001Welcome. Thank you for your patience. And uh we are going to begin this special board meeting at 10:43. I'm going to call this meeting to order. Please stand for the flag of >> Igiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. >> All right. I would consider any changes or additions to the agenda. Hearing none, we're going to move on to reports and presentations. Okay. So, we have um so I have a couple things here. Um I have the budget status report because I have to submit that with um our budget extension proposal to um the ESD and OSPI. Um so, is there any way for you to put this up on the screen in
002the presentation? >> The extension general fund. >> Yeah. >> Um So, um I wanted to first start with because we haven't done very many of these since I've been here. Um and so, and for the new people that are here, including myself, on this one, I just wanted to start with um to defining what a budget extension is. Um, so because sometimes it's referred to different things and and it can be interpreted differently. So, oh, I should have done that darker. Um, so a budget extension. Um, so we create our original budget um, which we'll do here um, shortly for the 25 26 year. Um, and that's monitored um, every month or more frequently. But a budget extension is basically um it increases the school district's legal authority to spend a given amount. So right
003now our legal authority that you have given us that ED approved and OSDI approved is 36,144,440. Um now we're not as concerned about revenues um because the revenues come in. we're more concerned about the expenditures um even though you have to have both but um and a budget extension must be adopted prior to incurring the expenses or processing payments. So it's really important that we do this and that OSPI approves this before final payroll is processed and before um AP accounts payable is processed this month. Um if we go even over by a dollar um it signals improper um monthly budget monitoring and it it will result it may result in an audit finding but it triggers a few different things and it's we would be breaking several laws by not doing this um even
004if we went over by a penny or a dollar. Um so it's really important. I've been watching this for the last few months um the last couple months and then the last month really hoping that we didn't have to do this mainly because it creates a lot more work um but um we also want to operate within our budget constraints um in the first place. So um so I guess then the question becomes well why do we need this? We set a budget why do we need more? Um and I think at this point right now if you look basically we are at risk of surpassing we are at risk of surpassing our original budget. Um so if we look at the July budget status report um you will see um several columns. First you
005have your annual budget of 36 um 144 and then you have July expenditures total 2.5 million and then your actual for the year which includes that um for through July the 11 months of expenditures is 33,34220 now our incumbrances are showing >> 3.6 6 million which means that leaves us with a balance after everything finalizes of849,000. Okay. So that's a little bit scary. So and then the question becomes well what is an incumbrance? What what does this mean? Are we really going to spend that remaining 3 or you know are we really going to spend 3.6 million because last month we only spent 2.5. So why would we spend 3.6? six. Well, incumbrance are estimates and um so an an incumbrance is a reservation of funds for specific future expenditures or open commitments to a
006transaction that are often liquidated at year end. So we do incumbrances for everything possible. It's very important because it's a critical budgeting tool. So we don't look at our budget and say, "Oh gosh, look at we have all this left. I have $100,000 left. Well, don't forget you have the town of Eatenville at 50,000 a month. That's still going to come out. So, we have to encumber those funds. Now, when we encumber funds for town of Eatenville, we know we're going to pay because we know we have to pay water. We know we have to pay electric. We know we have to pay garbage. We know we have to pay those things. But when it's something like repairs for buses, we don't know what's going to break. So we might open a PO for $100,000
007and use 50 and we don't need the last 50. So there goes 50 grand off of that849 just like that. So we don't know things come up, repairs come up, incidentals come up. We're really unable to predict. So um so it is possible, you know, it's we we will liquidate a a great portion of that, but we don't know yet. So um so then we have to look at okay what are all the possible scenarios um because basically are we really going to overspend um or are we going to be within budget? So let's look at a couple scenarios um that I ran and there can be lots of different scenarios. Um so the um so okay that's better. So there's our original budgeted expenditures um and our expenditures that's shown on budget status for
00811 months. Now that leaves us with 2.8 left in the budget. Now if you take 33 divided by 11 months you get this amount average monthly expenditures. Um now if we were to spend that in August we would have a negative budget of 187. Now we know that August generally um generally in August our expenses are a little lower especially in payroll because we're not doing extra professional development like we are at the beginning of the year. We don't have variances from people taking leave and needing subs. We don't need subs in July and those sorts of things. So generally your monthly expenditures for August will run a little bit lower. Now in the past that hasn't always been the case with um with repairs and MSOs because we were doing a lot of catchup
009um in in repairs and maintenance and in pool decks and those kinds of things. Um so that is one scenario that right now that we are looking at that we could end up needing that much. Um, now I'm going to throw one more variable into this. Um, and you can tell me if I'm taking too long. Um, if I if we have September bills too that are paid for August. So, all of our bills will still continue to come in in September and sometimes October because vendors have to send us bills in September that are for August. So, we do what's called acruals. So, is that number going to really be 187 or is it going to be 250 with by the time you add in acrruels? That is a possibility. Okay. So, now another
010scenario. So, that tells me, okay, we need to be on the safe side here. Um, now another scenario which I would say is probably more reliable um would be the forecast 5 projection because forecast 5 um looks at spending over the last five years and over a 12-month time span. So it's really smart um and it evaluates these percentages by month by year and trends. So forecast 5 is saying that we will end within budget by 88,49 that we don't need a budget extension but I don't know about you but I don't want to take that risk. Um so and that's just basically a summary of that. Um so those are the two possible outcomes and um you know I guess the next question that comes if if we determine if you determine that we
011need to do a budget extension which it's kind you know I that would be my recommendation. Um the next question might be how does this impact our funding balance? How does this impact our ending balance? because we, you know, we wanted to operate within a budget, but so what is this going to do um to our fund balance? Um first of all, we don't know that we're going to need that extra budget capacity. We're working really hard and we have been for the last for a long time to not have to do that. Not only because it's more work, but because it's more money and we don't want to do that. We want to put us in the best possible position to start the next school year with the bank. Um and so um so
012if we run those scenarios um which we still have to add in acrruals we would end with um one of those two fund balances or slightly lower with the acrruals um which is within um or policy. Now, the one thing that we have to remember is that part of that ending fund balance um actually includes restricted funds. So, we have donation money that might carry over. We have um idea money that we're committed to. We have coaches professional development that we're committed to to make sure that they meet safety requirements. Um there's um if we don't spend all of our CTE money and or um carryover for lap or title that we strategically set aside for you know salary increases. Um those are in those go in restricted funds. So those are part of the
0137.2 and 8 or less. Um so it's important to know that. But I guess what I'm getting at here is um our original so when we did the budget last year for 2425 um it was hard to estimate we had to estimate what our beginning fund balance was going to be and we ended up h ending up higher. So we're going to end in a more favorable position this year than what we originally budgeted for which is good but it's because we started higher too. So, >> um, can I make a comment just for the public's so that fund balance, the reason that the board really cares about that is we want to ensure that we have money in the bank in our reserves in case we don't get our money from the state, which
014has happened uh, multiple times. It happens when we don't get our money from the state in time to pay our employees. And so, it's really important that we have those reserves or if we have an emergency uh, debt. So it we're not trying to hoard money. We're really trying to be good stewards of making sure we're taking care of our employees. That's the pime that's the reason that as a board we set that standard. >> This June. >> This last June. Yeah. The state didn't pay us. We had to go to our reserves to pay our employees or they could just not get paid. Those are the options. And so this last June they cut us short. Not a lot, but they did cut us short because they had to meet their budget. So it
015was cut the district short all across the state. Um, so I don't know what that looks like going forward with the state having its own budget crisis. Um, if there's more of that to come. So that'll be interesting and all the more reason to have a strong fund balance. Um, so what they really were doing is they were pushing off some of their date from last fiscal year to this fiscal year. So it's going to be it's gonna it's going to catch up, right? it's just going to continue because we're on a continued budget. So, >> um so what are the things that have come up that um what are our budget variances? Why do we maybe have to do a budget ext why is it a good idea to do a budget extension? Um
016we have see here um so basically we have sorry I have it on the next slide too so I'm just going to read on this so you can see that the variances we don't care about debits and credits because that's just an in and out. So when somebody does a field trip or somebody goes, you know, on a trip somewhere, um whether ASB pays for it or we pay for it, um it's an in and out. It it comes out of transportation's total cost and goes into this other departmental cost. So where we're and and the supplies, there is some capacity in there. And I don't know why the system reads negative as favorable because in my world that's backwards, but um but there you go. So really where we're queuing into is um our
017salaries. We had um quite a bit of sub costs um that is really hard to control when people are sick and take leave and those sorts of things. But um we also had um quite a few more people this year that qualified for um sub health insurance benefits. And when an employee qualifies for sub health insurance benefits, even if they opt out, the district is still obligated to pay into those um at like 131 12- $1,300 a month. So, and that holds true also to our employees. Correct. So, if you had two employees, one working for us, one working for the parks. Um, one of the our employee could opt out, but we still have >> to pay for that. So yeah, that's another >> issue >> like another shake your head. This doesn't make
018any sense, but it's the way >> it's the new way they mandated that we >> So then we have purchase services. So we we had we did see an increase in um contracts and services with ESD. Um I will be because all that budget has already been moved from our capacity, I'll just be putting that right back into capacity. So and some of that's reflected on the resolution. Um travel were right on par, capital outlay right on par. Um and um and again these are projected. These aren't final because we've got two full months of data still to go in here as August and then September approvals, possibly some October acrals. So when we look at all of the objects according to forecast 5, we are ending favorable by 88,386 without the need for a
019budget extension. um the morning to forecast side. Um so the next slide um is just kind of a recap of some of the things that we are experiencing um in today's times. So we had some super great unexpected tutoring stipens and benefits um which is a very large chunk for us. Um and that was super great um but we do need the budget capacity in there to do that. >> Can I make just be clear? We are receiving money in and we're spending money out. So it's not costing our district anything. We just have to build that into our budget. That capacity to receive the money into our budget. Is that correct? >> Okay. So that's not an additional expense. >> Yeah. >> It's just we're facilitating that. >> Um and then we had some
020we had some increased extracurricular wages. We can't predict when our kids are going to be successful and go to state competitions and we busted that budget and that awesome. >> We sure can. >> Um and then again I increase certain classified sub costs um with that goes handinhand benefit costs and then those do qualify benefit costs. Um the ESC113 special services contracts. Um this one's kind of a unique one. Um, so when we budget, we have to budget how many drivers we think we're going to have. Um, and now that we're policed up, that's a little that's a lot easier to do. But, um, we rebounded super fast with our transportation pro scenario. And so, we filled a lot more driver positions than what we thought we were going to, which increased those wages and
021benefits in that department. So, what you will find at your end um is that transportation did really well at um getting all of our kids to school and filling their positions. Um and it was, you know, it was a nice surprise and a nice Yeah. Um so that but that does impact our overall budget. um which we knew was going to come up um down the road because for so many years we weren't getting our kids to school and we had you know the pandemic and so it just we weren't paying out those wages but now we are. Um we did have some increased motor vehicle fuel and diesel that goes handinhand with increased drivers. Um and we had increased food um in the food services program. So, that was kind of a hard one
022to gauge because you're always trying to predict how many kids are going to participate in the school and lunch breakfast program. Um, and with all of the kids eating free at Warehouser and EES for the first time ever, um, we really had to take a stab at it and say, how much in food do we think we're going to spend? Um, so we took a stab at it and it went over um and and so and we got some some extra revenues on that. So um so those are really the variances. Um so when you look at when you tie this back to the resolution um on the last part it will it says um due to the increased demand for special services contracts increased salary demands increased and socks cost which is your fuel
023and food. Um it just ties that back to this. Um and then last slide is just some other like additional information. Um the original budget um reference to the resolution. Um and again this is a budget extension for the current school year 2425 not the next school year starting in September. Um, and I'm required to tell you under state law that a combination of state and local funds would be used um for this budget extension should we need the capacity. Um, we will continue close budget monitoring and fiscal responsibility um through August 31st, 2025 and beyond. Um, but it is our goal um to end 2425 within the original budget. That is our goal. Um, and that has always been our goal. Um, and the additional budget, the capacity, um, the additional budgeted extension, however
024you want to refer to it as, is intended as a safeguard only. It is not intended as a green light to spend additional $500,000. Um, it is a safeguard only, and we're going to try to stay on the forecast five track um, and come in under budget. Um, and that is our our goal and um, we'll do everything we can to make it happen so that if we overspend by a dollar, we're covered. >> Okay. >> And with that is all I have for you today. >> Thank you, Christa. I just want to uh recognize and acknowledge the hard work that you and your team have put in and how really seriously you take your responsibility of being fiscally responsible and our gratitude is expressed to our community should um feel confident that you are
025really trying to make sure that um you're a good steward of our community funds as well. So thank you. I want you to be we can't recognize you for the hard work. >> All right. Um hearings of individuals. Is there anybody? There there is none. >> Okay. All right. Uh there is none. So we're going to go on to new business and consider approval of res resolution 752, the budget extension for general fund. Um I would consider a motion. >> I'll second. It's been moved and seconded. Is there any further discussion or questions that you might have of Jay, Christa, any of the staff here? >> I think she's explained it very very well. >> Thank you. And I appreciate you being cautious and careful and making sure that we're meeting the lovely letter of
026the law. I am um I too would rather uh do this work, this extra work and make sure that we are doing things appropriately and then also come in under budget. It's just worth it. So thank you for keeping us within all the balance of the law. So um it's been moved and seconded. All in favor? >> I and I will vote also. Um any opposed? Hearing none. Motion carries. And with that, we're going to move into adjournment of this meeting at 11:05. Good job. Christa, it's been hard for you. >> Thank you both for coming. Um, Eric and Santa, thank you. and being concerned and