Finance Board Meeting (03-09-2026)

001Hi everyone. Louder. Hi everyone. Welcome to the Peters Township School Board Finance Committee meeting. We'll begin with the Pledge of Allegiance. All right we're gonna kick things off with a presentation of the audit report for 2024- 2025 by Steve Niedenberger from Hosack, Specht, Metzl, and Wood. I didn't ask how to pronounce that. Hopefully I didn't butcher it. There we go. That should be better. Good evening everyone. Pleased to be here tonight for a little while to talk about the audit report on such a beautiful evening. I'm sure there's no place anybody else would rather be. The first thing before we actually look at the audit report, I just want to talk about bigger picture, something with this past year. About two years ago the administration of the district wanted to embark on a bigger project,

002basically prepare not just the audit report but a ACAFR, which basically is a bigger report which is presented so that the district could get an award in excellence in financial reporting. So two years ago we sort of went through a trial run and just so the district administration and us, the auditors, could get on the same page and everything like that with it. And then the past year, June 30th, 2024, that report was submitted for real. And I was here probably around the same time last year giving a presentation of it. Well it takes about six months for it to be looked at and judged and that was your initial submission for the school district. And as you guys probably know, you guys did win the award the first year, which is very difficult. A

003lot of times some small language in the report, just the way some things are broken down. Yes, we have some knowledge of that. Yes, your administration had knowledge of that, but a lot of times they don't like to give out that award the first year. Well your June 30th, 2024 audit report was submitted and received that award. So I just wanted to bring that to attention before we talk about the June 30th, 2025 report here. But that's definitely something the school district should be proud of. That's one of the higher level things you could do as far as auditing, audit report kind of stuff, accounting stuff. So I haven't been here since that happened. I just wanted to bring that to everyone's attention. And they do provide a letter of some small suggestions, which in

004preparation of this audit report, you know, the administration, we took into account and it's not a guarantee every year, you might get it one year. There's no guarantee you'll get it the next year, but usually you're on track for that. So just to keep in mind this report that I'm going to talk about here for a few moments tonight, June 30th, 2025 audit report, it was submitted in December of 25. And we're here talking about early March of 26, but it won't be told towards the end of June of 26 that you'll know about your status. So I just want to catch up the speed with that because that's definitely a new thing here at the school district. If you do have your reports, I will mention a few page numbers throughout, but it's not

005mandatory or necessary that you look them up as we go through some things. So anyways, the bigger report, you'll notice it's much bigger now the last couple years. It has a lot of demographic items in it. It has a lot of extra information about the district. You know, you do have to commend your administration team because most of that is prepared by them. But I'm going to focus in on just the audit reports and the parts that we are actually auditing, you know, that are opinions based off. So if you have the report in front of you, the first letter from the auditors, it doesn't actually have a page number probably, but it's the independent auditors report. It's a three page letter. And basically, we were able to provide an unqualified opinion, which means there

006was no qualifications on the opinion on these financial statements. It's also known as a clean audit report, clean audit opinion. That's what the district strives for. And obviously, that's what the district received this year, along along with their award for excellence in financial reporting from the state. So I'm just going to flip through a couple of exhibits quickly just to mention a few numbers that were in place back in June 30 2025. The first exhibit I want to draw your attention to is exhibit three. That is the balance sheet for the governmental funds and exhibit three is actually on page number 28. You'll see here the first column is the general fund. That's the main operating fund of the district. And at June 30 25, you had total assets of about 23.6 million, while your

007total liabilities and deferred inflows were a little under 13 million. And this result in your fund balance of being 10.6 million. The other column there, the capital projects fund, you had 6.2 million in capital projects monies, while you had liabilities of 382,000. And that resulted in the fund balance of 5.8 in the capital projects. If you flip a couple of exhibits forward, you will see the same two funds, the general fund, the capital projects fund, the governmental funds, the operations exhibit five on page 31. The first column general fund, you'll see the total revenues were a little over 84 million, while your expenditures were 71.5 million. You did have a transfer out of almost 12.5 million for debt payment and also $1.9 million transfer to capital projects fund from the general fund. So this activity

008resolved in a addition to your fund balance in the general fund of 15,986. The capital projects fund you'll see there, you have 298,000 interest earnings, you had a higher 19,000 of federal monies used in the capital projects fund, expenditures of 1.9 million, and you received the 1.9 million transferred in from the general fund. So your increase in the capital projects fund was about 348,000 in fund balance during the year 24-25. You'll see this exhibit has one more governmental fund type. It's a debt service fund. It didn't appear on the balance sheet because there was no assets nor liabilities or fund balance, but you'll see there was activity basically to transfer in from the general fund to pay your principal and interest on your bonds and a little bit of interest earnings there. So those are

009your main operating and governmental funds. There's two other fund types. I'll just draw your attention to those exhibits. The next one would be exhibit eight, which is actually on page 35. This is the results of operations for your proprietary fund, which is your food service fund. The biggest thing I want to point out there was three lines from the bottom. You'll see that you had a positive increase in the net position during the 24-25 school year of about 76,000. This fund is in theory to be a self supporting fund, and you see you had a positive increase during the year in that fund. And the final fund type, if you take a look at exhibit 10, which is on page 38, is the fiduciary funds. And there's two types of fiduciary funds. There's the trust

010funds, which has about 27,000 of money in that position. And then the custodial funds are your student activity monies. You'll see you had about 259,000 at June 30th, 2025. So that's just a real quick look at the exhibits. There's a number of notes to these financial statements to support the exhibits. A lot of the notes support the first couple exhibits, which we didn't go over in detail because that's on the government-wide basis that has your fixed assets and long-term debt on. That's not how the school district budgets, so I just focus more on the areas, the school district budgets. As far as footnotes though, one I'd like to draw your attention, sort of we always do, is on page 52. The long-term debt note of the school district, about halfway down page 52, you'll see

011that the biggest item I want to point out was the general obligation bonds at June 30th, 2025. You do have outstanding $105,485 of bonds, and also you have notes outstanding of $8.4 million. So that gives you an idea of the debt level of bonds and notes at the district as of June 30th, 2025. After the notes, yes, page 52. Yeah, page 52. If you see in about the middle of the page there, it starts as the long-term debt note. The two things I pointed out were the bonds that were outstanding at June 30th, 2025, and then also the notes outstanding. You'll see the bond level was $105,485, and the note level was $8,430,000. So that was one note I want to point out. Going through your audit report, the other area I want to touch

012base on was the RSI, the required supplementary information. That basically starts on page 70 and goes for about eight pages. If I could draw your attention to page 71. On page 71, about two-thirds of the way down, you'll see the total revenues and other financing sources totals, and you'll see you budgeted a little over $83 million while your actual revenues came in a little over $84 million. So you had almost a positive 950 surplus of actual revenues versus budgeted revenues. On the other side of the equation, if you look at page 76, about four lines from the bottom on page 76, you'll see that the total expenditures, they did exceed the budget amount. The biggest thing to keep in mind there was there was a $1.9 million transfer out of general fund money is to

013your capital projects fund. And still, with how you budgeted for a $29,000 increase to your fund balance at June 30th, 25, you still were able to have a $15,000 increase, almost $16,000 increase, even with the transfer out. In the final part of the audit, you don't really have to flip to any page numbers. I'll just talk about it. The single audit, anytime there's $750,000 of federal money spent, we have to perform a single audit. And two things there, we have to follow the federal regulations and look at the controls that are in place that have to be adhered to to follow the federal government controls. And on both accounts, the first letter basically says that we were able to provide unqualified opinion on the spending of your federal monies. And the second letter in that

014section basically says that the internal controls you had in place were sufficient, didn't have any deficiencies to be able to be under the federal guidelines. So that's another key part of the audit. There's a number of pages that basically talk about what I just summarized at the moment there. So I know it's a lot of numbers, a lot of page flipping around and everything like that. But I think the bigger thing to keep in mind is some of the results I talked about and that it's a clean audit report. And in the bigger scope of things, this is a, at least from an audit standpoint, it might not be exciting to everyone, but it's a big deal that the district was able to receive the award in the first year and now you have submitted

015for year two. There's only a handful of districts that actually submit in Western PA. Our firm audits about 40 school districts and we only have two, you and one other one that does that. So I mean, that's, it's a lot more work for your business office and administration, but it's something to be proud of, especially the district of this level and prestige. So I know it's a lot of stuff real quickly, but wanted to see if anybody had any questions, maybe something I said or maybe previously to this meeting. Just a few comments. One, thank you for being here tonight. Two, also want to commend the administration for a clean audit and the award on the previous report. Three, I'd say to all board members, take this and read this. It's boring, but it's good

016information. I read it on a flight for work last year. I'd read it, I'd fall asleep, I'd wake up, I'd read some more of it, like go through it. It's good material. I guess just my question, you know, just looking forward to the future. Is there anything you recommend, any areas of improvement? I mean, it's great when you get a clean audit, it's great when you're winning the award. So clearly we're doing something right, but if there's any recommendations, anything you point to, happy to hear it. Yeah, it's one of those things, it's harder and harder for a school district to have a positive result. The expenses go up across the board. The money, especially state and federal level, is not there like it used to be. You're limited, you know, your local taxes, how

017much you could increase those and different types of grants you could get. It's a hard thing. It's not something to take for granted that, you know, you could transfer 1.9 million and that you could have a positive bottom line for the year. You look around, a lot of districts are really struggling, and it doesn't matter your demographic makeup. It could be, you know, a good area, it could be a not so great area. It just really depends on your management, their fiscal management with expenditures. But, you know, there's a lot that goes to it. So there's constant new pronouncements that govern these financial statements between us and administration, we'll stay on top of that. But it's a challenge. It's not just a give me, you know, you see the auditor once a year and it

018seems like everything was okay again. Well, there's a lot that goes into that, you know, to be able to have that. So appreciate that. Thank you. Thanks, Steve, so much. Really appreciate it. All right. Well, thank you for your time. And if anybody does have any questions after this discussion, if they could just form to Brad and he'll get in contact, I'll be pleased to answer anything you may have. Thank you. All right. Next, we'll turn things over to Brad for a presentation of the preliminary budget. So it's that time of year again. We're going to talk about the 26-27 budget. I know all the different budget years we talked about 23-24, got the award 24-25. We just looked at the audit. We're in 25-26, but we're going to talk about 26-27 preliminary. So it

019is hard to follow along. A lot of the same things that we've seen in the past, but we'll go through as before. If anyone has any questions as we're going through it, just stop and ask those questions or if you have any comments. So we're going to look at the enrollment. That's where we always like to start. That's going to be our basis for staffing. We're going to look at our revenue trends, our expenditure trends, and then we'll have some public comment. Just one of the, you know, we always do this when we do our budget presentations, but kind of our overarching goal is philosophies to maintain a high performing school district and do that within the needs and be good fiscal stewards. So just looking at enrollment, the last couple years we've seen flat

020or slightly increased enrollments in the same thing we're projecting for next year. It's not, you know, it's our best guess. We take historic data, how many kids we see coming in at kindergarten, but also how many kids we see that come in in sixth grade or how many kids we see come in ninth grade, because we know we always pick up some kids along the way. So we add those kids in and we do our best to try to project where it looks like we'll be in 26, 27. 25, 26, we're at 4,040 kids. Next year, 26, 27, we're projecting a slight increase of 35 kids up to 40,075. And then we project three more years out and we see that trend of increasing over the next three years, 40 kids, 17 kids, 20 kids.

021You know, in 13 grade spans, it's not a, you know, it's not a huge difference year to year. And then we also know one of the things that we've talked about before is when you go back 15 years ago, actually our enrollment might have been a little higher in some areas. So it's not like we're busting out of the seams, but we did have a dip where it seemed to be bouncing back a little bit on the rise. So then when we look at the school levels, this is important, especially at the K-3 levels where you can see, you know, the students, they have their homeroom teacher, they stay with that teacher. We can actually see the class sizes. So the first, you know, February 26 at Bower Hill, we had rounds or those would

022be classes of four. And so that's kindergarten. And the reason it's four is because we have half day kindergarten. You really have eight teachers, but we're going to divide those by four, then eight, eight and eight. Next year, with the total enrollment was 705 at Bower Hill. We're projecting 698 next year. So that is a decrease at the Bower Hill building, but it doesn't move enough to change the actual class sizes. You know, we don't dip a class size below enough that we'd be able to remove a teacher and take it down to seven rounds, but still stay within the recommended class size. We try to stick 25. We don't like to go too much higher than 25. And at the K-1 level, I think we'd like to stay around 23. PV, we know we

023had a big year at PV this year. We have 517 kids. That's one of the bigger years of PV. And we pushed out to six rounds across. Next year, we're losing seven kids, 510, but the same thing as Bower Hill. We would not expect any change if these numbers come in the way they do. We would see those same class sizes. Now we see they're on the lower end at PV, but not low enough if you remove one. So the good news is we do have space. If we get more kids than we think we would get, we would have room. It really wouldn't affect class size too much. And we know we're using all our classroom space at PV at this time. So we get that question a lot. Is there, you know, PV

024is packed. You know, they're using all their classroom space, which is true, but there's room inside those classrooms. So that gives us, that makes us feel comfortable about where we are enrollment wise. And then McMurray, we had 614 in the current year, and we're actually going up to 632. And what we've been seeing at McMurray over the last few years is we get a class of over 300, 330, and then right behind them, for whatever reason, is a class of 285, 290. So we've been able to flip flop the teachers from 14 and 12. So we haven't had to make any staff changes. The concern, and we're just going to, you know, this isn't going to affect 26, 27, because you can see we could kind of do the same thing and flip them one

025more time next year. But when you look up the total grades three, we have 308 and 317 coming in behind. So looking out future in the next couple of years, we might have to come back and look at adding a teacher or two at McMurray when you get those two rounds of over 300 at McMurray at the same time. So that's just something to keep in mind going forward. And then at the middle school, 939, we know middle school and high school schedules are a little different. They have a lot more room in them and there's more flexibility to absorb increases. So 939 to 957. And at the high school, 1265 to 1278. Any questions on enrollment? Moving on to revenues, we do have some good news this year when we talk about our revenues.

026We are seeing, you know, we're getting a preliminary assessment information from the county. The township gets their assessments certified for January when the township bills goes out. So we use that as our starting point. When we receive that, we are still seeing some growth in just assessment value in the township. So without even a tax increase, you're going to see more real estate revenue generated because our set value is growing. We also are seeing an increase on our earned income tax. That's one where, you know, everyone's paying the half a percent. You're paying one percent, half percent goes to the township, half percent comes to the school district. We do our best to kind of gauge that, but we're making that decision in, you know, we're not even really done with 25, 26, and we're

027going to project out where we think we're going to be for 26, 27. So that's a tough one to hit. What we usually do is, you know, we see where we're trending at in the current year and then add some type of escalation on there. But at that point, we're just making our best guess. When we look at our 24, 25 numbers, when you look at the audit, we were kind of right on our earned income number. Budget wise, we kind of hit it right on the number. The current year, I will say we are trending higher. I went to a tax collection committee meeting. I'm part of the executive team for the county collection throughout the whole county's up a little bit. Ours is up, is kind of surpassing that when you just look

028at Peter's township. So that is good news. It's, you know, people within the township. I don't it doesn't look like when you when you break down that how do we have more people just paying? It's it does really seem like we just have more people making more money because that's one of the things we always want to try to drill down onto. We also are going to have an increase in our realty transfer tax for next year's budget. That's you know, that's the taxes paid on a real estate sale. The district receives a half a percent of that realty transfer tax. The township receives 0.75 percent, I believe, of the transfer tax. That's another one where we just do our best guess because it's based on house sales within the debt or property sales within

029the community. We talked about last year we did have a spike. We did have an increase over what we projected, but it was it was all mostly due to the sale of a commercial property within the township that was a big number. When we're projecting for next year, just because of what we're seeing this year, we are going to push that number up in our budget. So that'll be additional revenue. Interest earnings is the one side that we are a little concerned about. You know, our investments are interest rate driven. They're all safe. We have to be careful on what we can invest in. So if interest rates do go down, we will receive less interest rate revenue projection. So we did bring those down a little bit. Then all state funding, when we look

030at this all state funding, we're remaining at the same levels that we are now. We know the governor has a proposed budget out there. It's just the governor's proposed. We haven't heard anything else. Hopefully they would pass something before we pass our budget, but that would be a first. So what we will do is we'll just assume that we're not going to get any less than last year. So when we look at state funding, because you know when we talk about where our money comes from the state funding, that's you know when we talk about local revenue, that's what we can control here. The school board can make that decision, increase those revenues. The state funding will come from the state. When we look at other districts within the county, and then even some of

031our comparables. So in the county, you have Avella. They're receiving $16,000 per student. Here at Peters Township, we're receiving $4,681 per student. And then even when you look at our comparables to Allegheny County that we like to look at, they're receiving more per kid in state reimbursement. You see like Upper St. Clair, who we like to compare, just because we've got the same number of kids, they're receiving $5,346 per kid. Additionally, the one thing that I'd point out with that stat, it's a little misleading. So the state revenue, you know you get your basic allocation, but the other thing that comes with state revenue is reimbursement on payroll taxes that we pay. So when we pay for the retirement into Peasers, when we pay our social security tax, the state reimburse us for half that

032rate. So when you look at St. Clair, they're getting the same basic education funding that we're getting. The difference is, when you dig into the numbers, St. Clair's payroll for the year is $10 million higher. So they spend $10 million more on salaries, which means they spend that much more on retirement and social security, which means the state's going to reimburse them their half more. That's what drives their number. It's not really a basic education funding or a special education funding. It's their payroll tax reimbursements. We've talked about this the last two years. When you hear the governor's budget for schools, they talk about the historic investment in the school districts. They're driving all this money into the advocacy supplement and the tax equity gap supplements to school districts. So they're making this big commitment

033to education. They're pushing tons of money into it. And so for 24, 25, Peter's Township received zero dollars of that, of those monies. And then you can see what, you know, we weren't alone in Washington County. Avella and McAfee received zero. So in 25, 26, there was some lobbying done, and people didn't think it was as fair that we got zero. So they put a minimum amount that districts received, and that minimum amount was $50,000. So we received $50,000 this current year that we weren't expecting. But so in 26, 27, on the governor's proposed budget, what they released would be an additional $50,000. So when you see that, that $50,000 is $50,000 received in 25, 26, but then an additional $50,000 in 26, 27. So that's why it goes up to 100. But we just

034wanted to always point out that three-year column. So over the last three years, you know, a Ringgold school district received $8 million, and we received $150,000. And this, you know, when we talk about where this funding is, and the reason it's important is because if you're not getting money from the state government, we have to find a way to cover some of our costs. Like the auditor said, we have costs rising, and we have to find a way to cover that. And we're not receiving that state funding to cover that difference. Brad? Yes. Can I go back to page seven, slide seven? The, I had missed the, or I had forgotten the differences in the payroll tax reimbursement. So for Opposite Clear's payroll is just under $10 million. No, I'm tracking. I just have, I

035had forgotten that. But my question is, when we're comparing payrolls, do the contractors, like, do our half of our, does Malacca factor in the payroll or not? Malacca wouldn't. So that would be something, that would be about a $2 million difference would be the Malacca factor. Other than that, we would be the same. Okay, thanks. That was a good question. So advocacy, so that just shows the three-year totals over those three years, those districts, they're going to receive those, that much more additional funding. Federal funding, kind of same story, you know, during the ESSERS money that we received, we really didn't receive much ESSERS money. We received the same amount of ESSERS money, I think, that Fort Cherry received. So not too much federal funding, $523,000 for us. It's $131 per kid. So on this

036slide 10 is the Alex O'Neill chart that he had us put in last year. Thank you. It is, I think, and we're going back to, and actually, I should have pointed out when you, when you, when we go back to that, to the three-year, the advocacy supplement, you can see Kinn and Mack is actually getting money. So they're getting a significant amount of monies. So I, you know, when we get two and three more years out, I think Alex's chart's going to change because then you're going to see more monies coming in to Kinn and Mack versus that, you know, I don't, you won't see too much more money going out to the state, but you're going to see more money coming in where ours is going to stay relatively flat. But in this, go

037ahead, Alex, you want to? I was going to say, I appreciate you including this. And for anyone new to this, the history of this is we know what earned income tax looks like in the area. We know what one half of 1% is because that's what we receive. So Mr. Rao put together what one half of 1% is for every district in the county. And then we multiplied that by 6.14, twice the state tax rate to figure out roughly what we send in earned income tax to the state. And then we compared that to what we receive in state funding for education. And so what's interesting, we look at the bottom line, the earned state income tax for the counties, 226 million in education spending funding receives to 37 million. So pretty similar, but only

038us and Kinn and Mack and a very small amount of Chartier's Houston is in the hole. So effectively us and Kinn and Mack are subsidizing the rest of the county. So that's really just goes to show you of how disadvantaged we are in state funding. So again, I appreciate you including this. So total expenditures per ADM. So ADM is average daily membership. It's just the way the state does attendance. And that's how they present the total expenditures per ADM. So when we look at that, we know this is very important. And this has had nothing to do with on the revenue side, this just shows what we're spending per student. So we're at 19,898. We're kind of upper, lower, I guess it would be the lower end of Washington County per student. I would say

039I'd point out that, you know, when you dig into teacher salaries, we're paying our teachers more than anybody else in the county. So it's actually harder to stay into that number because, you know, salaries is the biggest portion of this. And so for us to be able to stay within the middle or in the lower end of the middle, we have to really be tight with everything else to try to keep that place in the county. And then when we compare ourselves to the Allegheny County, where our teacher salaries are kind of similar, you can see we're spending the least amount per kid. South Fayette, Watson and South Fayette are always kind of close, but we're lower than South Fayette in 2022-23. And 2022-23 is the latest data the state has out there. They will

040put the new data out for 2023-24 in April. They're always like a year behind, a year and a half behind. And thanks, Brad. And it probably goes without saying, but for the new board members, you know, you view this page relative to each school district's performance as well. So we used to only kind of look at the ones down below because we feel like those were our competition. And then there's requests, well, yeah, copy shop, but we're Washington County. So I think, again, this is just, there's many pages in here where, Brad, you and your team rock it here. But this is, I think, another feather in your cap. So we rank 324 out of 500 districts. So 324 being the, you know, the lowest amount would be 500. So we are on the lower

041end in the state too, which I think is, you know, and we stayed around that amount. We haven't seen much change. So when you just look at the millage rates, we are, you know, it kind of flips a little bit. We're on the little higher side. And that is part of the story that we tell earlier, you know, when you're not receiving some of the other funds, your local is going to be a little higher. And then we just always compare it to the millage rates of some of those Allegheny County school districts and some of the places where their assessed values are kind of similar. And you could see, you know, a $300,000 assessed value here at Peters Township, you'd pay school tax of 4,084. And then it runs down to at St. Clair,

042if you had a $300,000 assessed house there, you'd pay 9,455. So projected revenue by source, getting into 26, 27 numbers, you know, local revenues we're projecting, we're projecting an increase from almost 66 million to 67.3, 67.4 million. State, so we're always budgeting from behind, a year behind in state revenue. So you're still going to see some state revenue increases because we're catching up with what we got last year that we weren't anticipating. And then with our payrolls going up, our payroll reimbursements will go up also. So you do see an increase of almost half a million in state revenue. But for federal and other, we're not projecting any increases. Actually, with federal, usually what happens is sometime May, June, we get a letter saying that we've been reduced by $27. It's usually a small amount,

043but we usually get that later in the year. So just on assessed values on page 15, this is just what we're tracking. This is what would generate additional revenue without a millage increase. So right now we're at $34 million. So that's kind of in line with previous years, but this is early. We'll continue to track this for the next couple of months. We'll get updates from the county tax office. And when we come back into an update to our budget sometime in April, we'll have a new number. And hopefully that number will grow a little bit more and we'll get a little more additional revenue from that. Property tax millage history over the last 20 years, you see the small increases from going back to 2006, 2007. But then last year, the one thing we

044added, and I think it is a good comparison, is just our millage increase versus Act 1 versus the social security CPI. So we're looking at all four of those rates. So Act 1 increase is the Act 1. Act 1 is what the state certifies is the most the school district can increase their real estate tax. So that's the maximum amount. Then what our millage rate was, then what we actually increased our millage rate for that year. So then the difference between what we could have raised it to and what we didn't raise it to, but then also comparing that to the social security coal on the CPI. So what you'll see is, even though we did increase it in 21-22 and 22-23, it's just a rounding thing. We stayed below it, but I would say

045we increased it to the index those two years. But then we had two years where we increased it less than half of what the index was. That's just based on when we ran our budget numbers. This is what we needed. We raised the millage to cover what was needed on the expenditure side. And then this last year, we had those two years where we got away with only a 2% increase. We raised it 4%, which was the actual indexed amount. But the average five years for that was 2.55. You see growth on CPI at 4.5 and social security at 4.62. So we're still staying below those inflationary expenditure increases. I'm not going to go through each line. This is our first pass at our revenue assumptions. You'll see the first line is real state. So

046out of our $80 million, $90 million budget, $53 million, $54 million is that real estate revenue. So that is the important line. I'm going to drop down the earned income tax because you do see an increase there. We kind of talked about that. We had an actual collection in 24-25 of just under $8 million. And we have a budget this year of around $8 million. We're trending like 8.4. I added 2% onto that to get to the 8.6 that we're going to set in the budget. And that will be another number that we'll continue to monitor. So we'll be getting earned income collections. Once we get those and we project where we think we're going to end for the current year, we'll add an inflationary percentage onto that, the budget for next year. That's our

047best way of just trying to catch that number as close as we can. Real estate transfer tax, we are headed for a record year this year when we look at our real estate transfer tax. We're just seeing a lot of movement within the township. It's slowed down the last month and a half, and we'll continue to monitor it. But I'm projecting for the current year to be 1.4, 1.5 million. I don't think we'll hit those numbers. Like I said, we started the fiscal year off with numbers that we haven't seen before. And talking with the township, we dug into those numbers. There are more houses selling. And that really wasn't the case. It's just houses we're selling for a lot more money. So we were having the same number of sales that we've seen in

048previous years, but the value of those houses were going at a lot higher rate. So it was just generating more real estate transfer tax. So right now we're going to set that number at 1.2, and we think that's a number that would be a reasonable number. Everything else is pretty much similar to the previous years. Total revenue is 67 million. When you get to state, you will see that increase in basic aid subsidy, that 6.9 million. That's what we're set to receive this year. So we're just budgeting for a flat amount. And the same thing for the special education program of 1.8, almost 1.9. The one transportation subsidy, that's the reimbursement the state gives you on the transportation. They had held the line, even though CPI had gone up each year. They were, I think

049they were required to review it. They would review it and say there was no increase. So we stopped budgeting an increase. We haven't budgeted an increase from that. They did pass an increase last year, so we're going to get an increase in our state transportation reimbursement. No other changes there except for the bottom two, 7810, 7820. Those are our payroll reimbursements for social security and retirement. No changes to federal. We always budget $15,000 if we're going to sell something. A lot of times if we're going to a bus and we're replacing a bus or we'll take them to auction. So total revenues of 86.4 million last is what we had in the budget for 25-26. And we're budgeting 88.3. So we're seeing a 1.9. We're projecting a $1.9 million increase in our revenues. Any questions?

050On the delinquent taxes, real estate or earned income, how much total is delinquent currently? Roughly. If you don't have that, you can let me know later. We project the income from the delinquent real estate tax and delinquent earned income tax. What is actually outstanding that's delinquent currently? I don't have the current number. We know that our collection has been pretty steady. It hasn't really changed. We do get blips on how much we're collecting and when we collect it, what we usually see is one year we'll get a higher level of collection from the delinquent. You won't have any more delinquent outstanding, I guess, is your question. But then next year, for whatever reason, we'll see less delinquent collected and then it goes back up the next year. Okay. Thank you. Brad, I have a quick

051question. I know we talked about the PSBA conference call where they sent about the projected budget for this year. They thought special education was going to increase significantly. Do you think we would benefit from that from past findings of how the budget has increased? Based on what the governor proposal, they actually give us the spreadsheet per district. We didn't see a huge increase in that. I wouldn't anticipate it at this point. Have you gotten any more insight on the earned income tax other than people are making more money? I mean, a 5% jump in one line item seems pretty significant. You'd be surprised how much we would get from an individual tax payer in some years. If someone receives a bonus or a buyout, it could throw the number pretty quick. Okay. Do you consider

052the 2% growth for this year conservative? Probably. Moving on to expenditure side, expenditures continue to rise. It's mainly driven by our contractual mandated staff services. I don't think that's a surprise to anybody. Teachers and staff salaries, healthcare has been an issue the last couple of years with increases. Special education hasn't been on, but it doesn't take much to move the special education needle either. One or two students, that can be a significant increase, and then technology. On the staff, right now we're projecting, well, let me back up. When we're looking at these numbers now for staff, these do not include any retirements. There is a deadline at least for professional staff to give us notice, and that is March 1st. We did receive those. Those haven't been calculated into this presentation yet, but we will

053when we do an update. In April, we'll take those retirements into consideration. I'll have a meeting with Dr. French, Dr. Murphy, Dr. Fisher. We'll go over those retirements just on staffing, which needs staffed, and we'll roll those into our next update when we have a meeting. And so salaries right now, if everyone came back and we had all the same people, 3.59% increase, which isn't surprising. We know like with our custodial staff and our clerical staff on the negotiations, they were 4% increases. So it does fall in line. We also are seeing there's some that aren't necessarily, you wouldn't think of the salaries, but like our day-to-day substitute costs, there's things that are kind of variable within those two that we're just seeing increases on. Health care premiums, when we we're projecting an 8.3% increase,

054it was just approved last week. We were budgeting a nine. You're not going to see much of a difference there. I will say when we talk about the retirements, you will see a decrease on the salary side, but what we've experienced in the past is you'll see an increase on the health care side. So even though we are going to get a little bit of savings, when we do an update to the health care premiums, we'll probably get eaten up by the changes in retirement. And then the employer retirements with security contributions, even though, and everybody might have seen that they actually reduced the actual percentage by 0.01 when they certified it for next year, it's still based on our actual gross salary costs. So if our salary costs go up, it's still going to

055drive higher retirement and social security expenditures. So salary history, we like to just try to gauge this as best we can. Ten-year history, we're at 3%. I would point out that the 25-26 and the 26-27 numbers are budgeted numbers. We know we usually come in understaffed because we carry vacancies throughout the year and we're being conservative with some of our staffing numbers. So those are the two big numbers on the salary comparison sheet and they're probably high. So we're under 3% in the ten-year, but we're probably a little lower than that when we actually look at actuals. Hey Brad, I don't know if you ever modeled this, but all of the contracts we squared away in the past year, did we ever model what the total kind of salary? Put them all in one chart.

056No, we never put them all in one chart. We did them individually. My gut tells me we're close. Yeah. Right? Yeah, we'd be pretty close. Okay, thanks. The big driver on salary costs when it comes to teachers, everyone knows the teachers have the jump step in their salary. So we always want to look ahead. We're always looking to see is there going to be a year when you get a bunch of teachers hitting that salary jump at the same time. If you do that, that'll skew our salary numbers. We know that happened in 2021. We had 24 teachers hit the salary jump step. So we had a huge increase in salaries that year, but this is one thing where we should see this coming. Teachers don't move. Teachers, we have them. They're going to be

057here. We know they're coming. We know they're coming to the jump step. We know what the jump step is. So we always want to, you know, we need to always be aware of that because that will be a budget mover. You'll see for this current year, we're only projecting six. So that's a little less. So that's some of the good news on the salary side. You know, our salaries went up and then even out the next three years, we're at six, six and four. So that's good news. You know, at least going out those four years, we don't see a big increase coming on the jump step. Health care costs. Another driver. This one in 1920, I got an asterisk there. We actually were part of the IU one health care consortium. You saw that

058we had a 12.69% increase in a 5.99% increase. At that time, we moved to the Allegheny County health care consortium. When we moved, we actually only saw a 0.21% increase. That's not the full story either. When we left the IU one health care consortium, there was no fund balance. They were running out of money. When we went to the Allegheny County health insurance consortium, they had a fund balance. So to join the consortium, you had to buy into the fund balance. You had to put money up for your percentage. So even with putting that money in as fund balance to the Allegheny County health insurance, we only seen a 0.21% increase. And then a 1.8 to 4.42 and 1.41. The last four years have been a little bit more challenging. At those meetings, especially the

05915.09, some of the drivers were, you know, they suppressed the rates in 21, 22, 22, 23. People weren't going to the doctors. We're a self-insured consortium. So they're not buying premiums. They're paying actual expenses. So when no one's using the doctors and no one's getting their knee surgery done, we weren't having many expenditure outlays. But that kind of backs up eventually. And then when the floodgates open in 23, 24, you'll see the big increases. So that's what kind of drove to those increases. But over the last 10 years, you know, we've seen a 6.11% increase. I know that seems high. When you look at the industry standards, it's usually 8 to 12 is what they throw out there. So we are still trending below that. And then the other thing, you know, just pointing out

060in that consortium right now, we do have 1.4 million dollars that's considered, you know, it's attributed to Peters Township. Everyone has their own share of the fund balance. So it is a healthy consortium. And the impact on the retirement rate, like I said, we there was a decrease, they went from 34% to certified to 33.59%. But we still see we're still seeing an increase. The district annual cost is only 161. And you know, if you saw in a couple pages before, it was three, whatever. And that's because in this, we're just showing what the actual effect is to the district. Like I said, the state's reimbursing us for half. So the expenditure is going up 300,000. We're getting an extra $150,000 in revenue from the state. So the net effect to us is only 150,000.

061But the big thing that I know is always, you know, eye popping to everybody, if you go back to 2010, 2011, that retirement rate was just above 5%. And now we're, you know, hovering at the 40% number. So it has increased 516% in that time. And it's been a major stress on school districts, special education. There's no details, but we are seeing increases special education costs. And like I said, it doesn't take much for for one student, if they need to be outplaced in transportation, you're at six figures, and it would move that along. So we did have one additional outplacement this year, I believe, then we had budgeted. And so to cover that for next year, that's what you see as an increase. But it's not a major increase in special education, but it's

062one of the things on the technology. And we've had increases in technology in the last couple of years, I know we've talked about the laptop replacement. So right now, what we have in the budget is we're on the same laptop replacement that we've done in the last two years. And you'll see an increase of only $150,000. Well, the $150,000 increase is due to last year, in the technology budget, we updated the main I'm going to say this wrong, Adam, but it's the main server here, and it was $230,000. So that's been updated. That's been able to come out of the budget. There are some technology items that are that are added to the budget this year. And the major ones being some replacement, some printing boards, or they may not be printing boards when we

063buy them. But also the paging systems that are elementary are way beyond their useful life. So in the technology budget for this next coming year, we have paging upgrades at Bower Hill and PV. Unfortunately, our plan was to update the paging system at Bower Hill next year. It failed once this year already around Christmas time. Adam was able to get bubble gum and tape and put it back together. And we had and we thought we were going to make it to the end of the year. And we'll replace it at the end of the year. And we have it in the budget. It failed again two weeks ago. And I don't think we're going to be able to save it. It's probably not worth throwing money at it at this point when we plan on

064on replacing it next year. So I know this isn't a this isn't a preliminary budget discussion. But I just want to, you know, we feel like we're going to bring it to the board because it's a safety issue with the paging system being down. And it's going to take six weeks there, even if we get the okay, we have a workaround at the school. So it is safe there. But we think we need you know, it's important to get that done. So we're gonna actually get quotes for that and bring it to the March meeting. So if anyone has any questions about that now. Yeah, right. Yeah. Do we classify any of these expenses as capital? In this case, because because software upgrades, I mean, there's a lot of things that like, you know, I

065mean, to each their own, I mean, it's the pot, whether you raise the tax index for the operating capital, but I just mean like from a depreciation point of view, we would put it on either way for depreciation. And you're right, and replacement plan aligning to your depreciation value. Are we tying that in in our strategic plan? Well, I don't think the plan was ever to buy that a capital just because $50,000, right, a little under $50,000 for the replacement, you know, if we could fit it in a technology budget and just kind of same thing we do with curriculum, or, you know, I would say like sports uniforms, where we try to cycle things through within the budget. I think that was the plan this year. Unfortunately, I don't think we made it. I

066would still use just regular general operating budget this year. Yeah, because servers can get kicked costly. Yeah, so you know, a replacement view would probably benefit. Yeah, and we have we incorporated the technology improvements into the capital plan, just so they're on there, not necessarily knowing whether we're going to use capital funds for them. Because you're right, it's important to at least have them on that same priority needs. Yes. In this case, you know, I think it was going to be our recognition is to bring it into the general operating and have this approved next month so that we can get this replacement. Thanks. Tom, I think it's a good question. My question is, tell me why you're asking, because I'm not connecting the dots. I think if you look at the overall capital needs

067assessment, and, you know, it's just more than just addressing facility. So, like, you know, it may be an item that is high priority. And if it is high priority, how we strategically going to fund that? Are we going to look at increasing the tax index? Are we going to look at the bond situation? Okay, thanks, man. Sure. Any other questions about the Bowery Hill payment system? Just a quick question. Is this something that like has been kind of going south for a few years? Or like, do they have a lifespan and we just kind of knew it was coming? I believe they have a lifespan. And that's why we knew. Yeah, so they do have a lifespan. And here in the district, we've run them for well past that lifespan period. They're usually at this

068day and age around the 15-year mark. Those are considerably older. Those, I believe that one's at 28, 29 years at this point. But they're also manufactured very differently now than they were in the past. Does it line up replacement wise with any of the other buildings? Did we do them at the same time in the past? So we did McMurray during the renovation. We did the high school, obviously, during that. We did the middle school during the renovation as well. In our long-term capital project, we were trying to do Bower Hill next year. Anyway, we were just a couple months short. Well, then where's PV in that schedule? And would it make any sense to do them both at the same time? I'm going to defer to Brad. No, so we would want to keep

069that into the next year's budget. Okay. It needs replacement. I think it's going to make it to the end of the year, and then it would hit that regular replacement schedule. What we might see is in technology, because we're going to pull this forward, we're going to look into the technology budget, and we might see actually a decrease in technology, because now that expenditure will be in the budget for next year. We're going to pay for that next year. If we're going to do PV next year, can we get a quote for Bower Hill now? If we gave the same company the business to happen in the summer once we hit the new fiscal year, any potential savings there? Like we ask them to quote it both ways? So there's a challenge with that portion

070of it is all of our buildings have different manufacturers in them. Never mind. So wiring, unfortunately, sometimes there's a monkey wrench into those things where it's just, it's better, it would be nice to have everything all the same, but the cost of rewiring things could be significant. No. Yes, accidentally diversifying. Understood. Thank you. All right. Sticking with technology, the other piece of it, like I said right now, what's in the technology budget is the device replacement schedule that we're currently on. I know there was some discussion last Monday about that. The challenge that we've had and we've had in previous years to enact that lease and get the best pricing possible, if we would like to do it next Monday, if possible, if putting it off, I think Adam would talk like you're just concerns

071on getting devices and then the prices of everything just going up. We're just not sure. So when we talk about availability and pricing now, when we talk to vendors, we hear the same thing as we did during the COVID years is supply becomes an issue. Artificial intelligence has taken precedent when it comes to chip manufacturing and just availability of equipment. We run into two challenges as we draw this out. The more months that we draw it out, that we've been warned that we can expect a 10 to 15 percent increase in the price of the device every month moving forward. But not only that, if we get into the April and May months, we may not actually be able to get the devices for the start of school. We would probably get them around October

072or November. And our proposal expires before the end of or at the end of March, correct? The current pricing. So our pricing right now is locked in for another couple days more than anything else. Our vendors are only holding quotes for about two weeks at this particular point. We've been running quotes at the higher level just to kind of give us some padding so we're prepared for it. What we did was to help ease that burden as we went out to different manufacturers and different vendors as well just to see what was available. So as long as it can withstand the K-12 environment and it can be repaired, it doesn't matter to us as long as it's its operation. So the pricing will be valid on Monday Okay. Is the 150,000 option one or option

073two in our? That's the current. So I'm going to pull up from the slides from last Monday. So the 150 increase is what we baked in, just status quo. So that's refreshing at second, sixth, and ninth grade and refreshing Windows devices in sixth and ninth grade. Chromebooks at K. Alternative plan one was, you know, and this was after discussion, and I think this was going to be the recommendation. And the recommendation would be to move to Chromebooks in grades six, seven, and eight. And the reason, you know, talking with Adam, there was a reason why we did Windows when we did them. Some of the classes that were taught there, they had to use Windows devices, but there has been some upgrades that now they're able to use some workarounds with Chrome devices. We also

074know that our middle school kids are our toughest kids on our devices. The Chromebooks are a little cheaper. And then at the high school level, they have multiple classes that need Windows devices to be able to run those classes. Adam, do you have any concerns about the delayed rollout, potential delayed rollout of those devices in the fall? Should we, you know, delay impacting any of the regular operations of how you're doing things? I know that there's oftentimes work scheduled, you know, to be done in certain months, upgrades, you know, updates to patches, things like that. Do you have any concerns related to like timing of that rollout for you and your team? So the way that we look at it right now, based on how our vendors describe it, is if we move forward with

075the plan on the 16th, there is stock available. If we move past that time period, they can't guarantee stock there. As of right now, they're just guaranteeing stock for about two weeks. So there's no guarantee what's going to be available to us at the next month at the next voting meeting. They're not sure about much, so it makes it impossible for us to be sure about stock levels. But if you did purchase them, you know, if we did not vote and it wasn't approved next Monday or whatever day that is, if you were to delay that and the devices were delayed and you had to like instead of rolling them out right at the beginning of the school year, you had to wait a month or two to do that. Is there concerns about that

076impacting you to you and your team to do your other work that you have planned for the fall? Is there any disruption there? So it would create challenges for how we refresh devices moving backwards. So part of our overall plan that we use for the devices we pull out of service, it would be at the end of first grade, at the end of fifth grade and at the end of eighth grade, is those devices go back into K and 1 and they also go into our loaner pool. So for us to not have those devices available during those time periods, we run short on loaners now just because of the amount of work that needs to be done at times on devices. We essentially wouldn't have devices for our kindergarten program at that time and

077we wouldn't have any loaners, I wouldn't say we wouldn't have any loaners, but we would have a very small pool of devices to be able to pull from whenever students come back for day one. And we do come back with a lot of damage over the summer from students using them during their summer activities. So it would create a lot of uncertainty and we would for sure not have devices for at least one grade level because we wouldn't collect those devices at the end of the year like we would. So alternative plan one, there would be a savings, it would be a $33,000 savings. So Ms. Kennedy, like what you were saying, you would see a decrease from the $150,000, you'd see a $33,000 decrease there if we would go with option plan one. And

078then there was alternative plan two that was presented and that was just a two refresh model. The concerns there were, you know, you're really pushing the age of device, it would generate savings, but we'd probably have to, we're not sure what we would have to reinvest, but we'd probably have to reinvest for some additional actual number of devices because we would need additional loaners and replacements. And so we'll have to have one of these on the agenda for Monday. I prefer option one, just figuring our pool of loaners is kind of depleted. We've seen a lot of damage on some of these units. And if supply is becoming tighter and tighter, I'd rather lock in option one, have three rounds of computers. And then I would hope in the future to shift to where we

079can do to. I mean, if we can toggle back and forth year between year, by minimum when we need it. But in my perspective, it's, I think we'd be better to stock up a little bit now and have them for the three years. But thoughts, opinions, because I'd like for us to have an idea of which one of these goes on the agenda for Monday night. The only thing that I, when I was reading and looking through these options is when I think about the heavy reliance on the devices for the 10th, 11th, 12th graders, they're doing more and more work. Having older machines potentially, you know, breaking or having issues because they are relying on them more. I feel like if there's a way, and I don't want to totally recreate the wheel bit,

080if there's the way that our high school students could have the newer machines, probably makes more sense just in terms of like performance, reliability, you know, efficacy of those devices to support their learning. Yeah, but the only machines they're using, if I'm hearing you right, Adam, will be the windows? Yeah, so if you are looking at alternative plan number one, if you look down at, what is it? It would be 27, 28. Thank you. It would be your last year where you have the old computers in 12th grade. After that, the oldest computer will only be four years old. Yeah. Because they'll get it in ninth grade, they'll keep that same device. And then you'll have a five-year-old computer that you'll be able to use as a learner. So it still has some useful life

081in it. We'd still have that device and we'd be able to reuse it. Sorry. Yeah, there was basically a phase-out plan. Mike, Adam, I think I heard you say you're good, but you support this Chromebook expansion. Do you see any downsides there? I do. Because of the changes in the programming that has been available to our staff members. For instance, in our BCIT program, it's no longer app-based, it is web-based. It's provided our staff the ability to do a lot more web-based activities that really don't affect the classroom instruction like it would have a couple of years ago. This is an absolutely acceptable plan for our staff members. We appreciate you pushing on this and finding a solution that delivers the same and saves us a little cash, so thanks. Brad, what's the option do

082overall to the budget, to the operating? What's the impact? So impact on what we have in the preliminary budget. Option one would save an additional $30,000 because we'd be going from the Windows devices to Chromebooks in the middle school. But the cost of the actual lease, we're going to get new numbers now, but it's going to be around a little over $200,000 a year for over three years and then we own the device at the end of that. Can we balance it? Can we balance like the cost without having any impact in it causing any shortfall? Shortfall. Like overall? Overall to the operating budget. Is there any savings and slippage that we would need to balance out or do you have that baked in? It's baked in right now. And then it just bleeds out

083of the overall shortfall. Right now the plan is to have, I think I understand your question. Yeah. Because what's getting us to our $500,000? Right now we've had a three-year refresh laptop. So the first year we see we entered into a lease agreement. The second year we entered into another lease agreement. So we had an increase in technology and that's the current year. This will be the third year of that three-year lease amount. So we're going to have our $200,000 increase after this for this year. But going forward, that lease falls off and then we're just going to enter into a new lease and then you don't see any increase other than the cost of the devices. You're going to see a small increase, but we'll be at the level where you won't see technology

084increasing because now we're in a three-year rotation of those laptops. I got you. Because from a strategic sense, if we're pulling things forward, we can look at this in the same way. If you look at your facilities, that's why it all needs to be on an assessment list. Because you can have a strategic plan technology-wise and see if we can pivot on brick and mortar and some things like that. So that's why I asked you how do we bake it in in the operating because you may not see that as far as priorities clearly laid out as in terms if it would be part of the capital project, capital plan. So doing it this way allowed us to stretch it out over a three-year period to ramp up to the level of getting those devices

085knowing that we had the amount of devices to be able to still hold on to some of those older devices and get us to the very last bit, but then stretch that replacement devices out. I don't know if that's making sense. Yeah, it does. Because if you can offset it in your operating, then you take the hit on the operating. It's a nice luxury if there is an offset to a particular Airmark project that can bring us across the finish line to a capital project that we would be fortunate. Thanks. You might not know this offhand, but what are the costs been recently with broken computers like you said in the middle school? It's been pretty significant. Do you have any costs associated with that? Is that also rolled into the budget? We do have

086that rolled into our normal operating budget for supplies. It just depends on what the breakage is. Again, we've had a lot of our devices that we've used in the past that have been retired because they've had motherboard failures. We part those out and use top cases, LCDs, keyboards, those types of things. We reuse those to do the repairs on those devices that we have now. There are certain pieces that we aren't able to fix, like palm rests are one of the bigger breaks that we have, and LCDs we can't fix those if we fail. We've had to replace probably, I want to say, 75 palm rests this year and some screens, but not quite as many as we have in the past because we have two years worth of leased devices that are under warranty.

087Those additional costs for parts come down as those devices are covered under warranty. One last question. You mentioned after summer, do you find that a lot of computers come back broken? Just curious. Yes. We usually see about a 50% breakage rate that we need to do a repair on of some type. The degree depends. It can be a screen. It could be just a couple keys popped off. It could be a hinge broken. It just depends on the condition and the end user and how well it's taken care of. Do you say 15 or 50? 50. When we try to put it back into service, especially for our kindergarten students, we understand that these devices have mileage on them, but we try to make sure that there's no bent hinges. There's no missing keys, batteries.

088If they're below a 60% life, we replace those types of things. It just depends on the condition of the device and whether or not we continue to use it or not. Should we collect these over the summer? We've done that one summer. Dr. Murphy has trauma. I am also traumatized as well. The challenge becomes collecting and distributing 4,000 units is pretty much the only thing you're able to accomplish at that time period. Getting them thoroughly refreshed takes up, in reality, I believe it's about 60 work days to do the work from collection to the startup of school. We still have to do all of the work within the classrooms to make sure everything's set up as well. To be fair, I guess we don't know. I'm sure some of that damage is probably end late

089school year and they just didn't feel like addressing. It's not so much it was broken over the summer. It just wasn't addressed by the end of the previous year. Sometimes. I'm sure some was summer. I can speak for the Cameletti house. That wouldn't be the case. We let cosmetic stuff go. Those aren't things that impact the operation of the device. When we see deep gouges in a case, while that is physically unappealing, it's still operational. We want to keep those running as long as we possibly can. Adam, do you find that the breakage over the summer is more in the younger grades? Since those are older, would it be helpful just to collect those and get those back to you for inspection? I could pull some numbers for you there because I'd have to merge

090two data points there because we do collections of the three grade levels. That's about a thousand devices, what it looks like. I'd have to do a little bit of looking for that just to see what we get reported the first couple of weeks by parents because over the summer we don't get a lot of reports from families if things are broken until we start getting the Shelly Belcher emails. Waking them up for the year and then they start to look at the condition of the device and then say, oh, I need to get this keyboard fixed. Oh, this screen has a crack. So I'd have to pull a little bit of information to be able to tell you that. Would it be better for you to advise parents at the end of the year to

091look at that or are you overwhelmed by the thousand devices that you collected that it doesn't make a difference? Oh no, anything helps. The earlier we know about it, the earlier we can get it repaired. It's just easier for us to do it not under pressure because by the time we hit July, the end of July, it is all about getting school started and getting our counselors in schedules ramped up, our school done. So the sooner we know at the end of the school year, the better off we can be to do swaps, to do repairs, especially when kids don't need them when they go on family vacation. So it would definitely help us. To that end, would it be useful to broadcast to the parents or have teachers announce to the students saying early

092May, hey, if you got any issues with your devices, let's get them fixed now rather than wait till the fall when the technology department is swamped. Would that be something useful from an organizational perspective? Sure, absolutely. If so, what time would you want that notice to go out? So we'd want to do it in May so we give enough time for parents to be able to go through things because I know a lot of them are just focused on closing school, especially those within high schools and graduating seniors. There are some more pressing issues. So in May would be a good time to know that information. Thank you. I'm willing to continue having this discussion. I also want to make sure we get to Monday's vote and understand what it is we're voting for. Again,

093this is a very multifaceted kind of process that I think the devices, the technology, that's probably a year-long discussion to really iron out all the details of what the school should do, the administration should do. For purposes of Monday, I just want to confirm we are voting on the year three of a three-year lease, the purchase of new laptops for three grades. So at that point, we'll have nine years of new laptops for students roughly. Okay. Yeah. Thank you. Then returning to a numbers discussion, I think I might be missing something. So, Brad, you said that there's an increase of $150,000 budgeted for replacing the laptops. In the technology budget overall. Okay. Got it. It's a net increase. Okay. If we went with alternative plan one, we would save roughly $30,000. So that would come

094down to $120,000-ish. But in alternative plan two, we're saving $190,000. What was the savings for alternative plan two? So the savings was essentially eliminating one refresh grade level. So you were cutting 300 devices out of the refresh cycle altogether to get that savings. So I'm assuming then it's unreasonable to say that the 150 becomes a negative 45. You saved an additional $30,000 going from the Windows device to the middle school to the Chromebook device. That I get. What I'm having trouble wrapping my brain around is how exactly did we get the 195 annual savings if we're only budgeting the increase of 150? Yeah, Rolf, you're changing what we're delivering. That I get. And maybe it's because in future years, but if we decided Monday, okay, let's go with alternative plan two. I'm assuming we wouldn't

095actually, I mean, I'm missing something. The technology budget would be lower than it was, the next years would be lower than it was this year. Okay. We wouldn't have, because right now our baseline is 150 increase once we jumble everything in there. So it would be, but you can correct me if I'm wrong, it would just be lower. It would be by about 45,000. Okay. Got it. Thank you. So alternative one is going to go on the agenda unless someone, several people throughout issues want to change this now, but that's the intent is to put alternative one on. So if there's any discussions of alternatives, let's do this now. I'm good with one. All right. Thank you. All right. Back to preliminary budget talk. We look at expenditures by major function. That's just how the

096state requires us to report it. They group it into instructional support services, non-instructional services. So instruction is everything within the classroom. So that would be teachers, paraprofessionals. You know, you see vocational line, a special education line, then support services. It ranges from everything from people's services. So that'd be the counselors. You see the business office. So that would be me, the business office and at the accounting side, transportation, support services. And then the 3000 non-instructional services, those are student activities. So those would be, you know, athletics and other student activities that would fall within that. And the 5000 is the debt service amounts that we would have. So when you look at our increase in expenditures, projected increase of $2.4 million, we know we had an increase of, you know, almost $1.9 million of revenue.

097So we're short revenue $580,000. It's our first run through. Like we said, we have some updates to do, but that's where we are right now. What changed? So the revenues have changed. Earned income tax. We're budgeting an almost 9% increase in earned income tax. You know, a slight increase to the real estate, but it's almost a $400,000 number. We're increasing our realty transfer taxes we talked about. Miscellaneous, but then you have some retirement, basic ed, transportation stuff, subsidy, some decreases in our delinquent and our interest on investments. On the expenditure side, we see the increase in salary and wages, healthcare, retirement, special education, miscellaneous. There's the technology increase. We are budgeting for an increase in utilities. We don't have a final number yet. That's going to, you know, that's subject to change. Same thing with

098insurance. 10% increases we're budgeting there. That service is set at, you know, a slight and just, you know, basically level debt service. We have increased in SROs. We do have the big decrease that we're seeing is in the expenditure side is on the curriculum side. Dr. Fisher and Dr. Murphy could probably talk about it, but it's like kind of, you know, that ebbs and flows. We had a big increase last year in curriculum that we had an investment in the elementary reading. That was a significant investment last year. You do it once, you know, it's in. So, you know, we're pulling the budget back. They are doing some curriculum updates, but just it's not at that level this coming year. So we do see almost a half a million dollar savings. So I guess where's,

099so it's just from not purchasing new materials and books? We've cycled through all of our big purchases with K-12 English, math, science, and social studies. So now for the next couple years, it'll be kind of one-off courses. AP government needs a new textbook, things like that. So that'll be significantly less than a K-5 reading program. That is about what the K-5 reading program costs. So we're maintaining just general upgrades for the, we have a six-year curriculum cycle. So next year's a lighter cycle. And does any, is a lot of that curriculum sync up with these Chromebooks that we're buying? I mean, there are textbooks are available online and they are, there are online components to every Spending 140 to save 400 or spending 150 on Chromebooks. Then we're saving on books. Is that what we're

100doing? We tend to, not necessarily. I think it's just, it's a light curriculum cycle because we buy online versions as well as hardback. Now hardbacks are kind of a gimme throw in. It used to be the other way around when you, they come in a bundle. So anytime it's a 6-12 textbook, even what you do with, it used to be, it was cheaper to do the hard copy versus the online. And now it's kind of flipped. The hard copy kind of is a, is a throw in when you do try and break out estimates. Rob, I have a question for you and you might go over this. Apologize. It's my first time. The budget gap. So let's say that the end of year budget ends up, you know, in the negative. Where do we get

101that money from? Do we do debt services? Do we pull it from a fund? So when we have an estimated budget gap, the conversation is, you know, we could raise the millage rate to cover the budget gap. So that would bring it to a zero. The only other option would be to use fund balance to offset the budget gap. Once we get to that number, those are, those are really our only two options for the budget. Just based on our earlier discussion, on the expenditure side, we're pretty certain of these budgetary changes, correct? We know what the salaries are. We know the healthcare. On the revenue side, you said so yourself, we're a little conservative on our probably earned income tax and our transfer tax. So in all likelihood, we're likely to see more revenue

102on the next round of the budget. So the revenue assumptions that are in here are taking into account those increases. So I wouldn't necessarily say we would see additional revenue increases in the next round. I don't think you'll see much change. I will say like in previous years, we were a little more conservative. We're pushing the limits a little bit on our revenue assumptions over the last couple of years. The basic education subsidy is not going to change. We're going to go off with last year. We're not going to have an approved budget, so we won't have anything else to go off of. The one that we'll keep an eye on is really the earned income. And honestly, I could see it going down because we're basing it on where we're projecting the current year

103to end and then putting the escalation back around. It seems like we're a little ahead in collections. And so, Brad, the swing here is from your 1,000 line item instruction. So do you have escalation built in? Because at 23, 24, 44 million, 46 million, 48, it seems like do we have a standard escalation that we think for expenses? Those are the actual expenditures rolled up into those function codes by the state. So everybody that's every teacher's salary would roll up into the 1,000 instructional code. So they're actual expenditures. And we're just rolling those into and we're slicing the pie that way so we can see it. We always say functions the way things are spent. So it's spent in instruction, it's spent in support services. And object, we always look at it in an object

104level. Object level is what is being spent. So when we look at it by object, it's salaries, healthcare, debt service, things that are actually being spent. Right. But like the expenses, ultimately, here's an uptick, revenues can offset it. And that's really where you're getting to 2.4. We're gonna keep, we'll hit it. Yeah. So fund balance, where we're at fund balance wise, we're staying steady at just under $10 million. Out of that $10 million, 4.5 we assigned. So that's just what we're saying, you know, this could be used for debt service, 2 million for healthcare increases, 2 million for retirement increases, and 1.38 and unrestricted. There's 780,000 of the fund balance is considered unspendable. So that's for things that have already been earmarked. So those things are already going to be purchased. So that's that designation

105is they call it unspendable amount. Well, you know, we talked about fund balance, how much we're holding in fund balance. This is just a comparison slide. I don't think we had this last year. But, you know, Peter's Township, we had a, we had a fund balance and, you know, I took out the unspendable amount, 9.8, 9.9 million. We had a budget of eight, 81.5 million dollars. So we were holding 12%, 12% fund balance. So that's 12% savings that we have. When we look at some of the other districts, they're either similar. I know Mount Lebanon's a little lower, but they're working on actually increasing theirs. So Bethel Park, Mount Lebanon, North Allegheny, Pine Ridge, and South Fayette, and Upper St. Clair. Upper St. Clair is kind of similar, similar to us in dollars, but their

106budgets higher. So percentage wise, you know, it's a little less. And then Washington County. It's interesting to me, you know, some of the Washington County ones actually have higher fund balance percentages. And my best guess is a lot of that has to do with state and federal money. They received a higher percentage of that. So they were able to hold on to some of their fund balances and their budgets are smaller. Yeah. Debt service. Just to show, you know, we, this was a big ticket item for many years when we were doing the high school billing, but over the last couple of years, we're at a flat debt service. So we do not have any debt service increases. We actually see a decrease in 20, 20, 37, 38. It's not that long. You, we actually

107see a $2 million, almost a $2 million decrease, and then it completely expires in 20, 40, 41. Capital funds. We're just going to do a quick capital funds update today. When we do the preliminary budget update in April, we're going to do a deeper dive in capital projects because we know those two link. And then we'll have better numbers. So as of the end of July or January, we had a balance of $5.2 million. We had already approved the 1.4 for the lighting project, and we have an estimate of a $3.6 million in the paving that would leave us with $234,000 at the end of this summer. If that estimate comes in. Are we projecting any transfers to capital funds? The current year we are, we are seeing, we're looking like we will have a

108surplus in the 25, 26 school year that we will be able to transfer funds into. I think when we do our April update, we'll get a better number. But right now, definitely revenues are up. That's kind of why we're able to push some of our budget revenues up to 26, 27. So they're generating a little bit more. Okay. Thank you. So the base index calculation, the base index for 26, 27 is 3.5. We looked at that history chart and know that was hours ago. So you see that index numbers coming down. So 16.28, the maximum increase we can have for this current year would be a 0.569 mill increase. We collect just under $3.3 million per mill. So that would generate almost $1.9 million if we would do the three and a half percent increase.

109But when you know, we talked about where we're at right now with no millage increase, where our revenues expenditures, we're looking at a $580,000 budget gap. And the Mr. Briegel slide, he liked to always see the slide of breakeven versus what it would take. So it would be right now, we're short 580. We know this is our first pass through. We have some adjustments to make. If this is where we ended, I think our decision would be, do we take 580 out of our capital reserve or not, sorry, out of our capital reserve, out of our general fund reserves or raise 0.18 would be what we would need the actual budget. That's another revenue generator that we could talk about too. Assessment of recent sales. So just an impact on a 0.18. 0.18 would be

110$18 per $100,000 of assessed value. And we wanted to end our presentation just with this because we thought this was interesting. The Township, they did the comprehensive plan update this year. They sent out a survey district wide. And one of their questions was, and this is from their 2025 survey results, select the top three reasons why you selected Peters Township as your place of residence. And the number one reason was schools. So we just thought that was important to put up there. And actually the next, the most important reason they moved here was taxes. So we're moving here for recreational. This is from the Township Steering Committee. They're working on their 10-year comprehensive plan. And I'm on that committee. And so when we went through some of this preliminary stuff, brainstorming, talking about the Township,

111I mean, the schools definitely are a huge driver here, huge, face it, a huge boost to the property values. I know Mr. Allen, I've spoken at times like there's streets where several houses on the street are Peters Township and several houses are surrounding Township. And so similar houses. And the Peters House is valued, it's significantly more than a neighboring, than a house two doors down, three doors down that will go to a different school district. And so, you know, the value of the education here definitely helps drive and maintain the higher property values. You could see that when looking at our bordering properties. Any more discussion from the board? Any public comment? Thank you, Brad, for all of your work. We really appreciate it. This is the first of many budget discussions. Appreciate all the

112work that went into it. And if there's nothing else, then we'll adjourn and move on to policy.