001I got all these buttons up here now. Okay, I call this work session to order and wake everybody up. Um, could I get a an adoption of the agenda, please? I move to adopt the agenda as presented. Can I get a second? Second. All those in favor, please raise your right hand, vote. I I I All right. Motion passes. Uh we have two two items this evening. The first one is Mr. Holder and a budget. And actually, I'm going to start off. Mr. Holder will make his way up. We're going to kind of tag team this. So, this is your financial summary. We're going to end up talking about the close of this fiscal year and the opening of next fiscal year. Unlike the federal government that goes se October 1st to September 30th, we
002go July 1st to June 30th um at at the state level and district level. So, that's our fiscal year. We just got a couple days left. So, kind of going through and my clicker just Okay. So, you can kind of see here the reserves we've had over the last decade. Um, but you can see we were able to increase our reserves dollar-wise, but our percentwise just went up a little bit and now it's dropping down. I can tell you that the drop from 23 to 24 is just shy of $5 million. And that is the $5 billion we did not receive from tax collections in the uh 23 assessment year, reassessment year, because remember we set the tax rate in September. Then many appeals were heard and found uh and changed before the bills were
003paid and that difference was almost $5 million. We will get that at some point. Recruitment tax, it might be this September. It might be next September. It depends when the county gives us the information. Um, so that that really that 76 million really is kind of like an 81 million which makes that 28% higher. You're going to see again that we're carrying that loss of 4.9 million still. So this year you're going to see in a little bit we're dropping to 26% reserves and you're going to see why a lot of it's because of we've had a really rough eight days here financially on revenue side. So, first off, our I kind of to give you an um a little roll down on our roll back, our our our operating levy roll back. Um there's
004518 public school districts, only 22 rolled back a dime. We roll back 65 cents. We're leading the state. That's on the right. You can see the rest of them in the state and what their roll backs were. If you look on the left, that's the 12 districts in the county. Only two of us rolled back and we cannot undo that roll back this coming September. So, just let you know that that 65 cents will carry on and a reassessment year. You cannot um undo your roll back. Um here's the 18 districts that have 10,000 or more students in it. Uh and you can see again we're very much higher than the rest of them and how much we roll back and higher than the a almost double the average um when you put all 18
005together. Tax rate wise, here's the 12 districts in the county. We have the lowest tax rate. And I want to point this out because the last couple years, David Carlson will have a um work session with you about salaries later in the fall. Um we're starting to lose folks to some of those districts in the top of this list because they've given uh voters of have of raised levy or they're not taking the roll backs like we are. So, give you an example. We had a 15-year veteran um choose Raytown over us a few weeks ago. Uh because Raytown FST step 15 would pay about $4,000 more than us. Five 10 years ago, that was not the case. So, our our neighbors have are competing better against us because they've they've learned they're going to
006have to have a higher salary than us. And it's starting to impact us um getting our first choice in all cases. Um you can see this is the history going back to 20203. a 23 years of history here of what the tax rates been over those 23 years. You can see that operating levy is in blue and it used to be a much higher number than it is now. Then you add the debt service and then you get the total. When you get the total used to be $611 there in the middle of the chart, it's now down to $4.73. Um you can see the Prop C is a green column. That's going to be a conversation we have over this course of next year. Um we approved a resolution saying we're going to put
007it on April ballot. Eventually, we're going to have a vote to see if we do put it on the April ballot. Um, we lose about four million a year um in Prop C revenue because that roll back, again, only about eight districts roll back um enough that lose more than a million dollars and we're one of those. And in a very, very far right column, you can see um we didn't have a voluntary roll back until two years ago, and the dollar amount we're foregoing by having that roll back. So, we were getting all of our voter approved funds before. We are now in negative 22 million based on what voters had approved and passed. So just kind of show that piece. This year was really really really exciting and good. Um for the first
00811 months there's only 12 months in the fiscal year and we were three and a half% increase over prior year's 11 months both at expenses and revenue. We were very very excited about that. Then June came better yet June 18th and on came. So the last eight days we've had five pieces of bad news. So, I'm going to kind of go through each one of those. Number one, on the 18th, we were told, "Hey, the state state we don't have enough money to pay fully fund a formula. Even though we said we're going to fully fund it, we passed a appropriation bill in February to u make sure we had enough funds to do it. We've been telling you we're going to fund it the whole way. We're not." And that that's going to hit
009us about a negative $185,000 as Nathan's calculation. So, um and that's money we will not get back. So that's a loss and it's going to stay a loss. A lot of these rest of these are going to be not permanent losses. They're just going to be a loss for this fiscal year we're closing, but a gain in a future year. At least that's what they're telling us. So the first one is through our federal programs department of desi. They notified us that they didn't have enough money to pay us um for our title programs. So how this works, our title programs, we submit a budget and a plan in 2024 before July 1st. They approve it in July of 2024 and then we spend the money and then we ask for reimbursements after we spend
010the money because they promised they would pay it. So that's why we expended it and then we get the uh the reimbursements. Well, they didn't have enough money for reimbursements because the federal government hasn't given the state the money yet. Um they're behind in their payments to the state. So state can't give us what they don't have. And that was about a $680,000 loss. Again, they're saying we should get it in a July to September time frame. So in a course of two years it doesn't matter but of course of what uh looks our percent reserves going to look like on June 30th it does matter. Bad news number three basically the same exact thing from a different department in desi and this is special education IDA part B and this one was about $1
011billion that they didn't have to pay us. Same type of thing approved budgets. We expend the money knowing that they're going to reimburse us and in 23 years of being administrator they've always reimburseed us. This is the first I've ever seen in these in both these two funds. Um, so FY26, we should get this $1 million is what they're telling us. Bad news number four doesn't impact FY25. I I put this one last because it was last until yesterday. I almost switched it to um make bad news number five, number four, but um I didn't want to change the order since I I notified you guys these in this order. So we got our allocations for title one next year and it is 840,000 less. So, we get about a million and a half this
012year. Again, 680,000 is not here yet. Um, next year they're they're decreasing that by 56%. And the reason why, so how they come up with how much money first first off, they divvy it out by states on their poverty rate. And Missouri's poverty rate by the calculations is down compared to their neighbors. Even though it's up, it's not up as much as some of their neighbors. So, the state's losing about 12.5 million dollars. Now, we're got 2.1% of the kids. So you think $12.5 million. Okay, we should get about 2% um of that $12.5 million cut. We got a much bigger we got a six over 6% of that cut. Why? So they base it on census data. It's actually in EA law section 1124 and 1125 goes over four ways you can qualify to
013get title funding. Well, in that title funding, um it's based on census data, but you don't have a census but every 10 years. So in the years after that they predict what your poverty would be based on tax returns and we can't see those. So we can't see what the formula is saying about tax returns. SNAP um so federal assistance well that depends on people engaging with that. We know they engage at a lot less rate than they do free lunch um and some other factors. They also kind of guess gues gueststimate your population. So that drop is a big drop for us because we've already they usually tell us in early May that before May 15th. They told us this last week. We've already hired and have our plans and we have people in
014place. So we are going to negative spend in this area and have to recode things local because we already have services for West View Lemon Elementary Lane um title one at special early child special education buildings and also our home educators. So we already have hired folks. Um, so that's a big significant surprise hit. They also have yet to populate title two or three. Um, I don't know what to tell you about that. We have to submit a budget to DESIE on these things and we don't right now they say zero dollars and they said they just don't have the allocations yet. So we don't know what the next year will be for that. So I thought that was going to be the last of bad news. Um, but before I get to the fifth
015one, I want to show you just they're basing that census number on FY23. So this is not their census data. This is our free and reduced lunch rate over the last 15 years. You can see how it was in increased and kind of hovered around that 20%. Notice the anomaly of FY22. I highlighted that there. It dropped because no one had to fill out the form that year, nor did they have to fill out the year before because every kid got free introduced lunch or free lunch and free breakfast um during COVID during that time. So FY23, we started collecting the data again. We are now at FY25 at the highest percent we've ever been. So the school year we just finished, we have more kids qualifying for new lunch than ever before, but the
016census data is two years in a rear. They're predicting what our poverty rates was in 23. So I just want you to remember that. Um, so I think our title one dollars will pop back up two years from now. So let's look at that census data. The high mark in the last 20 years was 2012 in the census data when they predicted we have,815 families in poverty. Now they're predicting we have 947 families in poverty. That's a 47% drop over that 11ear span. Look at our free lunch data. We went from 3,600 kids to 3,400 kids. A drop, but only a 6% drop. So that's where it's hard for us. We're see this is what we spend the money on is these kids. So this is what's interesting for us is that we're seeing the
017need at a higher level than they say we should see the need. But in the two years since then, we've increased 20% in the last two years. went from 3,400 kids to 4,100 kids in free lunch qualifications. So, just letting you know, our need is growing fast. At the same time, our budget's getting cut 56%. So, that's a little disheartening. Um, so here's the mystery census data. You see a column that says funding just right of the yellow. There are actually four ways you can qualify. We had been qualifying in three of the formulas. Now, it's just one of the formula. But if you ask what that 947 number is based on, we can't see the data for that. We it's a number that comes out of a a formula that we are not allowed
018to see the inputs on. So, and you can see the million and a half this year down to 663,000. A loss of $840,000. Only nine districts lost 32% or greater of their allocation. We're at 56%. Out of 554, because this is charter schools too, get impacted by this. So, nine out of 554 schools were cut a third of their funding or more. only four districts lost a quarter million dollars or more. We're in both those pockets. Um state again lost 12 and a half million. You can see St. Louis and us are the biggest um carriers of that. So I decided to put this in a perspective on the loss or gained. There were some places mostly charter schools in the far right that did gain in title one from last year to the next
019year or the year we just finished to next year. And you can see most of Jackson County and this does have the outside of Jackson County the districts of 10,000 or more that are in our conference. So you think about St. Joe, North Kansas City, Liberty and Park Hill, it has them in there as well. And you can see most are close to the same. And even the ones that are losing quite a bit, they're at 19. Loanjack is the second biggest loss. It's at 19%. We're at 56%. So again, we are we are an outlier in a formula we have no idea why we're an outlier in. We've called Desi and they also say the same thing. They've looked at it. They they can't tell. They just know it is and you can't change
020it. So then bad news number five came yesterday and that's early childhood special education payment is being prrated because of again they don't have enough funds. Now early childhood special education is mostly coming from our general revenue state level. So I'm kind of surprised the email ended saying but you should get it in July. You know that is not what they said about the SAT being short. Um it's not a case the federal government hasn't given us money. We do get some early childhood special education money through IDEIDA part B or it's actually different parts IDEIDA. Um but vast majority and what they're talking about here is is state general revenue. Good news is we also had a positive surprise yesterday and it was bigger than that negative surprise. We got 1.8 million in pilots.
021Usually we get our last pilots in March and April. So we were surprised to have some more pilots. Pilots are payments in lie of taxes. This is when your cities pass um tax abatements for certain um you know chapter 100s, things like that. So to recap, there's a trunch of money you're never going to get that we lost in the in the last eight days and that's 185,000. There are four tranches, three of them you lost in the last eight days. One you lost in 2023 that eventually you're going to get back. 680,000 title one, a million in part B. This is special education 4.9 million via the recruitment tax because we lowered our levy based on data and the data end up being too high and so people bills were less and our tax
022rate would have been higher if we'd had known. And then one mill.1 million ECSC funds again those three that were the the 680 1 million and 1.1 million we are told that we will receive those in the next three months. We will monitor to see if we do. And then we have a potential loss. I should shouldn't say potential. We have a loss of five 840,000 title one and maybe more in title 2, three uh immigration and three ELLL. So we'll just have to wait and see about those last three. So we budgeted. All of them are approved. We spent what we said we were going to spend and they haven't reimbured us what they said they wouldn't reimburse us because they don't have the funds. our first 11 months, our expenditures and and revenue
023increased at the same rate. We're very excited about that. I think everyone's bought into the zerobased budgeting process and it's really worked well here. Um we have time and ability to recapture and change if needed. Um so our next steps kind of telling you a little bit if right now we're fully staffed for title one. If we have an opening, we're going to not replace that because we have an $840,000 hole there. Um we will already have to recode more than half the positions probably to district no longer title one. Um if title one funding p uh drop persists and I expect it will for two years before it pops back up. Um you're looking at attrition uh conversations throughout this year about FY27 future budgets could be impacted if this becomes a new trend.
024Um present recruitment tax um once the county gives us information. We've only done one other one this century and that was in 2021. We got the information in August of 2021. So, we'll see. Um, and then title 2A allocation, if it doesn't come in, that's over $600,000 that goes to professional development. Um, we'll have to rethink about what we're doing professional development wise. And then, of course, over the course of this year, you're going to have Prop C vote roll back conversations. And then course of next summer and early fall, you'll have conversations about the levy roll back. So you'll have your parts because those are levers you could pull um to make up for things that are not going well state and federal funding wise. So that was a lot of information. Now Nathan's
025going to go over the good news and of where we're at in the budget, what next year's budget looks like, and then we'll open up for questions. Thank you, Dr. Buck. Um very good summary of of really what's transpired in the last 10 days. Just to add to that, um, yesterday morning I was excited for about five minutes because we, uh, got the word that we received the pilot payment. Uh, our accounting coordinator notified me of that. Um, then the next thing we did was look at Desi to see because this time of year, Desi sends several payments. They don't just send one. They typically send four or five towards the end of June. So, we looked at that, saw there are uh, payment was about $1.1 million short. Um, so I emailed and I
026thought, well, maybe they're just going to send the rest either tomorrow or Monday, still before the end of the fiscal year. Um, because sometimes they do that, they split up the payments and that's when we learned that no, they didn't have the money. The reason that they gave was they estimate those expenses based on last year's uh final numbers and this year's final numbers. And this is for the state, not just Lee Summit. Everybody that has an early childhood special education program was prrated on their June payment in the state of Missouri. It's not just Lee Summit, but they didn't have enough money. So in July, uh we were supposed to get the the remainder of that. The other thing that I would add uh to what Dr. Buck said that is a negative but
027long term should also work itself out and be a positive is we're actually about $4 million short this year um in our local property tax collection fund 10. Now we have moved some other revenues particularly from merchants and manufacturing some from pilots to mitigate that. So we're not seeing the full impact of that but it has come at the expense of our debt service fund as well as our capital projects fund. That's another piece of revenue that over time we should recoup back. Um but To say that, you know, the last two years have been challenged would be an understatement. They really have. When you have normally extremely dependable streams of revenue uh that we count on and you all know that we are over twothirds locally funded uh from and not all of that,
028but the majority of that comes from um our local assessed valuations. So to not receive that not over not just one year but two years um is tough and then you compound that with the news from the state on some of the federal programs and even state program uh it makes for a challenging time as we finish the fiscal year and also you know budget for the next fiscal year but what I'll present tonight uh are are really two things one is the final budget amendment for 2425. The second item is the 2526 uh budget, the preliminary budget. And so you'll have two action items in the regular meeting under the finance section where you will approve both those things. So let's start with the 2425 budget amendment. In Missouri, you're actually legally required to
029amend for actual expenses. Um revenues it's fine if they don't come in as much as you thought or if they come over what you budgeted but for expenses uh the budgetary authority they want there to be enough budget that actual expenses do not exceed that these are projected through June 30th. Um we try to estimate these a little high. Um but that can be a challenge. Um particularly with you know expansion of summer school um curriculum trainings things that come in um they happen in June. They all happen in June. So, as we look at this, I feel really good about where we're at. Um, with fund 10, fund 20 are restricted, which you'll see a little bit later, I think we'll be a little bit higher. I think big picture it will be fine.
030Um, the good news is if you get to July um and you feel like there is amendment required, you can do that. you can amend the actual um later on in the fiscal year. It doesn't even have to be in July. Uh technically the revenues projected through June 30th. We will still receive um we didn't expect to receive the 1.8 yesterday. Uh but we'll still receive some money from the county. Tomorrow we'll have end of year interest. We're anticipating head start reimbursement and then there's just other revenue streams that come in. Um but It's significant what we will receive that we haven't received yet uh either tomorrow or Monday. So definitely six figures and it could approach a million dollars. Just a reminder, fund balances are unuded at this time. Um even when we present
031in July, you know, there it's never final until the auditor comes in in September and looks at it. You know, as I always say, we're we're very confident about the total am amount of dollars expended, right? But sometimes the auditor will say, "No, really that that belonged in the general fund as opposed to special revenue fund or capital projects." And so sometimes slight adjustments can be made between the funds, but there should never be an adjustment made on your total expenses or your total revenues. Um, and we haven't had that happen and I don't anticipate that it will. So revenue changes some important points here. Um all of the things that Dr. Buck described are not reflected, not all of them are reflected in this revenue. Um as we go through this, you know, we
032get to a point where we submit this and then we learn things. Um revenue is not an area where we need to adjust, right? I mean once we get to the point where we comfortable with where it is, then it's okay to leave it there. We're not going to be penalized because we come up a little short. But if you look at uh the adjustments that I made, you will see I I did make a negative adjustment in the incidental fund of 1.3 million. I made a positive adjustment in the special revenue teachers fund because I thought we were looking pretty good. Thought we anticipated 200,000 more. Thought We're going to get all of our ECSSE reimbursement which when I amend it amended in April. Um I was calculating that out to be just a
033little bit higher than I initially had because we had approval in April. Um so I thought that was pretty good. Um and really I was worried about the 162.8 million in the incidental fund. I was worried about not reaching that. Well, that is flipped. I actually think well I'm I'm comfortable saying we will be higher than the 162.8 million uh will be lower 107.5. Um the 1.1 million that Dr. Buck mentioned from ECSC as well as the title revenue title one revenue that Dr. Buck mentioned um the large majority of that is in the teachers fund for that revenue. So that's where we will fall short. So overall um again we'll be a little bit higher in incidental will be lower in the teachers across the rest of the funds really not a lot of
034change. Capital projects well there's one big change but there's a reason for that. Um capital projects just very small. It's actually going to go up a little bit. We'll exceed that just ever so slightly. Um debt service I lowered that a little bit again. Part of that is just tax collection not coming in as we anticipated. Part of it is I'm very comfortable with our debt service fund balance. We had the flexibility to move that into incidental where we needed it. So that's what we did. Um restricted funds a little bit higher. Uh that number uh looking at that today the 14.15 I think that's very close to where we'll end up possibly a little bit higher. Bond fund huge increase. because we sold the bonds and we did receive it in this fiscal year.
035So, um that is why there's such a large influx of money in the bond. I'll remind you that in the eyes of the state, bond funds and capital project funds are all capital funds. Bond is considered restricted in terms of the ending balance that you have, but it all reports on the annual schoolboard report as fund for capital expenses. So overall, um, you know, all of our funds increase a little variance and of course the bond fund throws that off quite a bit. So expenses. So the budget that you see there uh was approved in uh April. So and actually approved in April means we you know we put it together in March. And you'll you'll notice that um our incidental fund expenses. We did increase those. Um that was really a combination. Salaries and
036benefits is where I put a lot of that. Um part of that's due to summer school ESY. Um we have a robust enrollment in summer school. That's good. The revenue will follow next year um from the state, but we have to expend that money. Most of it gets expended in in FY25. had some other uh supply purchase services that came through. I'm I'm high there. Uh but but I'm high to try to you know to make sure that we had enough cushion. Teachers fund expenses increasing 650 is almost exclusively due to subs. Um we did a lot of training, a lot of curriculum work this year um that we had planned for, but in March when we amended that budget, we were behind with the billing from Kelly Services. Um not because of Kelly, but
037because we were trying to make sure that we had a lot of our federal program expenditures coded correctly before we paid those bills. Because if you if you pay them and they're not coded correctly, then you have to go back journal entry and correct things and it's just we'd rather get it try to get it right on the front end first time so we don't have to spend time correcting it on the back end. Um so that is almost exclusively due to purchase services. Remember that we contract our sub services with Kelly services. That's a that's a purchase service expense. It's not a we we pay them um and they pay our subs. So that's contracted service. Capital projects is lowered. That's simply because of the bond transfer. Okay, we knew that we had bond
038expenses. You know, when we approved the budget in April, we talked about this is as if the bond issue didn't pass. Of course, by the time we had the bond meeting, the board meeting, we knew it had passed, but um we we couldn't make that assumption with the budget. And so that's lower just to reflect what will be actual um expenses coming out of there. Debt service fund, no change. restricted went up a little bit. Restricted is is can be a moving target. Our activity uh expenses went up about 150,000 more than we had originally budgeted. Revenues correspondingly went up. Right now there's a $16,000 delta uh between those two out of $3.8 million in expenses and revenue. So we're pretty close there. by the end of the month, it's it's probably going to come
039close to evening out. Um, nutrition services expenses. Um, you know, and it tracks larger summer school, more employees, more food. Um, it going to be an increase in expenses there in our restricted. Just a reminder, and you see this on the the budget, but in restricted funds, um or I'm sorry, you see this in our reporting monthly in our finance committee, um our nutrition services before and after school care, the foundation, which is a break even um and then our activity funds, which are districtwide throughout all of our buildings. Bond fund went ahead and budgeted 12 million in there. We'll hit looks like about half million in bond expenditure. So we have a little cushion there. That is good too because it's nice to have a little cushion. One of the unique things by us
040splitting out our nutrition services um as well as our activities are sometimes there are capital expenses that come from those funds. And so on our balance sheet, those are reflected in um those funds when they actually hit they'll be capital expenses. So we've got a little flexibility there both in the capital projects fund um and plenty of room for the bond expenses expenses that that we will incur. So all that is really reflected here. Um all those expenses if you go back and look at that prior page you'll see incidental teacher fund capital projects debt service restricted bond all of those are reflected 26.09 um I don't think we're going to reach 26.09. I'd like to say that we would um but with the hits that we've taken uh the last 10 days um I
041I anticipate it'll be a little bit lower than that. Now, there are some things that could change that. There's still some variables variables that in terms of revenue that could potentially come in. You just don't know when Jackson County will release um a large amount of those appealed funds. Um, I know that there there has been some hope amongst my colleagues uh around the area that they would try to do that because we're all in the same boat with the local revenue. Um, that they would try to do that before the end of the fiscal year. Uh, but we'll we'll see what happens. It's a bad news good news scenario because even though all of the revenue shortfalls are not reflected here the revenue increases that we will receive as a result of in the
0422526 budget are are also not reflected. Now it's unfortunate because it creates variance and you know when you're comparing year-over-year that's not really accurate but um you know we have to play the that were dealt uh in terms of the revenue that that we received from your and then this is all three levels. This is federal, state, and local. Nathan, on on this your last amendment, we were 20 a little over 27%. And if we had not had the last eight days, we would be over 27% reserves, correct? Yeah. Yep. Definitely. All right. Dr. Buck kind of covered this. Um I go a little bit further back though. Um just a reminder, you know, we do have a CIP goal of 25%. It was 20%. Um and we we made that decision a couple years
043ago that 25 was a good number. We wanted to be in a strong financial position in case um of tough times. And guess what? We're experiencing some tough times. Um so I I think it is a good goal to keep. Um and you know, if there there is an overarching with everything that's going on here, um, our district finances are not in any danger. We're in good shape. Um, and we have the ability to rebound from anything really that's thrown at us. So, overall, we'll be fine. Um, even if we finish a little bit below 26 next year, um, we'll we'll be okay. We have the ability to adjust if we need to. You can see going back to 0910, you know, there was a time when we were actually below 20%. It was a
044great recession, right? I mean, there there was some reasons behind that. Um, and then we built it back up. All right, let's talk FY26, the preliminary budget. This is a challenge. Um, as much as FY25 is a challenge, as we end the year, FY26 is a challenge because still just so much uncertainty. So what is in this budget? What makes up our revenue budget? Well, when we look at our assessed value, I look at a slight increase. This is a reassessment year. Normally, it would be more than slight. Um, but CPI was only 2.9%. That's the consumer price index. That's what we are limited to in growth in Missouri. you get the CPI plus you get any new construction and improvements. So, it was never going to be a windfall, all right, with a reassessment
045year. It isn't. Um, and sometimes that's a misnomer that's out there is, you know, property values go up. Um, obviously we've experienced that the last two years. um and and everything that has happened around that. But districts don't experience a windfall from that because levies are required to be rolled back. Um we were in a very unique position uh being at the ballot, but again we felt like it was the right thing to do. Hindsight is 2020. If I would have known in 2023 how much um how long it was going to take to sort this all out and the shortfalls that we incurred. If I could have predicted that, um I never would have recommended taken the prop, you know, the roll back of 65 cents because we were all doing that in good
046faith that those assessments were correct, right? And they weren't. They they since come back um and there's still a lot of u uncertainty um that we really don't have any certainty um yet and that's unfortunate but the bottom line is that all plays into you know we're living with a 65 cent roll back right now that was set on inaccurate data and that's unfortunate but that's it is what it is unfortunately Prop C is budgeted at $14.95. That's slightly down. It was 1504 this year. Um so $9 that's per weighted ADA. Um so that that will be a little bit. That's not too much of a a hit to the budget. Now the state revenue uh is projected to be up significantly. legislature passed the state ad target at 7145. Still waiting for the governor
047um to he has until July 15th to sign that or if not it it automatically becomes law. Now that does not prevent withholdings. All right. And um you know a lot of us in this room have been around long enough that we remember when there were withholdings right from the basic formula. Typically they like to do it from areas like transportation first because there are um tax decreases that are tied to uh the funding formula the basic formula being fully funded. So typically transportation is first then any other area before they get to the basic formula but but it could it it still could happen. Hopefully not and hopefully state revenue stays strong. Federal is down. Dr. Bucks illustrated that with title one. Now, one of the the things with title one revenue is we
048experienced the decrease in our allocation for next year. One of the silver linings, I guess if you want to call it that, is that by not receiving that money in FY25, we should get it in FY26. So, I didn't have to lower the overall title one revenue allocation um because between what our current is for FY26, what our carryover that we anticipate having. Um, and then the revenue that we'll receive that we didn't receive this month. Um, that should stay pretty level. Federal revenues are a very small source of our revenue. Um, even smaller now. Uh, but you know, actually our biggest source of federal revenue, but it doesn't come from the US Department of Education is nutrition services. We receive a large amount um for reimbursements for any student that is a free lunch
049or reduced lunch. Uh there's a much higher reimbursement. So actually uh the highest amount of revenue that we receive comes to the USDA. It gets passed through uh the department of elementary and secondary education um in Jefferson City, but it's actually a federal funding source. Um special education is next. Part B. Uh we have close to a little under $4 million in revenue from that. Um and then our title programs, more commonly known as ESA, uh are the third largest source because there's more than just title one. As Dr. Buck mentioned, there's title two, title three, title four, title one D. Um and just a reminder that there is no ESSER funding. um you know for several years we had that that's done um for next year. Those percentages when they we merged our slide
050presentation they didn't all come out um exactly but the exact percentages on that graph are 66.48 local 1.48 county uh 28.28 28 state and then 3.76 and federal didn't even show up on that but federal is 3.76 even before ESER we were closer to four and a half or 5% federal and then kind of made sure that we stayed at that level and even a little higher that's pretty typical um local and and that is just a reminder there that 28.28 to a state that is even with the projection of the basic formula increase state advocacy target. So we are still a district um that you know is heavily dependent upon local revenue and with the exception of Prop C which is a statewide sales tax that the state expects us to um code as
051local. The All the rest of it is is truly local revenue coming in from personal property, real estate, commercial, uh, and a. All right. Expenditure budget. What you see there is salary schedule increases and those are average increases. Um, always remember that those are and those come from the March board meeting agenda. Those are snapshots in time, right? They're going to be close. They can vary a little bit. Um the teacher schedule went 3.42%. I will say the support professional and administrative schedule received um the exact same percent increase. What happens in the support area? We had a couple ranges that we adjusted for employees. Um and so that is why you see the 3.28. All right. the difference between professional and administrative 3.07 and 3.11 obviously very close. Um but that has to do
052with after step 18 on both of those schedules because it's the exact same percentage between steps but after step 18 you go to a half step or or sorry half of the normal percentage. So what that really indicates is there are more on the professional schedule that are off schedule. Uh and it could just be people that impact um that that overall percentage. That's why it's not exactly equal. Insurance, I budgeted 2%. Um I will note that's 2% on the entire year. We went ahead and and bumped it all up 2%. In actuality, if we decided to increase health insurance um board paid, sorry, board paid contributions, um it would only take effect for half the year because our insurance is a calendar year. So January 1, 2026 um forward. We're actually locked in through
053December with our current rates. Um, so that is definitely an area where I uh I was a little bit conservative. Right now, our health insurance is running pretty good. Um, we've had a couple months that were okay. Um, we haven't had a really bad month. Uh, we had one really good month. Um, but we still have really seven more months to to go to see where we end up. But hopeful for less. I really am hopeful uh that it's possible to possibly keep those uh board paid contributions flat or else it's go up small amount. Retirement stays the same. That's good. Um just so you know, retirement contributions in the state of Missouri, those are significant expenses. Um that 14.5% is on certified, 6.86 is on non-certified, but then you have social security on top
054of that. So it ends up being just a little bit under 14 and a half. U those have stayed the same for several years. That's a very good thing. Um but those are fairly significant part of our budget when you look at overall salaries and benefits. Um those retirement contributions. Now they're also significant for our employees because the employees also contribute that amount um to the state whether they're in PSRS or peers. Um so the reward is obviously at the end of the career. Those are not sign are not insignificant uh expenses either way. Um you'll notice that next year the transfer to capital is only $2 million. The main reason for that is we have the ability to lower that this year and we feel like we can be flexible and do that. We
055have a lot of expenses that are bond expenses. Um we also have a little over $2 million, actually about $2.4 million um between uh a new system in transportation, but the majority is a little over $2 million for the purchase service for early childhood special education transportation. that is an expense that we will incur next year but not be reimbursed until the 202627 school year. So that is really a a one-time hit to our budget um that we're also absorbing in this fiscal year. So I try I'm sorry in the next fiscal year. So tried to mitigate that a little bit as well with that transfer. Now what you will see is uh on the slide after this is we are still in good shape capital projects funding. We're going to continue to build that
056balance. So it's not as if we're deficit spending in capital projects. This slide is a little bit out of whack and again I apologize for the translation um of merging these um on expenses. This is skewed a little bit because of bond expenses. we don't always have uh such heavy bond expenses. So if you just look at operating um we are expending 82% of our operating budget on salaries and benefits. Okay. So the 57% yes that's reflected of our total overall expenses. Um but within just fund one and fund two operating we're looking at 82%. Next slide is our debt service schedule. Um that is uh with this you see the series 2025A. So that has been included. You'll notice I budgeted quite a bit higher in debt service. That's just for flexibility purposes. We
057may not need to spend that much um and likely probably won't but um I just wanted to that flexibility as we reissue um in 2000 it will be in FY26 likely um probably in March uh around that time frame I wanted us to have flexibility if we needed it again likely we won't but it's in the budget debt service uh again remains really an area of strength that allows us to continue to do projects and in a district size, all the buildings that we have, all the parking lots, all the roofs. Um there's a lot to maintain. Uh and so the strong debt service really allows us to do that and you all will get to see the the benefit of that uh over the next few years um as we spend those bond dollars.
058All right, here's the budget. Um I just want to point out some big picture items here. Um, you know, you'll notice that our overall fund balance, if you just look at the percentage, it goes down a little bit. And if you focus on the box at the top, uh, the yellow box, then the on the left side of the page, and then the yellow shaded area at the bottom left, you'll notice goes down 34%. Which is odd, but there's a couple reasons for that. Both are important I think as as we look forward. Um fund balance though goes up 2.48 million. Right? We're adding almost $2.5 million to our bottom line. There's two reasons for this though that that the percentage goes down. Number one, you know, again, we were fortunate to be able to
059um give salary enhancements to be able to add some positions. Um that expense along with $2 million, right, of the one-time expense that we will get reimbured for. When you increase your expenses, the revenue has to be fairly significant for your percentage to hold. Okay? The other factor which is a large factor is if you look at our restricted budget um 14.26 million in revenue 15 just a little over 15 million in expenses that impacts our ASBR and so I always try to reflect that um percentage. If I didn't it would show that percentage going up. Well, then when you get the ASBR, you would see that that percentage is is down lower than what I projected. So, I always try to air a little bit low with my ASBR projection. Um, but within that
060restricted, um, nutrition services is an area that we'll we'll have to um, focus on, I think, um, with revenues versus expenses. Um it is you know there there was a a period of time during COVID where the reimbursements were extremely high because everybody was reimbursed at that free or reduced rate. Um we are now out of that period. Um and so we're we're in an era where obviously food's gone up. We've all experienced that in our personal lives. Um East Trails Middle School, you know, was added. It's a middle school kitchen which is not a small kitchen. Um but you know obviously enrollment was stable during that time period. So there are some headwinds that nutrition services is facing and so we we just need I think to help you know figure out that process
061and going forward because we don't want to be in a situation where year-over-year you know it's it's a deficit uh that because that will impact our overall operating. So it can be done um certainly but that is part of the reason you underrestricted $817,000 reflected. I'm pulling that over into that ending ASVR balance. So that's why it's reflected as is being lower. That being said, if all this happens exactly as I projected it, um it would be 25.75 if all those things came in. Uh you'll see 75 million in bond expenditures. I would be thrilled if we spend $75 million next year. So with Dr. Shelton, uh hopefully we can. Um that means our projects will be going well. We'd be moving along. We get a lot done in the next 12 months. That's budgeted
062high. Um in all reality, probably that's okay to have that flexibility. That's all I have. Uh happy to take any questions you might have. Um so I have a I guess I have a logistic question before I ask any questions. We've got five minutes left in session. I know we've got another agenda item. Should we hold our questions till later or can I start asking questions? Okay, we're good. Okay, got a few questions. Um so for the delayed funding that we're going to receive that we should have received in 2425 and we're going to receive in 2526 um will that be asterised or denoted some way next year or I mean next fiscal year or I mean is it going to show up in in that budget and how do we how do we highlight
063that because like you said it's going to it's going to create variation. It it will be um I mean we it can be presented in in any fashion in the the budget that we uh present. You know ultimately I I I forgot to mention too there there's a large document that's you know a lot of required by the state that's been uploaded um that is you know also part of the budget that's approved. But typically what the board sees um and what we want to communicate is we try to you know communicate a condensed version that hopefully makes sense to everybody. Um, where you will see that is when budget amendments come through next year, you will absolutely see that reflected in the budget. And so part of the reason was timing because I mean,
064you know, I was in a place where, you know, I needed to get this posted and some of this happened after this had already been submitted and uploaded in the board docs. But part of the reason is also it's okay and I wasn't worried about it because really to your point, it does need to be reflected next year as it's received. And so when you make that budget amendment, then the revenue can be reflected to to show it. Okay. Thanks. And um the uh the 1.8 million that we're getting in the pilots, the pilots fund that came in, does that go into fund one or the operation? Yes, I put it in fund one. It can be split um amongst your levy. Um but yes, it was placed in fund. Okay. And um the idea
065part B that uh was delayed is that federal or state? So it is federal but it comes through the state. So the federal government sends a state and has uh has every single state be the fiscal agent to divvy it out. Okay. Um and and do we have an estimate? You said that the title 2A and three EL and there was another three. Um, do we have a ballpark of what we were originally asking for last? Well, we don't ask. They actually just give it to you. All right. Um, last year it was over 600,000 for title two. That's the second biggest trunch of title. Title three, I don't have off top of my head, but they're much much much smaller. Yeah. Typically, title four is around 180,000 um to 200,000. Dr. Barber, you can
066correct me if I'm wrong. And I but I know title three comes in two forms, e and immigrant. And those are typically around $40,000 each. Okay. All right. Thanks. And um so for the title one A that is being reduced. I have several questions on that. Um why so why what's the thought process behind recoding and uh freezing uh uh what was planned for under things like that? We have a million and a half that was going to be coded as federal programs resource as the funding source. We have to now turn in a budget plan with a significant less and we have to tie FTEEs to that where there's a second page on our sporting document. We have to actually say who it is. So that means all those people who are not, you
067know, we had to move into local funding, we have to code them as local and uh local funding and no longer can we code them um as federal programs um because we don't have the money. Our dollars are attached to people um when we send submit our budget. Okay. I guess my thinking on that, and I think you just answered my question, um, but my thinking on that was if if we start to recode people and not do uh actions that we were going to do, is it going to look like we don't need the funding? That's my concern. I mean, that's not how this particular budget works. It literally is. They decide how much you're going to give Title One nationwide. Then they have the formula and it's prrated by what states poverties are.
068Um, Missouri lost 12 and a half million and then has to use the same formula to divvy it out to um districts. So it is not a needsbased, it's not a competitive grant. It literally is just an allocation. And so u what actions can the board take to advocate for those funds that calculation to change? I I'm going to DC in two weeks and we just had a conversation today about this with um uh the person leading the group. That's in EA language which replace No Child Left Behind. We're a little afraid of asking our current um federal government to address X. We're afraid they'll make ESA worse um by the current um focus on education out of the federal government. So, I don't know if I would advocate for a change in that formula
069at this time, although it needs to be changed. Um I'm I'm afraid you'll see a big charter expansion push and a re uh a redone ESA, and I don't know if that doesn't help us. that diverts funds from us to charter schools. All right. Because that formula is at the federal level, right? Yes. It's in the education ESA. Somebody help me remember the It's been too long since it passed, but it's it's a it's the act that replaced No Child Left Behind. Every Child Succeeds Act. Thank you. Um it's and it's in it's on starts about page 84 and goes into the 90s. If you want to look it up, it's section 1124 and 1125 that describes the formula. And then you can go on the census page, which I had a screenshot up there.
070Um I have it up right here. Um it'll it'll go through what's in that formula, but you can't see the data for a lot of it because um like I said, tax returns are part of it and they won't share that data with us. And I'd imagine the other 49 states are impacted equally to Missouri. No, some are positive. So Missouri lost 12 a.5 million. What we are told is the um there's flat funding for Title One nationwide. So if we lost 12 and a half million that went to another state and that happens every year as some states um poverty rates increase faster or maybe even go down. There's always a reallocation stateto state. Usually if you look at our history $100,000 swing was a big swing before. So seeing an $800,000 swing for
071us is unprecedented and pretty volatile. It's hard to plan for that. And I can't remember which of you mentioned a two-year recovery from that. Can you does it? formula. My prediction just looking at a free reduced lunch rate going up 20% over the last two years. Remember that number they're basing on is 23 and it's not based on free lunch way back when free lunch was part of it. Um 22 years ago or something like that. Um but seeing our poverty impact from our measures that we do get to see has gone up 20% in the last two years. Two years from now I assume their poverty numbers are going to increase by a similar rate. Um at least that's the hope. Uh so I I don't expect to see much change in FY27. I
072would expect to see a big change for FY28 if that um correlation does hold. Okay. Um I think you answered all my questions, but I'm not sure. Oh, I had one other question. Um and this kind of ties into some agenda items that we have uh coming up at the 7 PM meeting. So, the uh employee salary and benefit increases you showed in the presentation. Um, but I noticed in the 7 p.m. agenda that the um Kelly services, the purchase services increase was significantly lower. Um, is there a a logic behind that, an argument for or against, you know, why they weren't about the same? Dr. Carlson, do you want to answer that question? She's asking why the rate um was not a 3.42% 42% increase for Kelly services like teachers. Teamly Summit does not
073take on sub rates. Um basically Dr. Carlson works with Kelly services and they look at fill rates and they see if our rates are working. So we have a high fill rate and if it's not, what do we need to increase it? Yeah. So I'm going to give a bit of history. So for a lot of years, for about 10 years, we held our sub u pay rate the same at $100 flat um all the way up until COVID and shortly thereafter. Um at that time we found we were behind market and struggling with fill rates and decided at that time to go from $100 a day to $115 per day for for our Kelly subs for substitute teachers. Um at that time that was a that was a big shift in the budget going
07415% higher uh than where we were. So at that time uh Nathan Holder uh we we discussed um you know maybe wait because our fill rates have been strong but waiting until our fill rates dip to then make a big move to the market and our competitors. We probably wanted to be a little more proactive than that. So, we decided to start making increases with the market and this uh small increase we're looking at making for tonight um puts us in the middle of the market for subfill subs. Our subfill rate has been very strong because subs just like coming to our schools. We have great kids, great schools, great teachers. Um and everything that we move to subs that takes more away from what we can do for our teachers. So, we're just mindful
075of that balancing act. um as we move forward and move through Kelly Services services many of the districts in the region and I think we have the highest uh fill rate of any of the districts even though we're in middle of the pack and pay we're the highest fill rate subs like sub for us and like being in our buildings with our kids and I would find that line item in the budget under instructional pro uh purchase services is that right it would be a purchase service okay because I when I was looking through the the the book the fish five age book I did see the only thing that looked large enough was that item is that correct it like it was like 8 million uh I don't remember I don't have the book
076up so there are other things that would reflect that under purchase services but if you really the the area that under uh the teachers fund so or fund two if you look at contracted services or purchase services. Um those expenses are not exclusive but almost exclusively to Kelly. Um and so there's a couple factors related to that line item and it was actually able to be lowered a little bit this year. I saw that. um primarily due to we had a huge amount of work that was done uh with our staff, teaching staff across the district uh that required subs for them to come in um and do curricular work, training. Um the other item there is building subs. Um and we took a look at their utilization and trying to be as as efficient
077as possible in that area. Um and so we comfortable that that number can come down a little bit from where it's ending up this year. Our first 11 months, we spent 4.4 million in subs and that's a 2.2% increase over the first 11 months out of 12 um the previous year. So, we spent 4.3 million total last year. We're 4.4 million at the end of May. I know the June we have summer school, but you still have payments coming in from what we did in May. So, um, there will be an increase, but it looks like it's on track to be about a 2% increase. U, maybe a little bit more, maybe a little bit less. Right. Thank you all for answering my questions. Anybody else? Okay. I'm just wondering back to the title 1A
078funds. You said if the allocation doesn't come, we'll go back in PD, but also that there will be a hiring. So like so we have it fully staffed. So it's not like we have openings now. We're not going to hire. If someone left midy year, we would look at attrition and not replace that person. But is that only in in terms of title schools? The folks who the it's not just school building. Remember we have a title one class in early childhood and we also have home educators. They're like PAT. They kind of they kind of do the similar thing. Um it would be any employee within those funding codes. Yes. Okay. So like with Underwood hitting we're not and that's another thing I should have said that we were want to expand Underwood because
079they were at 40% in September. The official count they end up being 39.6%. We thought they were going to be 40%. Pretty close. Um we are now not expanding into Underwood because of this loss of funding. Okay. Anybody else? Thank you, Mr. Holder. Will you you will present to us a little bit in the 7 o'clock meeting. Is that correct? The proposed budget or is this your last hurrah at that microphone? But I I'm happy to do whatever you would like. Well, no. I just want to personally thank you. um as a as a former staff member, as a community member, as a board member, you came into a difficult situation and your calm, confidence, um you've done a great job and I I I know you're going on to bigger and better things, but
080I just wanted to thank you and let you know that we all up here have appreciated your your work. Thank you. Thank you. He was told he has to work hard these last two days left. That's his legacy. It's how hard he works Friday and Monday. Dr. Carlson, I think we're going to get upstairs and then unless you think you can do this in one minute or so. I can do it in a minute. All right. Uh, so the next item is two board policies. Um, ADF and JCA. These two policies are um have been to SLT. They've been through board policy committee and they're here for your review and then we'll go on to the future board meetings. Um, two small changes, district wellness program eligibility to enroll. Happy to answer any questions or
081uh if they're specific to the functions of the policies, I know Dr. Barger and Dr. Wilson are available to go deeper if needed. Thank you, Dr. Carlson. All right, I think we've got to get upstairs. Thank you.