2026-1-21 Board of Education Study Session (Audio Only)

001Hello and welcome to the St. Ray Valley School District's Board of Education study session of January 21st 20 21st 2026. Can you call the roll Sarah? Sure. This is Beth. I believe she's not coming. She's not coming. Mr. Burkle? Present. Mrs. Gilligan? Present. Mrs. Horanek? Here. Mr. LeChuga? Excused. Mrs. Solomon? Excused and Mrs. Weiss? Yeah I think today we all the only thing we have on the agenda is our amended budget update. Tony and Justin you want to take it away? Great yes thank you. Appreciate the opportunity. We've been looking forward to this study session for a while. For quite a while we've been sort of warning you this was coming. Hey we're going to talk more about this. We're going to talk more about this in January. We'll have a whole bunch of information

002for you in January and it's January. We do have a lot of information for you. So I've got three sections tonight that we'd like to discuss with the board. One was sort of here we had new board members this year so we wanted to do a school overview at St. Ray Valley School. So how do things operate here? How do we get funded? Where do our funding streams come from? A little bit about the finance department things like that. Just a more generic overview and then from then I wanted to hand it to Justin Patrone our executive director of budget and finance who will give an update on the FY26 amended budget changes. As you know we do two budget cycles every year. One is adopted in June and then that is then subsequently amended

003in January and that we wanted to provide an update at the study session because that can get pretty dense some of the information in that and we wanted to make sure there was plenty of opportunity to go over it tonight answer any questions so that the board could spend their regular board meeting time more expediently. So I'm going to turn off the speaker. It's a little loud. It buzzed into my ear. I think I just turned down the style. I'm going to push that button now. It's not going to buzz. It's better. So all right and then after Justin's done with that we're going to kind of tag team together. He's got a lot of information on some of the budget challenges and issues that are happening at the state level. What's on the horizon?

004What's going to happen as we look past FY26 and into 27 and beyond? And talk a little bit about that outlook, the challenges, some of the relief outs that we may have and how we can address those things. So I'm going to talk fairly quickly here. I know most of you are familiar with most of this content but feel free to stop me if you have any questions. Again this is mostly adapted from my normal presentations that I usually give community groups like Leadership St. Graham or Dr. Capuchin invited me to present at one of her classes for DU once and a couple times actually and I had the pleasure of doing that. Look at this to administrators once in a while. So I wanted to first talk about of course our strategic priorities. So

005finances is driven like all of our departments for strategic priorities hierarchy. We're down here at the bottom. Strong district finances but we don't take that lightly as being on the bottom. We look at it as being the foundation. We understand that our role here is as a foundation upon which all the other successes and programmings that the district they rely on us to provide that support here. Take that very seriously. Some of the principles that we want to work with that sort of guide our work is first and foremost compliance. These are the non-negotiables. We're going to follow the law, we're going to follow the regulations, the rules, the board policies, the accounting rules, all that stuff. None of those are negotiable. We're going to start right there make sure hey those are the baseline

006but in addition we obviously need to ensure we've got good fidelity so that means we are have integrities in our systems and our processes all of our accounting transactions they should they're all accurate. Finally accountability and along with this is transparency right this is our producing a report this is our board report here this is when we produce our budget document and our annual comprehensive financial report and our monthly financials. We want to make sure that people we're we're an open book we want to let everyone know where we're what we're doing where we're going what the different issues are where our priorities are and be able to provide any information and answer any questions that anyone we have. Efficiencies of course we want to make sure we're using those resources wisely. I'll talk about

007in a little bit that it is we have a different charge than private business. Our charge is to actually spend money right. Business might want to save as much money as possible we actually want to spend money we just want to make sure we're doing that efficiently and effectively as possible and be the responsible stewards of taxpayer resources. Finally advocacy so we want to work and make sure that we are here for our students we are here for our staff we're providing adequate compensation while also protecting the resources and making sure we don't put ourselves in bad situation. We advocate for ourselves and for the organization at the state level too. We'll participate in conversations with legislators excuse me legislators and help provide input on how their various decisions might impact the district and its

008students. I touched on this a second ago. Government versus private sector accounting so as a government we actually operate just a little bit differently from the private sector. A lot of people say well why isn't our government just run like a business we run like a business and and while I understand the intent of that is like hey we want to make sure that businesses are trying to be really efficient with their resources our main motivations are fundamentally different where a private business works to enrich its owners and make sure it generates profit our charge is to actually expend those resources to provide those goods and services as efficiently and as effectively as we possibly as possible we've been given that charge they we've been told by our community please take our resources please educate

009our kids and make sure that we have a population that is a contributing members of society. Our accountability stakeholders are also a little bit different so in the private sector you know they need to be accountable to their shareholders their investors their owners and debtors right their issuing bonds. We also do have debtors but we also have our accountability of course to our students our community our board of education taxpayers public officials and then some of the agencies to which we are subject. The relationship with our peers I love this one this is awesome relationship with our peers is complimentary we love to go and meet with our group other groups our peer groups in 170 other school districts in the state of Colorado and even some of our peers across the nation see what

010they're doing make sure that we're not to reinvent the wheel so it works best for them and share knowledge and and try to maximize efficiencies ask people how they're solving problems that we're also being faced with and and I enjoy that a lot versus the private sector you're very closed you don't want to share information you want to share trade secrets you want to compete right so instead of competitive we're very complimentary with our peers and I enjoyed that and that's not just true with finance it's true with a lot of other areas advocacy and curriculum and there's a lot of different groups as cases you know that all work together to advocate for common good one of their interesting item here that I want to talk about is accounting standards I was mentioning accounting

011standards governments are actually governed you see if you've heard of the term gap GAAP stands for generally accepted accounting principles and what it is is it's a set of rules under which an organization should be recording all of their accounting transactions and reporting their accounting transactions to provide consistency and comparability amongst their peers so that if stakeholder is looking at the financials of one organization and another organization and compares them they they they're comparing apples and apples not apples and oranges it's not like each organization is operating really differently those rules are promulgated by by what's called the financial accounting standards board for God or excuse me for private businesses private organizations and there's a separate organization called the governmental accounting standards that promulgates rules for GAAP for governments for us so we actually have

012different boards that are happening at the national level that is providing all the accounting rules and so you'll hear us once in a while to talk about these Gatsby's they're called Gatsby pronouncements Gatsby 103 Gatsby 34 Gatsby 78 or 68 a lot of those are rules that govern different different processes and procedures that we have to make sure we enact so that's where all that comes from so you're interested in learning more about Gatsby we'll sit me up afterwards it's very fascinating some major sort of higher high figures that that the finance department deals with so again we have an overall district appropriation of more than 1.3 billion I think this was last year's figure no it is is the current year figure before we do the amendment this is a number that number I

013didn't update Justin but our accounting and reporting team they manage over 43,000 account codes our account code string has seven different elements and each of those different elements can be a variety of different codes and so when you put all those together you can you can actually have just an insanely high number of count codes and we're dealing with 43,000 our payroll process over 5,000 employee paychecks which is about 22 million dollars a month accounts payable and 6100 purchase orders and 21,000 invoices a year about 100 150 million a year and financial services reviews over 46,000 p-card transactions per year they have more than 700 of those credit cards floating around we need to keep track of and track all the expenses all the receipts all the account codes and make sure that they're getting

014the right budgets I want to talk just briefly about the role of finance and again this is pretty in-depth and we have limited time tonight so I don't want to burn too much of our time on this so we get to some really important stuff later so I'm going to glaze over these I'm not going to read them all but finances I'm just going to talk about the high-level charge and again please pause me if you'd like to learn more so obviously we're responsible for budgeting forecasting and planning Justin and his team do a great job at that we have an accounting and reporting team which helps ensure that we're reporting our transactions appropriately all those journal entries are getting posted and our financial statements and both monthly and annually are getting prepared our payroll

015office as you know they get our employees paid on a monthly basis our procurement office ensures that we are maximizing the use of our resources by going out for bids quotes RFPs to do competitive procurement practices to ensure that you know we're not picking the vendors maybe that we're comfortable with or a buddy that we like or anything like that and end up paying high prices we want to make sure that we're being objective and fair with our government contracts and following our those procurement rules a lot of that is best practice but a lot of it isn't trying to statue as well so they make sure both of those things are true that we're doing best practices and we're following them all our accounts payable office they're the ones that make sure our vendors

016get paid so payroll does the employees AP does our vendors they also manage the key card program cash investments team make sure that our reserves are being invested appropriately that we have adequate cash balances make sure we're not bouncing checks and removing money appropriately to make sure that these are in the right accounts at the right time they also make sure that as we see bank transactions come through that are electronic that we're getting those appropriately routed the right places for for posting and review and and then help manage our district debt we have a business information systems team so as you know there's a lot of systems that are talking to each other a lot of programs a lot of interactions with human resources with DTS and business information systems make sure that our

017systems in our processes as well that are built upon those systems are all operating efficiently and they're problem-solving and helping us modernize our enrollment and data quality as you know there's a records team this is amber years team they make sure that all our student information systems are up-to-date and they're all of our student information is being tracked a class of transcripts all the registrar work all the enrollment information and then the final of the year and reporting to the state for all that information our grants team Hillary as you know she's not a part of my team we work with her and we have a grants senior analyst Lauren Spencer on our team that ensures grant compliance that we're managing all of those grant agreements we have a lot of grant agreements and all

018those grants have stipulations on how those funds can be used under what time frames they can be used and then all the reports that we need to provide back to the grantors our grants team helps ensure we're doing that and then school business services school business services team is ensuring that we are on boots on the ground making sure that we are helping our schools and our departments address all of their financial concerns make sure their processes have integrity and that we're providing supports that they are but to handle all financial matters that they're faced with all right good I went over that twice as fast I normally do so I'm good getting being efficient here do you have any questions on the accounting the financial team my umbrella and what we do great I'm

019really proud of the team there's about 40 people total amongst all those groups and they are phenomenal we've had zero turnover in the last year proud of that they're they're just doing a great job and again we try to do a culture building we try to make sure that we're not just following processes and procedures but we're also ensuring hey we remind ourselves why we're here we're here to provide that foundation to our school districts and provide the success to our students that's really what the goal is right we're all here to make sure those students are successful and so we try to make sure that we touch base on that once in a while too so it's not just about the numbers and the spreadsheets it's about to be all right so let's transition

020to financial reports I mentioned earlier our accounting reporting team does some financial reports also our budget team does some financial reports and so I wanted to highlight three main ones and give you a little bit of information on what you might claim from those so first of all is our annual comprehensive financial report this is a retrospective looking document so basically it looks backward and tells us what happened in the past year it's an annual report and it provides information on the district's finances for each fiscal year so as you know our fiscal year goes from where this is the period the time period that we track the financial activity and then report on it that fiscal year goes from July 1st each year to June 30th each year and then at the end of

021June we prepare this ACFER is the acronym that we use ACFER to give us a report of hey what happened in the year what happened to our reserves where our expenditures go how's our debt doing right all that information for all of our funds provided in this annual comprehensive financial report and it's also packaged with the audit report so our auditors come in and do their annual audit and they serve at the pleasure of the board they provide the audit report that is packaged with that annual comprehensive financial report nice big packet we do lots of presentations on that as you know it's a big document and so if I would recommend that somewhere to start if you want to look at that ACFER is to find what's called the MD&A our management discussion and

022analysis that's a good sort of first executive summary look at what happens in in the last year for Samaritan Valley school this year this is the report that we've gotten many awards on thanks to James Frederick she's got 22 consecutive years from the government financials offices government's financial officers Association and as well international Association of school officials international 22 years on her role for reporting on her ACFER all right now we also do Jane's team also does some periodic financial reports first half of the year these are quarterly financial reports second half of the year we switch to a monthly cycle to stay a little bit more on top of it and so these monthly and quarterly financial report they just provide an overview of financial status for the respective period so if it's for

023the three months then that report will show hey what did you expend how much did you expend on this for these three months how much do you get in revenue for these three months how are we doing and then we do as you know reports to the board and then you reports to the finance not committing for summary read through the executive summary dashboard that's a good just quick glance at how things are going for that particular reporting period there's the executive summary dashboard for an example of one to do all right other financial reports as you know we're going to talk about the budget so we prepared Justin his team prepares the superintendents adopted or amended budget that is a prospective looking dot planning documents produced semi-annually like I said we do an adopted

024budget back in June and then we did an amendment in January and it provides information on where we're allocating resources our projected revenue sources on student counts debt expenditures it has four main sections and again if I would recommend you start somewhere I'll read through the executive summaries that very first section in the budget document a lot of work a lot of work goes into the preparation of these reports make sure that again our public has all the information that they might want to see when they have questions for us all right let's talk a little bit about how we track funds call I use the kind of term envelope method of accounting views fund to count fund accounting is the where we have multiple funds and really think of these as each their individual

025little businesses little ledgers they have individual ledgers so instead of one big ledger for all the districts that's running we actually produce I think 11 different fund reports each of them have their own financial statements their own balance sheet their own income statement and each fund is dedicated to a specific purpose the largest one well the largest in terms of operating is our general fund as you know we talked about general funds a lot we're discussing the state of our finances at st. Frank will usually focus on the general fund talk about the reserves there and the impact of budget decisions but we have ten other funds ranging from risk management fund our cap reserve fund our self-insurance fund we have a cash in lieu fun anyone tell me what the cash in lieu fund

026for I can't tell you that what it's for no there's a law in the state of Colorado that says a developer needs to donate land to school districts to provide for school sites but usually that's not practical because based on how many units they do they can't give you like a half acre of land here for a school like we can't do anything like that so what we do is we translate that into dollars and say okay based on your your new developments that you're producing instead of giving us land just give us cash in lieu of land cash in lieu that's where that term comes from and so we have a special fund that tracks the revenue for those cash in lieu receipts and then those monies are set aside for purchasing school sites

027I'm having this and then allows for that cash in lieu yes absolutely yep yeah that's that's what actually the normal way to do it it's based on the old very old antiquated law giving us land but yes technically someone could just give us land if it was appropriate and in some states tell me the developer has to build the school I didn't know that in Texas the developer has to go wow that that would be a nice that's a little $50,000 cash right so lots of different funds and here's a list of them and this is produced in the budget document each year if you're ever interested in sort of the executive summary budget of each the beginning reserves the anticipated revenues the anticipated expenditures and the ending reserves of each of those funds that

028is further expanded upon in that budget document so you can see there's a general fund and by far that's the biggest in terms of our operating revenues and expenditures and then depending on if we have recently done a bond the building fund gets pretty big too again that's just for building schools building construction lots of other ones here to you and again any questions on any of them happy to dive in and talk about the general funds primary revenue source roughly 72 73% I think I have it in here a little bit later is from something called total program funding and total program funding is a really big complicated formula that you guys don't need to know about we do but I could tell you in its simplest form it's per pupil revenue times the

029number of enrolled students that we have so the state says based on all this formula work that we're gonna do you have a per pupil revenue amount that you're gonna get as a school district you're gonna multiply it times the number of students and that is your total program funding total program funding I think of a little bit of an it's nowhere because there's a lot of other funding that schools that schools get school districts get on both locally and state and we could talk about those if you want but nonetheless back in 1994 it was named this total program funding and there's a lot of machinations that help us arrive at both of those numbers but the interesting thing about total program funding is it doesn't just come from the state the state determines

030what that is but it's not funded entirely from the state it's actually funded in part both locally from a local property tax and from the state funding which usually comes from these like income taxes and sales taxes and so let's talk just a little bit about how total program funding works at st. Rainey this is different for every school district depending on how much a school district raises from their local property tax the state back fills the rest in order to arrive at that total amount total program funding so if you're in a school district that has very low property values then they're gonna not make very much in terms of local share and the state will give them a much greater share and the state could give them like 90% of their total program

031funding for other school districts like Pawnee grasslands and Aspen that have high property values each for different reasons they generate all of their total program funding locally and the state doesn't give them any money at all so at least for total program they give them some for categorical but but not for total program we are a little bit we are 40 60 45 65 but you can see here we have about 353 million dollars in total program funding again that's split up and funded from two different places number one is locally which is made up of property taxes and specific ownership taxes property taxes the vast majority of it there's a special mill levy that they dictate what we levy at it's 27 mills per statute and we have to levy exactly 27 mills it's

032fluctuated a little bit recently because of some legislative changes but nonetheless the 27 mills in that entire amount it's generated locally and it goes toward this total amount that is called total program we get some additional amount about 7 million through something called specific ownership taxes which really the vast majority of it is vehicle registrations there's some a whole bunch of stuff going on at legislature about specific ownership taxes right now we're going to talk about at the end of this conversation but nonetheless right now specific ownership taxes we get 7 million that goes toward total program we actually collect about 15 million in specific ownership taxes only seven of that goes towards the local share but we get a total of 15 then the rest is made up of a state equalization so total

033program minus property taxes minus specific ownership taxes equals what the state gives us in this case you can see the state is about a hundred eighty eight point four million so one eighty eight point four plus seven plus one three seven forty five is that three fifty two point nine that's what we get into a program here's a big pie you can see we're at property taxes about 45 plus two gives us 45 degrees 47 I think I said 43 or like 47 in terms of local share and at the state they give us about 53 percent from the state equalization again we're all over the place in in the state as to this mix of state of local versus state now this pie right here only accounts for about so I'm going to go

034to it here about 72 percent of general our general fund revenue the rest comes from mostly our mill levy override some other state revenues things like UPK some categorical funding and that remaining sliver of specific ownership tops taxes I was telling you about before but this pie right this portion right here here here and I think it is that this one is my my that that one's broken into two a part of it goes to a school program but those three wedges are what makes up that other any questions my stand with me we're good right okay good we're doing all right we're going to 20-25 as then here's a history of our total program funding and sources since 2017 you can see little fluctuations here then we've we've gone up a little bit here

035but then we're starting to level off and again we're seeing some some suppressed future revenue prospects as well but we don't think that we're going to be getting much much more in the way of total program both state and local level for a little while so we're keeping an eye on this but I was just a little bit more in 26 than 25. Cool question so that's 2021 number it's not considerable but I can't see like all the actual numbers yeah the left hand on the Y axis there is could that be a result of less funding due because there was like the ESSER funding and things like that that came in could that be the reason why that's a little bit lower some of that the majority of that lift is because we had

036a big drop in student count just student okay remember we got PPR times funded pupil count equals this bar and so our fill in a pupil cover 2021 we had a dip there they actually did initially severely cut our PPR side but then during the amended cycle account within the same year they came through with COVID dollars and so they bolted it up so we didn't see a large decrease in COVID from the PPR side it was actually from the student student outside yeah good question all right this is a bachelorly I've said this multiple times as my favorite chart this is a Sankey chart and what it does is it shows our inflows our total appropriation and our outflows for a given time period for whatever I'm talking about which in this case is

037the general fund you don't need to see the numbers if you don't want to this is in the budget document Justin's got this also a little bit later on but what it's saying here is that for the fiscal year 26 budget we anticipate to bring in 160 in property taxes 180 in state equalization 79 mill levy etc right these are our sources of revenue add to that our beginning fund balance that's our starting reserves and from there you see this line right here those are all of our general fund resources with which to use for the following year now we don't want to spend down all of our reserves so on the other side of this is our ending fund balance right but other than that there are all the uses of dollars so this

038is the sources there's the total that we're dealing with and there are the uses and it's kind of provide this nice little spaghetti chart you can see all right we already talked about this one let's talk about our use of dollars so in the general fund again operating general fund only this isn't together we're about 85 percent of expenditures for I don't know if I have the one that's broken down by salaries and benefits Justin's got it I know but I will I'll have to jump to that one later so this one shows by activity so instead of bringing down by salaries benefits supply services and all that this one says okay what what purposes are we using the dollars for so we have direct instruction about sixty percent and classroom support about seventeen eighteen

039percent and the combined of those is about seventy eight percent and that's the direct instruction obviously you know teachers and pairs of classroom support is no the questions for is Paris doesn't include yeah that's that's Paris there on building support is all of our custodial it's all of our technology it's all of our you know curriculum all those areas to provide make sure those buildings are operating properly central admin and support about three percent a real small amount that's like finance and HR superintendency everyone else is in these other other areas but you can see we're only about three percent for for admin here okay any questions for I move on to our mill levy overhead right so our MLOs as you know they were voter approved tax levies that produce dollars that come straight

040to St. Frank and stay at St. Frank they're not included as part of total program they're not included in the calculation of local share versus state share what this is is our community saying hey we would like to provide some additional resources for our students and we're approving a special tax to do that so there were two voter approved mill levy overrides one in 2008 and one in 2012 they were originally at 16 and a half and 14.8 million dollars at the time that they were passed but they're based on what's called a fixed mill and so as property values overall go up in the district the the mill that's applied to those property values stays static well this one's going up and this one's static you know the end result the product of those

041two is going to increase over time and those two dollar amounts have actually increased to about 73 million dollars is producing a really big resource for our students right now and again that's by design because what you're seeing there is more people moving in right you have inflation occurring and in order for us to keep up with salaries and benefits and increased food populations that increase in assessed valuation is going to reflect both of those factors and that's what's producing the additional funds to help provide for those that grow other major general fund revenues we talked about total program we talked about mill levy override those are the vast majority we've got a few other little things I'll just talk and talk about real briefly state categorical funding that's a little bit that they give

042us for things like special ed very very little compared to how much we actually do spend on specialized very small amount gifted and talented transportation ELL and CTE programs are vocational education we also get some money for the universal preschool program and we also get a little bit for preschool tuition for families that maybe want to get like a full day of pre-k instead of half day which this is what the state's thought is that all right let's talk about how schools get their funding how we allocate staff and how what happens at the central level versus the school level and again I spent a long time on here again I typically do what I'm talking to administrators new administrators but here we'll just say hi level we do some managing at the central level

043for our schools this provides for consistency this ensures we make sure that they are allocating staff in the right places to make sure that we're have a consistent quality educational programs at all of our schools and that there's some comparability and equity between them and then there's some dollars that we just give to the principles and say this is yours to provide the special specialized programming and address the needs that you decide are most important at your school it's a smaller amount there for the discretionary amounts but the majority of the cost as you know is FTE and FTE is managed at a central level and the nice thing about this is we obviously work heavily with the principals on our staffing plans probably heard about our staffing process but what we do is we

044develop these staffing plans based on projected student counts and we work with human resources we work with the areas and superintendents and of course the principals and say hey based on your student count this this upcoming year we believe that you're you need this set of administration of support personnel and teacher pool and they start and work with work with those resources to create their schedule the nice thing about this is that the principals are not required to figure out the dollar impact of their staffing plan they can hire the best teachers that they can and get in get in get in if you've got a if you got a high veteran teacher that's really high on the on the salary schedule they're gonna be counted the same as a brand new teacher from a

045staffing plan perspective they work in FTE and that does not translate to dollars at all they don't see that at all until it occurs at our level and then we manage the ups and downs and the averages and do budgeting for that at the central level it really does free up those decision points that some other schools might be faced with with having to deal with well do I want my heat on or do I want a more high quality teacher right they got to use their pool of resources to pay for for utilities or for custodial or for for technology our principals our schools don't have to do that they all that's provided from a central perspective and all they need to do is manage their staff and personnel as best they can and

046build their programming that way a quick note on that is that we do have formulas for initial configuration of staffing plans but then from then on we actually sit and work with all the principals and the area system superintendents NHR on and touch every single school and make sure that their needs are met we're not beholden ourselves to our own formulas and it provides a mixture of consistency a formula based consistency and then we add on a the human component make sure that we're addressing a special needs through ad hoc special allocations we address class sizes in that process so if we've got you know three rounds at 30 it's a little higher we need to figure out they need more paras or if we need to actually create fourth round those kind of decisions

047we make as a group so other critical funding that's non general fund stuff now I'm transitioning to as you know we have voter approved capital construction projects that occurs in what's called a building fund when we issue bonds those we sell those bonds those bond proceeds go into a special fund for Brian Lamers used to build schools and that's all it's for it cannot be used for operational purposes at all we don't use that to pay teachers we don't use it to buy pencils it goes towards building schools or improving schools our bond redemption fund or debt service fund that is the fund that we collect the special tax that is used to pay back those bonds so all the revenue for the tax to for debt service comes into this one fund and it's

048also cannot be used for operational purposes we do not use it to pay teachers we do not use to buy pencils it goes in there only for the express purpose of paying back our principal and interest on those bonds that were sold previously our interest in services fun I think that's self-evident student activities fun that is where all the athletics and arts and clubs and stuff are part are trapped so when the student pays an athletic participation fee or an art club fee or something like that it'll go into there and they can maintain that those aren't there's no use it or lose it those balances roll forward and so if they do a fundraiser or something or they're raising money to go to Walt Disney World it'll go into that fun and stay there

049until they actually go and use those dollars our community had fun is where community schools and where a lot of our grants are also kept when those grants are from partnerships and corporations and if we have federal grants we keep them in a separate fund called the grants fund I talked about bond redemption funds so I'll skip over this one and then let's just talk a little bit about the bond because I think that's relevant I'm seeing as we passed one 2024 and we are as you know going crazy with building right now so this 740 million dollar bond it was passed in 2024 it's passed for a specific purpose it was for for growth for modernizing some facilities for security and those are disclosing the bond and then the monies that are collected there

050excuse me the monies that are sold for those bonds are used for those express purposes as you know the 740 million dollar bonds for safety and security early preservation CTE Center and growth I want to talk about this without imposing any new tax because there's a nuance here that I think is important to note and I like forums like this to talk about that because oftentimes a town hall meeting it things kind of get a little difficult to really get into the weeds the technical legal obligation for this without imposing any new tax here's what it means it means that St. Graham Valley schools may not collect any more than a hundred and twenty five oh two two oh two five hundred twenty five million dollars per year to provide for debt service on the

051new bond that makes sense that's the legal restriction and there is no other legal description restriction on this without imposing any new tax that sum of money that 125 million that is actually the sum of the previous three authorizations that were provided by the voters so that amount that we can collect didn't change right it was already authorized by those three previous authorizations and all this did was extend that authorization saying can we keep collecting that one twenty five oh two two oh two five I think I know that number because I kept repeating it over and over and over again in our office and a couple of these meetings and so what that means if you think about it is a hard dollar amount it's not a rate so if we have growth in

052our district if we have new construction we have new businesses moving in we have new housing coming in and we can't collect any more than 125 what's gonna happen it's not it's not it's not rhetorical go ahead and ask what do you think it's the same pie divided amongst more people right everyone's everyone's contributing a little less because there's more people contributing overall right so that means that in such a circumstance people's taxes may actually go down right it's not that not just not just without imposing any new tax it that really is the aggregate amount that we're collecting that's what's locked into place from a legal perspective now there's also a political aspect of this and we recognize this what people hear is my taxes aren't going to go up right and that we

053have also made sure it's true and so we've been working to make sure the rate that raises that 125 hasn't been going up either and so what we've been managing is both the political side to make sure that people aren't seeing hey my my tax bill going up and also we're of course sticking to the legal definition here and so so what we've been working on for the last couple years is making sure number one our debt service mill levy because we have four mill levies so we'll talk about that in just a second our debt service mill levy which is the one that we're talking about when we issue bonds that that one hasn't gone up and it has not gone up now it could legally right for the legal restriction it could if

054we needed to if we couldn't raise enough to make that 125 in order to pay back our debt it could but that's a real edge case and we'd have to be in a quite a quite a few different negative circumstances would have to happen for that to occur but we're also managing that and so I'll show you a little bit that the history of that debt service levy actually went down the year that we went for the bond and then it has not gone back up at all we have three other levies one is the total program levy which I talked about one is the mill levy override which I talked about and then the third one is the abatement levy the abatement levy is one that's kind of backed into so it always fluctuates

055mill levy override had some interesting dynamics we talked about the board earlier this year and then the 27 mil total program the levy that's locked per statute and so what we did make sure is we also even though there was some fluctuation that would have happened if we hadn't done anything for that first year after the voter authorization we wanted to make sure that voters still didn't see any kind of fluctuation with their mill levy even though our even though the political promise was really for that debt service levy want to make sure none of their levies changed just to not muddy the waters not not raise questions and people go what's going on so we kept all of those flat as well since then with those we let those continue to fluctuate as usual

056but we still made sure that we're not moving that debt service levy just to make sure that there's no ifs ands or buts about what's going on two quick questions yeah please so use back up you said that there's the political aspect and there's the legal the legal aspect and I forgot that number already no problem what happens when that rate does go up what the difference between that legal aspect number that you just called and the rate what happens to the monies between the other different yeah so so right now we're not raising the 125 oh two oh two five so that that total amount that cap we're not at the cap so we're not raising the whole amount right now so what what we anticipate will happen is that over time as there's

057new construction and people's the value people's houses go up that the current mill levy that is in place for the debt service levy will stay flat but it will a little bit more but if it ever hits that 125 then we actually lower the levy on everyone's houses so that we don't over collect the 125 right sense but you said that does but that's I don't think that's the way I'm asking so you said that the political side of it that they could raise the rate right and so there's a difference between the number you call the legal number and then the rate increase right what happens to the money between the difference in the the legal rate in the rate that possibly I'm not saying we are increasing that but that could politically increase

058yeah it's not it's not being collected so there is no there's no money that's we don't but what happens to it isn't what I guess you know it's not levied so it's a savings it's a savings that the individuals aren't taxed on in the first place so so the amount that we're collecting for debt service I don't know if you know off the top of your head that's it's it's 16 miles yeah what's the amount that the debt service levy raises so so there's going to be amount an amount that's not 125 right reflect to be less than 125 amongst all of our constituents in the community in order to pay back our debt service that amount is a dollar amount and that's the one that can't exceed 125 and if it ever does increase

059to 125 naturally we're not going to increase the rate so if it goes up naturally as a result of increased value and increased construction then if it ever does hit 125 based on our calculations then the rate that generates that will drop it to make sure that we do not exceed the 125 and and so what that's what's going to continue to happen let's say values continue to go up over time the rate will drop more values continue to go up over time the rate will drop more and if in a situation where everyone the value of everything does drop a little bit then that rate might have to inch back up in order to raise the 125 or we might just collect less and I think that was my second question yeah so you

060did say well if that rate that what what is the number again let me ask what is the number again the 125 million is 125 maybe I thought you said something different it's 125 0 2 2 0 2 5 I believe that right yeah sure we're collecting 98 million yeah we're collecting 98 million right now we're authorized to collect 125 legally but again we're we're not collecting 125 we don't need it right now based on our debt service we haven't done as subsequent issuances of our authorization and we have sufficient reserves right now so where there's no need to collect the 125 so we're keeping those rates the same and we're working with our municipal advisors to make sure that when we issue future issuances that our current rate is going to be adequate to

061provide debt service on and I was just saying I guess the the other question I had that you I think you answered it was if that for some reason we didn't meet or couldn't have that number met that we could raise or we would have to raise and there's a legal part in there that I think will allow us to say we need to raise this to get to that one yeah that's right so what could happen in a in a edge case again we're getting really hypothetical and I don't I want people to think this could happen is that it's really low chance but it could the way is that is that if let's look at it this way let's say that we're raising ten dollars among two taxpayers they each have to pay

062five dollars let's say one of those taxpayers moves out or that house gets destroyed or whatever we only have one taxpayer well that one taxpayer we could collect ten dollars from instead of five right in that situation when you have fewer people that are contributing to the debt service then each person might have to pay more which is the opposite of what's happening right now but yes the converse could be true but the thing is is we also have a choice we don't have to collect that 125 if amounts that were to be collected or less in a year and we found that the amount collected was sufficient to pay our debt we don't need to increase the rates to make that 125 we can just let that savings happen in the community thank you

063sure all right that was pretty cerebral we got into it on that one right okay this forum for this is what this place for it I really enjoyed this you guys all right one of the things I want to talk about with regard to our debt one of the things that we work on Justin and I with our municipal advisors is savings opportunities because when we have debt just like you might have debt on a mortgage or a credit card you have to pay interest on that right we want to minimize interest where possible and so we look for savings opportunities to refinance debt or pay debt off early so when we have some additional reserves in our debt service fund not our general fund only the debt service side when we have reserves there

064we will look for opportunities to pay debt early and save on the interest cost that we would have had to pay on that there's a couple of things that we've done over the years since 2010 which had resulted in our calculations of almost 90 million dollars and this is due to various restructurings where we'll front load principal to minimize interest or we'll pay it off early this is that called the fees or refinanced where we be a payoff old debt at a high interest rate with new debt at a low interest rate that's what that's what that first column so all of that we work hard and we continue to work hard with our municipal advisors to find opportunities to do that and in doing so we've allowed for some margin in our in our

065the area between how much we owe and how much we're our good can collect and that's what allowed us to be able to do this no tax increase remember I said that the authorization was the sum of the previous three authorizations and we paid off some of that early we were refinanced we were structured those three authorizations giving us some room to be able to do that and that's what allows us to do seven hundred forty million dollars no tax increase that was a pretty remarkable thing we've talked about property tax mill levy calculations this is the timeline as you know we need to come to the board every December with a new certification of our property tax levies and that's what we did if you recall the board meeting last December just in the

066death forest and there's always a weird timeline though because the counties can give us their information as late as December 10th and we have to turn around and give them our certification by December 15th the five day window and so so usually we have a board meeting between those two dates and we're fine but once in a while we have to do a special like you know pre-authorization or subsequent ratification in the case or a special one of the things to note is that our property tax payments come from the county in the spring when people pay their property taxes and so we usually don't get any property taxes between June and February so in the spring we start getting payments late February that come in in and then through May and or June and

067so the majority of those local share is coming in property taxes only one part of our of our year now what happens right after spring summer and if you remember our reporting period our fiscal year ends June 30th right so it's right after we just got all of those property tax receipts and so our fund balance I think is important to note that our reserves it's the high water mark of our of our year so those reserves that you're seeing on annual basis if you saw earlier was 174 that's the maximum amount that we have because immediately from then on we start spending and spending and spending and spending and our low water mark is about January before we start getting those property tax receipts to fill back up our coppers and so a lot

068of times we'll think wow where do you go with $170 million well that's absolutely maximum amount of reserves that we have is that I'm not sure does your preaching cash chart back in there okay just it's got a cash flow graph that kind of shows where the at where our cash ebbs and flows but advice say you can I think you can picture our cash uses go all the way through January and then we start collecting property taxes I talked about the mill levy calculations so these are the four mill levies these are the current these are the ones that we've ratified or certified in December general fund levy there's 27 that produces our local sheriff's little program abatement levy this is from previous years abatements the counties provided their taxpayers for newly accepted property

069but abated property taxes or when someone goes and contests and protests their property tax valuation they'll come back and if they're successful in that the counties gives us a bunch of reports saying hey we're not going to be collecting these taxes that you guys were counting on but you can collect them next year that's what that abatement levy does is it's a small levy that takes amounts that were previously we were told we're going to be collected and then weren't and they said you could collect that next year there's our mill levy override and then there's our debt service levy right there that's the sixty point seven two eight delivered the history of that you can see it has gone down and urban static since 2016 now let's move that let's translate that to how

070it impacts our taxpayers so this fifty seven point seven one seven I think that's the only number that most taxpayers see on their tax bill they don't see the four different categories and that's again why I was saying that first year after we did the voter approval I didn't want to move that number at all even though the other categories could have moved I wanted to keep it steady so since then it started to float again but not because the debt service levy just because the other ones but I wanted to make sure that that didn't move at all for that first time because that's the only one they see and I don't want to see that change but in any case how does that translate to their property taxes so you take your value

071of your home that's the market value that the assessor says you multiply it times something called the assessment rate the assessment rate says it's a percentage of your market value that is taxable so funny enough someone with a $500,000 home only 7% of that valuation is what gets included in the tax calculation to figure out their property taxes only 7% so you take that 500,000 multiply it times 7.05% multiply that times our mill levy 57.717 right there they need to divide by a thousand right divided by a thousand anyone know English teachers it's a mill the mill is a one thousandth so mill levies one thousand so divided by thousand in order to get your annual property tax two thousand thirty four dollars and fifty two cents that would be their property taxes for the

072year for someone who owns that five hundred thousand dollar that would be for sacred Valley schools they may be other taxing jurisdictions as you can see you know there they may have a cemetery district fire protection district their city county or town may have a levy that they pay as well just a quick question for the general public if they were that interested we wanted to know all those other categories but I would assume there is some way that they could find that information what would that information be budget document yep our outside of the I mean I know it's in that one but would they be able to find that anywhere like from the county or anything like that I don't know if I would assume that's the first place yeah I don't know

073welder Boulder County would publish the breakdown they absolutely have it that's how we report it I don't know if they publish it to provide that kind of information to their taxpayers but absolutely they could come to us and we would definitely be able to have that for them I love it you know this is always very interesting to me to talk to the general public about to demystify exactly how that property tax calculation there's a history and that's this is the total history not the individual categories this is 2021 this is a reverse chronological order you can see this is the assessment right because it's moving it usually doesn't move but the the legislature has been tinkering with it in order to address some of the property tax questions that have come up in the

074past few years so they were tinkering with a little bit but right now it's at 705 where it's in expected to stay for the foreseeable future there's our ability rate and then I did that $500,000 calculation on the previous page this is done on a hundred thousand dollars so you say per hundred thousand dollars at home here's what your impact would be and I like to show this because this is cool we've actually we're still below what we were in 2021 per hundred thousand dollars of value we actually dropped so we went up a little bit in 2022 and we dropped in 23 and 24 and then 25 just dropped went back up a little bit we are still well below our per hundred thousand dollar home value impact on taxpayers compared to 2021. Nutrition

075Services Fund, I want to make sure we have adequate time for this as you know nutrition services fund we moved to healthy school bills for all there was a ballot measure that was just recently done to make sure it was funded fully but there's still a lot of factors that we need to keep aware of for nutrition services fund nutrition services is self-sustaining so they're expected to collect the revenue that they've been used to provide for meals to our students the general fund doesn't help them they don't do like a transfer or anything from from our mill of the override or from total program funding or anything like that they're self-sustaining but they are kind of subject to the amounts that are prescribed for them so there's a state funding source healthy school meals for

076all that essentially says you need to get all of the federal funding sources for nutrition services that you can and then we'll provide the rest sounds familiar right it's kind of like equalization on the total program side right local share and then we'll give you the rest they say okay well you get federal funding and then we'll give you the rest but they're still subject to whatever the federal government determines it costs to provide a meal whatever they say it is then that is all that they can get for that meal between both federal and state so they're they have the charge of staying within their they have to control their expenditures their salaries and benefits number of people that they're using to provide those meals as well as the food costs which of course

077is a challenge as well due to inflation and all of that have to stay within those funding sources so as I mentioned in a previous meeting there they're having to find some some ways to control costs in order to stay within the bound student activities fund I already mentioned in class fees but sufficient fees fundraisers donations and all the donations from our PTOs our boosters goes into the student activities fund I talked about financial transparency adopted budget audited act for our salary schedules are also published out there on our financial transparency site and then there's some state financial transparency sites that do sort of aggregation of data statewide and you can compare different districts and different schools it's limited usefulness because you need a lot of context and not every district puts things in the

078same buckets for instance we do transportation excuse me we do technology and custodial those are recorded centrally they're not recorded at the school level whereas another school in another district might actually record those with the school's location code on them and so in that situation it might appear that another district is spending considerably more on their elementary school than we are on our elementary school if someone were to look and not know that context and so so I say no limit there's a limited usefulness to that state financial transparency site but it's out there all right so gotten through my portion this again this is intended to be sort of an overview and orientation new head new board members and stuff and and again trying to bring anyone else up to speed who's interested and

079then I wanted to stop for just a moment before I transition to Justin's portion make sure I answered any of your questions sure you have tons and that's totally okay if you know I know we've talked a lot about this and in the past and so most of you I think are well-apprised and it's not a question but a comment sure always fascinated with how many years you have in your budget oh yeah you're you know you're you know July to June right and then you have the when will when will taxes show up and when in the school year is different right and I mean you have so many yeah years and dates mixed in I just don't well I appreciate that we do careful tracking we do multi-year tracking of course in our

080enterprise resource planning software and in fact the the reporting awards that our team aspires to earn those have some prescribed criterion criteria that stipulate how many years that they want you to report both historically and prospectively and so a lot of that we do just make sure hey they've determined that it's a good best practice to provide it to your community and in order to get our award we'd like you to provide that for free in your reports and so we're happy to do that and so these guys do a lot of work and we're to provide that well fun the act for and the budget document but thank you for mentioning that eight eight columns I think there's a lot everybody doing okay everybody see the National Championship team modern which college football I

081know which just making sure it's it's only been 130 years so second portion of the night again transitioning from orientation and St. Mary's specific operational to talk about the FY 26 current-year amended budget again to give a little bit more in-depth information on it so that at the board meeting next week we're not to go too much in the weeds and spend much time and it's of course they want to answer your questions here to be able to spend that time so that we can have a little more to be important for you because I know you have usually have quite a lot of other things to talk about so we're happy to provide information on Justin's here as our executive director of budget financing is in charge of this process and I'll have the

082time over him thank you all right thanks Tony as Tony mentioned the Board of Education accrued the 26 budget back in June and so now what we're going to talk about is how that adopted budget transitions to the amended budget and so of course in June it was built in March April May June we do staffing plans and things legislation was still in session throughout that process last year so a lot of things have changed so a lot of things have crystallized things like net assets value have come in and been finalized the state's determined how much they're going to find a lot of categorical programs and things like that and how many students we have in our schools right so we're gonna walk through that that's the main objective for this session so just

083a shameless plug here this really is a little more credit to Tony but for twenty four and twenty four twenty five we again received the ASBO award the meritorious budget award it was a nice long three-year process to get there and this is the second year which means all we're just trying to do is keep the wheels on the bus and keep things going but we at least did it successfully one year after Tony and his team did it so I'd be remiss to not mention Terri Cowan so many some of you know and Justin Newman but Sarah does really a phenomenal job she really does the lion's share of the work and putting this document together and she knows not as much about that school finance act that's really complicated as anybody in the

084state so all right so when we think about we're gonna focus just like Tony did but we're gonna focus predominantly on the general fund because that's where the lion's share of our costs are certainly all most of the discretionary decisions live there so we're gonna focus on the general fund and again our focus is gonna be what has changed since the adopted budget to now the amended budget so that's where we're gonna spend a lot of our time so we start this is like a 30,000 foot view we're not even at the moment gonna start with total revenues and total expenses but what we're gonna start with is the 26 adopted budget had a 28.9 million dollar spend down and then as we think about what happened we're gonna get into details but what we've

085seen since then is about a seven point three million dollar increase in revenues and about a seven million dollar increase in expenditures and we'll get into the details of what those are and so the amended budget document includes a projected spend down of 28.6 million dollars as you all have heard many times that number is might seem a little large but it's before any out performance that we typically have and we'll talk a little bit more about that but that's the very very very high level of either so now it's just kind of getting to the next stage deeper when we think about the changes in revenues this is kind of snapshot we're gonna go one level one level down but this is kind of what makes up that seven point three million dollars so

086as we discussed I think at the lap maybe a couple board meetings ago we did a summary of the funded pupil count and how all that changed and how the enrollment numbers came in and what and how that is really driving some of the growth numbers and per pupil revenue we'll see a little more detail there we had some MLO revenue changes just a quick note in all of this we're usually gonna talk net of charters right it's not that they don't matter it's not that we don't love them but when we think about our general fund if we collect a dollar from for a charter we pass it through it's kind of a net zero for us so we kind of exclude the total totality of their changes we have some other URA and

087tax revenue changes some federal funds and some category or another ones revenues so if we get into the details of these this gets back to the total program this has the potential to be really exciting but it is pretty boring and that's a good thing that means our projections were really solid I compliment Brendan a lot so much so that he's getting nervous when the numbers don't come in just like he thought and then he's gonna have egg on his face but so far as I've been here he's done a really nice job so there's two components to this when we think about Tony to find that total program as the number of kids times a dollar amount per kid right so there's two pieces of that the first line is an increase due to

088growth in enrollment and so we had about 28 additional funded isn't quite the same thing as just a kid or a head count if you will but 28 out of 30 some thousand is pretty solid that's a really really small number and so those projections came in really really nicely and aligned with his initial thought so we're 28 up and that generated about three hundred and thirty-five thousand dollars of additional revenue that's just slightly offset by a decrease in per pupil revenue so again at the time we're doing this budget we have an expectation of what the dollar amount per student will be and then that of course well of course but it does change a little bit over time the new school finance act that we've talked a lot about really redefined and reshaped

089how that number is calculated completely reconfigured the way the math works and it added things like different weights for English language learners and at-risk students and then most importantly it added a factor if you will for special education students when this budget was created and when the law was passed nobody knew what that was gonna look like so we use some estimates from the state there was no real true student count or I'm sorry special education count as part of the October count and so those numbers came in just a little bit different than projection and so the dollar amount per student was a little bit lower and generated that decrease again but all in all I used a lot of words but that is a insanely negligible change when you're talking about three hundred

090million dollars two hundred fifty million dollars in solar just kind of just add one clarifying item in case anyone's curious you can see this increase of 28 from the people count that is compared to budgeted from the people count that's not compared to the last year as you know we talked about our change from last year we should drop a little bit very small now but that's why you may see a discrepancy thinking oh it's all going down just a tiny bit from last year that is true we go down a little bit faster but there was a projection that we were going to give them also we outperform that we did better than projections and that's that's a good thing thank you for that clarification all right so as we move away from total

091program now we'll talk a little bit about bill of the override this is where we saw probably though we're not probably but the largest increase from where we thought we would be you might recall we do a lot of work with the counties Weld County in particular throughout the year but in particular as we get ready to create the adopted budget that the official estimates come out in August and then they don't finalize until December like Tony mentioned December 10 but way back in April in March or April May we're doing a lot of work with them to try to estimate and then they gave us their best guesses but it's really challenging so this isn't a knock on them but we estimated about a 3% increase and it came in at 3.1 and that

092is a pretty significant increase but that has an impact really only on the mill levy override revenue because again with the state equalization it doesn't really impact our total program but it does impact our mill levy override revenue so between that increase in the assessed valuation and then as the board approved and as we've discussed we've reverted back to the mill levy override mill levy itself to 13.5 90 which is where it had been for about 10 10 years at least many several as well yeah so we reverted that back in the combination generated an increase of about 5.8 million dollars the next line if you go back to the previous slide with the quick summary of the next line is URA and other tax revenues an increase of 1.8 there's a variety of changes

093in here but the URA revenues kind of along the lines with the net assessed value increase those generate an additional point three million dollars or at least on a projection basis in addition the specific ownership taxes these are the vehicle registrations we're going to talk a little bit more about those but they they tend to flux because you can't really control when people are going to register what vehicles and then we'll get those collections but we were able to increase that estimate by 0.3 million based on the AV increases and then the abatement increase and this was kind of a large one Tony has mentioned that this is a really small dollar amount in total and it's a very small mill levy and so 1.3 million it's not biggest number in the world for us

094but relative to the normal abatements that's a little little unusual and we reached out to Boulder County and they ended up had a variety of folks coming to contest and they won or they were granted that awarded that decrease and when they were contesting their property values so they off issued quite a few more abatements than I think the last slide on revenues Medicaid revenues there's a lot that goes into this there's a lot of projections and estimates but I think there's a there's a undercurrent where a lot of things have changed the federal level a lot of things have changed at the state level and some of these percentages in the way things are calculated we're trying as hard as we can not to change the total program number and so the state can

095say that we're fully funding that but everywhere else seems to be dropping just a little bit and so as we really dug into the Medicaid and worked on those projections with the state that's just going to come down a little bit about a half a million dollars and Justin can you outline the Medicaid piece is very important because it covers a number of supports for students direct supports it's our nurses it's in some instances it's our mental health interventionists and these dollars are likely to decline dramatically in the next year and likely we will see impacts to those employee groups go ahead so the Medicaid monies does that come from state only or does it come from federal as well it's federal and this is actually one of the exceptions to our federal funding being

096tracked in not in our grants fund so most of our federal funding our title fundings and IDEA all that's in our grants fund and not in our general fund Medicaid is the one exception and it resides in our general fund so we talk about our total reserves there's a small sliver of that it's about three million dollars of that is actually set aside for Medicaid and so all our Medicaid revenues Medicaid expenditures flow through the general fund and like Dr. Christian said we fund nurses refund fund some counselors at a lot of our schools majority of that just like any of other funding sources are for salaries and benefits to provide services and so as all of our federal funding is becoming more volatile Medicaid we're seeing impacts as well and so that that could

097certainly impact it will public will certainly impact a general fund in those areas we currently have I worked with Johnny on this a little bit today we have seven interventionist mental health interventionist on Medicaid and as those dollars go away we're going to have to figure out how to backfill that or if we backfill that we're currently working with Boulder County Commissioners because they passed a mental health tax in Boulder County and could potentially help us backfill it I don't know if all of it will be back that filled yes seven FTE is about what in eight hundred thousand dollars yes yeah it's not insignificant by any I think it's about two point five million in total revenue that we get and yeah I didn't mean to confuse or muddy the waters but it's federal

098dollars but the state does administer it so they they have some part in helping us determine what it's going to be and unfortunately with this in this case we're really beholden to a lot of factors that we have no control over we provide the services regardless but things like the statewide average for the number of students who have an IP the local average the number of at risk students it always in but unfortunately the dollar pool I think shrunk a little bit and it's putting some pressure on yeah thank you so in this middle section it's a hundred thousand dollar change there's a whole lot of you know relatively little things as I mentioned you know when we start the year and we go into creating this budget we don't have things like the categorical

099totals or special education for transportation or CTE and those kinds of things they're kind of like fuzzy guesses that we do our best to work with the state but then they become crystallized and we make adjustments for that preschool similar similar idea we're not really sure how many kids are gonna come in and then we we worked of course correct again in the aggregate this is just kept capturing a whole lot of activity we point out one-time revenue increases you know especially as times are getting a little more challenging we really like to focus on one time versus ongoing revenues we like to think about everything is ongoing right if this we're gonna get money from the state that will probably just go by cost of living next year and sometimes that's true we do

100the same with salaries right our largest expenditure but sometimes we we have one-time revenues and one-time expenditures and as things get a little more challenging it's really more important to keep track of these so I just highlighted it here there were some URA revenues that came in really late from that were supposed to be received in 2025 that didn't come in until 2026 we make an adjustment but it's it's not a really a long-term kind of thing that all right any questions on revenue so pause the revenue picture all right the expenditure side is a little shorter again because people are our primary driver it's just a shorter list I guess but so we've got a category that we're gonna do something similar or we'll go into a little bit more detail but we've got

101FT additions and changes you kind of benefits and other which is also a personnel type category and then we say discretionary budget changes but that really just means non budget for non FTE or non personnel changes and then again we'll get some one-time expenditures where we've got some additional line items that we're incurring in this year's budget that won't repeat themselves so the first line we have maybe 1.9 million from the previous slide of addition FTE additions and changes and this is kind of a conglomeration Tony mentioned that when the kids come in in the fall right we start to see it and then that there was four rounds or three rounds of 30 we might make a fourth round well that that's a teacher right and so that's where that goes we might have

102Paris that's where that goes that's some of it it's not all of it we have we add some special education staff to meet student needs where they are we actually added some custodial staff because we have a little bit of a misalignment and how things were budgeted relative to how things were going and the needs in our schools and other facilities and then we have a slight increase to set the stage from a staffing perspective for our new MECA school that's opening next year the next line is benefits another sort of a generic category but an increase of 2.1 million the line share that is an increase in benefits so we had I believe a study session here a few weeks ago where we went really in-depth into the benefits and as you might recall

103and as you might have heard in a lot of other avenues in the world medical costs have gone kind of through the roof and we had sort of a challenge in renewal cycle and we worked internally and with dr. Christian to bear as much of that as we possibly could to minimize the impact of staff right and so the alternatives might have been to kind of cut benefits make them worse change the plan design or just to simply increase their premiums which doesn't feel that great either so we did all we could to do that and came to the conclusion to bear a little bit more from the general fund perspective because we contribute pretty significantly to the penny care premiums and employee premiums as well and then the last little bit is just kind

104of the turnover another I actually that's two hundred thousand dollars or hundred sixty thousand dollars I like to speak to this because this is just kind of like what's left over this shouldn't be a big number but this is just what happens when you use average salaries to benefit to estimate a new position or a vacant position and it comes in a little different so across you know five thousand employees that's a pretty small number and so that's that's good so as we move away from personnel and we get into discretionary changes there were there was about seven hundred thousand dollars on that previous line couple things we're working to start up a new infant and toddler room and so there were some discretionary dollars that went to kind of prep for that and get

105that ready and going there's a couple items that we're going to see in the SRO contracts I believe every year and this is basically where we're we're working with our local police and sheriff offices to provide school resource officers in our buildings and collaborate with our schools and work with our kids so it's part of that renewal process which doesn't happen before the end of the year or sorry for the year started we had some increases in there I think that was about five hundred thousand to the ongoing level of service that we were receiving and then as we move down there's a couple more SRO items but we're going to talk about these one-time extended tubes of 2.4 million dollars these are predominantly just timing so but we'd like to track them separately because

106that's that's feeding into our kind of big picture for the year but these are costs that won't repeat the first two actually go back to again fiscal year 25 when things were planned or scheduled to have happened so we entered into a new five-year agreement for a firewall which is our internet protection software and service we had the money for it we budgeted for it we thought it was going to happen in 25 but those darn accounting rules said you know what you have to put it in the next year because it didn't really start until FY 26 so it's just a timing thing so that cost shifted from FY 25 to FY 26 we had a really late large SRO invoice from the city of Longmont it just was supposed to have been received

107and paid and they didn't get to actually their CFL retired, which causes some problems, but that happens sometimes, unless you have some issues. Doug, can we get some help with that? I'll work out that for you, Sam. Oh, I'm sorry, I'm talking about SRO, don't worry about it. I'm sorry, that's really embarrassing. I said how awesome you have it, right? Just put yourself on the way home in your car. So that's it on the expenditures, fairly short and sweet, but again to go back we had a pretty consistent change in revenues and expenses and so when we take all that new into account we also look at the beginning fund balance so this kind of brings it back up to that 30,000 foot view. Tony mentioned that number, 174.4 million, that's what we started the

108year with. We have a projected spend down of 28.6, which is a projected ending fund balance of 145.8 million. And again, as we said, that's before any outperformance. The 145 is still over 28% of total expenditures, which is from a statewide perspective or a best practice perspective is still pretty high, very high actually. And I don't like to really start to project outperformance because it's a little bit early for that but we're working on it already, but the last couple years we've been in the neighborhood of 13, 14 million dollars and so we would probably expect to see something somewhat similar to that. Yeah, here we go, it's a great graph right there. Looks pretty good. We talked about this and it is a really good visual representation. I really did like it. Actually Tony

109shared this one as well, but this is a pretty key part early in the budget book and it just highlights all of them. It's also a really nice reminder that as we go through this process we just talked all about Fund 10 and the general fund, but we do focus on all of them. We do spend time with all the people who own these funds and own these activities to make sure that things are still on track and nothing, no stone really goes unturned. I'll just point out a couple quick things, but you can see the self-insurance fund at the bottom. That's really hard to read, but we talked about that, how there was a kind of a planned spend down in the self-insurance fund. The bond redemption fund is that collection to repay debt

110and as Tony mentioned, that's kind of that high water mark at June 30th. So we've got a nice balance that will really be used to pay December, I'm sorry, was used or will be used to pay the December principal and interest. And then what you also see there's a really large number there, $260 million. That's pretty conservative, but that's the spend down in the building fund because they are really, really motoring and working on new buildings and construction. And this also is the appropriation, the resolution from that, which President Hewlett signed, I hope, on next Wednesday, one week from tonight. But this is a resolution and just as a reminder, we appropriate or make available all resources. So it's that beginning fund balance and all projected revenues and transfers in. And that's where that $1.3,

111$1.4 billion number comes from. Can I show the group something? I think this is really cool to see. It just ties a couple of things that we've been working on together. So first of all, look back here. So we look at this thing, right? We mentioned earlier this is all of our revenues and our beginning fund balance. There is the total appropriation, which is all the resources, right? Those two sources combined. And then this is the uses and then expected remaining fund balance. So if we look, you can see here just the general fund, which is what that chart was for. Let's tie some things together. It all is supposed to make sense. You're like, oh, this is what I'm looking at, right? So we look, beginning fund balance, 174.4. If we go back, there's

112our beginning balance of 174.4. And the remainder of these items are our revenue sources, which is this budget of revenues right here. Then on the other side, you have this 525, which is, excuse me, of all of these right here, of the uses, our expenditures. And then our ending fund balance of 145.8 is right down here. See how that ties together? The number that I skipped was this, this appropriation, 671. Like Justin said, that is the total resources for the given fiscal year. And if you go back to the appropriation, there's the 671. Isn't that cool? So you can see kind of where everything is going from and how each of these are tied together and how they relate. I love that. It's a good kind of a check to make sure that all of

113our schedules are working out and stuff and kind of a QA thing. And now as you look at those, you can kind of see how they're tied together. So I would like to show that. If you can't tell, both Tony and I grew up as accountants, even though we don't do a lot of accounting work anymore. We like to take in time. It's kind of useful sometimes. So that is really it for the fiscal year 26 amended budget. We'll pause there before we move forward. Are there any questions or any comments? I have a question about and I know he had talked about this in a finance and audit committee meeting. I know we spend a lot of time on the general fund because it is our biggest fund balance. Will we do that or

114something similar for the building fund? I know we had like some performance. Yes. OK, thanks. I know we had some outperformance in the building of the pre-K-8. So, I mean, I just am curious to see how we're doing on all the projects that we're working on. Yeah, actually, Brian Swisler, I say and I, but I'll just be doing a little piece on the finances and interest and things like that next. But on Monday for the finance and audit committee meeting, we'll be going through a presentation from Brian. Good stuff. Any other questions, comments? So now we're going to we're going to switch gears and we're going to move to I mean, this is actually real time, too. Right. And so we're just updating the budget for the year that we're currently in midstream January. We've

115got five and a half more months. But literally this week, next week for the last couple of weeks, we've already been working towards FY 27. The legislative session just started. But we are actively kind of getting staffing plan analysis work together and starting to work with folks around the district. So this is actually really timely. We keep track of this stuff all year round. This isn't like a one time deal. But right now, things are pretty important. So we're going to do a little bit of a look on what is upcoming in the current landscape. So we've recently had some really nice discussions with Dr. Capuchin and cabinet and really starting to just get a little bit ahead of where we are. We just walked through the budget and we've got the spend down. We've

116got some outperformance we're going to have. There's a lot of decisions that are going to get made between now and June 30. We come back with this budget. Right. And so we want to start to get ahead of what do we know now? What do we think that we can project now? And so when we think about that that really important revenue source that we always talk about total program funding, we say, well, what do we know right now? And so the things that we know and this actually just changed in the last couple of days. But one of the components in state statute is that that per pupil funding number will go up by inflation. And that's been an estimate for a while. It actually just got finalized at two point three. So that's

117actually for calendar year 25. But then it's applied to our fiscal year 27. So we when we think about this, we say, all right, well, what's the value of that? The value about is about eight point one million that we would expect to receive an additional one. Whether we could talk all day about the changes that they made in the school finance act and formula and what they're likely going to change. But for now, I know we talked a little bit about the new finance formula and current law. This is all basically current law. Current law says that we're going to start to implement that new formula a little bit more. So the super, super simple version is that there's still an old formula. We still have to track it. And then there's a new

118formula that theoretically gets people more money. And so what you do in the current year is you say, well, we're going to take the difference between those two and we'll give you 15 percent of the difference of that number. It sounds kind of weird, but that's the way it works. Next year, you do the same thing for fiscal year 27. In current laws, you get 30 percent of the difference between those two numbers. Right. So they have a nice formula that gets a little bit more money. It puts more weight on special education and at risk and students. Good things. It says we can't really afford to fund it all right now, but we can afford to fund some of it. So the value of going from 15 to 30 percent next year of that

119new formula is an additional one point one million for us. These are all kind of broad brushstrokes. Those are the increases. Unfortunately, it's a couple of decreases. We've talked before about declining moment averaging, which has been a state mechanism or a mechanism within statute for many, many, many years. And it basically says that if if you're declining in enrollment, right, if you drop 100 kids, well, you're not even likely to find out until September. Right. August. Well, that's a little late to just pull funding from those 100 kids. So the historic formula has been you can take your current year count or you can take the best of up to the last five year average. So that means you look at a five year average, a four year average, three year and two year and

120you take the best of those. That's been that way for as long as I've been around for short. The governor is like wanted to change that. And so we are actively changing that. So this coming year, we will go from four years to three year average. We used to have five. Now we have four. We're about to have three in current law. In addition, so that's this line right there. The seven seven hundred thousand dollars. But in addition, there's also just a natural loss because we have been averaging. We will lose a large year from four years ago. And so that year kind of falls off. So we have been getting the benefit of that averaging impact and that benefit will decrease a little bit. Right. I hope that makes sense. This is pretty complicated,

121but basically our revenue was kind of propped up a little bit from the benefit of averaging. And we're going to lose some of that benefit. The loss of that is an additional two point five. Another way to look at that, it's really good. It's that we are decreasing or increasing, but much less so than previous years. So in previous years, we had dropped a lot and now we're not dropping as much. And so we got a lot of a benefit from that. And from a bigger drop, the declining enrollment averaging softened that drop. Well, now we don't need that anymore because we're not dropping. Right. We're not dropping. And so so that's a that's a good thing that that happens to school districts that aren't freefalling enrollment. But one thing that I do see a

122lot in comments when like the state just put out a whole enrollment report and the comments that I see that are frustrating and they're simplistic. Is that well, good, less kids, less expenses. The problem is, is that it's not commensurate because when you lose a hundred students, you don't lose them all in one school and you can't cut four staff from one school. You might lose three from the school, eight from the school, ten from the school. And it's not enough to cut that same amount of money commensurate with the loss of enrollment dollars that you get. It's just a very simplistic way that people look at finance and budgeting. You know, and it's it will take us a very long time to actually catch up with the loss that we're realizing. We're still running

12360 schools. We haven't lost enough students to close an entire school. And yet there is this belief system that if you have a hundred less kids than you just cut your budget by, you know, that a million bucks. Yeah. Yeah. Another way to put it is just look at one class level. So if you have a class of 25 and you lose three kids and you got 22, you're going to still need a teacher. You're not going to pay the teacher less, right? Or a fraction of a teacher. But the district is going to make, collect $35,000 less because of those three kids. And just to give you some more of that top level view, like this doesn't hurt us as much. And I think we talked about this in another some other session a

124couple of months ago. But there are other schools that are going to hurt from this averaging, this new averaging that they're doing. So it's for us is a little different. We're kind of like in that middle. And I think we were talking about this even before Donna left, actually. But some of those other schools, the schools, this will hurt a lot more. There are going to be districts that are literally in crisis this year because of our reserves. We are not. Right. But we will be there in five years or four years if we don't really pay attention today. There's there's a lot of concern to go around. But I think you can't understate that we're in a better position than most to deal with this. And you can't understate it. I should have been

125a little more adamant about this. But this, I call it a bummer, but it's really good because to Tony's point, we're if this projection is based on us getting down to an averaging benefit of like less than 50 kids. And that's where you want to be. You actually mean growth, right? You don't worry about averaging. But we're down to a space where we're not reliant on that benefit. So whatever happens at the state level with it, we'll be in a better position. OK. Total program. So one point seven percent increase. The next one, also just the nature of the beast, but MLO revenue of seventy nine million. We're going to project that to be flat. It's a non-reassessment year. And we are we are not really seeing the same kind of oil and gas swings,

126which in a general sense is good for all of us. It's probably good for everybody. We had some good years and we had some down years, but it's leveled out quite a bit. And so when we look at that, though, when you put that in the context of our total revenue projection and what we can afford to do things with, keeping that flat doesn't exactly help because of that non-reassessment year. OK. So when you put all that together and I kind of skipped over there, we made some other assumptions about categoricals and things like that. When you take all that together, our total revenue increase with the general fund is about eight point one million. This is a very, very early projection, but eight point one million or about a one point six percent increase

127in the aggregate. But this becomes really important because this is kind of the baseline which we go into conversations and make decisions about all kinds of things. As we think about the expenditure side and how we want to staff our schools, trust raises and things like that. So but this becomes part of our baseline. Now we get to the really good stuff, which is we've alluded to several of these. But when we also think about the twenty seven forecast, what we showed on the previous slide is current law and the state has got it's got some challenges right now. There's a state shortfall. That's another one billion dollars. So if you recall, it wasn't more than six months ago. The state was digging out a billion dollar deficit. K-12 remained largely unscathed. And to date,

128we are sort of largely unscathed, which is just to say that the governor's budget, which came out in November, is at least current law. He's already put out some memos and some addendums and adjustments that we're going to talk through a little bit here, but trying to ratchet that down a little bit. And, you know, this is personal commentary, but I would say make no mistake, you know, the legislature in total, the governor for sure. They love this idea that we brought down the negative factor and we're not doing it anymore. They want to hang on to that. That doesn't mean they don't have problems to solve and they're going to kind of come. And I my phrase is always digging through the secretions, right? That's what they're doing at every possible avenue without reinstating

129that negative factor. So what does that mean? What is the what might the billion dollar shortfall look like? Or how might it impact us? Tony alluded to it, but we've been in a lot of conversations around SOT. So keeping it pretty high level, that specific ownership tax, which is a vehicle registration process, right? That's when we all go to the county and pay our registration. Right now, we receive all of it, and that won't change, likely. We receive all of it, but the state takes credit for about half of it. And they say, well, cool. Well, we'll take credit for that and we'll reduce your state share by that and the additional amount they keep. We keep, I'm sorry. Because it was generated on voter approved mills like the MLO, like a bond, et cetera,

130because all of the SOT taxes, the vehicle registrations are distributed on a pro rata basis based on total mills. So that potential proposal or that potential loss would be seven point eight million dollars. That's that other half-ish of the SOT that we received. This, in total, the current estimate is about two hundred and twenty million dollars that it would benefit the state. DPS, I believe, loses twenty five million dollars, I think. Aurora, it'll be huge. So these are catastrophic changes, meaning, sorry, go ahead, Jack. Well, if you go back to the other slide, we were going to bring in a certain amount of money. Yeah. Eight million. Eight point one million increase. And it will go almost completely away by the playing around with the specific ownership tax. I really am kind of frustrated with

131this because it really is just a it's a cut to K-12. It's a decrease in funding K-12 from the state. But they're kind of wrapping it in some complexities to make it seem like, oh, this is a mechanism needs to be fixed or some inequity needs to be solved. And that premise I also disagree with. And so I've my messaging when people ask me about this, I says, if they want to cut K-12, then let them own it and institute another negative factor. That's what they want to do. But don't wrap it in sheep's clothing and say, oh, this is some mechanism that. In addition, this particular method is especially harmful to those districts that have bonds or military overrides like us, like Aurora, DPS, Littleton, Poudre. A lot of the other districts that have

132have that because, as Justin mentioned, SOT is distributed based on your proportionate share, your pro rata share of your mill levy. And you can have non total program millage. Remember, we talked about multiple categories of mill levy. Only the total program portion of our mill levy goes into that calculation for how much the state recognizes local share. And they're saying, well, what we want to do is use all of your SOT counting to your local share, which means we're going to pay you less in that same amount. That's about eight million dollars for us. That's that's that difference. We get about 15 total in SOT. Seven of it is counted towards total program. The other eight is not. We still use it. It's budgeted. It's in our revenues. But what would exactly happen is literally

133there is no ifs, ands, or buts. If they just took that away, it's just cutting us eight million dollars. They're just going to send eight million dollars less in our equalization payment for total program. That's it. And they're going to say we protected education. Now, there is some talk I've heard just to give a little bit of credit. If they say that 200 million dollars, could they refile it back into K-12 into the implementation of 448? Remember, Jess was talking about going from 15 to 30. Maybe they could take it from 30 to 50 or something like that. Just maybe like, oh, maybe we could do that. So instead of saving the money at the state level, they could sort of take it out of this and then put it back in in this other

134mechanism. The problem is, is that implementation comes to us pennies on the dollar. So we would lose eight million dollars and we might get in the additional implementation of 1448 another two, one or nine. I was going to say you are very optimistic. But even if they did that, it would still be incredibly harmful to those a few districts that and us and DPS and Douglas County. And I remember this should be the last check the other day. But it would be very, very harmful. So at worst, yeah, they just wipe out any gains that are in current law if they were to do this. And at best, we lose seven instead of if this SOP proposal goes through. So we are working hard with working with our legislators to oppose this vehemently. All right.

135It's like the commercial or something. Oh, wait, there's more. So we don't have time to go through a lot of this, but you might have heard that there's some in the one big, beautiful bill. There is a new federal tax credit, which some people would say it's more specifically referred to as a scholarship. Some people would use the word voucher, but it allows for tax, not deductions, but tax credits for donations made to scholarship granting organizations, SGOs that would be used almost exclusively for private private schools and other institutions. So this isn't quite a direct impact, but it would certainly funnel money one way or another out of public education and into private education. The really interesting thing to note here is that states have to opt into this to allow those SGOs or scholarship

136granting organizations to be eligible to receive donations such that the donors can get the tax credit. Polis is so far one of two Democratic governors around the country to indicate that he's going to opt in. So similar to SOT, this has kind of a long way to go, but there's a potentially pretty significant impact, if not such a direct impact to K-12 in Colorado. Anything we want to add? Well, just that states that have implemented some kind of voucher program like this are their public school systems are literally bankrupt right now. Because they cannot control for the costs and there's no accountability for the people utilizing those dollars. Something that shocked me a little bit today, and I don't know why it did, but I guess in Arizona they give the dollars directly to the

137parents and some of the parents are using it to buy jewelry and vehicles. There is no accountability that you educate your child if you get these dollars, these public dollars. So it's very, very disappointing. It will certainly drive participation, additional participation in private schools, so having kids opt out of public schools, and or homeschool programming as well. So these funds can be used for homeschool participation in curriculum, tutors, and online programming. So again, while they do say that some of the money could be used for public school expenses, like someone paying for fees or up to four hours of school care, tutoring and things like that, it really is a pretty major overture to enhance or incentivize private school registration. And one of the most disappointing parts of the bill is that it waives for

138private schools any anti-discrimination laws, federal anti-discrimination laws. So a school, a private school child could show up at the door with their money and they could say, because of the color of your skin, your religious beliefs, your disability, your socioeconomic class, we are not taking you. And so it really is choice for the school, not choice for the family. And it will create a class system in the United States, and we will lose our middle class. Aside from the education piece, that's pretty much what the entire bill is, if you really read it. It's a classism system. We'll keep going with the good news. The last one is sort of a generic comment about grant consolidation, which is just a trend that we're seeing in the state right now, where to try to do something

139and do things, they're trying to say, well, I know you guys don't like grants, so there's a lot of these things around workforce readiness. We're going to collapse it all, and we're going to try to do better with it. We're going to redistribute the funds in different ways. And the math just isn't mathing out in my mind so far. And I think what it will ultimately do is take money away from programs who have been really successful, like St. Brain, and redistribute it in a different way in the spirit of starting up those programs elsewhere. But there won't be enough money. They're not putting new money into it. So it's not really going to serve anybody, but this is just another example of the state trying to do something and redistribute, but in a way

140that is probably not going to help us. This is happening on a macro scale. I want you to understand that when, in times of plenty, when things are going well, a really good example is COVID dollars. COVID relief dollars, when they came, there were direct distributions to schools, but there were also distributions to other organizations that would then benefit the schools. So we would get a compounding effect of not just direct distributions for COVID relief money, but then a grant here and a partnership here. All sorts of additional benefits would happen that were secondary to the primary one, so you would see a doubling or a compounding effect. The problem is, it's the opposite of true. When this starts, the main thing starts drying up, all of the peripheral stuff starts drying up as well.

141And so you can't go to those secondary sources. You can't say, well, this grant dried up, so we can just go to the general fund. Well, the thing is, the general fund is also drying up, so you can't refer back to that either. So we're seeing the opposite effect now. It's not just direct allocations shrinking a little bit, but also the peripheral ones, like grants, grant consolidations. Companies may not, in poor economic times, may not be as inclined to provide grants or partnerships or do programs or things like that. We see that all over, and you see on a macro basis, you see just a compression. All right. We are going to get out on time with the last nine minutes. I have a quick question, Justin. Yes, I know it's probably really difficult to

142put any kind of estimation around all of these things, but what kind of stress testing are we doing to our budget and our plans? Like what's happening behind the scenes to sort of stress test these scenarios? Am I getting ahead of you? So we do a lot of briefing with Dr. Confucian, and we talk about this kind of thing, its impact, its multi-year impact on our reserves based on if we change this, if we change this, if this happens, if this happens, with compensation numbers for this or this. So it's basically a what-if scenario analysis for multiple years. So we can say, okay, well, these are ongoing expenses. These are our one-time expenses. We pull these out. These revenues need to be pulled out. And we've been able to, I think, paint a pretty clear

143picture both to Cabinet and to Dr. Confucian about what we can bear and where we need to change course either now or within the next couple of years just to make sure that we don't put ourselves in a crisis situation. We don't want to let a two become a ten. And we are actively working to ensure that doesn't happen. It's a really well-timed question because that is the last thing we want to talk about, which is I couldn't come up with anything better and more creative than levers to pull. We talk about that sometimes. But so what do we do now? Right. So the first highlight here is that we've talked about it a lot, but the fund balance that we have and the reserves that we maintain, they really are going to allow for

144us to have a strategic timeline to course correct. Right. So I want to pause there, too, because when you think about how we got where we are, there's a lot of things that have changed at the state level that haven't worked in our favor or anybody's favor as well. But some of it is sort of centric to the same brain. Right. So when you think about changes in NAB, including state financial health, but right, if you think about the last five years or so, we had two years in a row with over 20 percent net assets value growth. That is astronomical, like unbelievable around the state. Nobody sees that, especially at the levels we're at. Right. And so that generated some of these really significant reserves. We are also trying not to just put it

145all on the bank and save it for a rainy day because that gets egregious at some point. Right. So you try to make these incremental decisions and you build that up. Well, two years ago, we experienced a 12 percent decrease because of oil and gas. That took 10 million dollars out of our revenue from one year to the next. Just that one little thing. I mean, it's not little, but just that one thing. But all that to say, we kind of get here with the reserves and we ride the wave with the reserves. And that will allow us to do that. So then when we think about, you know, some of the levers that you can actually pull. Right. We do, I think, in St. Grant, a phenomenal job with local brands and partnerships with

146businesses and the community. That's an opportunity. Right. That's an opportunity to expand that. Of course, it's a challenging market, just like the rest of the economy is. But that's that's an option. This one has a lot in it. But the idea of spending growth being less than revenue growth. Right. So if we're going to add one hundred dollars, maybe we don't add one hundred dollars of expense. If you add it on the revenue side, maybe you just let that increase be smaller than the revenue. So that you can whittle down that decline or arrest the decline. Terminal. But there's a lot that goes into that. Right. Is some of that is super simple. Right. Like, oh, we get a percentage where we just translate that to a percent salary increase as an example. Right. But

147it can also be in how we choose to staff our buildings. What programs we choose to fund and what programs we choose to expand or contract. So there's a whole lot of things that can go into that. That's just the general idea. Really, really big picture. We would expect to see the increase on the expenditure side be a little bit less than the increase on the growth side. The revenue side. And another thing, just to point out, this isn't like formal planning at any time. But we just like to point out that some of the other levers that we have at our disposal, there's two really notable voter approval items. That we could pursue if we wanted to. So right now we have a mill levy override, which is capped at 25 percent. And we're

148not there. We're down here. I had a note. I want to think that that was we still have seven or eight million dollars of revenue, so to speak, before we were to reach that 25 percent. With some recent legislation, actually, House Bill 1448 allows that cap to increase the 30 percent. So in theory, we could go back to the voters in the next four years and ask for that cap to be increased to 30 percent of total program revenue. In addition, there is might have heard the term debt free school act. It's actually it's referred to in legislation as the capital construction and technology and maintenance fund or something crazy like that. But the idea, the genesis of it was, is that as opposed to borrowing bond dollars and building schools. What if we just

149had a levy that said, you know, hey, let's take on some of this construction costs, the capital costs. It also includes the ability to apply maintenance costs. Right. So even things like custodial and building maintenance and things like that. It's just another mill levy that's out there that the district chose to we could pursue as an additional revenue source. And aside from building schools for that levy, you can actually use that, like Justin said, for for other capital needs. Right now we have the cap reserve fund. We allocate about seven million dollars, excuse me, eight and nine million dollars from the general fund to fund cap reserve to ensure that's got resources there. A specific debt free schools act levy could provide for those needs and free up the general fund from having to provide

150that transfer. So so you can see how that even though it's a it's a capital based levy, it would actually benefit the general fund because the general fund is right now bearing the burden of those capital needs. And then to be clear that he says by July 1st, 2030, that's in statute. That's sort of a window that the that we were given to get that approved by voters. If we if the voters do not, we don't want to create the voters or the voters don't approve it. That expires after 2030 and there's no opportunity to raise that for 25 to 30 percent. It's 25 forever. So those those small options again, controlling costs or seeking out additional revenue opportunities to help face the incoming storm. So kind of questions can be answered. Do board members

151have any questions? That was a lot of information. It seems like we're, you know, we have a lot of stuff to go through and figure out. But you've got to know the facts. I mean, that's right. You have to hear the truth, as you know, and potential problems that are going to come. Well, and I always appreciate how thorough you guys provide this information. And I think you guys do a really great job of providing it in a way that's really transparent for us to really understand. So, yeah, I mean, just keep us informed. And I know we'll be I'll be a finance committee meeting on Monday. And I'm sure we'll discuss this with our community members there as well. Just keep everybody up to date. Thanks for all that good news at the end.

152Wow. You save it to best to last. Well, we wanted to make sure. Talk to Dr. Bouchon about this. We're like, hey, we don't mean to worry you. We want this to be a doom and gloom thing. And she made a good point. She's like, no, this actually is comforting because we know that we have our eye on it. We have an idea of what we're facing. It's just not all bumper crop years from now on. But that doesn't mean that we can't prepare ourselves to make sure that we're successful. We can successfully get through it, right? You just have to be more disciplined. We have to, you know, do some do some some hard decisions and make sure we can't give out. You know, the huge raises and open programming and stuff that we

153have in the past. And we are we have the knowledge that we need to be able to weather this and move forward. And I think that's comforting. And I think Miosha mentioned it earlier, but this is not just us that's going through. No, I will tell you at our superintendent meetings for other districts, it is catastrophic. There is one district that it has to find forty million dollars to cut in their budget this year. They've laid off one hundred and fifty employees and they're closing eight to fifteen schools. I mean, it is catastrophic. I can't even imagine the chaos that, you know, will happen in some of these districts trying to stabilize their budget and serve the needs of thousands of children. So it's frustrating for me because public ed is called upon over and

154over and over to be innovative, to be stable, to use their dollars wisely, to be transparent. And yet these games go on and on and on at the legislative level. And six months is not enough time to generate the solutions that a school district needs to put in place for these levels of cuts. And so St. Vrain is I won't say lucky because we've been disciplined for a very long time. And there was a lot of hard work that went into building the reserves. And we were not careless in the in the fat years. We weren't careless. We operated the same way around staffing plans and programming and going after grants in those years that we will have to do this year. So it wasn't feast, you know, during those years. We were very disciplined.

155And to Tony's point, we are not a savings and loan. We are expected by our taxpayers to use a good portion of the dollars we receive to serve children. And so we couldn't just stockpile, you know, a half a billion dollars in reserves for the rainy day because our taxpayers expect while their children are in school that we will serve them with those resources. And so it just puts school districts in an incredibly difficult space. And and we will our team is amazing, as you you can see from the talent that we have and we will work on it together and we will keep everybody updated on those decisions. But we we will have some different decisions to make this year than we've had in the last 10 years. Thank you so much. Thank you,

156Justin. Appreciate the information. Do board members have anything else? Any other questions? No. Okay. Our next meeting is Wednesday, January 28th, which will be a study session and regular meeting followed by February 11th, which is a regular board meeting. With that, I'll request a motion to adjourn. All in favor. Aye. Aye.