27 school year, your target to get your end fund balance." And I'm just let's just use fake numbers here. So let's say we're a million in the hole at the end of this year. They may say, "I want you to get it to half a million in the hole by the end of 26-27. And then by 27-8 27-28, we want to see you back in the positive."
067And then by 28-29, we want to see you hit your minimum fund balance. And so they're going to give the district some benchmarks to work with. Um OSPI will likely send a rep out for a board meeting to and kind of talk through what that process is with the board, too. Or they may join remotely, but um >> So some other I hate to even use the word positive. But so we have a couple pieces of property for sale. As an example, if if we are in binding conditions and we sell a piece of property, that money can go into our general fund and not go into our capital fund. >> Yeah, there's some more options. So, that's one of the things you do need approval from OSPI ahead of time and it's got to
068be a one-year I think the rules around it are basically like it's a one-year fix essentially, but you can only do it every so often. Like it's got to be a one-time deal. Um you can also potentially borrow against your transportation vehicle fund and not have to pay it back. Um if the if they deem that you have enough buses that are to run, you don't need you know, you don't have a big dire need to you know, to keep those buses or you may not need to buy two or three buses, they may say you can transfer 200,000 from there to your general fund and you don't have to pay it back. Um >> And that's what happens with that capital money also. >> And that's something we did at Prescott to start school
069last year. >> In indirectly, yes. >> Yeah, one of the things though that's really helped you guys in this situation is not so fortunate for some other districts is your county's willing to work with you. Um some counties are not in the financial position to be able to float districts and so they cannot go anywhere near the red. Um where Benton County's been a great partner and been able to kind of help us through this tough time. Um >> I think part of that too, you've heard me say is relationships. Yes, Benton County has the financial capacity to do it. >> Yeah. >> But when I take this is what we've done so far, like I know this sounds crazy and and I don't want to take a bunch of time cuz we're almost at
070but they handed us a piece of paper on Tuesday for the first time since >> uh October. >> October or October? >> Mhm. >> We got a piece of paper that was all black and had no red. Now, it was $91,000 out of a $46 million budget wasn't very big, but we they even we all there was six or seven of us sitting at the table said, I think we need to frame this piece of paper. >> So >> Yeah, some of the tax dollars had come in for the month already and so >> same time I think they're vested in my point was there is invested in us or there is as vested in us being successful as we are. I think is my point of that story. >> So, it's been really good
071to work with them and um so we are seeing some progress. It's just um did that answer your question on the binding conditions though and kind of what that Okay, just want to make sure. >> You mentioned um there's some title money that is available still this year and potentially we could recode some things to that. Do you have an approximation of how much that could >> I don't for title two and title four. I can get something to you though. >> It's not a lot on that front. Title one has more money. >> Um no. No, we're talking 40,000 maybe. >> Yeah. >> In title two and five four. >> Everything else. >> Yeah, but I don't know title one maybe a little bit. >> Title one's more, but I know that there are
072some plans to use some of that for next year too because the title one money is actually the allocation we just got the preliminary the other day. It's $144,000 less than this year. And so having some of that may help supplement some of the things that you've been able to do in previous years. >> So, where that comes from, that comes from our 20 Shoot. >> It's a three-year look back. >> No, but is it our 2020 census? Or did we have a census in 2024? >> No. So, >> based on our last I mean >> census. >> the last census I think is the safest way to say that. Our poverty level went way down. And so that means we're getting less federal funds. So I want >> And that could be >> something
073we, meaning the Prosser school district has done or didn't report something properly. That's based on a federal census. >> And a lot of times it's because families don't fill it out. It's not saying that your poverty really >> It should Yeah, 2020. I knew I thought it was 2020 but then I >> Yeah, it doesn't mean your you know, your poverty didn't go down. It just means that a lot of times people don't fill it out or don't take the survey. So >> Or they don't feel safe completely certain. >> Yeah. So anything else on this front before we kind of talk about what next session is going to look like? >> I was curious if there's any other school districts or how many in the county you know, that are in binding conditions. >>
074So I've got out of my 23 in my region, I've got one currently and I'm projecting by December we'll have another probably two including you guys, maybe maybe three. Um statewide there's seven currently but we're hearing there could be close to 20 to 30 by the end of the fiscal year. So >> That That number is going to go up at the end of the year, right? >> Yeah, so once the a lot of them are going to kind of happen once the year ends come through in November and so really that December to January period we'll we'll probably see a lot more go on. >> In the superintendent world, right? We're a little callous to mind say, but we're hearing in the neighborhood between 25 and 30 by December. Yeah. >> And so it's
075a it's a variety of things playing into it. It's and it's not just a Prosser specific thing. I think it's very important to keep that in mind. Um while we have our own things to kind of figure out and figure out how can we navigate this, we aren't alone in this either. So um I know that I've talked with some different business managers, just some of the strategies that they're using, too. Prescott's a very different situation than here. You guys don't have a lot of the same things that were going on there. Um and so, I'm talking to some other business managers across the state that have been in kind of a similar situation, you know, where it's they're losing LEA, they're losing students, like what what are they doing to kind of build things
076back up? So, we are exploring those avenues, too. Okay. Uh next slide. So, as we look to next session, um in June, we're going to do more of a expenditure breakdown. So, we're going to be talking salaries and then and benefits and kind of that side of the house, as well as our material supplies and operating costs. So, we'll kind of look at them in two different um lenses. I'm going to try to get some data comparing you to similar size districts. Um and then kind of talk through some areas of where I see maybe we can make some reductions or, you know, throw out some ideas for cost savings. Maybe not for just this year, but for the future, as well. >> We're continuing to talk contracts. That's a big one. Um operational contracts.
077Um Please understand I'm not naming things, but I'm just going to use the company who monitors our elevators. As this is an example of a contract, right? A company that um helps monitor our um students who look at things online are not supposed to and we have 24-hour monitoring services, right? So, those are all kinds of contracts that we're talking about. We're not necessarily talking about a teacher's contract or a Right? >> Yeah, we're really we're really looking on the material supplies and operating costs. Um and doing some initial data dive, you guys are spending a lot more per student than some of the other districts are in similar sizes. And so, it's a larger percent of your budget. And so, really your salaries and benefits are okay. >> Right in the middle-ish. >> You're
078right in the middle, but we really need to kind of hone in the material supplies and operating cost section. So, um that's we're looking at every contract, seeing if there's a way to either reduce or they give us a deal on something. Maybe we have two or three contracts that kind of cover the same areas. Can we reduce on that, you know, those contracts? Um and maybe there's a contract that you're paying for that you really don't get much out of it. So, can we find another option or do we really need it? >> So, I'm going to just call him out and give him a kind of a thank you. So, Tanner Tobin works for Apollo. And I'll use it as an example. So, we sat down, and we I told him I'm going
079through every contract, and we sat down with them and said, "Okay, what are we going to do, right? I've got to be able to make sure I have money to to pay your contract, right?" And so, we sat down, and we had um he and another person were there, and we sat down, and we said, "Okay, what can we do?" And he goes, "Well, let's see if you qualify for DES." And so, just so you know, I have no idea what the acronym stands for. But basically, it's where you're part of a big pool, and so you get a a lower contract rate, hourly rate. And we did. So, we went through, we rewrote the contract for next year. So, where everything is going up so much, our contract with them went down about $700.
080Now, on a $19,000 contract, $700 doesn't sound like much, but if you compare it to what everything is going up, plus the $700 reduction, and here's where the big one is. Now that we have um a DES contract with them, if we have an emergency, our rate per hour is set. Right? So, by doing some of that work that we're doing with all of the contractors, that saves us not only on our our annual contracts and what we're doing, but it also saves us on the oh, no, it's December, it's 30 below zero, and we don't have heat in X, and we're calling in somebody. Now that hourly rate is set. >> Yeah, I think another area is your switch to Red Rover from Frontline. That software change is going to be a big one,
081too. Um one of the things that Frontline, they charge you per staff member that's on there. Red Rover does as well, but a lot of times per districts get hit hard is their teachers. So, when they do a training after school and they're going to be paid that extra hour, they just put in that hour. Well, with Frontline, the license is one cost, so maybe it's $50 per per teacher. Well, in Red Rover, they cut you a break on that license because they're not a everyday user. So, maybe it's $20 a license, 25. Well, then that adds up when you have 200 teachers in there, too. So, you're going to see a a cost savings there. Um I really think that's going to be a really good switch for the district. >> iReady to LinkedIn,
082almost 80-some thousand dollars. I mean, like we're really Drew kind of challenged me What was that? Maybe a month ago? He said, "Okay, you said you're going to save 600,000 in accounts payable. I want to know where the list is. I don't Kim, I need to see where the 600,000 is. You can You're You're telling me you're going to save 600, but where is the 600?" And it started as much as 701 and 80,000 in another and 10,000 in another. And that's where that savings is going to come from. >> Yeah, so we're really trying to go line by line, you know, vendor by vendor, what can we reduce? Where can we save money? Can we Can we talk them into a better deal? I know it's 700 bucks, but it adds up over time.
083So, um that's a lot of the work we're really trying to do. And so, we'll bring some more ideas, you know, to the board this next time. But, um yeah, I really want to get into the expenditure side. I think that's where we can kind of have some good discussion. >> So, the reason Drew and I are are pushing for June is that then, after we listen to you, and we share our thinking, and then if there's questions, we still have the month of July before we have to go to hearing and to our final piece in August. What we don't want to do is have to answer questions in August, 3 days later, we have to have the hearing, and we're spending all night trying to fix something or listening and doing whatever. We're
084really trying to do it far enough ahead. So, what you will have though is probably a budget extension hearing, which is different than our budget hearing. >> And I and I may tie them in the same meeting too, potentially, um depending on the size of the extension. Um because then you don't have to pay the ad cost twice. It's kind of nice to do it in the same meeting. So, if we can do it in the same meeting, we're going to try. Um ideally, I would like to adopt the budget probably the first meeting in August. I'm gone for 10 days in July, so I really won't be around for part of that month, but um ideally, we can adopt in the first meeting of August. So, if we need the second meeting is there,
085and it's open, but >> Um like the August 30th meeting that we've had in the past. >> Yeah. And the big thing is we just really want to be transparent with the board, and the board feel good about what the budget is going into adoption. So, um I really like having these work sessions. I think it's really good to we can have these open honest conversations, and um kind of give me some guidance or okay, where you guys you're on track with the budget, or hey, we need to see something different here. So, it's it's really nice to have feedback. >> I think the other piece was right now, if you look at our cash flow document, for example, it says don't quote me when it says $725,000 in accounts payable, and it's exactly the
086same every month. That's um I think it was Director O'Brien and I spoke talked about that's really not how it works, right? We have less food in December cuz we have 2 weeks less school and we have right? So, they really should have a better reflection. But, until you track it for a year or two, you don't even really know You know what your end result is, and you know what's numbered, but you really don't see those flows. And so, kind of like I said, the um graduation lines is you're going to see three checks next year. The reason you're doing that is that we can then see. So, we're going to work harder at it won't It'll The cash flow document's still going to look the same, and it's going to look but there're
087going to be some sub places where we can say um we're supposed to spend $100 in food in December, and we're going to spend $200 in food in January, but we're only going to spend 180 in February cuz we have 4 days off, right? Like Does that make sense that it'll be match the number of days we're in school and >> Yeah, the revenue side's pretty We try to project that as we know, you know, grant claims can be a little different month to month depending on some of the uh material supplies and operating cost side, but if we have our encumbrances in there for payroll, we kind of have a good idea of what that's going to be, but if there's anything the board would like to see or has questions on either about
088the stuff we talked about tonight, or even going into the expenditure stuff, please send me an email. I'm happy to, you know, talk with you and um or just kind of prepare something as well. So, >> That goes for the community, too. If you're not I like specifically um addressed it as thoroughly as you'd like or there's an area that you'd like us to touch on, we're only as good as the information that we get asked. It seems pretty wrote to people who work in it every day, but we would like to keep the community as informed as we can. So, I guess any thing else before we close or any questions? >> How much massaging do you think you would do, I guess, moving forward up until July, August on the on your 26,
08927 revenue projection? I mean, is that >> It's pretty set. I made >> So, I mean, we have >> big here and there, but I would say the revenue's pretty I feel pretty comfortable where that is. I don't know that I'm going to adjust and part of it is I don't I want to be conservative on that side, too. So, I don't The only way that something would change is if we get some federal allocations in and they're way different than we kind of think they're going to be, but I would I feel pretty good where that's at, so I don't think that's going to change. >> Okay, any more questions for Drew? >> Thanks, Drew. >> Yeah, thank you, guys. >> Great job on this. It um very organized and every question I wrote
090down, you you you hit it, so I appreciate that. >> Appreciate it. >> Okay, well, that's it for discussion items. Um our next regular board meeting will be here in the Prosser School District Board Room at 6:00 p.m. on May 27th and the meeting is adjourned. Thanks. >> Thank you, Drew. >> Very pertinent.