001Harry will lead us in prayer and then we'll do the pledge of allegiance. >> Okay. Uh Lord, we just thank you for a new year. We thank you for the freedom we have to hold public elections and to serve in this capacity. And we thank you for the wonderful staff we have here at Western and the facility. We are so blessed to pray that you will guide us throughout this year that we might u accomplish our mission in Jesus name we pray. Amen. >> I pledge allegiance to the flag of the United States of America and to the republic for which it stands one nation under God indivisible with liberty and justice for all. All right. So, we have the uh agenda. Any changes to the agenda? >> There are no changes to the agenda
002this evening. >> Make a motion to approve the agenda. >> Second. >> All in favor? Oh, any questions? Sorry. Any questions? All in favor? No. Uh, nobody signed up for public comment. So, we're up to the reorganization calendar for 2026. >> All right. So, if we can pull up those documents, um we're just going to kind of run through each one and obviously uh we will um um we'll approve each one as uh we go through the recommendations. So, the first one is to recommend that uh we appoint Kyle Zan, corporation treasur and Dana Bloom uh corporation deputy treasure for the 2026 school year. Both bonded at $100,000. >> I'll make a motion we approve that. I'll second. >> Any questions? All in favor? >> Congrats, Kyle. >> The next uh would be the appointment
003of bonding of ECA treasures, secretaries, and food service directors. So, I'm recommending the appointment and bonding of the following staff listed uh in front of you. >> I'll make a motion to approve the bonding of the ECA treasurer, secretaries, food service, and head cooks. Is that what we're doing? I'll second it. >> Any questions? um recommending the appointment of James McIntyre to be school attorney for the 26th school year at a rate of $235 per hour. And please uh in that you can reference the legal representation document that he provided for us. >> So moved. >> I'll second. >> Any questions? All in favor? recommending that we appoint Mr. Charlie Wolf, Mr. Richard Wells, and Mr. Richard Taylor to be the Western School Corporation's School Building Corporation board of directors for the 26th school year
004until their successors are elected and qualified. >> I'll make a motion to approve the appointments. >> Second. >> Who was it? Jill. >> Okay. >> Any questions? All in favor? I'm requesting that the superintendent have the authority with the communication of the board president to appoint board members to committees as needed for the 2620 or 2026 school year. >> Make a motion to approve. >> I'll second. >> Any questions? All in favor? >> Appointment of bid opening committees. I'm recommending the bid opening committees consist of superintendent, assistant superintendent, director of finance, and the director of food service for 2026. >> Make a motion to approve the building committee. >> I'll second it. >> Any questions? >> All in favor? >> And then this is the uh regular meeting dates and times for the 2026 school
005year. Please note that we will not do a Back to the Future episode January 5th of 2007 uh down at the very bottom of next year's reorganization meeting. So just note that that's actually supposed to be 2027, not 2007. >> So [laughter] asking for asking for your approval on that. >> So [clears throat] moved. I'll second. >> Any questions? All in favor? um requesting that the superintendent be allowed with communication with the board president to call special meetings as needed for 2026. So move >> second. >> Any questions? >> All in favor? >> And um board member compensation. Um, in accordance with Indiana code 202647, I'm requesting that the compensation of school board members be an annual amount not to exceed 10% of the beginning salary of teachers employed in school corporation at zero years
006of experience in which members serves in the governing body. Please reference the board resolution where the board resolution says, "The governing body of Western School Corporation hereby approves that duly elected or appointed members of the governing body shall receive compensation for services as a board member in the in amount 10% of the beginning salary for the teacher employed by school corporation at zero years of experience not to exceed the maximum compensation permitted under Indiana code 202647 as may be amended from time to time. This resolution was duly um made and then hopefully approved and it would be effective January 1st, 2026. >> I'll make a motion to approve second. >> Any questions? >> Is that a change then? >> Yeah, >> that's a change from what we were doing. >> Correct. And that's >> 2000.
007It is 2000. >> Okay. Originally it was 2,000 but does it change as the base salary changes? >> It will because it's at 10%. And so we don't we wouldn't h the way it's worded we wouldn't have to continue to do the resolution but because we are changing it. That's why we're doing a resolution to actually change it from the original amount. >> Okay. Any other questions? All in favor? >> Mileage rate. Um the current mileage rate um reimbursement uh is 70 cents per mile. This mirrors the current u prevailing standard of the IRS rate. I'm asking for your approval of the rate reflects any changes made to the prevailing standards of IRS rate uh for the 26 calendar year. >> So moved. >> Second. >> Any questions? All in favor? And then the next
008one is designation of bank depository. Indiana code 141 states each year we should designate bank depository. We are recommending first farmers bank and trust. >> Make a motion to approve. >> Second >> questions. All in favor? >> Now the one thing that we still need to do is we and I apologize I started going into the deputy treasur part. We do need to do the election of the board president, the election of the vice president and the election of secretary >> in the legislative. Right. >> What's that? >> In the legislative on as well. >> Yes. >> Okay. Five or four. Sorry. Four. >> We have a motion for board president. >> Are we making a motion or >> Oh, no. Not motion. Sorry. Nominate >> nomination. I'd like to nominate Jill Newbie for president.
009>> I'd like to nominate Joey Dyer for president. >> Nominations. >> Okay. So now we vote on each nomination. All right. So Jill, you up first. So all in favor of Jill for school board president. All in favor of Joey. >> Harry. >> I hate this. >> I vote for Jill. >> So 52. Jill is the new school board president. >> Congratulations. >> The election of vice president >> nominee Joey >> [clears throat] >> Any other nominations hearing? None. All in favor of Joe is vice president in election of secretary nominations. >> I'll nominate Cindy B. Any other nominations? All in favor of Cindy as secretary. And now for legislative leaison officer nominations. >> I'll nominate Greg Stevens. Nominations. All in favor of Greg. Congratulations won it all. This is it for our uh correct
010>> and so yeah so we can go ahead and close the reorganization meeting like I mean I Scott you'll have to do that and then we'll open the finance meeting. >> Y All right. So that brings the closure of the need a motion to close the reorganization meeting. >> Make a motion to close the reorganization meeting. >> Second. >> All in favor? Yes. Now we go to the board of finance meeting and we have the approval of the agenda. >> Make a motion to approve the agenda. >> Change correct. >> Oh, yeah. I'm sorry. I need to read read that statement. >> Oh, I'm sorry. You got that. Uh, Indiana Code 51376 requires the board of finance to meet annually after the first Monday and on or before the last day of January. At the
011meeting, the board of finance is required to elect a president and secretary and to receive and review the investment report of the investment officer. >> Now have the approval agenda. Well, and I think yeah, there are no changes to the agenda. >> Yeah, no changes to the agenda. >> I'll make the first motion. >> Yeah. Joy made the first motion to approve the agenda. I need a second. Second. >> Any questions? Favor. No public comment. Now we have the transfer report. Correct. >> Yeah. The uh document that Laura is going to bring up is the same document transfer report that you review each month. that's made available to you. Obviously, this one is going to have the transfers that have occurred throughout the year. The transfer from education to operations for the year totals 2,86,90.95.
012Uh our practice has been 14% of what we received from the state. we've maintained that uh this year I will say for the first time and if you work out the percentage it's actually a little bit less because of the new curriculum funds that we get directly through the education fund uh that part is carved out and 14% is not taken from that. At the bottom of the report is the other transfers that have occurred throughout the year. Uh this consists of the invest transfer. This consists of the interest correction that we did out of operations. This consists of the Kasich payin transfers and Medicaid transfers. The total transfers for the year uh is 3,275,414.74. I submit for your approval. >> I'll make a motion to approve the transfer report for 25. >> Second. Any
013questions? All in favor? [cough] >> Election of the president and secretary. We typically be the same as the board. Any any objection to the motion to keep the president and the secretary the same as the board positions? >> All in favor? investment summary. >> So, this is going to show the interest earned on the funds for the year. Uh, the largest of which is going to be out of the first farmers checking account totaling 797,400.93 uh for CDs also through First Farmers uh total being $284,9209. So the total interest earned for the year totals 1,82,3212. To put this in perspective of where we have been over the last four or five years, last year in 2024, the total was 756,000. I'm obviously rounding a little bit. Uh we actually had higher rates uh last year
014in 2024, but our fund balances were higher this year due to the $13 million bond being in the accounts. Uh 2023 the total was 765,000 very similar to 2024. 2022 it was 167,000 and in 2021 it was $24,000. So where we're at this year over a million to where we were at in 2021 at 24,000 you can see the difference. I'm very confident to say that this year will be kind of the inflection point, the peak uh and we'll we've already started uh to come down and that's something that we will have to budget on. We've talked extensively and we'll do so in the later presentation on SEA1's impact to operations revenue. Well, the other side of that impact, one of the other sides to that impact is interest rates coming down that we're going
015to have to accommodate for. Do you have any questions or I submit for your approval? >> Make a motion to approve. Is >> that the overall investment policy we're approving? >> No, that this is you're approving. >> It doesn't say approve either. >> Yeah. I'm not sure we actually have to approve. >> Approve. It's not saying it doesn't say approve. That's why I'm checking. It doesn't say that's fine. >> That's on me. I apologize. >> That's fine. I just want to make sure I we Okay, so now I have the overall investment policy. >> I just want to thank Kyle >> for the interest earned. Just thank the bank. >> Well, >> yeah. [laughter] I encourage you also I encourage you also if you have a chance to thank First Farmers because as a reminder,
016we do have an agreement with them that allows us to draw a higher interest rate and since going to that that's made a significant impact. >> I appreciate you going after that. >> Yeah, >> as far as our investment policy, I I won't go over this word for word. This is something that you guys have reviewed as part of your policy updates. Um, I don't believe there's any changes in this since last year. So, we submit for your approval on the investment policy. >> Make a motion to accept the investment income. >> Second. >> Any questions? [cough] >> All in favor? Financial condition report. Make sure I've got control of this here real quick. Uh, this is the longer one. This is the report that we are required to do. The same Indiana code 5-13-7-8
017that Mark referenced before uh is the policy or code that does govern this. Uh the presentation that we are going over now serves to check the box for this requirement. As far as the indicators that we are required to discuss and go over, uh you see them on the slide before you. There are six total. uh those being ADM, fund balances, annual deficit surpluses, fund balances as a percent of expenditures, revenue by type, and then operating referendum. That sixth and final one, operating referendum does not impact us as we do not have a referendum. In the coming slides, I'll break down each of these. Each one's probably got about two or three slides. Uh typical practice is it starts kind of high level very broad and then narrows down and goes into more detail. Uh
018we'll see that first and probably most because we'll go into more detail on this one than the others uh being ADM or average daily membership i.e our student counts. In this first one again very high level we can see where we have been over the last 10 years. And if we try to pinpoint some trends uh we can see that from 1516 through 1819 school year we were relatively stable from there. Unfortunately we saw a slow steady decline. However, there is reason to be optimistic uh that the 2324 school year was a bit of a hinch point, if you will, in that we are seeing encouraging increases in both the 2425 and the 25 26 school years. In this slide, key takeaways that I'll encourage you to notice. Uh first being that it's a reminder
019that there are two count days. the first being in October, the second being in February. So, we are less than a month away from that second count. The other thing that I'll encourage you to notice and likely serve as a reminder that we are almost always higher in the fall, that first count, than we are the spring count. Uh we budget for a 20 student decrease from the fall to the the spring. If we average out those student counts and then we look at the last 10 11 years uh we can see where our you know trends have been and also the plus minus from prior years. So we can see that steady decline from the 1617 school year up until the last couple school years. Uh but as I mentioned in the previous slide
020there is some reason for optimism. uh there's reason to believe that we have hit our population low point and at the very least are leveling off and likely to see increases over the next several years. The 2526 increase that you see the 2518 uh came in spite of a very large senior class exiting one side of the the building and we expect that a smaller kindergarten class that would replace them. saw that. But despite that difference, we still saw what I'd argue is a fairly significant increase from the prior year. And we'll see more details on this in the coming slide. I will mention uh our first count date for the 2526 year was the 2518 that we've mentioned. Uh we are I guess gearing up for that second count date in February. As of
021today, we are 252. So, as a reminder, what we've already said, we kind of budget on a 20 student decrease from first count to second count. We're trending right along that lines. Uh, the goal is to stay above, I think, 2500. Craig's promised me that he'll make sure that happens. So, if it goes below, it's it's on Craig. >> Here we see an analysis of the first count date for this school year. And because we saw the increase, I thought this was worth breaking down a little bit. Uh that chart on the left going through each of the columns. The first column shows this year's I'm going to repeat this year's grade. Column two shows the cohort for this year's grade 2425. So their last year's spring count. Column three shows the 2526 count day
022count. And then column four shows the change that particular cohort had from last year's. So if we look at the first grade, first grade, that's this year's first graders had 167 students for this year's first count date. Last year when they were kindergarteners, they had 163 students. So they as a grade as a cohort saw four student increase. Conclusions we can draw from this analysis. And I'm reading the bullet points here on the right. The post-graduate cohort was the only group that experienced a decline in student numbers and that was just one student. Uh these are our Kasich students. Uh overall enrollment increased by 49 students when adjusting for the senior class exiting and the kindergarten class that takes their place that ended up being -23 students. So you could argue a true underlying enrollment
023growth of 72 students if we take out that decrease of 23 students from graduates versus kindergarteners. This year's kindergarten class is the largest that we've seen since the 2122 school year. I think that's a big positive. We however did not experience our typical eight student increase from kindergarten to first grade. This has been a consistent trend for several years now. That cohort only saw four student increase this year. Third grade showed the most significant single grade growth increasing by 13 students. The middle school obviously grades six through eight uh is the only three grade span in which each grade level exceeds 200 students. Average [snorts] enrollment per grade level AC across the district is 193.69 students. >> Can I ask a question? Do you have any idea how many kids we are >> teaching that
024are already past 12th grade? >> That is that that grade 13? >> There's five this year. >> So, we don't get an ADM. >> We do because they're all >> Yeah. Anybody any tally that's listed in there, we get ADM for. >> I had a question. >> Yeah. Do we know um the difference between our fall count and spring count especially? Well, is it due to kids going to homeschooling or online oral? >> It's not midterm graduates for the seniors. >> We had like for example, we had a family that moved and they had >> I mean they just they moved mid year and so it's >> a combination. [clears throat] >> It was just such a combination of different things that There are a few midyear graduates, but not not as much as we
025used to have. We've really declined in that area there because they have other opportunities to stay at the school um through the spring semester. But I mean, some of it's just some people were transfer students and wanted to transfer back to their home school. Some people actually moved out of the school district or out of the county. It's just a combination. I'm sorry. Go ahead. So the 163 kindergarten, you did have the eight increase. Is that 163 a bigger number than usual for kindergartens from last year? >> Yes. The kindergarten we have this year. Uh is the biggest >> So the 163 the first I'm sorry. So you said you only lost you only went up four instead of eight, but is that 163 a larger number? >> Is that why? >> That's that's actually
026a smaller >> Oh, really? >> That's been one of the smaller kindergartens we've had. >> Okay. So my question is the the increase that we saw is it for out of district or in district or do we know? >> We haven't got our transfer report yet but when we get that we'll be able to have a more inepth >> analysis. The transfer report will tell us a lot but um I all the transfers come through me and I would tell you that we haven't seen any spike in the number of transfers that we've had over the last couple of years. I feel like it was pretty pretty level uh from what we've had in the past. So, I do think we have, you know, some of the new housing additions um we've seen an influx
027from from those and I know some of the apartment complexes that were remodeled are now being filled. So, there's some some opportunities for people to move into the district. >> So, you said there's a lot of reason for optimism. Another one I'll point out uh is this year's senior class is relatively small. so that graduates to new kindergarteners won't be as big of a loss this year. Uh so we also have the housing addition houses are going up. They tell you to budget half a student for each house that that does go up. Uh there is again reason for optimism that we have hopefully reached that low point and we'll maybe start to see some gradual increases in the years to come. Last slide I have for ADM uh shows a chart that's going to
028show the school total students in that school based on that first count date uh average students per grade within that particular building the teachers within that building and then the student teacher ratio within that building I will note which you see the asterisks there at the bottom these numbers exclude Kasich teachers and Kasich non-western students the high school. I'll also mention that there are 125 Western High School students that attend the Cookamo Career Center part day. If we accommodate for these students, then the high school student teacher ratio drops to 15.69. Moving on to the second indicator being fund balances. Uh this slide is kind of the the big picture. uh you'll see that there is an increase from 2023 to 2024 and that number that you see for 2024 is actually larger because $9,340,964
029is in CDs is not shown within that particular bar. Uh biggest reason for that spike, that big increase is the $13 million we brought into our accounts by selling bonds. Uh other lesser factors for gradual increases uh can consist of high interest rates which we've seen the the benefit of that energy savings that we've been able to capture esser funding unfilled positions outstanding incumbrances also factor in there specific to 2024 that spike the $13 million bond again is going to be the largest factor. We did have the continued high interest rates that we've referenced several times. We also had what I've just gone to calling the $300 or the 300 fund windfall that consisted of the tax waiver that we did that allowed us to do a transfer from debt service to operations. That was
030a one-time deal. The AV increase that we saw thankfully that year and the one-year circuit breaker decrease we saw that year because our tax rate did fall. Uh if we project out where we'd be in 2025, you're looking at about a little over 19 million uh with CDs, it's about 19.7 million. So down if you consider the CDs and the fund balance in 2024, we are down in 2025. The reason for that decline, which I'll obviously go into more detail next year when we're doing this report, is going to be the spending down of the $13 million bond funds. Here we see a a breakdown by different funds or groupings of funds. Um I'll mention that negative balances in federal funds is the result of federal requirement that you got to spend the money and
031then being reimbursed which means you have to run the accounts in the negative. We have more than this more of this than most schools due to being the housing agency or the LEA for Kasich. Uh the blue line I'll mention the larger of the lines for most of the years definitely 2024 uh is the construction fund line. Sharp rise and fall depending if you are selling bonds or spending down those bond funds. Tan and orange are the education and operations funds. Steady increases in these have been due to the reasons that we have previously mentioned. Here we see a more specific and detailed analysis of what I've called before the big four funds. Those being education, debt service, operations, and rainy day. And we can see where they have been over the last 5 years.
032Uh I'll mention the numbers shown include the amounts in CDs. So that is accounted for. Uh in the education fund, the increases steady increases have been a result of unfailed position. Well, the maybe be specific 22 23 to 24. I'm sorry. Uh the reason for the education fund increase uh is going to be because of unfilled positions. It's going to be there was a $30,000 community health bill that they got to us late that crossed over a year. And then the big one is going to be the curriculum fund. what was the old0900 had to be brought into the education fund and that was 513,283 increase to the education fund as a result. Uh as far as the operations fund increases, this is going to result from interest rates we've mentioned several times, the tax
033waiver that we've previously mentioned, the AV increase that we've previously mentioned, and the one-year circuit breaker decrease that we again have previously mentioned. Uh if we project out in 2025, the education fund will be about $5.6 million. However, if we take out curriculum funds, this becomes $5.1 million. Uh debt service will be $729,000. I'm obviously rounding. Operations about $5.7 million. Um not much of an increase, about $30,000 there. The interest correction is a big reason for that. And then rainy day fund, no change from 2024. So our total funds in 2024 totaled between 12.8 and 12.9 million. In 2005, we're looking at just under 13.1 million. Our third indicator is going to be annual deficit and surpluses. Within this chart, the green bar is going to reflect revenue, blue reflects expenditures, yellow indicates a deficit,
034and the gray line that runs east to west equates to fund balances within a particular year. Uh deficits could be related to construction projects, bus purchases, waiting on receipts of tax revenues and reimbursements, or rainy day spending. Uh notice that you've got one graph that's to the left that shows multiple years and it also shows uh the totals with construction funds and construction funds are the biggest factor of why the disparity exists between revenue being much larger than expenditures for 2024. If we remove those construction funds, that is what you see to the right. You still see the green i.e. revenue is slightly larger than expenditures just not as much as not as much if you include the construction funds. Uh our fourth indicator is going to be fund balances as a percent of expenditures.
035I'm only showing this because well I'm I'm going to go into detail on this indicator but I want to show uh this because if you go to the state's website this is the graph you will see. However, this is not correct. Our fund balances as a percent of expenditures for 2024 are not 77.8%. Uh the reason why this does show is or why this is inaccurate is they are including the investments from our bond funds as a part of this. I've contacted DGF and given them the right numbers, shown why this one is off. They are in the process of uh fixing their data, making the correction. Once they make the correction, what you will see is this. These are the correct funds. The bond investments uh are removed within this. So we can see
036that for 2024 our expenditures 23 million uh $830,978 fund balances 12,67,367. Uh so our percentage is 50.6. Uh this as an indicator is considered as by most as one of the more important physical indicators. I would argue it's the most important that we'll go over today as it reflects our or any school's ability to maintain operations in the event of hardship, delays in in revenue or funding or just changes in revenue. Uh typically 8.3% is considered a bare minimum. This is usually regarded as one month expenditures. So, if the revenue streams shut off completely, if you've got 8.3% balances, you can fund day-to-day operations. You can make payroll, you can do all the things for one month. 20% is considered a desired target. If you've got 20% the kind of the equation is that you
037can maintain two to three months of your expenditures uh without any delay without any offset into day-to-day operations. Uh we obviously are considerably uh ahead of that which I mean it's a good thing that shows uh the financial health of Western. Uh it also shows our ability to kind of sustain an an impact a financial impact that maybe you weren't expecting i.e. SEA1 um our if our fund balances percent expenditures was lower much lower than this and SEA1 comes on I'd be a lot more nervous about our ability to sustain and withstand uh the hit that that has been and will continue to be. Uh, I'll say if we compare ourselves to some of the surrounding schools, uh, Tri Central is at 45.6, Eastern 30.3, Taylor 26.3. These are obviously percentages. Northwestern 34.3, Cooko is
03840.9. The highest in our area that I could find is West Lafayette at 63.7%. Um, if I run projections for 2025, I will note and I've got this on the bottom and I forgot to mention it. Yes, we are 50.6%age, which was a decent increase from the previous year. But a bigger reason for that increase was the curriculum funds coming into our accounts, the education fund for the first time. If you account for that, then we only have been 48.5%. If I project out where we'll be in 2025 when we're having this conversation, the numbers have all been uploaded through the form 9, uh we're looking at 50.92% so relatively stable from the 2024 numbers. With that being said, uh in the coming years, we can expect this to fall. uh we'll try to control
039this at an acceptable level. But as we get more aggressive at addressing our continuing to address our feasibility study results, as we get even more aggressive at increasing salaries and benefits, and then as we feel more of the impact of SEA1, which is going to drive down revenue, uh and thus our fund balances is something that could very likely take a hit. uh we'll start to see this percentage tack down a little bit. The fifth indicator is going to be revenue by type. This as an indicator is used to identify trends in revenue sources. Uh looking to make sure that we're not overly dependent upon any one source of revenue, particularly if you have a referendum, which we do not. uh revenue streams for Western are within the expected ranges. I'll note here that due
040to SEA1, state revenues will be strained in the coming years. Actually, it's local taxes and revenue that will be strained in the coming years as a result of that. Uh unfortunately, our ability to enhance revenues is rather limited and that's what makes SDA1 hit uh so significant. Uh bonds are our biggest uh ability to increase our revenue, but that's restrained by our good stewardship uh of our levies and rates uh as well as our debt service tax rate limits that the state imposes on us. However, as far as RSA1 response plan, we have sought out additional levels of revenue. This has consisted of the solar federal refund that we've talked extensively about. Uh this includes the Medicaid billing uh which will increase by I'm budgeting about $25,000 in revenue. Uh our IMAC billing which is
041also tied to Medicaid, but it's kind of the administrative side of that should net us, I'm hoping another $25,000. And then the bank interest rate agreement that we've detailed in a previous board meeting is another um approach to trying to enhance and capture additional revenues moving forward. With that being said though, you can't new revenue your way out of the sea one impact. We're going to have to accommodate what it's going to do us do to us in other ways as well. Another way to look at our revenue is far is is [clears throat] by the percentages that it makes up the total revenue. I'll say for this debt service or debt revenue is removed so as not to skew the data because it can fluctuate so widely from year to year 13 million in
0422024 nothing in 2023 would be the example but if you look at this by far our largest revenue source is from the state you know what we get each month uh this is going to be followed by local taxes and federal revenue local taxes will be where the sea1 hit is going to take place uh which I mentioned in the previous slide. Uh other local revenue uh could be from the sale of items. Uh however, we don't get much for the sale of buses and some of the things that we put up for auction. Uh every little bit does count though. Uh for us though, we also, as we've mentioned, serve as the LEA for Kasich. Uh this means we do have some money coming in from other schools to cover sped expenses. uh this
043you know will primarily serve as the kind of the passing through agency because we are the LEA for Kasich in this sense >> and Kyle I could be mistaken here but federal stimulus this will be the last time we see that on [snorts] the chart >> 2024 will be the last year we see that yes the sixth and final indicator is operating referendum as a percent of total revenue this is zero 0% because we do not have a referendum So that goes over the the six indicators. I do want to go over a few things that are related to these because things that we have talked about need to talk about or we'll continue to talk about that impact decisions you're going to have to make. Uh the first of these things and I'll try
044to go through these in a timely fashion. Uh the first is the the circuit breaker. Uh and this is something that we've talked about before and that we are a high circuit breaker district. We're going to get higher. Uh this results directly from the SCA1 impact. Within this chart uh left to right in the columns you see the year. The second will be total tax rate. Next over is the operations approved levy. That's what we're I would argue supposed to get from the taxpayers. The next column is the circuit breaker report estimate. State gives us a report each year that is an estimate of what we're going to lose. It's fairly accurate as you'll be able to see. The next column is the actual operations revenue that we receive. And then the actual circuit breaker
045loss takes that actual revenue received and subtracts it from the levy. And you can see what our loss should be. So that's actually kind of a a negative in that sense. Uh percent revenue lost, the percentage- wise you can see has been creeping up each year. Uh a high circuit breaker district is typically considered one that is 20% or higher. There's about 50 of us that are in the state. So, we are are part of the club, if you will. Uh, I'll notice that if we look at trends or I'll note if we look at trends, we see a drop in 2024. This was due to our tax rate falling and the supplemental homestead credit temporarily increasing. In 2025, we brought our tax rate back to 2023 levels. So, we saw the continued climb up
046of the circuit breaker. The circuit breaker impact in 2026 you see rises sharply from previous years. This is primarily resulting from the homestead credit being added to the circuit breaker total. And I'll note I'm going to go over this in more detail in the coming slides, but note [snorts] this is just showing the circuit breaker impact to operations which before 2025 that's I'm sorry 2026 that's all we needed talked about was how operations was impacted. That's not going to be true for at least 2026. And that's what we see here. Uh here we can see in the operations line left to right the same numbers but broken down differently what we saw in the previous slides. That total credit estimate of 1,654,986 is the same from the previous slide, but you see the breakdown of
047that. That tax cap credit of almost 1.5 million. That's your traditional circuit breaker, if you will. The one that we are used to. The local credits is credits for people over 65. It makes up a small percentage, so we don't typically talk about it. The new one that I do want to mention is the homestead credit. So for this 2026 and beyond, for this year, each homeowner will get the lesser of 10% of their total taxpayer liability or $300 as a homestead credit. good for us individually as taxpayers and for our population. Uh they get a a modest uh tax credit, but when you add up those credits that each of you gets and each of your neighbors gets and each of the people in your neighborhood gets and each of the people in our
048district gets, it becomes some big numbers. Uh in operations, the hit will be around $176,000. uh debt service which was not protected from this the traditional circuit breaker it's protected from it's not from the homestead credit. So we're looking at 193 to $194,000 hit to debt service. Now, the assumption is after this year, the legislature will quote fix this to where debt service is no longer impacted by this homestead credit, which I guess is good, but it also means that operations then has to take that hit on as well. So in 2027 and beyond, assuming the legislature does make this quote correction, you'd be looking at a 370,000 plus the increase from each year that operations would have to take on that would have to sustain. >> And part of the reason why they're taking
049on that or they may make that [snorts] change is the impact that it will have on credit ratings. And so that's why it's an issue to be discussed. this legislative session, next legislative session, whenever they discuss that. >> So, this next graph um was provided to us by our partners at policy analytics and the numbers will be slightly different for 2026. They're making some different assumptions than the state is, but it's within range that they are not far off. But what policy analytics is able to give us, provide us that the state does not is a projection out beyond 2026 of what we can expect and plan our circuit breaker to do in the coming years as sea 1 is more fully implemented. So we can see that hit that we've detailed. We'll say 1.8
050million in 2026. Uh, and in the breakdown of the the collars on the bar, the darker color that is the majority is that traditional circuit breaker. The light blue is the hit to operations from the homestead credit. And then the orange or red, depending on your level of color blindness, uh, is the hit to debt service again from the homestead credit. Now, I think it's a safe safe assumption that after 2026, we will see the orange/ red go away and it will all be operations. So, I'll focus on the full impact uh as we move forward. But in 2027, we are planning for it to be just under $2 million and then in 2028, we see a significant jump to where it goes to 2.6 million and then has a sto slow steady decline from
051that point on. Uh so this is a huge consideration for us uh as we budget from this year and beyond as we consider what we are doing with our levies that we're asking our taxpayers for when we consider what we are doing with bond money. Um every financial decision has to at this point on has to factor into this graph of what we're going to be dealing with uh in the coming years. All right. Also from policy analytics, they provide us with a taxbased profile. And I thought this would be good for you to see as far as the people we represent. Um, you know, where are the taxes coming from? Uh, this first graph, I'll focus your attention to the lower left. Here you see the different uh tax districts within our school district.
052Uh, and I'll challenge you to notice that the overall rate differs drastically from the different taxing districts. Uh, Harrison that encompasses Cooko, you're at $3.87 where if you look at the Honey Creek, I think is the lowest. Not the lowest, um, but one of the lowest, but we'll use them as comparison. they're at $1.99. Uh our rate though, the $114, this is obviously for pay 2025, is $114 regardless of the taxing district that we are referring to. In this next chart, uh I'll focus your attention first at the top left. Uh within this chart you can see the certified net levy of each of the taxing districts as well as the percent of the tax base they make up. Uh Harrison Township by far uh makes up the majority of the revenues that we are
053bringing in through taxes. At the bottom left that middle bar, gray bar, you can see the percent of parcels that are at the circuit breaker cap for us at 48%. Uh we can see a further breakdown this if we move to the bottom right where we see the percentage of parcels at the circuit breaker cap by cap levels. So that cap one is going to be your 1entersenters. They can't pay more than 1%. Those are going to be homeowners. Uh the it's 42.2%. We're at the cap for that group. The cap 2 uh is going to be the 2enters. They can't pay more than 2%. This is going to be primarily rentals and farmland. Uh they 26% are at the cap. And then the cap 3 is going to be your 3enters businesses. They can't
054pay more than 3%. Uh 29.9% are at the cap for this group. Next graph we see the taxbased composition for our gross assessed value and our net assessed value. We like most districts across the state are very reliant upon residentials. I'd say for the area schools we have a healthy dose if you will of agricultural commercial uh apartments. I'd like to have a little bit more because that means our circuit breaker would be a little bit less. our ability to sustain the hit of SEA1 would be a little bit more, but most of the schools definitely in our county uh and our surrounding area would probably not probably would definitely trade us our tax based composition for theirs. So, we'll all count ourselves fortunate uh in this sense. The AV outlook also provided by policy
055analytics within this first slide. Uh I'll guide your attention first to the top left that just to say that we've already seen that that pie chart from another slide. Uh I'll direct or focus your attention to the right where we see our gross AV change by property class. Now we saw a 13.6% increase from 2025 to 2026. Uh that was a surprise and that that was a very good surprise that our ability to project out of what the next few years looks like is much more rosy because of that. So we can see here a more detailed version of where that came from. Uh residential saw about a 14.5% increase on average. Apartments 6.6% 6% commercial 2% industrial 6.1% agricultural actually saw a decline 4.5% and then personal property a 1% decline uh but overall
056for us over 13% uh increase. Next slide is going to show our net assessed value outlook. So we can see where both the total AV and the certified net AV have been past, present, and future. Uh I'll walk you through the gray boxes here. At first we see the actual average NAV change over the last 10 years from pay 2016 to 2026 is 6.5% increase. Actual NAV change from pay 25 to 26 is that 10.6% 6% that I referenced again that pleasant surprise that we got late October I believe it was of this last year. Uh and then the last gray bar there projected average NAV annual change over the next five years uh is -4%. Then on the chart to the left, the green top dotted line uh is where the gross AV is
057expected to go in the coming years. And then the blue line, the one that actually is going down is the net AV. And the reason for the difference, as we've detailed in previous board sessions, is the increase increasing deductions for taxpayers that sea 1 is progressively imple implementing from year to year. We can see this in more detail as far as our past, present, and then future net AV. Uh you can see where it has been. You can see in 2026 that 10.6% 6% increase that we've referenced several times and then we can see the projected decreases coming. Um, you know, in the October board meeting for the budget meeting, I was kind of doom and gloom, uh, saying that, you know, bad days are are coming. Uh, literally the next day we got our
058net AV increase and it was higher than what was being projected. and I sent an email out saying, "Hey, things are better than what I doom and gloomed the previous >> down the hallway, weren't you?" >> I was. Yeah. [laughter] Sight to see. But I also said in that email, in my communication [clears throat] sense, that I mean, yes, that was a gift of sorts. Uh, it doesn't cure all the ills that are going to be caused by SEA1. It doesn't fix what's going to happen to our NAV in the coming years. And I think this graph does a good job of showing that and what is coming. So kind of a more finite example of what is coming. Uh we can see in this chart to the right, I'll walk you through the different
059rows. That first row, when I say row, it's actually the first three rows, uh is our certified levy. This is showing where we are at 2026, but then also projecting where we'll be uh in the coming years. The plan that the board has kind of cleared and we've detailed with you in debt service is to maintain the levy from 2026 in each of the progressing years. Uh operations the projection shows a 4% increase from year to year. Uh that may change but right now the MLGQ has been capped at 4%. So that's what shows in the model. The second row is going to be the unfunded credits. at the circuit breaker losses that we have detailed in detail in the previous slides. Uh the next rows are going to show the net levy. So that's
060taking the certified levy subtracting out the circuit breaker losses and you can see that these are going to be declining as the sea 1 is more fully implemented in the years to come. And then you can see our tax rates of where they are projected to go in the years to come. Now I'll mention we saw a decrease from 2025 to 2026 because of that unexpected increase 10.6% increase in our net AV. It's not that we are you know asking for something that's drastically different. It's just that net AV increased uh so much. In the coming years though, you can see what the tax rate is projected to do from $1.17 in 2027 to $146 in 2031. This has less to do with what we are doing differently. Again, the plan is to maintain our
061levy for debt service and just do what we're allowed for the increase in operations. And you may say, well, do we need to increase operations? Well, yes, because eventually we're going to get to a point where our operations revenue is not going to be enough for our expenditures and we're going to have to rely on bond funds. We're going to have to rely on cash balances. We're going to have to rely on an additional transfer from the education fund. There's several levels levers that we can pull to accommodate this that we'll detail when we get there. Uh but you can bet that our expenses and operations are going to go up by more than 4% each year. Especially when you consider energy cost, when you see consider property casualty insurance, when you consider increases to
062our staff salaries and benefits that I think we want to try to be aggressive with as much as we can. So again, that tax rate is going to be less on what we are doing and more on the increased credits that homeowners are getting from SEA1. And with that being said, this is last slide. Uh this is one you've you've seen at least on two other occasions, but I think it's important to reiterate any chance I get. These were kind of the SEA1 impact key points that that we've gone over. First being sea 1 introduces a series of taxpayer deductions over the next six years that will reduce our net assessed value. These are progressive in nature and that each year it's kind of a little bit better for the taxpayer a little bit worse
063as a result for us the receiver of those tax funds. Um number two to meet our desired levies our tax rate will need to increase over time as NAV is eroded by deductions. And we saw this in the previous slide of what the tax rate is doing. Less caused by us asking for more more caused by the NAV being eroded due to the increased deductions from SCA1. Third uh key point is a strategic shift is needed from managing to a tax rate to managing to a levy i.e. a revenue target. And this is what we've detailed talked about before and this is what we saw in the previous slide uh with debt service of maintaining that levy the 2026 levy from this year for the foreseeable future. And then the fourth one, our debt service
064tax rate is likely I'll put a asterk I'll draw an asterk like I can draw it on this the slide here. Uh likely to exceed the 70.7 70 cent threshold in the future which would require referendum approval for future bond funded capital projects. Um, if your debt service tax rate is above 70 cents, the only way for you to sell bonds is by doing a referendum. We obviously want to stay under that. Um, in October's board meeting before our NAV came out, we had that unexpected increase. I'm not didn't think we'd be able to make it. I thought that at some point in time during SEA1's implementation, we would very likely go over. If we look at the projections now and I'll go back to the previous slide. Um, got to navigate to where I
065can see the numbers here. Uh, if you look at the debt service tax rate in 2026, it's 0.5695. It climbs to where in 2031 where policy analytics is projecting will be is at 6991. So just under um from that point on our net AV this is barring they don't make any more additional changes but from that point on the net AV should start to progress back up to where that tax rate should then start to progress back down which would give us bond capacity but that's something we'll have to consider when we sell bonds uh in 2026 and when we sell bonds in 28 2028 through 2030. >> Something also to consider, if you remember, that 70 cent threshold was 80 cents last year and that was reduced by the IG. There is also talk
066that that threshold may get lowered again. So that's just something as you're having conversations with any of our uh state leaders. Um going below 70 cents is going to be pretty hard on a lot of schools as you've seen the projections that we've run. Being as fiscally responsible as we have been for a decade plus um that just makes it really hard. So um just something to think about when you're having those conversations. But that is a little bit of the chatter that that could drop to 65 cents to 60 cents potentially. >> So have a plan, work the plan, plan for the unexpected. Part of our planning for the unexpected was the 28 through 2030 bond and going ahead and getting grandfathered into that with the idea that any changes the legislature does make
067such as reducing the debt service tax rate threshold from 70 cents to 60 cents. That bond should grandfather us in where we could tap into that and sell those even if we were above any new threshold that was created. That's that's all I've got. If you have any questions, um more than happy to go into any more detail that we need to >> make a motion to approve the financial condition report. >> Second. >> Any questions for Kyle? >> Thank you, Kyle, for walking us through that again. >> Stick with us sooner or later. >> Oh, you got a question? >> We got a vote on the condition. >> Yeah. I'm getting ready to do that. [laughter] >> They gave me a comment. >> All in favor? >> That's right, >> bud. >> All right.
068Now, we're on the pressure. >> I thought you were going to comment. [laughter] I don't >> Just a reminder after um adjournment, we do have a document to resolution needs to be signed by you. you and then also we have a virtual uh voting practice. Uh so just a reminder we to move we adjourn. >> Second. >> All in favor? Yes. You are adjourned.