001Good evening. This is the Wednesday, October 8th, 2025 work session of the Marlington Local School District Board of Education. Um, call the role, please. >> Josh Hagen, >> here. >> Karen Humphre, >> here. >> Kathy Krepco, >> here. Mark Ryan >> here. >> Jonathan Swift >> here. >> Thank you. >> Wow. >> Um let's adopt the meeting agenda. Is there a motion to adopt this agenda? >> Some move. >> Second. >> Any discussion? >> All the role, please. >> Mr. Ryan, >> yes. >> Mr. Hagen, >> yes. >> Miss Humphre, >> yes. >> Miss KCO, >> yes. >> Mr. Swift, >> yes. Okay. financial forecast discussion. >> Okay, I'd like to welcome Ryan Gazone tonight who has uh helped prepare the forecast and we're looking forward to anything you could share with us, Ryan, to
002give us a sense of um where we think we're headed with the forecast. >> Sounds good. Let me go ahead and share my screen. see the screen. All right. >> Yes. >> That's better. >> That's good. >> Good. >> Yep. >> All right. Thanks for uh thanks for having me. Um here earlier than normal. uh new filing deadline has the forecast due October 15th uh rather than the end of November and then um be back much earlier in the year in February if that's new requirement for the spring rather than the typical May filing. Um last time we met were some uncertainties around um potential changes in property tax law as well as the uh legislators are still working on the new final budget. Um good news is is that the final budget passed. Um
003there were some changes afterwards with um legislative vetos of um by the governor and then a veto override um of one set of legislation. Um there's expected to be a couple more veto overrides potentially in the next couple of weeks. And um there's still a number of policies that have been introduced in both the House and the Senate that could have some substantial impact on school districts that we're still still waiting to see if those make it through uh to become law and what the overall impact of those are. So this forecast is based on current law, current tax law, current state uh school funding law. Um and so the district right now we are looking at this in 2026 bringing in about um $28 million in revenue and slightly under that in expenses. So
004right now you're project of having an operating surplus of $348,000 um with an ending cash balance this year of 6,578,000. Uh the good news is is the district has once again this year um has a balanced budget. So when I started working with district quite some time ago um the district did not have a balanced budget, had declining cash balance. You guys have about $6.5 million projected in cash in the year and then start deficit spending next year. Um so you you've moved away from deficit spending this year, push it into next year. half million dollars is not significant at this point. Um so hopefully able to overcome that for next year. Um and then you start deficit spending a little bit more as we move out. Some of the things in here that I'll
005go over that um we want to we look at revenue and what could change what is changing there. Um you guys are a guaranteed district meaning the most that you can get is what you received in 2020. um that is it's the the guaranteeing the current funding formula. There's no real sign based off of current law or on your district's uh enrollment that you have any chance of getting off the guarantee. Um so without besides that, there's a small $27 per student uh per uh funding supplement this year that you'll get. >> Ryan, don't you mean we're getting the least amount that we can, not the most we can because we're at the 20 mil floor. That's the least allowable by law. >> Um, yeah, I guess let me show you an example. It's in
006under law they do this entire calculation, many steps, right? And what happens is we get to right here um line R. So based off the funding formula this year, if there was no guarantee in place, you'd get $6,200,000. But in 2020, you got 9,100,000. So as a result, they're giving you an additional 2,892,000. >> So that's the state that's the state's portion, right? >> Uh no, you're getting this entire 9 million. They're saying should if blind R1 was not in law, that's a guarantee, you would drop down almost $3 million in funding. >> Okay. >> So, they're they're guaranteeing for you that amount. Then there's also another guarantee. You come down, they throw in um transportation funding and there's a 21 guarantee and you're on the 21 guarantee by an additional 262,000. So, a little
007confusing, but there's two guarantees in place that guarantee that's the amount of money that you're going to get based on the funding point for >> Okay. >> And then for your district on line P here, you get about additional $48,000 this year and $69,000 next year because of the per people supplement they put in place. That is not part of the guaranteed funding. So, that's on top of that guarantee, but is additional funding issue that wasn't necessarily in place uh previously. So the good news in the district is you know what your funding is going to be based off these guarantees. The bad news is if they take those guarantees away there is quite a bit that you could fall to where funding for covering you should be. Um just as a reminder under the
008the governor's proposed budget there was a 5% and 10% reduction in the state funding formula for guaranteed districts. That did not make the house version. The House version had a 25 guarantee that did not make it into the Senate version or or um permanent law. So it it maintained phasing in the formula but keeping those guarantees in place um for you. Um so from there you know this this is your unrestricted state funding here in in green and red that's your restricted that's for economic disadvantage. Um and then there's also some special ed funding that's that's restricted. So you guys have a lot of of um state funding that there's not any indication right now that you have any increases there in any kind of near future based on the current funding block. As we
009move into this blue area here, you have had some increases because of changes in property values and being at the 20 mill floor. uh that has produced additional revenue for the district and we're not anticipating any significant increases right now moving forward. Uh next time we get to reappraisal there's some slight increases in 28 and 29 as a result of the next trial update next time we go through it. And then finally you'll know what sticks out here is this big orange piece in 2025 and why did you collect 4.8 million then and only 2.9 million being projected in uh 2026. that is because um of the pipeline settlement that she received has been going on for a period of time and you got some back taxes paid onetime money. Um so you know how
010that um source there we we have the depreciation of of the pipeline moving forward. That's not the only thing that orange line. You also have public other public utilities such as uh electric lines um and other uh gas lines besides the pipeline that generate the revenue there. One thing to note um you will notice that it's going down a little bit because there is no reappraisal on public utility. It's just new construction as a depreciation value. Um you could see those values go down. There also is one taxpayer we believe in north northern Ohio that has challenged their property values because districts have typically exception of the pipeline collected around 100% a lot of districts dropped to 95% this year. So we think that's because of tax complaint um that that that could be taking
011place in the next coming years. And then the final thing is any new growth on public utility starting in 20 uh tax year 2027 the law changed where that the value of that property for anything new that public utility is reduced down to 25% of what's being assessed at. So we've also included that in the forecast here. It's a new loss moving forward. Um your the good news is is that for your your real estate you come in about 100% collection right around that gross collection meaning delinquency plus current collections and so that's been a stable source of revenue for the district once we get past state funding um and your public utility and property taxes. Well, we can see here other revenue interest income we're expecting to actually decline. Um I'm sorry this is
012state share here of property taxes. So this is the state's portion of what uh they pay for property taxes for um for residential property owners. So other revenue here you can see is declining interest income is expected to decline um based off the the interest rates market right now and um climbing cash balance. That's not the only thing in there. You also have several um federal Medicaid reimbursements that you're going to get. We anticipate a double settlement reimbursement this year goes back to a single one next year. Um and then you also have some tuition payments in there. Those are going to be for court plays, foster play students, and then any special ed excess cost tuition that you get. Um that mainly makes up the majority of your other revenue. And you can see
013that's declining source. >> Right. The reason why I wanted to bring these in is uh really right now under current law the only increase in revenue you have would be we go through trial updates uh which occurs during these two fiscal years here. Besides that you're pretty much flat funded going forward with other revenue slightly decreasing. >> I've got a question real quick Ryan on on the tax for the public utilities. Is that based on the effective millillage or the 20 mil floor? So for public utility, it is the only type of property value that is based off the full voted rate. Um everything else, class one and class two property values are based off of an effective rate which can go down to the 2004 can't drop below it. >> Yeah. >> Public utility
014property is at your full voted rate that when it was originally voted in by the voters. So, so if we had levies passed that met the 20 mil floor without, you know, being brought up automatically, how much additional income would we receive from public utilities? Do you do you have any idea what that would be? >> Um, you're you're receiving the full amount. And what I mean by that is if we look at this table here for your class two, you can see you're class one, you can see it's a 20 mil floor here. Um, and you could see for class two, you're at 22.9 this year, but your public utility is at the full voted rate. So there is no reduction factor like there is for class one and class 2. >> You collect
01554.9 >> 1993. Say you passed an 8.7 mil levy, then we're still getting 8.7 mills. >> So it wouldn't make a difference if we had u what's the effective millage round? What is it? 16 or 18%. those like 16 or 17 when >> so if if our effective voted millage was at 20 it wouldn't make a difference to that from the public utility tax. >> No, they they collected that full whatever originally. >> Um so as an example >> that was my point with the renewal like if if the voters would vote a renewal down their property tax would stay the same but the but the public utility effective would go down so we would lose three or >> Well that's what I'm saying. If we if we had additional levies though to bring us
016up to the 20 mil 4, wouldn't that levy more taxes against the public utilities? >> It would also levy just against public utilities, but we would be the same as a 20 mil. >> Well, that that that's what my question was is how much additional revenue would that if we if we had effective voted millage up to 20 mills. >> So, we could ask the question to John Oats over at Stark County. He'd say, okay, let's just say our effective millage is, let's say it's 16%. I don't know exactly what it is, but it's around there or 70. >> And we said we would like to have effective millage at 20 mills, which is what the correct >> the le the state constitution kind of has us at. Yeah. >> He would say you would
017need to put on a X mill levy. >> Yeah. >> So that would cost taxpayers X dollars on $100,000 home. Okay. The standard procedure, you know, or income tax, property tax, however you want to look at it. uh then that would raise based on what Ryan's saying. So we're at 54 effect mills based on all those levies. So that levy then would go up that that that much more. So you would get both. You would actually Yes. In theory, what you're saying is the public utilities would actually go higher. >> Well, that's what I was wondering. Is there a way that if you passed a levy where it would increase that effective rate for the public utilities but not for the homeowners since we're already at the 20 mil floor? >> Oh, so what you're
018saying is can we pass a levy that would only affect the public utilities but not our current taxpayers? >> Yes. Since Since we're not since we're collecting at 20 mills, you know, no matter what, and they're only affected by the effective millage, wouldn't it >> make sense that if it was in if you're thinking like I am on theory, I'd say yes, but but I would have to ask John Oats specifically. I wouldn't want to say yes or no to that answer, but I could ask him. Mike could tell us exa he would tell us him and uh Angela Kinsley the new auditor could tell us exactly where are effective where we are based on the the you know recent property tax evaluations which I think you're right it's around 1617 we talked about that.
019>> Yeah. >> Um >> I would just be interested to know what what that difference would be >> from a taxpayer standpoint >> because they're paying it either way. They're saying you're saying they're paying anyway. So if we passed it additional money, >> yeah, the homeowner's taxes would remain the same, >> but it would increase revenue from public utilities. >> Correct. But it wouldn't increase revenue on the homeowner. >> That's that's exactly what I'm saying. >> It makes great sense. It'd be an interesting cell if we could get the taxpayers to say, "Hey, you're not your property taxes are going to stay the same, but public utilities are going to pay the district more." That'd be good. I I'd just be interested to know what what the amount would be from public utilities if we
020were if we had levies passed and voted in to get us to the 20 mil floor versus where we're at now. >> Okay. Give me three or four days. It doesn't take him long. They're usually pretty good about it, especially when Bob and I ask the question. Any other questions on on the revenue piece? All right, I will move on to the expenditure piece. Um, expenditure is coming in close to where the forecast was in May. Um, as you can see, your largest expenses is going to be salary benefits. Um, and we do have slight increases here. the district did have some savings from producing some positions and then get some retirees uh that you're able to hire in um lower costing replacements for um in addition we have your health insurance here um with
021health insurance I believe is part of the cost you have we continue to have your um your premium holiday filled in and then also your premium increases this year are basically we have changing moving forward um when we get into purchase services um I will show you an example of that and what is making changes there. So the easiest way to provide this in a visual when we talk about purchase services there's we break this down into main categories. So in blue you have contracted services you actually are expecting a reduction this year in your contracted services. These are usually things for professional services that you don't provide in house um that you get from either the ESC or other vendors that are out there as well as legal fees, things like that. Um you
022are expecting a decrease this year and then just modest increases based off of um increases in inflation. As we go to the next one here, we are looking at repair costs. So this is maintenance repair cost plus property insurance and just gradual increases there. Nothing significant. Um you can see that trend 400,000 in 2024 about 440 this year and popping out we're expecting around 467 2030. Um the next major one we have communications not necessarily major this is going to be for your ITC internet services things like that not a significant source when you do look at utilities you have seen a spike in utilities um and we're continuing that moving forward. So you're up roughly 10% um closer to 10% from last year to this year. Not expecting as much of an increase moving
023forward, but do have some increases there. And then your second highest expense is going to be tuition. Um and we are expecting based off of your data through the first three months a slight decrease in out source uh tuition costs. Um these could be to crowd placement. These could be to um that you're paying for students that are residents of years that are foster court place and it could be for outside special education tuition as well. But it does look like you're going to have a a slight decrease which is a good thing and then just inflationary costs moving forward. When we look at your next biggest non salary benefit expense is going to be supplies. And in supplies, the breaking is down the same way. Your largest expense is transportation costs that we can
024see up here. And based off of, you know, once again, your first three months, we think that's fairly level. And then just minor increase there. Um, your next biggest one is going to be general supplies, mainly classroom supplies. This could also include electronic subscriptions. Um, the district did have a part of your Chromebooks were paid out of there last year. um and this year not having those part of of the plan. Um so you do see a decrease in those costs here and then we have the textbook cost but you had a larger adoption the last two years bringing it down to about 72,000 and then no major adoptions planned in 27 through30. Then finally the last one in brown there is going to be your your custodial maintenance supplies which are are pretty steady.
025Um no major changes anticipated there. Next we come to capital outlay. There's not a whole lot there. 125,000 um basically majority of that is for buses budgeted. Um so not a substantial amount of of dollars there. And then finally we go to your other expenses. You'll notice other expenses are primarily one category and that is dues and fees. The vast majority of these dues and fees are um county auditor treasur fees. So you don't have much control over those. It's based off of the property values. Um and the collections as well as delinquent collections as well will increase the cost. So um no no major change. You did have an increase going from 24 to 25, but no major changes moving forward there as well. So overall with your expenses, you see some of your
026major purchase services come down. Uh supplies are pretty steady actually. Some decreases there. um no major changes in other expenses or in um in your capital outlay. And then your final one um one of the larger ones that you have here is going to be your transfers out. Um that's going to be the next the next the last item we'll cover here. So obviously you saw a much bigger transfer out in 2025 by transferring out when you got got that onetime payment public utility you transfer out as well. And then you can see what is being budgeted as far as transfers moving forward here. um pulling about 1.8 million this year, dropping down to 1.7 million moving forward. Um so with that going back to our our simplified statement here, um based off I keep
027on stressing uh current law is we are projecting that you'll start deficit spending next year. you push that there was a small deficit I believe in the last forecast this year uh through some cost cutting cost cost cutting measures by the district which you guys continue to do over the last the past several years you have a balanced budget projected for this year and a slight operating deficit next year um and you can see that grows moving forward what other questions can I answer uh for the board or the audience being a five-year forecast. Uh I should point out we are still producing a 5-year forecast, but the legislators are only requiring now a budget year plus three years. So really a four-year forecast, but because of different being able to illustrate long-term effects and
028cycles, we include the fifth year um still in in our presentation here. And um you can see we do have a renewal levy coming into play in 2029. Would be the first time wouldn't collect if we don't renew by that point. Um and then you can also see there that the district as of right now would run through their cash balance that def spending increases by 230. So Ryan, I'm gonna I'm gonna brief the board a little bit on it, but you can also verify. So feel like I'm speaking out. But obviously, we know that at any given time in the next few weeks, House Bill 186 could come to fruition based on what I'm sure you're hearing and what I'm hearing. Uh, so I mean I'll just pass out a something that I got
029we got from obviously the department of education and workforce just from Marlington which is kind of so basically what he's basically talking about right now is where we're at and under current fiscal law which is good. We're under the guarantee. We're getting the 20 mil floor. Obviously House Bill 186 wants to take us back to basically 2022 levels. and basically retroactively go back and take our money back and do that per year to catch up. So, as you can see on the if you look on the right hand side, it's a little small. That's what we currently are at for Marlington based on the Department of Education and Workforce as estimated revenue coming in under current law. And then if h senate or sub uh bill house bill 186 goes through then you're going to
030look at so if you look each year 2020 they're going to match 21's going to match 22 is going to match then soon as you get to 23 you're going to see that the difference between what actuals in law and what or 20 I'm sorry 24 you're going to see us we're going to see a significant decline of our money taken from us. Uh, so you're looking at maybe $500 to $600,000 a year and that's not anything that Marlington did. This is coming from the legislators and this is a very big push. They look like they have enough votes to go through is what I'm told. So Ryan, you want to elaborate a little bit on that? Am I saying that correctly? >> Yeah. So on the screen, the blue line's your current forecast, your
031cash balance and your for current forecast. The red line would be based off of the LRC estimates um what they interpret the the cause of this bill to have on the impact on your district. Um the the easiest way for me to explain what this bill is is that if you're a person that got your raise two years ago and you got a a big 30% raise, let's call it. Um and now they're coming back and saying you should not have gotten the 30% raise. you should have only got a 9% raise. And so moving forward, we're going to reduce your pay by 21% and we're also going back and recollecting the money for the last two years in the form of a credit >> um for what we already paid you starting in 2027.
032We're going to we're going to rec recoup that money from you. So that's why you see a little bit bigger of a drop here in 27. That's when they they take that recoupment of the last two years and they reduce your increase by being at the floor down to what the rate of inflation was, which right now we calculated around 9%. Um, so it's capping the amount of increase moving forward plus retroactively going back and taking money from the district that you already collected um and already under current law. So I just and I I'll you don't have to stay on for that. I but I will brief them and answer any questions. I mean obviously you know as we are a conservative district and I understand that and our legislators are conservative but this
033is one where they uh they have a lot of support for um right now and it's uh we're advocating what it would look like for our own story or our own district. And this isn't just a Marlington issue. This actually affects um I think 15 of the 17 districts in Stark County with the exception of the ones that are not on the 20 mil floor. Okay. Is really what it's doing. Um there's >> so they have more money and they're going to keep their money. >> Correct. It's really this is a way to offset this is their idea of trying to make the property taxpayers a little happier by saying we're going to take this away from the schools. Uh and it's not just the schools. It's it's also affects your fire, your police. So
034this will affect all our townships uh you know that we depend on that have been voted in by taxpayers for support for roads, libraries and all this. It isn't just a you know this but this I want to give you guys at least from them what they gave us that we that I that I asked for you know specifically um a group of us did. So um what it looks like for us. I just asked Ryan if that's accurate. Um he said it is. So, we're we're talking about about how much per year, you're saying? >> Uh, you see on you can do the math, just start the last line and go back and forth and you can kind of figure, but you're looking at roughly5 to $600,000 a year. Uh, so it's it it
035adds up quickly. Um, >> and they're taking it back, but where's the money going? >> Uh, in theory, Ryan, where's the money going? They would want to return it to the taxpayer. Is that correct? >> Yes. So, think of um you get your tax bill and it says how much you owe each year. Under this um based off the last two years, there's going to be a credit on your tax bill. So, um basically, you would when you go to pay your taxes, you have a what's called a discount for this year because of what you paid before under the new law would say you're not you weren't entitled to before. So therefore they would get a credit on their existing tax bill starting I think for the next not this tax year the following
036tax year. Um and then moving forward it would cap any additional growth based off of what the rate of inflation was the three previous year. So like so when I met with Aaron Roush which he's the chief in budget of school funding for the department of education workforce like his point is to all districts you know obviously but in particular you know when we when him and I just talked about with Bob just Marlington you know the part of this conversation is if House Bill 186 goes through you know we have to be the board has to start thinking about you know how we're going to continue to balance our budget based on the amount of property taxes we continue to transfer out. Not saying change anything, but the conversations have to be made publicly
037about what's right and wrong to balance our budget because it's not a Marlington issue. You know, we've cut staff every year through attrition, >> done those things, looked at that, looked at your purchase services, make things right, and Ryan would, you know, has backed that up with what we've done for the last four years. But at the same time, there's going to be, and I'm not saying this is just right now, it's all pending, but the pending is a little bit more real based on what we're gathering from um what we're hearing from Columbus. So, again, I'll still be advocating for our story just as much as others are going to advocate for theirs, but we have to be this this is why we have a work session is just to make you aware that
038those these things are looming out there. There's many other pieces, but this this is probably the biggest one. Wouldn't you agree, Ryan? This is the biggest one there. Um there's also a house bill that was amended kind of replaced house bill 335 that where this is capping 20 mil floor districts increases at their the average rate of inflation over the last three years. Uh 335 would then your inside millillage would be capped at no more than 1% increase per year. So that's also a change. Not as significant as this from a from a standpoint of of financially for you. Um but if you ever were to have to go back to the taxpayers and pass a new levy, then the only thing that generates additional tax revenue for the district after you pass that is
039inside mill that would be capped at 1% per year based on the way it's written right now. So that also would prevent I mean your ability to increase revenue is especially for Arlington at the guaranteed district is significantly hampered um with the changes in in property tax law moving forward if these were all to go through to where basically you know as your expenses increase you're going to have to either cut more each year or go on a levy cycle quicker because that's really the way your district specifically can increase revenue um without any other you know with this change in 186 with the change in 335 um it's really hampering any way for you to keep up with inflation. >> Okay. Thank you. >> Thank you, Ryan. >> Yeah. >> All right. You guys,
040let me know. >> We'll do. >> Thank you. >> Talk to you tomorrow. >> Thanks, Ryan. some good news. >> Oh, I have also I meant to give to you guys. I'm sorry. You could one, two, three, four, five. Right. One, two, three, four, five. This is just last year's May. This is May's forecast. uh just from a projection standpoint of what he talked about, we were we were also projected last year to be at a balanced or above budget of only $5,413. Um so we are about $200 or $300,000 higher than that based on what he said, but we were either way. That's the general the big one was the following year when we're looking at our you know overunder on our our deficit spending uh for that. And I asked Bob to put
041this together and he could explain it a little bit too since we're talking about deficit spending. Uh obviously I I was asked uh is Marlington deficit spending and I said on the forecast yes you know it's uh last year we were the the year before and that that's really the general question um that I was asked and it's it's accurate. You can look it up on our five-year forecast. Um, but then again, I I call it, you know, I said I then I explain we're deficit spending because we're moving taxpayer money out of our operating budget to support what what uh building initiatives, which is all good. It's not a bad thing. It's what we the intention is for. You know, by law, we can take taxpayer money, property taxes, and move it to a
042different fund, PI 070, it doesn't really matter, to support your buildings. You can never take PI money and move it into operating. That's the law, >> right? >> Uh so what I had Bob kind of put together, here's one, two, three, four, five. Uh you know what I the general way I do it and we'll put and if it's not on the website, it might already be up is basically if we in general if we would just leave our property taxes alone, we are not deficit spending at all in the last four to five years. Okay. So, I mean, the word is used like pipeline money. At the end of the day, it's it's, you know, I talked to Aaron Rous. It's a tangible property. It's a property tax. Doesn't matter. It's all goes into
043one pot. We get X amount of dollars into that. The board years ago said, "Hey, can we take out a portion of that to maintain or upgrade or do things to our facilities, specifically our elementary or middle school and high school?" All correct. That's what we've been doing for the last four years between roofs, multiple paving projects, AC and HVAC concerns and so forth and we're going to continue to do so in in a fiscally responsible manner. That's kind of why we hold work sessions and hold and talk about that. What I want to put together is, you know, when I and I call it halftruths, you know, just be truthful. You know, if you say your deficit is spending, then say yes, but you're not if you're not transferring money out. You know, it's
044it's it's very simple. It's a property tax. So yes, we are deficit spending based on what we take out of our own checking account, savings account. That's how you want to look at it. >> So we could balance the budget if we didn't spend any money on buildings. >> Correct. But that's not >> that's not the initiative that we want as a board. We want to continue to maintain. It's just we want to be clear that, you know, the reason why we are deficit spending is because we are making sure that we catch up and maintain a lot of our building initiatives that we've been doing for LA the last four years, >> right? you know, the $4 million roof project, the millions that we've spent on paving, you know, the continued upgrade of our
045fix or, you know, upgrading our Hback in the auditorium, you know, the min splits are consistent uh cost every year to just to make sure they're maintained and up, which is all fine. You know, I'm not saying change anything. I just think it's to make it clear when somebody asks me, you know, is that I don't give a a halftruth. I just give a full truth. We are not as a board or as a district deficit spending if we leave what's in there alone. We're choosing as a board to transfer out. The board is making that decision. >> Yeah. I think to understand it all, there's a couple key points and it it probably sounds like double speak in some ways when we talk about deficit spending. We are, we aren't kind of thing. And
046here's the here's the uh caveats to that. The five-year forecast is just the general fund. Okay. And when we look at that five-year forecast, transfers out to the general fund are considered an expense. So if you look at the the five-year forecast, in our case, we're transferring out significant money to another fund. So if you look at just the five-year forecast, it's going to show deficit spending on line 6.0 because we have this transfer out. Now, we've been spending that money to maintain buildings. So, if you take that those two things together, are you deficit spending? I would say yes, we are deficit spending. But if you looked at just the five-year forecast and you were to not transfer that money out and handle buildings with the building funds separately, if you will, and not
047not have that transfer out, then we would not be deficit spending. So it's more that it just takes a little explaining to understand what Dan's saying here. So if you looked at it like just from an operational standpoint, imagine not transferring this pipeline money out. If we just used what is general fund money that comes in by taxes, including the pipeline revenue, we would not be deficit spending. So you could complicate that further by saying, well, wouldn't you be spending money on maintaining buildings out of there, out of the general fund? Well, yes. and we'd probably be deficit spending. However, right now, by moving those monies to PI and that's the only place that can be spent and we have building needs like we did the two phases of the roof this year instead of
048one. Well, we're going to spend all that's there that's required to meet our our budget for the year because it's already been reserved for that. We can't spend it on uh other expenses. So I hope that's not speaking too much but I wanted to just kind of clarify what what the difference here is that we're talking about just general fund when we look at the forecast and it has one big expense in in taking these transfers out as directed by the board. So as we look at I think what Mr. Swiss is probably getting it and Ryan I think alluded to it too is that as we see the diff district heading into deficit spending in future years then I think the discussion has to be there to say well you can't have negative cash
049you have to stay afloat as a as a financial organization can you continue to transfer that money out if there's no other revenue coming in to offset the inflationary expenses and thing and needs that we have >> so that'll be a discussion from Actually, when I when I explained it that way, what I was talking about, the the community members I talked to said that, "Well, that makes a lot more sense." They don't mind it as much because we are targeting specific things within our buildings, continuing to make things look better and making it better for our kids and our staff. So, that makes a lot more sense, you know. So, when you're saying that, so it's not that I I'm saying let's change something. I just wanted to be clear that based on the
05030 plus cuts we've had in the last three and a half years from classified and assertified and the fact that you know we're transferring money out we're doing pretty good and with what we've done to maintain buildings is pretty remarkable. >> Right. So are we at a point where we need to have that discussion in the future? >> I I I think the only time we would get to that point is if something like a House Bill 186 would go through. >> Okay. And then you're talking as a board, you're going to have to have a public discussion of how we're going to continue to operate in the black after you're looking at everything else as possible too and any questions. So, no, I don't think I think we're continue fine with what we're doing.
051It's just >> The other question I have is once the roof projects are done, do we need all four million in the PI? >> There's not four million. It was a one time. That was I know it was a one-time thing, but what I'm saying is we once the roofs are done, which is the big single biggest expense we've had, >> is are do the expenses come down? What other large expenses? >> We still have about an $800 plus,000 loan loan that we're still paying on the bank through 2027. Forgot about that. >> Okay. So, we got we still have that. >> What do we pay on that a year though? >> Exactly what it is. I think there's two years left. I think this year, I think 2027 is when that loan is up.
052>> Say at one payment a year. Two payments a year. >> Two payments a year. >> What's the amount? >> Uh I could try to pay. I want to say between 8 and 900,000. I want to say like 887. >> Now, does that come out of PI or does that come out of operating? >> It it comes out of operating technically. That's our you mean because we're it comes from the transfers out. I mean at the end of the day comes out of operating money. Well, actually that one if it's if it's the payment for the upgrade projects to the elementaryaries that were done that we're speaking about, >> it's coming the transfer out. >> It's going for >> we've paid that a couple different places in the past. >> Okay. >> You know, however,
053I think I have it uh set up to be paid out of it's either PI or capital projects fund. I'm going to check >> changed at one point because of the COVID money. What it really at the end >> it's more like a treasur choice in a way in the sense that um you know as I look at what we're going to write a purchase order against for PI versus um the capital projects fund they can be used for similar reason >> to answer your question to me no I don't I think the only time the discussion would come into play is if House Bill 186 would pass or if you're getting enough feedback from the community saying hey I want you to operate in the black you know well if you need to operate
054in the black and you've done you could on a cut standpoint as much without affecting the educational point that you may have to look at portions of it to make sure you're operating a black. Again, it's more of a a board decision. And then obviously we still have major needs. Not I don't want to say major needs. We still want to make sure like I said I said it took me five it took me five years to get to where I thought we get caught up. All right. You know I still think we have some paving needs at the elementaryaries that um to finalize. I mean we did the bulk of Marboral. We got one thing left. We still have the bulk of Washington done. We have one thing left and we have Lexington. I
055have one small left. I mean those that's that I can think off top of my head. Um I do want to make sure that I you know obviously I didn't leave out my thing that I want to talk you know anything else you guys had to come up with from uh you know major uh there's still HVAC for our high school gym I want to look at you know from that aspect of it because that's the last piece that's not you know there from an HVAC heating standpoint. Um, athletically I I I want to make sure that we're, you know, we haven't really touched anything athletically since I've been here. Um, so it's really just getting an idea in the next few years of needs. You know, uh, the middle school floor at over there
056is been there since I was middle school. It's pretty much shot. It's very a lot of hollow spots. I think that is a conversation. I don't think it's a huge need like a cost, but it's still we need to get some estimates. And Men Center floor's been there since the inception. That thing's been an amazing floor and used. Uh, and then I got to look at, you know, based on our strategic plan, there's other things in there that I want to make sure that we looked at as priorities. >> Um, so no, I >> I can't think of anything in magnitude anywhere close to the school. There's nothing. I don't think there's anything like that. But again, it would be >> all open aboard discussion like I think I put in my update Friday. I'm
057hoping to have by December some a list and some quotes and numbers for you. And then you know so we can have maybe a work session like we always do about buildings and grounds and just kind of you know say hey here's the pot of money potentially we have to spend based on the forecast and you know which items do you want to target or not target um and then we can go forward. Josh that bond payment uh that's going to come out this year uh $77,770 or $77. So, um, that'll be coming out the latter part of this fiscal year. >> That's the two payments combined or two pay. Say that again, Bob. >> About $78,000 >> per year. >> Yeah. >> 780. >> 708. >> Yeah. With rounding. >> So, we're close. Like
058I said, 2027 we become debtree. That's really >> So, that helps also. >> Roughly. So, it's roughly what 1.6 is owed. Is that what you're saying? >> What was that? I'm sorry. You said 780,000. >> 78,000. Is that what's owed or that's what we're paying? >> No, that's what we're paying each year. So, I think we have three years this year. 25, 26, >> and maybe all 27. >> So, we're probably looking about 2.1 million, you know, left >> on that. >> Yep. >> I think it's a good point, Dan, that you brought up u what we're doing here is a reflection of what the community wants. You know, there's you they want their buildings. Correct. We're We're not going to get new levy money passed to put new buildings up. So, we're maintaining what
059we have. We're keep We're keeping it upgraded. We're doing the air conditioning. We're doing everything that the community wants. So, explaining it that way is is is perfect in my mind. Uh yeah, we're deficit spending, but at the same time, we got buildings that are viable for another 10, 15 years at least >> longer or longer. And to be clear, so if that money I'm just going if for the discussion or if we get to the discussion about transferring the money out when the money comes in in general fund, if we need to use it to pay for repairs or things, I just want to make underline. We can. >> Well, you always can. Currently, not the way it's designed right now. >> Okay. The way it's designed right now, you can. Okay. But if
060you put that money into if you transfer it out, it cannot be used for anything but those. >> No. So currently the way it's the way the currently the way we transfer out it could be transferred back in if we chose to okay under a board resolution. >> Okay. >> If you would what you can't do you cannot transfer >> PI money that's passed so levied money permanent improvement money and then try to transfer that in for operational money. That's illegal which you cannot do. >> Okay. Two questions. In the in the forecast, is the um when the loan is paid off, is that already worked into the forecast? >> No, it's not actually in our forecast because we transfer it's being paid out of our transfers out. So, it doesn't it's not >> it's
061already out anyway. So, and that's called the cap capital outlays account. >> Is that what is that what you're calling it? >> Capital projects which is separate from the PI. So we got a PI, we got a capital project, two different, >> let's just say the >> PI1 gets funded by by tax revenue like the property taxes, the pipeline money, etc. There's a portion of it based on the millillage that we have like in the PI levy that goes into that fund directly. >> So when those loans are paid off, will the >> let's just say we paid it off this year. No, not necessarily. Okay. No, not at all. That's my question. So, if the loan was paid off this year and we're saying as he showed, we're transferring out $1.7 million in tangible
062property tax this year. The board could say, "Hey, I only want to transfer out a million or I only want to transfer out 700,000 instead of it all." The board has that right to say, "Hey, I still want to be able to transfer out x amount of dollars because obviously we want to continue with specific initiatives that we want to target or attack." or they could, but we also want to say we don't need that much, so we're going to keep it into the operating expenses where it belongs just to make sure that we're staying on a balanced budget so we don't have to go back to the taxpayers and ask for any money. >> Got it. The only problem hypothetically doing if we're going to reserve that money to try to keep the BA
063budget balanced since we have increasing expense expenses every year and then the nexus money that we're getting is decreasing every year. Eventually we're going to hit a point where we can't do that. >> You are in 30 years. You are correct. >> 30 years. >> You are right. But a little every year and I you know I mean in the next 10 to in the next 10 to 10 to 15 years I'm I'm pretty pretty safe assumption that this a board or board members are going to have to ask for levied money. I mean it's the way the legislators are designing it. They want the taxpayers to have a choice. So you we're going to at some point in time in the next 10 years going to have to ask I mean it's been 25
064plus years since we've had permanent improvement money you know and I and that's just for buildings and and we're pushing well over 22 years for operational money. I mean it's and that's great. So I do I think this district has been very fiscally responsible for the last 20ome years >> 100%. Mhm. >> Uh it's it's you know but it do would I say that you know at the end of the day call it what it is. It's it's taxpayer money. If taxes would drop in the trienal we're going to we would get less anyways. And you know based on how house bill 186 now stand on 20 mil floor. No, but you know based on up until the 20 mil floor, we were our our uh property taxes that came in were very dependent on
065you know if they would go up or down and obviously they of course they have increased but there's a good speculation in the next trienal you're not going to see anywhere near that increase. It may even it may possibly decrease. Second question, because it's a forecast, is there a percentage that Ryan calculates in for anticipated retirements? Is it possible to even do that? >> No, he asks every year, you know, what we would possibly anticipate for retirements and then what we would he would ask me what I would choose to replace. So like last year I could say I was gave the example that we uh were able to uh three four I don't have the exact number because I don't have it in front of me teachers that we weren't going to replace. Okay.
066>> So those savings are zeros plus their benefits but I I can think of >> multiple I'm thinking four or five teachers right now that plan on retiring this year because STRS changed it to the 32 mark. But I don't know right now off the top of my head if those are positions that look forward to that build that is forecast >> sometimes. >> Okay. >> Um so yeah so he'll anticipate and ask those questions like hey are you planning on making any cuts this year or you status quo on the classified and certified side. >> Got it. Okay. >> That was my question. [Applause] >> Okay. Are we good? I I have I obviously if you have more questions tomorrow for Bob and I for the board meeting because we do have to have
067this approved tomorrow due to the new change in the law for October. Everything he kind of had slidewise is in your folder um stapled. >> Yep. >> In that. So take that take that back home and take a look through that. >> Okay. >> We can always come back. It is a work session if you guys want to talk. something comes up from a question. Okay. Uh moving on. I'm going to take the next probably x amount of minutes, as long as it takes uh to obviously twice a year we have to present to you guys a uh policy. So Ed Holland kind of says here's a list of policies that he feels either by law have to come up and be uh board adopted or changed or they're just general that they're outdated and
068he has a chance to go through them. So in there I I gave you uh obviously the list of policies is on the second page of your agenda and then I gave you like a basically a overview of each one. >> Okay. And then I'm going to go through each one just as as a brief and kind of give you what he said is either law or something worth a discussion point. All right. So the the first one is policy 22 22 uh 2266 which is non-discrimination of the basis of sex at education programs or activities. It kind of then gives you you can if you choose to read each couple paragraphs that's a synopsis of the policy. He said this is law uh is why it's being brought up and the reason why is
069he said Trump wanted to remove specific verbiage which is why that is law. That was exactly the notes on that. So there's not anything if you wish to read through that and you have a month. So I just going to give this to you as a work session to talk. It'll only be on a read tomorrow night. You have 30 days. If you want anything from me or Ed, as always, please tell us. The next one's 2430.02. That's participation in community stem cell, home education, extracurriculars. Uh, it's just removing a piece of the language under House Bill 96. It's again, it's a law. It's just House Bill 96. It's a it's a law change. Policy 2431 under Interscolastic Athletics is also a law under House Bill 96. Uh, policy 3130, assignment and transfers is also
070a law. It's just a legal change. Policy 5130, withdrawal from school, is also a law. Policy 5136, personal communication devices under House Bill 96, also a law. Okay. And that's probably the the the most hot button one right now. That would be your cell phones. Okay. >> Yeah. >> That's the one that uh the Jane Timkin bill. Um that was her big push was basically no cell phones K through 12. Right. So, uh, how they define instructional day is gives some wiggle room. So, we're following exactly what the law is. So, right now, currently, uh, the way our language will read, we're abiding by the law, okay? Because we don't, you know, we're already at the high K8, there is no cell phone. High school, there is no cell phone on the instructional part of
071the day, our core classes, things like that. And then obviously um they are allowed for specific things based in the law when they can or can't use it. So um Ed verified we're good, but that's probably the biggest one that's on there. Uh any questions please ask. Uh 5200 attendance, that's the law. Uh that's all house bill 96 policy 5223 release time for religious instruction also law policy 5410 promotion of academic acceleration placement again law under house bill 96 policy 610 109 is new. That is just acceptance of payment by credit card. That just basically means that we have a policy that we would accept credit card for payment for various things. Could be school fees, you name it, different things like that. That's that's just an option in there. Uh policy 6152 is a
072technical correction. Um, you're adding the term Department of Education and Workforce, which is why that's policy 6152 is even in there. It's a technical term change. Policy 6830 audit is law under House Bill 96. Uh, policy 7540.02 digital content and accessibility is law. So basically we have to have a uh it's for Americans Disability Act uh closed captions. So like I gave the example uh we do this is on YouTube right now. So obviously we have to be able to have it on a closed captions option which you YouTube offers under that uh policy 7541 is just a uh it's it's kind of it's a delete and resend. So it kind of goes together with policy 8300 and 80 or sorry policy 8305. Basically it's that's the information security is law under house bill 96
073which is basically deleting or rescending policy 7541. So these are the cyber security stuff the things that we got to be aware of. uh policy 8400 school safety uh this is law. So this is more or less the suicide uh the suicide prevention we have to be able to have 988. So we have this on our website but if students have planners and things such as we had to make sure it's in their in or on their planners. So like if our middle school has planners or elementarymentaries have planners we basically have to purchase stickers and make sure they're on on there from the mental health side of things. Uh, twist over policy 8462 is student abuse and neglect. That's law. Policy 8640, transportation for non-rine trips. That's also law. And policy 9270, equivalent education
074outside of schools and participation extracurriculars for students not enrolled in our district is also law. >> Um, let me go to the next ones here. Is that the one that says that uh that it is that homeschooled kids are were required to allow them to participate >> that and extracurricular activity? >> Yes. And >> Okay. Good. >> Homeschooled special education students may participate in junior reserve uh officer training corpse without being enrolled in the district. uh also eligible people from the John Peterson or Austinism scholarships they just kind of expanded it >> okay >> you know from that aspect of it which you can read through on that end uh also under there then we have uh the non-discrimination revisions that's the second uh the second page there which is the bylaws and policies so
075it's policy 1422 3122 and 4122 those are those are replacement policies for non-discrimination, equal employment opportunity and anti-harassment. Uh the policies of 142202 31 2202 and 41022 non-discrimination based on genetic information of employee is being deleted or rescended. Um they're just replacing them same as above. um they're taking those policies and putting them under 2260, 22601. And then um in policy 1623, 3123, and 4123, that's a technical correction for 504 and ADA prohibition against disability. We need to make sure we have names for people to go to if they have an issue, and that would obviously be Nick and Renee in that aspect. So, their names have to be added. And last uh these came out after. So we you know he was here in March uh and then he had he sends out updates
076and this was this also needed to be sometime between that after that March meeting. But the student super supervision and welfare the 1613 3313 and 4313 is law that has to be put in there. Um you turn the page we have a revised policy under special education which is also law. That's just stu. It's all about student supervision. These are just things that are in law when it comes to student supervision. Uh so I put the full policies in there because I did they didn't have the uh the paragraph form. So I just copied the full policies in there and what we're looking at. >> I'm not seeing any of this. >> So it'll say March 25 legal update in one of the [Applause] >> I got you. I'm with you now. Got it. Sorry.
077>> So, usually >> the two >> we can give you we can give you a brief update. Ed can put together paragraphs with that and then I kind of just went and when we went through it, it was just which were law, which is just an option for like a discussion piece and wanted to have that. Again, these are just on for first read tomorrow night. Uh so, please look those over. Please let me or Bob know um any concerns or questions with that and uh we'll happily get those responded to you quickly. >> That's all I have. >> Okay. >> Thank you. >> Is there a motion to adjurnn? >> Second. >> That's quick. >> Well, Mark and Jonathan, >> I'll second. >> Oh, you'll second. Whatever. >> Okay. Call the role, please. >>
078Mr. Swift. >> Yes. Mr. Ryan, >> yes. >> Mr. Hagen, >> yes. >> Miss Humphre, >> yes. >> Miss Krepco, >> yes. >> Right. Thank you.