001Thanks for everyone for uh taking the time to walk through. This is a um another look at the budget. We what we'll start off doing is talking about where we're at now, where we're projected to end here at the end of this month. Uh as always, I'll do some cleanups with some accounting um through November and then we'll walk through some budget slides you've seen in the past and then we'll get to some data that's a little more granular. Um I'm open for questions throughout. Um, this is I, like I said, it's a work session, not really a report. So, we'll just talk through as it goes and then we'll get to some more granular data and then talk about some options for things that are coming up around the levy. Um, there's a packet
002full of all that and we'll get started. >> Okay, great. >> That's good. >> Um, so we're projecting to end this year with a negative fund balance we talked about at the last board meeting and that is due to the outstanding accounts payable and so those are all recognized. you see a giant spike in um expenses on the graph and that's that orange line and that is due to us that's when we recognize all the outstanding expenses. So what that'll do is it'll push our fund balance down into negative about 2.2 million maybegative -2 million. Um so we'll start off this year a little bit better. We'll start off next year a little bit better we started off this year. Um but because of the decisive and uh decisions that were made, difficult decisions that
003were made in the spring, um the outlook for the end of next year is a lot more sunny in this path of a plan we've built to build back our fund balance to the proper amount. Um any questions about the ending fund balance for the year that's just finishing? >> I know we talked a lot about it mostly every month, so I it's fine if you don't, I guess. So I guess my question is with the we we found more. >> We didn't find more. It's just the liabilities are booked are your accounts payable, your outstanding bills aren't booked as liabilities until the end of the year. And so that's when that accounting happens and so you're recognizing them in your books as an outstanding liability. And so that's what it spikes that up, which
004is what happened last time as well. There were a bunch of unknown ones that were um discovered. >> Yeah, >> these are all known. We talked about this with ESD. and OSPI the whole time. This fund balance projection graph that you're seeing has a lot of raw data behind it um that the ESD has evaluated. It's been presented to OSPI and it that's what we worked through to get to this point this gra >> the reason for projection for the negative fund balance of 2.2 or around to 2 million >> um is that again we close our our books we submit to the state u by November 1st. So that's that's why we're still projected. We're closing up on our bills. We still have bills to go until the end of this this month, right?
005For sure. >> Yeah. >> Payroll and accounts payable. >> And we we we have done some things, you know, we sold that house on university for about 270,000. Um that'll help with some of those outstanding that's accounted for here. There's some other things that that aren't accounted for here that might still happen, but I'm too conservative to put them in there when they're not happening, right? I don't have a guarantee for them. Um, great question. What other questions do you have? >> How are we doing as far as our bills for community businesses? >> Yeah, so um I just talked to um just about this too and and Mark Sigler about this. We are prioritizing the local vendors uh and the universities for Running Start. Those are the largest outstanding voices that we have uh
006the ESD and the universities and so we are in constant contact with them. I've talked to most of them uh either me or my staff talked to every single vendor. Um we have about 330ish. Um so we've kind of all of them. Some of them will take a little longer to get. Other ones that were small were just and were old. I mean some folks have had complained about this bill was from 2023 or and so we just try to get those short up quickly. Um and so we're trying to work from the oldest forward and get those cut up because also in their system they recognize it as a real dated invoice, right? And so we're trying to help them with their books as well. >> Yeah. >> But it's it's a constant conversation.
007We're every day and every week we're talking to to folks and making sure we're um communicating what bills are being paid out. Some folks require, you know, they don't require, but they asked for could it be possible to get like a copy of the check before you send it. It's so going to be PDF and send it to them so they can see it. >> Just trying to build overcommunicate to build more trust with everybody. >> Yes, I appreciate that part because that's the part I think that is >> really important is rebuilding. >> Those are the phone calls, >> right? And that's the good news is like putting a stop to that long historic practice of not paying through and having bills continue to add up year year in year out where vendors aren't
008getting paid. >> The the good news is that I mean like Carrie is asking the question I'm asking the question um in in so much that I'm not getting those phone calls on Saturday afternoons anymore. >> So >> yeah, I would hope not. Yeah. I mean it's it's a lot of work. you know, we're obviously doing better than we were or at least we're communicating this to >> Yeah. I mean, it's hundreds of phone calls and it is >> I I will also to their credit once I explain the situation that we're in, what we're doing, how we value them, and this is because most inventors have a long-standing history of of supplying Shelton with supplies or services and we want to honor that relationship and they've all been very empathetic and understanding and willing
009to work with us on all of it. So, it's been really um a relief to me as I'm having hundreds of the same competition over and over again. >> How many years out before we have none of those? >> Um so, this next year will be a huge chunk off of them. Um even with the positive fund balance that you'll see at the end, um some of them are are quite large, so it'll take another year after that. >> Okay. For sure. Would we say within two years we should >> Yeah, I consider uh yeah, two two or three years. Some of them are pretty big. Yeah, >> if you're asking for all of them, then yeah, I would say I would feel more comfortable saying three years to be honest with you. >> So,
010and all that shifts too, you know, as as we build more programs and enrollment grows, that that drives more revenue, which we'll talk about in a second, and that also frees us up to do more, >> right? >> Um, back to um ESD and OBI, they reviewed these numbers. Is that said, okay, I'm just thinking if somebody says, hey, >> yeah, I mean, >> who's who's oversee? >> I think we talked about this before. I do not I'm not a magician. I'm not a w like I don't like to work in a silo especially with problems this big. I think the more eyes and more brains on it the better and I don't have any ego around it. Like if someone catches something that I missed great like we're in this together and so yes
011we've been partnered with the ESD and then that those numbers get reviewed by the ESD and then we present them to the OSPI and then they have partitions by themselves without us. Okay. Then we circle back. >> Love that. But in talking about the ESD, because we have a large bill with the ESD, I >> made that email where I was acknowledging that somebody from the board was acknowledging um that. >> Are we continuing with those services that >> that caused this bill to be the size that >> some of them we have to and others we don't. And so there are some strategic abandonment, I think is a good way to say it, that we're not going to do. But some of the a lot of the services through the ESD are special education
012and they are the >> kind of the only way and and the best value to serve some of those students like I think it's called Olympic Academy that's a very expensive service through the ESD. Um we have True North that provide little services that are fantastic and these are really making an impact with students lives and so we are keeping a lot I would say we're keeping a lot of them but we are trying to move away in areas that make sense for us to move away. Anyone want to add anything to? >> No. >> Okay. >> Great question. Yeah, I mean that's a trick too, right? If you stop using your credit, if you you pay your credit card off, we also stop using it, right? Like so. >> Well, and because that's one
013where we have to look at what it is that we're doing versus say the community colleges cuz if you have kids doing Running Start, that's something you just have to pay. >> Yeah. >> But with the ESD, those are services some of which >> possib I mean obviously special education, some of those true north recovery credit things, those are things that we want to >> Yeah. Yeah, we so we've negotiated different contracts and kind of move forward to make this a little more affordable for us and also create better outcomes for kids. It's one of those changes and um Chelsea Bra really hard on a lot of that. >> Yeah. >> Great. Thank you. Um so as we talked about before, enrollment drives all of our revenue. Um every student's a basic ed student. Some
014students uh do qualify for additional revenue streams if they're special ed students or title one or identified as ELLL or LAP. And so what we're projecting for next year is actually a reduction um from what we budgeted in in previous years that were ending was budgeted 4341. We did not hit that number um which was the previous year's ending I think. And so we're budgeting for 4375 which is a small uptick but we also know that we've been making phone calls and bringing kids back in um pretty aggressively. And so that feels like a conservative estimate for our enrollment. We're not fully rebounding from CO. A lot of districts haven't. Um >> almost all districts. >> Yeah. I mean it's really rare to see a district that that would have. Um but overall the truth
015is we are we are trying to recapture those students for sure. >> And most of those are again high school students. >> Yeah. >> Right here at choice. And so that um going out and getting almost like a 50 additional kids that were not currently enrolled in high school one way or another. There's a story behind each of those 50 kids, right? It's not just a you know just making sure anybody listening and for the board to know it's not just like a hey they just enrolled from the Shelton school. That's actually not actually always the case. They're just kids that have been hanging out there. They don't have they're just not enrolled in in high school. >> So we went out and got them. Um, and so that's I think that as Clinton's mentioned
016that's that's majority of why we have an uptick is because we are keeping or going out and getting enrollment at more at the high school level. It's not really happening so much and we have different fluctuations as you know we've talked about different cohorts come through and things move through the different schools. So if somebody was also listening in on this conversation they would go wait there's less kids in my kids school the teacher like yeah well that that rolls through naturally too. around enrollment, but enrollment is so critical because that is directly tied to our funding. And so making sure that we have our enrollment correct helps our budgeting and as well as again back to revenue uh tied to it to get an uptick is kind of nice and it >> um and
017despite again rumors that have gone on since I've been here around we dropped enrollment that that is actually not true. It's been flat since co and again it was a reset for every district during co. >> So as those students drive those revenues the breakdown which is the next slide with the big boxes um there's a couple things that I wanted to point out with this slide one is that when those students are driving revenue we get most of our revenue comes from the state but um a large 22% of that is also restricted dollars from the state. those are lap dollars or ELLL dollars or some sort of special education some sort of program that are earmarked for specific functions. So it's not it is considered um it's part of the aortionment that comes
018in but it's not the regular basic education allocation we talk about a lot of BEA dollars that's only 57% of our budget which is if you think about they're expecting us to operate uh with the revenue that's only 50% of what we get um and it's still short even with the others. So, I just think that's really important. That's a a different breakdown. You know, $19 million of our state money is restricted in some way. Um, and then 9% of our um of our money comes from our levy. It's about $8 million. Um, and when we pass a le, we talk about this a lot too, but when we pass the levy, the state is then obligated to give us additional dollars because it's levy equalization dollars because not the assessed valuations is so um
019drastically different across the state that they try to give these additional dollars to equalize that differences those differences. And so for every dollar that the community member gives us, we get another quarter from the state. And they're they're required to do it. What's interesting is that if you don't pass the levy and you would need those dollars, they don't give it to you, right? So, I just think it's important to understand that difference and those um those LEA dollars are included in the 57%. So, one passes. So, >> is 22% what most districts are working on that >> uh yeah, it's roughly around that. It just depends on the populations, right? So, if students if districts have a higher ELL population or um lat population, those dollars can be plus or minus. >> Yeah, it
020does v. I mean it varies I mean district so like but yeah it can vary >> pretty significantly but like he said like um those districts who don't have as much uh federal programs those restricted dollars those are the ones that can generate a lot more money off of their levy. So, it's like this this thing and they're not restricted, which is back to like >> um districts like Shelton can be highly penalized uh when you don't pass a levy because we we do need those levy equalization dollars leaving, you know, $2 to $3 million on the table. That's going to go to another district if we don't, you know, if you don't pass your levy. And then those restricted dollars are just even more of a handcuff because we have to go to more
021you know that they are going for support services as where as Clinton was mentioning in the basic ed you're like only 57% of the 80 you know 84 $85 million is what they they think that we can fund this district off of $48 million >> for basic debt. And so um it's just a have and the have nots. It mcclary didn't solve the problem. >> Yeah. And for us in our particular situation, as I've said since I got here, being this reliant on restricted dollars has caused a problem because you can only those are the dollars that you are stuck having to utilize as we're getting care because the 48 isn't enough to cover our operating expenses >> and it can look like hey you got all this money coming in you're like I can't
022take that money from restricted dollars and move it over here where it's needed. >> Right? So all those districts Olympia is one of my getting examples. they not only have a EPNO but they have a capital levy that capital levy is able to cover all sorts of other operational related expenses you know and so that that is monies that we don't even have that's not even a conversation here so that's why again it's the have and have not shown and that's why a levy is so critical is because the we want the state to give us our portion of those monies we do need that additional money and to give it the money to another district is, I don't know, quite a criminal in my mind. >> Yeah. And what a levy also allows is
023a little bit more local control because you get to decide what you're valuing your community when you pass a levy. >> Yeah. Right. >> So, it's less restricted. Yeah. >> Because it's not restricted. The state can't dictate to you where it's all going to go. So, uh, any questions about revenue? Great conversation. We're going to break we're going to again break down the expenditures a couple different ways and then we'll get into some detail about them. Um we are a people oriented business. So a large percentage of our um of our expenditures go to people. And so I have a breakdown here of certificated salaries, benefits are expensive and always on the rise. Those are those are never getting cheaper. Uh classified salaries and then MSOCs are materials supplies and operating costs. That's all this
024stuff. And that $12 million is an uptick from the $10 million we're spending this year. But it's on purpose because we have all those outstanding accounts payable bills to pay. And so some of those savings that we had to make are going to pay for those supplies, materials, and operating costs. Right. >> So those aren't just the materials, supplies, operating costs now. They are also the ones >> that we're having to catch up on. That's exactly right. Okay. >> Yeah. Like we we should probably be a $10 million >> district, but we're having to get caught up from years past. And so that's what this is doing. >> So it looks a little different from previous years. So Clinton, would that be true though? Like knowing that the state has underfunded us in MSC dollars
0254 million over the last three years >> and interest, you know, >> I like how you're thinking. >> We can't charge that, but yes, I would like >> everything is increasing cost. >> Lauren, I love you asking super public education. It's good, right? You're like >> I'm saying plus the increase to everything. >> Yeah. Oh, inflation. Yeah, inflation. inflation. >> Yeah, we have to adjust and you know um some utilities are going up 14% uh in Shelton area and that's 14% every year they're going up and so we are accounting as as we're made aware of those and we seek out that data that is adjusted in the budgets. >> Great question. >> Yeah, that's right. The inflation is significant on and that's what has contributed part of our problem. >> Yeah, >> that is
026part of the story. And I I think what's important is this this spending level of $81 million is similar to what we've spent in the past. Even though the revenue, if I go back real quick, the revenue is almost 85 million, but our expenses are only $81 million. But when we're starting the year with a negative $2 million, we are holding back some of the basic ed and levy dollars as much as we can and still operate to build back into a positive fund balance. And so we'll do that for this year and we'll do it into next year. And so that difference of of you know $4 million will go into fund balance. So instead of ending 1.6 we might have 5.6 at the end of the year after. Right? And that's all that's
027part of the plan that we've laid out to rebuild our fund balance. >> So not change the subject but um as far as like the state auditor goes. I know they're freaking out now about us, but how long before they start really freaking out or if we have a plan to get into the positive? >> Yeah. Uh so you're you're talking specifically around the so we uh the shelter is a fund balance uh policy um and so that is a because we're not meeting that and we're in binding conditions that is an alert and they are >> looking at that um the plan that we have and showing them the same data is the same way out it's the same way out it's having the plan making taking the decisive action that everyone at the
028table has taken is that solution is the same solution for the auditors as that is for OSPI to get our funds >> okay they want to know about this meeting for example So like when are you meeting with your board? What are you covering? We give them the materials. They have access obviously to all of our budget documents. >> I mean the there is full disclosure. There's no nothing to hide. It's really, you know, we're back to building the general bounds. A lot of the same actions though just just for clarity purposes and I think people listening in and again these are the conversations we have is the whether you're on 2 million on one side or 1 million on each side of the ledger positive or negative you're taking a lot of the same
029steps. >> Sure. uh for us uh we've taken more even more quick quickly took the steps the the steps that by taking actions mid year last year right away was really extremely helpful to the part where you don't want to keep carrying your debt because it just keeps building up. That is what's part of the the other part of this story is having that and then you need to um get on the other side of your plan so that we can end the positive um ultimately this next year. But it's the part that I think people listening also might understand is well if you got $1.5 million in savings, how come you can't just pay all of your bills? Well, there's a thing just really simply cash on hand, >> right? >> The 1.5 million
030um has two sides to it. Back to the restricted. So, some of those carry forward dollars that 1.5 will be restricted dollars. >> Sure. Yeah. >> So, that means that's really not part of your ultimately. >> So, it's there but it's not liquid. So, >> correct. Yeah, >> it's like it's locked down on forless support activities that we definitely need. >> Um and hopefully the federal government doesn't cut further >> and then um for us um so that means that it's not really all you know $1.6 million on hand and then proportionally again I know I'm a broken record just like to keep saying things so people understand what we're doing. We do not get all the money. the 85 million is not all provided to us up front. >> Um, and is, you know,
031we get reimbursement for the restricted dollars. That's not most of that is just stuff that we have to get reimbured on. And so, we need that cash on hand to even get those dollars on top of the fact that 20, you know, 23 to 25% of your money's come the last two months. >> So, that means in July and August, >> which is why you want the cash on hand. >> It's just it's just super hard. It's it's it's akin to living in a very fixed income household. >> Mhm. >> Yeah. >> When the roof goes, it costs a million dollars >> and you got to go back to those budget dollars all the way back in the past. Yeah. >> Mhm. >> And do you have anything to add to that? >> Sounds great.
032>> I'm just trying to I know I end up getting I this simple part of the explanation, but I just the lame mans. I just want to share people >> and just keep the broken record so that anybody again paying attention is can understand the best. Again we want to empower the community to understand how public you know public school districts are financed. Uh so the next slide is uh the same dollar amount broken up in uh different what they're called activity groups. And so teaching activity is uh all the teaching extracurricular teaching support is is just that um but it includes all the object codes like the principal's office the copers are coded in principal's office. So it's not just this is all principal money right it's papers put there from the buildings there's
033a lot of other stuff that's included in these so secretaries the principles as well but it's not just principles as as people and that's true for central admin as well other things like we pay for central admin there is insurance is $1.3 million that's coded to central admin right it's not coded to teaching activity because not it's not that so but it's just a different look at the same dollar amount Um, I just think it's important to understand that that's all these different activities exist and the reason we're doing that is two reason like these are all dictated by the accounting manual but if I gave you that it's really hard and boring to look at and so this is a different way to look at >> who puts up the accounting manual >> OSPI
034when you look at this compared to other districts if somebody say hey comparables where do we land >> um with this one um >> are we heavy any place or we just got >> we were we heavy in salaries like but most years are heavy in salaries and so we've made those adjustments that we've made um in trying to analyze all of our bills and see where we can make reductions. We have identified that our our utilities overall are are more expensive in our area than in other areas for districts our size. We looked at districts I think maybe nine districts our size plus or minus uh in our area and on the other side of the state uh which is a little tricky like Grant County has the cheapest power and water in the
035state. So, um, wasn't really a fair comparison. I throw that one right out. Um, but, uh, we do pay a bit more for some utilities that we're looking at, um, strategic abandonments on some things to cut that cost down. >> But, >> water is very expensive and I think everyone knows the sewer is very expensive. Water is very expensive. Yeah. So, >> but looking at the things like teacher support or other support or teaching activities, >> uh, no, this is this is pretty much in Yeah, this is this is pretty normal. Yeah. I mean, it it may it may shape 3% one way or another, but >> Yeah. And I I think this is like to a way bigger theme like, you know, um how do I trust the Sheldon sew district and are we
036off in our proportions, right? Like to your questions. That's one of those questions. >> You know what I you know what I like to say now? I said, "Well, for the top performing school district in the entire state for early literacy, we must be doing something right." >> Yeah. So I mean I because I don't I you know I don't shy away from the fact that we do do business different here. I know we have like restrictions you know we're trying to uh generate savings to our general fund balance but there's there's a reason why in our strategic plan we have four priorities. One is about effective educators and leaders. We are not getting away from professional development if if we can help it. Why? Because if we give that up, then we've just given
037up the ability to improve. >> Yeah. >> Our teachers and our leaders are contact in contact with our students every single day. They we have to get better >> um in our position. And so we have dedicated to that. We've kept that. We've prioritized that in the budget, you know. So like back to your question, like that's real time, right? Like that's why our teaching and support budget I I wish it was more. We don't even have enough. I would like to to start a slow walk over the next two years for doing a math adoption. We can't afford it. >> And that's sad to me that that you know I mean like that can't even be reflected in a budget. >> Yeah. >> I appreciate that though cuz that's one of those questions you're
038asking. It's like hey why here? How would >> you know the balance and getting results right? Like cuz we could balance it out and make it look so pretty and everything like that, but you know, form and function are are really important things to both understand on both sides. >> Yeah. If we quit teaching kids, it gets really cheap. >> Yeah. Said better than I can. That's correct. Like unions look at our books and stuff and they do those comparisons. They bring to the table and say, "Hey, you're spending more in principal's office than another district or whatever." Well, yeah, but I'm also charging printers there because that's where it's housed and that's where the work comes from. So, it just >> you can you can kind of shift it plus or minus a little
039and from different districts, but overall it's it's pretty normal. I think the big difference is the laser focus on plan and the outcomes that we're we're seeing regardless. Um the last one uh before we switch gears real quickly um into a little more detail is what all of this means. uh if we zoom out a little bit from the um from the different revenue and buckets. And so we'll there's a little table on the right. We'll start next year a negative fund balance. We have a 85 million coming in, 82 and 3/4ers going out. Um so that ends in a a positive fund balance of 1.6 million. One thing I will say is that this budget was built um conservatively and what's not included here is the reinstatement of some of those title dollars from
040the federal government that came in back late. They said, "Hey, we actually are going to give you those dollars." I haven't seen exactly what allocations are for us. So, I didn't add them because I don't know what that looks like. Um some OSSI dollars came back. We saw those, but I didn't add them either. um just the timing of it didn't work for me to uh because this is a giant um 200page document that I also have to send them to the state and so it's too late to make those changes in the approval process of the document and so OSSI dollars even though we knew what they were it was kind of too late to include them in our approval process >> uh and the title dollars also aren't in here so it it
041could actually be a little bit more um we may spend a little more too as those dollars come in because we didn't account for them as expenditures and So if those dollars come in at a substantial amount, we may come with a budget extension for a small amount um because we'll need to spend some of those dollars, right? Because we are dedicated outcomes. >> Yeah. >> What with with everything on the landscape. >> Yeah. >> Um a I think it's very intelligent to be conservative because I'm not 100% certain that there's not more cuts to be made by people on high. >> Sure. Um, is there anything that you know about on the landscape? >> So, >> no. I mean, the big the big uproar over the summer was um the shuttering of the Department
042of Education and Title Dollars going away and and um you think of Title One, but there's other title programs within that. Uh and so those dollars coming back could be will be helpful. Any dollar is helpful. So, we'll take them all. Um but uh I have not heard of anything else coming through. Um the next legis legislative session, it's too early to really get into it, but there's a lot more advocacy around um we'll get to the details, but what they did special education is really frustrating and so there's more advocacy around those dollars coming, I think. >> Okay, so great question. Um the next Sure. Great. Um, if you go to the next one, I highlighted uh a handful of programs. So, now we're looking at we looked at object codes, which are the
043columns. Actually, the salaries, the benefits are all those columns, and they're labeled 01 23 because that's what the accounting manual labels them at. Um, and then their definition, and then how much money is being spent in each object code under each program. Um, so we're go in a little bit more detail and I wanted to talk about a handful of them. That top one that's highlighted is basic education. Um, and that is that's not that 48 million or 44 million. Uh, it's whatever it was now. Um, because basic education 40 and a half, it's not those BEA dollars come into program 01 and they come into program 97 and they come into program, you know, they go to other programs that are considered basic education. Um, and the revenues that are accounted for are also
044levy dollars, right? So, they're also spread out through these. Um, okay. So, I wanted to point out the space education because it looks like it's really close to balancing, but it is not. And I just wanted to and that's because there's a breakdown in other areas um of those levy dollars. Um, and that's all I really wanted to say about that is our it is the biggest bucket of money that is tied to the aortionment schedule. Whereas the grant claims that I was talking about that we frontfunded and claim if we spent, you know, if if the title one grant came in at half a million dollars and we spent all of it in September, we could claim it all September. That's that's not what happens, but you could. I just wanted to talk about
045that structure looks different in basic education. The other one was uh programs 21 to 24 are our highest need population. And that now looks like in the in the accounting of it, it now looks like it's fully funded by the state. But what they really did was they dictated that you cannot code it to the levy. And so now we're coding it to basic education instead of the levy. So it's being paid out of programs 21 24. will end up cleaning it up the differences of about two million into basic ed because that makes it look like the state's fully funding special education when it's not. >> Am I hearing that they just made it look they just approved us to spend the money? >> They dictated that you cannot code it to the levy
046because the levy has its own code in the budget. We have to code it to 01 into basic ed and so any overages now look like it's fully funded by the state. >> Oh, sorry. um when in fact it's not. What that means though is that and I talked about this once before, every district in the state was coding their overages in special education to the levy and then we can say, "Hey, this is exactly how much we're over. We need more funding in these areas because they've dictated that you can't code it there. Everyone has to code it to 01. We'll still track that, but now we have to spend our levy dollars somewhere else, which is fine. We have there's overages all over. They're underfunding all over the place. What it seems to
047do and the concern is it's it's lessened our ability to advocate for ourselves in a unified front. >> I just wanted to point that out as we get into session. I know I know it's very complicated. >> This going to be a lawsuit. >> Yeah, it's a lot. >> It's a it's a it's coming to be a this one's going to be a lawsuit. I don't know when you know how long things take. This is a lawsuit. >> It's it's moving deck chairs around to make them look good. >> And it's frustrating because it's been underfunded forever. We've advocated it forever and this little bit of changing to what the cap looks like that doesn't that's not really solving the problem in social education. >> They're the highest need students. They need more money. >>
048It's really that simple. And I I I have some frustration on that I wanted to share and provide some background for you on that. What looks like as we move forward. >> Um the last one that I highlighted that I think is important is 97. That is districtwide support. That's where insurance, utilities, maintenance, grounds, all that stuff comes out of that. Um, we have some big MSOs coming out of there and it's just a it's just a big program and that's um it's the other half of basic education basically if you look at it um in account language and so I wanted to that's $12 million that's including again this is including all the staff for that and it's including all the utilities all other stuff. Um those are highlights. The other one that we
049could talk about I didn't highlight was is uh numbers 31 and 34 are CTE. Um and we have maximized those CTE dollars. We shifted into more allowable expenses this year than we have in the past. In previous years at the end of the year there'd be some sort of surplus and then they do a bunch of journal entries at the end to clean it all up and balance it out. We're doing that ahead of time now. And so that allows the CTE program to fully plan out their full year and all their dollars that are remaining to them. And so some of the things that you're able to charge there are the utilities for those programs. Um some principles that are serving students, vice principles, counselors. So all those things are being charged directly to
050that program. It's it's allowable and it just creates more um predictability for the CT programs and their their staff and director >> Proportionally yes, it's a proportional. We can't I can't just code whatever I want. You know, there's 25% of the students are in the CTE program, so 25% of it is is code. Yeah. And he actually I think it's 26 and we even went under just to be safe. >> But does that does that also help us with like state CTE dollars and stuff showing that we're spending all this on CTE, so we need more to do better or more? >> Uh yeah, it does. It allows us to tell a more accurate story of where our dollars are going. So yes, there's a bit more detail on this. It's about as low in
051detail as I as I I wanted to go for this work session. If you had more questions, I was going to tape them in the announcement of the next board meeting. Um what questions do you have about this document? >> I don't know if this is necessarily like you were talking about maintenance districtwide support. >> Yeah. when we have such a when you know we're in a negative balance, what are we doing as far as like our maintenance plan and then because that that you know trying to plan out where some things may need to have replacements or things like that. Is that baked into this? Is it are we so thin that >> uh it's pretty thin and and the district has a history of a long history of deferred maintenance and so we
052have um Robert's put together and he meets with wide every week he'll meet with me every week starting as well um a plan to go through and what are the highest priority needs because this $1.6 $6 million fund balance is part of the plan, but if I have like three chillers fail across the district and I can't get an emergency grant from OSPI, like it just changes the outlook when an emergency occurs. And so we are trying to keep up on these um big issues to make sure and we have a handful of across the district that we are they are built into the budget. Um the ones that are we trying to budget by priorities, right? So we have 50 priorities. We can't we can't fund 50. We can really only fund six. Great.
053let's do these six and know about it and the next year we'll get to the next section and that's really the plan moving forward. >> Yeah. So, Robert does have that running plan. >> They're all we're all well we're all aware of what they are. Yeah, >> they are. Um you know I think if you're I mean like if it's it's a very it's been a lean budget and then in the past we've long history here we've you know before or before co even somewhat during co I >> I just think some things you know like maintenance went on a pretty still pretty lean lean budget and for us and um the facil really the for the facilities these we need a significant raise in in monies to actually get like caught up. Like if
054you were to say like that running list >> like >> you if you can only capture really the top 10 or 15% and time goes on and depreciation continues. it's that you're only getting more you're pushing yourself into a corner of more emergency situations as opposed to any level of prevention which Robert and the team there are great uh but we are very limited right now in just what we can get done just around now today stuff that we need to fix uh and we're not in the preventative stance that we would like to we have some I know some roofs that we need need replace. I feel those are really are doing for us. We've done some work uh on on some of the grounds. But then, you know, we're back to we've got
055lighting issues, we got security camera issues, we got uh that are getting old, you know, and so those things happen for us. Um some of our water things that like not all that water. So, that's the reason we're losing money on water is that there's some replacement work that just does just has to get done. um because we're geeking in places and we know boilers. We have two boilers uh that could go anytime. So those are, you know, like soon as one of those happens as he's using an example and it's $100,000, uh that means four, you know, five things just got kicked off the list, >> right? So like in this budget for the next year, we are essentially holding back $4 million of revenue to get out to get into a positive fund
056balance. And we'll do something similar the next year. And when we do that, that just creates additional cash flows to start addressing those problems. So we're really just trying to make it through to a point that we can then start fixing things and get back to normal. We're really not operating. >> Normally a district has 85 million coming in. You spend 85 million. You balance your budget out. you've got your $67 million of fund balance, you just keep rolling. And that's not where we're at now. We are in in a tougher time. We build that back up to get there. >> And so once we are all those different maintenance things going to start getting addressed quickly and and I know we're talking about maintenance, >> uh technology >> makes me even more nervous. >>
057We're falling far behind. There's been a number of ransom um attacks to districts um here in Washington state. So, it's not like this is somewhere else and uh we need to get on these things that that I mean those are liabilities that we have afford. It is expensive to run a school district and again the rich can do capital levies that help fund both of those items and when we don't they come from basic ed which is even makes it harder especially again when you have a high needs population. Yeah. >> Yeah. Capital would be really helpful. Um the last so the next two sheets are actually just a different breakdown. >> Um I thought the text would be larger easier to read but it ended up being the different text. Uh, and so the
058first one is just the salaries with that cost and we're not going to go over that again. I just want you to have it uh so you can see what the totals were. And the one after that is MSOX, but it's the same exact data. I just cut the graph uh the table in half. Um, the next thing that I think is important to talk about is is introduce some levy options. No decision need to be made tonight. Um, but there are some options to walk through for what the next study could look like um when we draft a resolution in the fall and submit it to the county to get on the ballot. And so um this next thing, where's my where's my picture? All right, cool. Oh, here we go. Thanks. I feel
059way better. Uh that I'm not going to lie you that worked flawlessly before y'all got um all right so this is there's a handful of tables on this graph on this um sheet of paper and all of our different options they are predicting which is always tricky thing assessed valuation growth at 5%. Um, historically in Shelton and across the state, it's been way higher than the last couple of years except for last year it was a negative. Uh, we had negative valuation but years before that was 12% 10%. So five still feels conservative and so what you're trying to do I mean crystal ball what that valuation does because that affects it impacts what the rate ends up being. It does not impact the amount that goes out and is collected by the levy but
060it impacts what the rate is. I think it's an important distinction. Um, and so this first table scenario of scenario four is just keeping the current levy collection amount the same. And so in that middle box, if we go over the top, um, there's what year the assess valuation, the the growth rate ends up being over there, and then the EPOn levy amount, and then the levy rate, and that's uh the next column is where a capital project levy would be. We don't collect one of those. then a bond rate and then what our total tax rate is. Um, so there's a lot to look at there. I want to focus in on the EPO, the one in the middle, the EPO levy amount and the EPO levy rate. And so you'll see in 2018
061the Shelton uh community supported the school district at about $46. It's actually a little higher than the year before uh per thousand. That was the rate that was paid, actually paid by the sheltering community to support the school district and collect $7.4 million. When you run down that list of dollar amounts, it becomes startling. We collected 7.4 million and then the levy swap occurred and we collected 2.9, which is a heavy drop. Every district across the state had a significant drop just like Shelton did. And then we slowly rebuilt that over time. And so now we're at 8.2 million. And so if we went out for 8.2 2 million each year for 3 years. The tax rate is around 213 and then it just keeps going down to $1.93 because this valuation grows and so
062your tax rate goes down. It's an inverse relationship. Right? Now, if you go up for $8.2 million for the next 3 years, that does not um salaries still increase um >> inflation like >> and then the cost of goods and services still increases. Inflation still occurs, right? So, it's actually negatively impacts you because you're not covering what you were covering the year before with that $8.2 million cuz the cost of everything has gone up. Um, the next scenario um is if you keep the t the current tax rate the same at $2.20 and you'll see it goes up about $4,000 each time roughly a little bit more as it grows up as it grows. Uh, so we would cut up 8.4, 8.8, 8 and 9.3 and the tax rate is remains at 220 but we're
063also crystal ball crystal balling that assess valuation. If it goes up higher than 5% again the tax rate will be lower than 220 >> which is fine. We're not close to the cap yet. The bottom table and that bottom section is the darkest brown I think um is the current state tax rate limit is $2.50 which is what was approved last time. We went out and collected $2 per.50 per and that's what we actually forecasted as well. Um but assess assessed valuation grow at a rate that it didn't stay at 250. So on this one if again we're forecasting 5% growth at $2.50. And so then it goes from 8.2 to 9.6 to 10 to 10.6. And so those are the three options. I don't know why the total's not there. I apologize. That's annoying
064to me. now um 29 million 29 and a half 31 >> it maxed out >> 31 uh and so we're maxing out our leggy collection by the rate. >> Um and so those are really the three common options that school boards have to kind of wrestle with to see what makes the most sense for their community. Um Is there any sense? >> I know levies were not maybe amazingly popular last year around the state. Was there any sense of which of these options was most successful in community? I know there's not apples to apples. Birch Island is going to be different than >> Yeah, it is it is really unique to each community. We did see a significant uptick in levby passing in the last election. Um yeah, >> this last this month. Yeah. Yeah,
065but the but >> February 11, I think, right? >> That one Yeah, that one was rough. This this last month was a a significant uptick and >> Mossi Rock passed theirs. >> Yeah. Yeah. And so, >> but what did they pass it? >> That's that's what I'm wondering if there's whatever you >> We don't >> I can look it up. >> You can go back and get all those kind of numbers. People have cut theirs down. I mean, people do like >> Yeah, if you fail it the first time, >> you fail the first time, people go pretty low. Like I you know, and so for um >> but we can get an average. I mean, I was just we have our comparables, you know, we have comparable districts that we run our numbers against.
066>> I just wonder if that'd be helpful to see, hey, what's what has >> like like districts, right? >> Right. >> Some are kind of free and reduced lunch, similar size. >> That's kind of like just kind of gets you in the ballpark of like the kind of community, right? Everybody's kind of got east side, west side. Like there's some differences around the high- five corner, same deal. But we can um uh we can do we can get you some more numbers and we can we can put that out. That's that's not bad. DA Davidson would help us crush those numbers. Um, >> and I guess the one the one question that I would have just kind of based on the the what I hear around the county um, and in my own lease, uh,
067being able to demonstrate that we're running for what we need versus what we can get. So, you know, yeah, we can go to 250. I think 220 is probably too low based on, you know, everything. But if we can show them we can survive on 235 240 and that's a responsible number, I think we have an easier time. But if we go to 250, that's there's no way to market that other than you went for the max. That's that's my concern. >> Yeah. I also that's actually a good point. These are the three common scenarios. Of course, you could go for 225, 237. You can go for whatever amount you want. We can calculate what that's going to generate. >> Yeah. And I we are super mindful that a lot of people a lot of
068our families are surviving day, you know, dayto-day week to week, monthto month. And so, um, we do weed on our own, you know, like advice, you know, not setting a a mount today. >> Yeah. Yeah, but it's just around the the comfort of just really back to trying to just say where are we at now and what can we capture with realistic inflation cuz that um that I believe our households having conversations with community members too they are they're they are mindful and understanding that inflation is a real thing and can impact services and those are the some of the voices that do come to the board meetings as well. I want that service. I think that's basic ed me too. So does the district. But that's what it really reel in costs and that's
069where it gets tricky is because the state is defunding public education. So this is this whole thing of like how do we get back to this levy conversation when this, you know, the communities used to be charged at 7%. I'm just trying to bring this full circle. >> Yeah. >> I'd say this is, you know, that's one part of the conversation. The other ones I'm going to keep going back to. I can't think of another district in Washington state that you're getting more bang for your buck. >> Yeah, correct. >> We're outperforming everyone, not just in literacy. We cut our suspensions. Our attendance is up. Our nth grade on track is up. Your dollars are going farther here than anywhere else. The just look at the numbers. You can go to the state and look
070at those numbers. It's not just coming from the superintendent's mouth. And and to go back to to what I said is if state if the state is defunding us at a rate that we actually would need to be at 260 270 to really be happy and healthy then we need to be able to articulate that we're running the 250. We actually need more but this is all we can get. So, I I think that if we if and I know we don't have to decide this tonight, we don't even want to decide this tonight, but I would love to have the numbers of what we need to live through what's going on so we can ask for an appropriate amount or market what we got to market. >> Yeah. Yeah. And I think I think
071um I've been thinking a lot about this, you know, really trying to make the numbers as easy to understand. One only has to go through this packet and realize there's a lot of numbers and a lot of complexity. >> Sorry. >> No, I mean that's what you know we have to get into. But I, you know, trying again back to the public, you know, those people that can empower themselves to understanding how schools and districts are funded. I think there is a way that what we could do is kind of like this is what basic ed costs here if you like that this is what it is and this is what it looks like into built into a lab because there are those things um with special ed getting pulled out of it. Um we
072are still talking about mental health therapists. We're still talking about counselors. We are going to be talking about librarians and we are talking about safety and security and we are talking about athletics >> and maintenance on operations. So like >> and technology being part of that. I mean yes. So, I mean those are how much you how what do you want, you know? And I think some people are like, why can't I get this and that? I'm like always like I then I have to that means this other cuz that's just the same that pool of items. When you say I want more of this, then I got to look somewhere else where I redivide the pie >> cuz that's that's the amount. >> Somewhere else, right? >> But like you're saying, if they want
073to Yeah, I think that's it. I I want more of you want to make it a little bit bigger at a different rate because I think that is critical and that community feels that way to your point. >> Yeah. >> I want to fund that or I don't want to fund that. That that is helpful for us >> and I guess if we as we have been being stay you know staying laser focused on our strategic plan. >> What is it going to take to maintain our strategic plan and then move on to the next strategic plan which is coming up in a couple years. >> Right. But I'm still still needing to disband um a lot of the rumors and the things that are not true is that district office is getting bigger. I
074don't have a secretary and I got rid of a teaching and learning expert. We've >> cut tremendously from our district office that I have to say that at the same time I say this. >> Yeah, that's what I was just thinking. All this is real. >> Half my problem is >> perception out there matter. I mean reality matters but also perception matters. >> Yeah. >> How do you get that? There's such a short attention span to digest these things. We've done amazing work to put this budget up there on the website and how it's laid out, but you come back like, "Oh, well, aren't you spending districts growing by this percent and like you could go read this?" So, as it comes to levy, I'm just curious how person by person we're going around uh
075every every single administrator is working their tail off. We're at every event almost every night for the last this whole month. Like I can't like maybe not Sunday nights, but anyway, um you know, we're out there shaking hands and doing it person by person cuz that's what it does. We're finding that it does take and especially in this era of you know like I know we've talked about this many times false information. So person when I'm out there people you know it's people are really respectful face to face people we're getting a lot of people curious >> um and um most people are like oh my god I have such a great experience with the Shelton school district. 98% of them and then 2% have some tougher questions. Totally respectful. I actually we enjoy those
076questions because I'd rather have someone say, "Hey, I heard you guys are having problems paying your bills." Or, "I heard like, yeah, we did. We own it." Like, I don't have a problem with that. And did you also hear how great our educators are doing with our kids? It it provides like with your taxpayer dollars. So those are the you have to have this conversation probably to your point is like I got to have this piece of information go with this information because I only I don't want to tell them half the story cuz if I only tell them half the story chances are someone else is going to get in their ear probably not accurate information. >> Yeah. I think something that came up earlier today was this idea that if you are hearing
077something about the school district that doesn't feel right like that doesn't make any sense. Why would they do that? Then it's probably not actually happening that way because if it doesn't make any sense to you it's probably not to us either. And so what you're probably missing is some context for what that nugget of truth might be and to to reach out like um I'm happy to walk anyone through any of this or answer any difficult question especially if you're hearing something that just again if it sounds weird it's probably not right cuz it's we don't work in weird. That's not that's not >> call us or email us. I'd rather have a call or email. >> So you've done a lot of leies. >> Yeah. Yeah, I mean I'm Yeah, I've gotten to know
078what works and what and sometimes you're pushing against a and I appreciate you guys doing that leg work cuz I think that's probably I mean >> when you go through the good stuff that is happening in our district it does surprise people because that is not usually what they hear. >> Um do we know back to the last levy? Do we know what our numbers were on passing that? I know I voted in it a long time ago. >> These are thin. >> 51.8 I believe. Okay. I was wondering >> it was very thin. It's 50. Thank you. >> I think the average was trending though across the state for >> it has been that the whole time I've been on the board the last >> it's been it's been slim. >> 10 levies is
079like 65 like it's really way higher than that in our community. So there's a long history of Shelton supporting the schools. >> Um >> but things are getting thin here and other places and have been for a while now especially with McLaren. I mean I think some of that things where like oh they're taking money you know what I mean like which is why that leg work and that will that you guys are doing probably matters when you're talking 51%. Every single one of those >> crucial we have the same >> Well, there's some there's some things that I ran into on this last one, you know, like when you look at um inflation and CPI and stuff like that, it says right in there, you know, Seattle Belleview Olympia or Seattle Belleview Tacoma and
080everybody's like, well, I don't want to pay the same taxes as sh or Seattle. Well, first of all, dollar to dollar, they're actually lower. But there there's this perception that you're going to pay the tax and it has nothing to, you know, they're not realizing that it's actually just the inflation rate that is based on an average through those markets. And so I think there's some economics/civics that we need to do a better job of of talking about because I there's a lot of people that just don't understand >> local government especially in junior taxing districts. >> Yeah. >> Is there any just watching time sorry. >> Oh yeah. >> Yeah. Um so is there any other further questions around the budget? any other information because we are going to have to come to the
081next board meeting next week uh by state law. We do have to pass pass a budget. >> Um and so is there any questions issues? We'll come back to the levy. I promise you you got questions. Clinton's probably more your guy than than me. I'm happy to take him, but he's got more space than I do on this. The the quick easy down and dirty question that I ask every year is can we afford to do everything that we need need to do and still pay down our back payments and all of that with this budget and projected revenues as stated. >> Yes, this district has prioritized the the work that's happening in the classroom made reductions. Some of the class sizes are are a little bit large with those reductions. But the short answer
082is yes. The long I have a long answer, but the short answer to your question is yes. >> Okay. If somebody were to look at this budget, what would be something that you might forecast they would object to? Is there anything in there? >> If someone wants to look at this budget, I'm happy to do it with them because the actual budget document is complicated and like 180 pages. So, it's there's a lot to it and I'm um >> but that that person that you know is looking for something >> Oh, sorry. >> What might they be? >> Um, >> if that makes sense. I just want to be ready for that. >> Yeah, sure. Um, >> if there's not I don't know. Can I offer a suggestion? >> I'm going to be Go ahead.
083>> Can I I know you have buddies that you all, you know, hang out and do nerdy budget stuff. >> Yeah, it's super fun. >> Can you get this document with for other school districts? >> So when people say, "Why are you paying this for >> I can get comparable percentages." >> Yeah. I mean, if we could get something like I >> I will say this came up a little bit earlier and I know we're out of time um about the levy and this idea of what other folks are doing. I do think it's important it's important to have some guard rails and some where you're at. >> Yeah. >> But also some of those decisions are happen what's best for our kids and our community. And so you get to prioritize and make those
084decisions >> differently than the people down the street do. and our outcomes are are are so much better than those that that that's the choice we get to make to invest in that PD or invest in those things. So it it it could look different and maybe it should look different. >> So I don't want to get too complicated around that levy work session, right? Maybe we can this is early first. >> I want to I want to answer your question because you you asked a question is if somebody could look at this budget and have a possible issue, it's it is coming back to um advocacy on for a specific service. That's who I hear from the most. Sure. >> Um who say where is I mean I I've gotten librarians a number a
085handful of times. Um and then I get things after that then it's like what are we going to do with this item or this that it becomes pretty small to be honest with you. Um uh but that is that is really where it's at because we are literally like it is classrooms. It is your what people know as your front office personnel. >> We are already lean in nursing services. A lot of kids have a lot of medical needs and >> and so outside of that we don't we don't do any we're not doing anything. >> It looks really it's a lean rate. >> I find that helpful to say what might we complain about and and just be ready with that. >> Yeah, we're we're ready for it. It's a it's going to come
086from an advocacy standpoint on a specific type of service. That is what it's going to come down to. >> That's really >> And then that's where I'm wondering. We have had teachers who have said they understand we're in circumstances like this. So like in a sense with a librarian, are there ways that we have people in place that are willing to do other things or bring some of those in in the meantime while we don't have some positions available that there that our children in our community are not just going to completely miss out on going to the library in their school. Doesn't mean that it's closed. Maybe we don't have a full-time librarian in there, but you will still get to experience. there's a plan >> until we can fill that position again. And
087then my question that I have is you are saying that it is a conservative enrollment that we've budgeted for. So does it take into account any of these housing developments that are so we don't have any idea what the impact is? >> Super hard. >> And enrollments we don't know the first count of that until what October or something. Well, you get your first um what we'll do is we'll meet every day when school starts and talk with the get the data from the secretaries about what it's looking like >> and the official count is I think 5 days after the first day of school. >> Oh, okay. I'm thinking next bus that's >> but then October is a is a October one is a big date for lots of things that are regulatory for
088this day. >> Okay. >> So, I can see why that'd be in your head. It's a it's a big day. October >> October being important. >> It is. It is. But yeah, I I think one of the most impactful things that I have heard from someone who works for the Shelton school district and the high school was they came from a community that did not pass their levy. And that I think telling some of those stories too. The realities of not passing the levy do hit home for people. >> Yeah, it ripples out directly to homes and families and it's such catastrophic. >> Yeah. we just don't have as many things to give our children >> as things to do with their time or experiences to have. And >> yeah, >> I think that having
089a lean budget, we still are going that's still going to impact kids, but I do think that there are ways that we can try to combat that with what we have too. >> Great. >> Thank you. Thank you. Thanks for all of your updates throughout the year to make this digestible. >> I was going to say making felt well prepared for making digestible. >> That is the goal. >> The most readable budget document I have seen. >> Great. So then the next step at our board meeting next Tuesday, we will vote on that. >> Yeah. And that will be we'll actually if I remember the rule right, we have to adjourn, go to a budget meeting and do that. You have to do a special budget. >> You can do it right in the middle
090of your meeting. >> You can do it. Okay. >> I never remember that. >> Yeah. >> But it is a separate event within >> public hearing. Yeah. >> Yes. >> Just like we do with a um sale house. Mhm. >> Yeah. >> Public hearing. >> We have to have a totally separate public comment period. >> Oh, gotcha. >> Yep. Correct. >> And actually is is a public comment. I somehow failed to answer an actual question that I think was good. But it's not supposed to be a question and answer time. It's just public comment. >> Did we send it?