001[Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] Good evening. Welcome to the Montgomery County Board of Education special call meeting, budget hearing number two. Today is September the 11th, 2025, and the time is now 4:00. At this time, this meeting is being called to order. We do have an established quorum. At this time, I'll entertain a motion to approve the agenda. >> Madame Chair, I move to approve the agenda as printed. >> Is there a second? It's been motioned and second. All those in favor do so by showing of hands. It's unanimous. All right. Receive as information we have Miss Pamela Watkins with the presentation of the fiscal year budget number two hearing. Miss Watkins. Funding public education is important because our students are our future. It is our responsibility to do all that we can
002to prepare our students for our community's workforce, our national military, and our nation's success. When I came to Montgomery public schools, Montgomery public schools was at that negative fund balance. And so people were like, "Why are you going to work there?" Well, my kids were educated in Montgomery public schools. Um, at the time when I came here, I had one that had just graduated, went off to college, and I still had two in public schools. All of them were doing very well in the programs that they were in and have gone off and have been successful. But I felt like Montgomery public schools, I felt like I had the tools to come in and and and help in the process of making a difference in Montgomery public schools. And that was really the main reason
003I came. I mean, I had never thought about education finance in any other accounting career that I'd ever had. And I had that thought process and I came and I, you know, I just felt like I wanted to be part of the process to make Montgomery successful. But not only do my kids deserve that. All of these kids in Montgomery deserve that opportunity. And the only way for them to have that opportunity is for somebody to be supportive or for all of us in the community to be supportive of this school district. Evening board president Smith, board members, Superintendent Bird. Welcome to our second budget hearing. Um we are required to hold two budget hearings each fiscal year to the public open to the public and um that tonight is our second one. Um the
004budget process is interactive and in inclusive. It includes input from all of our departments, all of our program leaders as it relates to their respective areas and their budgets. So, for example, we meet with all department heads. Um, that seems like a lot, but we do. We meet with all principles. And in addition to that, um, funding sources that are specific to certain department heads or leaders, we meet with those individuals as well. Uh, we encourage input from the public and our board members. There are certain constraints that we are bound by. Um, the US Department of Education as it relates to federal guidelines, we have to make sure that we are compliant with federal guidelines, the Alabama State Legislature as it relates to state laws. And then the Alabama Department of Education as it
005relates to state funds and us being compliant with the expending of those funds. In addition to that, there are certain funding allocations that we must also meet. um specifically the foundation program for so in order for any school district to participate in the foundation program all districts are responsible for making that match. Um this year our match is 36,187,000 for foundation and in addition to that we have the capital purchase match which is 1,335. Before we get into the budget, I want to point out just a couple of our highlights for fiscal year 2025. One of our biggest highlights during fiscal 2025 was that the district went through a credit rating review. Um, we do that probably every three years or so. And this year we received an upgrade from a tripleB plus to an
006A+. That was a three knot notch increase. Um, which is pretty unheard of, but we were able to do that. Um some things or contributing factors that contributed to that increase was our increase or improved financial reserves. Um our control spending and our financial stability all contributed to that improved credit rating. Additionally, the district has approved and implemented um a more competitive salary schedule. We couldn't do 100% of what we wanted to do, but it was a start. um we had to make sure that initially it was sustainable and then we'll continue to review those salary schedules a lot more frequently than has been done in the past. Additionally, um with the abalorum funding that we've started to receive, that has allowed us to expand opportunities for our students um by investing in certain initiatives
007that are contributing to strengthening the district in certain areas. So we have our arts, we have music, we have foreign language. Um we have been able to provide additional units for advanced placement programs as well as additional career tech teachers and assistant principles. Also um we have been able to increase some initiatives in student support services as well. So, these investments will ensure that our students have access to a well-rounded education that prepares them for any track that they choose to take in the future, whether that be college or a career path. District continues to attain the three-month um three times the state required one month fund balance. Um, as I reviewed some of this information, I looked at districts across the state and the average monthly the average month fund balance that districts have
008across the state is actually four. We attained between three and three and a half right now. So that's good. Um, we continue to receive positive audit opinions. Um, one thing that we initiated some years ago, all of our accounts are under one bank umbrella, which is very helpful for the finance department. The district continues to implement electronic systems um that makes it convenient for our parents to um purchase tickets to athletic events, to purchase concessions. And with that um set up, there's not money that's actually going in the hands of a lot of our bookkeepers. These funds when parents utilize these tools, the monies go straight to the school's bank accounts. Um, as I mentioned earlier about reserves, the district has set aside reserves of 35 million for our capital renovations, replacements, technology and security,
009and vehicle replacements as well. The establishment of these reserves help us plan in the future for economic downturns that may occur. And we still have these reserves available to make sure that we are able to provide for the needs of our students. with financial highlights along comes some financial challenges as well. This was our first fiscal year without those federal COVID funds. And so we were because we have those reserves, we were able to be financially sustainable and to continue to operate effectively and efficiently and responsibly. Um, one of the challenges is the fact that PHIP, which is health insurance that's provided to our our employees, had about a 13% increase in fiscal year 2025. In the reading that I've done in the last couple of weeks, that is um expected to continue next fiscal
010year as well. economic challenges that we face, instructional supplies, operational supplies, technology devices, all of those may be affected by economic um challenges, increase in the cost of imported goods. And so we have to plan and be able to respond to those type of changes as well. Um the unforeseen something that we've mentioned for the last couple of years because we are seeing the effects of that currently as we prepare to build Percy Julian. The unforeseen and devastating increase of construction costs um has caused MPS other government entities not just us um to rep prioritize our entire capital program projects. So num a number of our projects may possibly be delayed um as a result of escalated construction costs. Finally, the district enrollment continues to decline. Currently, we're being funded for 25,226 students, which is
011125 students less than what we were funded for in 2024. for fiscal year 2027. The projected amount um for the funding for next fis for fiscal year 2027 is about 340 students less than what we will be funded for in 2026. Here's a visual of that and you'll see that the district has been on a decline for several years now. Um and I know that Dr. Bird has some initiatives that he's wanting to put into place that will hopefully stabilize and send us in an opposite direction. As we go into talking about the budget, there are several funds that we talk about when we talk about budgeting or that we actually budget for. The main topic will be our general fund, but I do want to explain the other funds as well. We have our
012general fund. Our general fund operations for local school district um state funds we receive property taxes um local appropriations and private donations. Those are the funds that support our general fund. Our special revenue fund includes federal programs. So title one, title two, title three, title four. It also includes our CNP revenues. In addition to that, it includes our local school public funds capital projects which is our major capital expenditures currently that is our Percy Julian re um we have some other capital projects but our largest one right now is the building of Percy Julian High School that service fund which is the payment of long-term debt. That would be the debt that we will be paying on the Percy Julian project as well as some other long-term debts that we are paying as well through
013the state department. We have our last fund which is our fiduciary fund. Those are funds that are at the local school but they are considered non-public. So those are funds that we have um mostly in our high schools. That's FBLA, HOSA, DECA, debate club, etc. This is our annual operating budget for fiscal year 2026 that's being proposed. We have our general fund with anticipated revenues of 700 and approximately or I can't see that far. 7 and um about $40,000 will be our general fund. We have special revenues which is at about 55 thou I'm sorry million million sorry about $55 million in special revenues. Um and then we have our debt service capital projects and expendable trust. So let's talk about what makes up our general fund revenues. Our total revenues, I'm sorry. We've got
014general fund at 295 million. I misspoke. I'm sorry. 259 million general revenues special revenues approximately 55 million debt service fund approximately 20 million capital projects fund approximately 368 million fiduciary for a total revenues that are budgeted of 862,000 in revenue focus on our general fund. So what makes up the revenues of our general fund? We have our state sources which includes um foundation and some other state funding sources such as transportation um nursing and a few others. And I did break that out. That's a slide that I added. I think um Miss Cloud maybe asked during the small groups about a breakout of those state funds. And I did add a slide in there for this this time. We also have federal sources which includes um the funds that we receive from ROC. So the
015ROC actually provides us half of the salary and those are what those funds are. Then we have our local sources. We'll talk a little bit about that. And then we have other revenue sources for a total of 293 million. Other fund sources kind of near the bottom 2.4 million. Those are funds that we receive that are transfers in. The majority of that is going to be indirect costs that we earn from those federal funding sources. So general again state 196 million our federal is 294,000 and local is 95,829 806. This is a visual of our general fund revenues. As you'll see, and I think I spoke about on Tuesday, approximately 67% of our general fund revenues come from the state of Alabama, um, with about 32.4% coming from local revenues. And so when I look
016at this, what that tells me is that we're still fairly heavily dependent on state funds. um we can use definitely more local funds and um we're only receiving approximately 32% support in local funds for our general fund budget. So the state funding process the state of department of Alabama administers legislative appropriations for education trust funds. So the foundation program appropriation for all LEAs is majority grand majority is based on student enrollment. So each district receives a proportionate share of the state funding based on their enrollment. MPS was funded for 25,226 for fiscal year 2026 or will be funded for that number for fiscal year 2026. The state enrollment is approximately 721,814 students. And so MPS has approximately 3 and a.5% of that total population of students. Um and then so with that amount coming from
017the state department, we realize that that does not fund us 100%. And so the difference is funded from our local funds. And the amount of local funding that any district receives depends or the quality of education for most districts depends on the amount of local funding that they receive. Of course, districts that support or um districts that provide more local support per pupil, they have the following advantages. They have increased seasonal cash flows and they have the ability to employ more locally funded um teaching units and they also have the ability to fund enhanced learning opportunities for our students. As we're talking about the foundation program, you'll see that our ADM for fiscal year 2025 was 25,351 students compared to 25,226 students approximately for fiscal year 2026. So with that number when they look at
018how many students we have they take that number and then they determine how many stu how many teachers we we will be awarded how many principles assistant principles counselors librarians and tech um director and counselors. And that gives us a total number of units of 1,668 units compared to our 1,677 units that we were awarded in fiscal year 2025. And so going into 2026, you'll notice that we lost 8.61 teaching or total units going into fiscal year 2026. What does that look like in dollars? So in dollars and they take those units and they come up with the how much they're going to provide us in salaries benefits and then OCE which we can use to pay for um staff in our schools our um office staff and some other we may encounter and that
019are directly related to running our schools. It also gives us instructional support. So we get funds for student materials. All of this is related to our students in the classroom. We get funds for student materials for technology, professional development, library enhancement, and then we also get an allocation for textbooks. So the state of Alabama says that your total foundation program will cost 193 million 57722. That is how much they said it will cost based on our units earned for fiscal year 2026. However, you will notice on this screen that's not how much we are sent. So, the foundation program though it costs $193 million, the state will only send us $156,870 of that amount. Why do they send us just that amount? Because it is up to the district to make that 10 mil match.
020And that match for us is $36 million. So the total of the 36 million plus the gets us to the $193 million. That's why it is so important that we receive the local funding. Um when we talk about the local revenues, you'll notice that we we budgeted 96 million right off the bat. 36 million of that is going. So now we're down to $60 million. um that you have utilities, you have your custodial, you have your logistics. And so um when we get to the end of our budget, you'll see that even with those funds, we will end the fiscal year still with um revenues over expenditures less than a million dollars. And so with that, you can see that we will spend every penny of that money. And that shows that we actually need
021all of those dollars. In addition to that state foundation, there is an operating allocation that we receive for transportation. We receive an allocation for our fleet renewal, capital purchase, and career tech. So for a total state funds as it relates to this state funding model here is 178 million 546247. Again, here is our local match that we're required to pay or make. 36,187 in addition to the 156 million that is specifically foundation on the previous slide. Those two numbers together get us to the 193 million that the state says is required for us to run foundation or to prop support those 168 units. and the instruction this is breakdown of um this is an additional slide that I added here and so with this you'll see everything that makes up that state revenue line item
022that we have so in the general fund we are budgeting 196 million 910583 for state funds so 156 million of that is foundation. You'll see the allocation that we receive for state. These are all state funds that we are currently aware of. Um you'll see an allocation for specialized treatment for our teams. One thing I meant to point out the other day is there are four funding sources at risk ESL gifted and high hopes that we will not receive a specific allocation for but it will be included in a new highlighted there called the raise act. The raise act is a new funding source provided by the state of Alabama and it stands for renewing Alabama's investment in student excellence. And so that allocation is 7.7 million. However, it replaces and increases our at risk
023amount. It replaces and increases our ESL, our gifted and our high hopes. And in addition to that, it provides an additional allocation for sped and for poverty. And so those are funds. And actually that $7.7 million, they have given us exactly how that is to be broken out. Um, but it does replace the at risk, the ESL, the gifted and the high hopes. And in addition to that, it provides funding for poverty and for sped. Um, and I think there's also a charter school allocation. Um, and we do have the three charter schools. you'll see um the ARRI which is Alabama reading initiative compared to the allocation we received last year our OMI allocation transportation nurses OSR prek um there's some special appropriations that we have actually already received so we have received um summer
024and and a summer and after school appropriation as well as an additional special textbook appropriation and then we have some additional smaller grants um there that we have budgeted for as well. Um, so you'll see that all of those numbers total up to the 196,910,583. Other FE our other general fund revenues as I mentioned total federal revenues are 294,200. The grand majority of that is the allocation that we receive from the ROC. And then we have our local revenues. Um our local revenues include the district regular property tax. So that represents um our abalorum that we received. The county regular property tax represents the three and a half um county tax that was voted upon in fiscal year 2024 um for an additional 30 years. We have our business privilege tax and then we have
025our sales tax, sales and gasoline tax that we budget for. And so that totals 95,829 806 and those are the local revenues that we receive from the county um and those tax that we receive from the county as well. And in addition to that under other um there's some interest earned as well as some city and county donations that we receive. Um, as I stated earlier, we're really appreciative of that county um, at Balorum as well as the sales tax and we budget and expend every cent of that. So, we definitely need all of those funds. Um, then you also see other revenues and other fund sources and as I stated previously, indirect cost represents a good portion of that. Let's talk about how we have budgeted those revenues that we anticipate receiving. There are
026eight functional areas that we budget for. When we're budgeting expenditures, we have instructional services. Those are expenditures that are directly related to the students in the classroom. We have our instructional support services. Those are activities or personnel that provide supervision to the people that are instructing our students. So you have your principles, your assistant principles. Um you also have um guidance counselors, librarians that are also providing support to those students that are in the classroom. We have operation and maintenance. Those are activities that are concerned with the keeping our students comfortable and safe. So in that line item, we have logistics. We have our security budget. We have um maintenance operation and maintenance. So maintaining of our buildings, all of that is budgeted in that line item of auxiliary services and general fund. Auxiliary services
027represents transportation. So all of our transportation expenditures are actually budgeted on the auxiliary services line item. Then we have general administrative services. Those are um um initiatives concerned with establishing and administering policy. So a lot of your central office personnel are budgeted on that line item. Then we have capital outlay which is our building and improvements construction um architect and engineering. Right now as I stated we have we do have capital projects going on in the district um Carver South Middle and then we have the building or construction of Percy Julian. We also have debt service which is the payment of long-term debt. And then we have other expenditures. Other expenditures will consist of expenses that are related to prek extended day as well as those expenditures as I mentioned that are transfers ends from
028federal funds. um the administrative that is our extended day and our OSR prek. So the proposed budget of expenditures that we have as I stated instructional services which would be related to your students in the classroom services would be related to your um principles, assistant principles, your guidance counselors, um your librarians, those that support our students in the classroom. Then we have operations and maintenance. That's budgeted at 38,487. That's going to be your security, your operations, your maintenance personnel, custodians, as well as the district's utilities. Anything that is related to running the district and maintaining the operations of our school district. You have your general administrative services, which are your central office um personnel for the majority. And then we have outlay debt service and other expenditures. Um other expenditures as I mentioned is OSR
029prek and then some of our extended day programs that may come out of general fund. The grand majority of the other expenditures, 6.3 million, the grand majority of that is the OSR expenditures that we've budgeted for for a total of 294 million 641,921 in general fund operating expenditures. This is visual of that. You'll see that we spend approximately 77% on instruction. That's a combination of our instruction instructional line item as well as instructional support. So those two combined we combine as instruction related. You also see that we have about 13% um of our expenditures go to operation and maintenance 4.2% 2% to general administrative services and then auxiliary which would be our transportation 3.37% to auxiliary as we r wind up general fund you'll notice that um we also calculate what we anticipate our general
030our ending fund balance to be for fiscal year 2026. So we will start with our total revenues. Our budgeted revenues um coming in to general fund would be 295 million 56619. Total expenditures budgeted of 294,641. And so excess of revenues over expenditures, meaning if we were to receive everything that we've anticipated, if we were to spend exactly how we budgeted that we will spend, there would be in excess of 918,000, which is really not a lot in the whole scheme of things. But you add that to our projected beginning fund balance of 89,114 and we have a projected ending fund balance for fiscal year 26 of 90,32,78. So our required fund balance estimate is 24,553. That number is derived from taking our total expenditures and dividing it by 12. And that's the 24,553 which is
031um per month reserve not quite but it comes close. So also our reserves as I spoke about earlier the reserves are a positive thing for us um especially when it comes to credit ratings. Um, as it relates to the bond issuance, we actually will have to go back to the credit rating a credit credit rating agencies and they look at these reserves as a positive. Currently, we have $35.1 million in our reserve account. I think fund balance is 89,114 and there is a breakout of what we anticipate making those funds up. Transportation um will be about 6.1 million of that. We can only spend those monies on transportation. We can't do anything else with that. $4 million on our books is actually charter school appropriations. We can't do anything with that. That is strictly charter
032school related. And so our 601 or our local general fund we anticipate ending at about $78 million other small funding sources that are allowed to be carried over for the state department and that's a little over $1 million. And so that gets us to our total general fund balance projected beginning fund balance for fiscal year 2026 of 89 million114. So I anticipate that's where we will end in a few weeks when we close out September or close out fiscal year 2025 and that number also becomes our beginning fund balance for fiscal year 2026. We move on from general fund. We're going to talk a little bit about our special revenue fund. Special revenue again is related to federal fund sources. Again, as I stated, that's the grand majority of this is going to be your
033title ones, your title 2, three, and four, as well as your CNP revenues that you receive. So that 50,266 represents a good portion of that represents federal dollars related to title and the um portion of it also represents revenues received from CNP. Those are also CNP related and those are the monies we anticipate receiving when kids actually go into the cafeteria and make additional purchases. Um we have other sources of 543,546. So we have revenues of approximately close to 55 million when you take the total revenues plus other funding sources. And then we have total expenditures of approximately $54.3 million. Special revenues 54 million56. um small amount that's state related and the grand majority of it is federal 50,2662 as I stated again those are federal funds tied to title ones and title two three
034and four as well as our CNP revenues we have local of 3.2 2 million and other revenues and funding sources that are tied to special revenue of 543,546. This was like 50 million. You can't see I'm not sure what happened to my little but the orange represents the 50 million. Um and so the grand majority of it is our federal dollars. This is schedule of our um proposed federal revenues that we anticipate for fiscal year 2026. Title one 18 million64. We'll see that that's down about 1.7 million. I'm rounding from fiscal year 2025. Our title 2 allocation um is approximately 2,ion59. And then you'll see also our career tech, our IDA and our IDA preschool um allocations that we'll receive for fiscal year 2026. Additionally, you see our title three and our title 4 allocations
035and then you'll also see a huge portion for child nutrition. That brings us to 50,2662 in federal revenues out of special revenues. Again, we have some state revenues that are small there. Those represent small state grants that we might get. And although they are under the federal special revenue part of the budget, because they come from the state, they actually fall under state revenues based on the coding. We also have some local and other revenues. As I previously stated, those are CMP daily sales from our students as well as our local school public revenues that are at the school level. Um other fund sources that are um internal transfers between local schools. Um here's a breakout of those expenditures and you'll see that of those revenues that we budget for special revenues. We do budget
036similarly as we do in general fund. You have expenditures for instructional services instruct service operation and maintenance. Um as well as you have auxiliary services. The auxiliary services and special revenue represent all expenditures that are related to CMP, child nutrition, well as other expenses and then other fund uses. visual of that information. You'll see that our instruction for federal dollars is about 49% is budgeted for instruction. We have another 38.5% that's auxiliary. Again, that is our child nutrition expenditures and then we have 4.2 for a general ad administration. Those probably represent your administrative expenditures that are paid out of federal dollars um related to your title one office. And then we have other expenditures of 6.38%. Our proposed total fund equity for special revenue we have total revenues and other fund sources of 54,876 total
037expenditures of 54,306 um with an excess of revenues over expenditures of 570,000. So we anticipate a beginning fund balance of 11,566 and so that our ending fund balance at 12,136 out of special revenues that the majority of that represents child nutrition revenues um that we have there that in the child nutrition account that service um is the next fund that we see there and Our debt service represents debt that we long-term debt that we pay out um via the state and we've actually already budgeted with the anticipation of long-term debt for the um bond issuance that we will have. Hope you receive some funds from the state that we leverage. We can leverage some of our capital project funds. Um, and we do leverage some of that to um, pay for long-term debt that this
038that we have with the state department is capital projects. Um, and those are our PS our um, PSCA funds that I'm sorry, our ATF funds that we receive from the state. The grand majority of that on the state sources or funds ATF advancement and technology funds that we receive from the state department. the local source represents um a portion of the county taxes that we receive that we must apply to capital projects. And so when those revenues come in, a um approximately six mills of that has to go to capital projects. And so that's the anticipated amount for that for fiscal year 2026. As I stated of the 36.2 million, 28.3 million is advancement and technology funds. Six half million of it is our state capital purchase funds and then also we have budgeted in
039this fund this fund our fleet renewal. Um the fleet renewal is for transportation. It allows us, right now we're using the grand majority of that to pay on um buses. I think the the debt from that is probably from 2017 or 18. Um our local revenues said the grand majority of that is um the abalorum that we must put in capital projects fund. And then we have the state capital purchase match that we are required to make to participate in the state capital program. The other fund sources represent proceeds and the transfers in from the bond issuance if we do that for fiscal year 2026 and we have already budgeted for that expenditures for capital projects. We have some instructional services instructional support. you'll see um operation and maintenance. The grand majority of this budget
040is capital outlay um well as other fund uses which represent those transfers that I just spoke of on the previous page. Finally, we have expendable trust which represents the nonpublic the grand majority of this represents the non-public funds and the local schools. So if we were to take all of our local schools, all 48 of our local schools, that local source, they have monies that are budgeted in their fund. It is the um um nonpublic funds that may be FBLA, our DECA, our um clubs that our high schools may have. And so that's what those sources are from. And then the expenditures are budgeted accordingly. That wraps up our presentation, our second presentation of our budget for fiscal year 2026. Um, again, we have our general fund, our special revenues, debt service, capital projects, and
041expendable trust. Um, our total revenues budgeted across all funding sources, 739,862. And our total expenditures budgeted across all funding sources 680,044. I miss >> we still a since we now identify as having all of our schools coming up as Todd one schools are we still a provision to school district you know paying that's through CMP where everyone we just contribute the amount to match for the free and reduced yes okay we call it provision two but We are that we're we've still had that umbrella for our lunch. Okay. Thank you. >> Any other questions? >> Right. Thank you, Mrs. Wack is a dog well down done again. [Applause] >> All right. At this time, we'll have consider for approval Dr. Bird. Thank you so much, Madam President, board members. At this time, superintendent requests your
042approval of the funding year 2026 original budget. >> The superintendent has made a recommendation. Is there a motion? >> Yes, madame chair. >> I do move that we accept the superintendent's recommendation to approve the fiscal year 2026 original budget. >> Is there a second? >> I second it. >> Has been motioned and properly second. Any discussion hearing? None. All those in favor do so by showing of hand. It is unanimous. This meeting is now adjourned. [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music]