001e e evening good evening everyone we'll get that uh squared away a little bit test down hello test much better still too loud yeah still too loud is that better same same and still too L how is [Music] that just hold it out a yeah allow your Rel um good evening thank you for joining us this evening this is our first uh dedicated budget planning meeting for 2526 school budget um we have we will host these on the 4th Monday sort of in May it's on the Tuesday but that fourth week of every month through May and possibly June if necessary to as is always the case we must pass a budget by June 3r unfortunately the state is not held at the same timeline and a good percentage of our funding comes from the
002state budget but either way we must pass a budget by June 30 um we'll use these meetings for the regular Updates this first meeting is intended to be kind of a high level overview to the budget right now and there's there's many many details to go into it but we're going to stick to the largest reporting categories in terms of expenses and revenues and that's that's where we started um I'm going to present and then afterwards we can open it up uh to questions first from the board and then from anyone in the public and we'll do our best to answer them we might have to say we'll get back to with that answer but we'll do our best to answer them here this evening um I just wanted to start with revenues and expenses
003and and be sure that we're all on the same page as far as what that means uh revenues is money received by the school district from taxes grants and other sources the money that the district receives expenses is money spent by the district on operations programs Debt Service and that could be broken down into many many many different categories but revenue is money coming in and expenses is money going out where does our Revenue come from we have state funding State funding uh will represent percentages where the percentages of our funding comes from I think on the next slide we have what we call bef which is basic education funding that's the largest bucket of State funding for us uh there is SEF special education funding there is some funding for specifically for special education
004that comes from the state there are grants that come from the state some of those are grants that have existed for years annually and some will maybe be a one time Grant um we get reimbursements for p and f so um just about 41% % of any District employee salary in addition to what we pay in salary we pay about 41% on top of that in P Prim mostly peers that's about 34% and then F your federal um income tax we do get reimbursements from the state for a little bit less than half of what we spend in feers and fight right so it's so p and Pik is on the on the expense side but then it comes back on the revenue side to State money and then also Homestead relief and these are
005these are just some of these categories get a little tricky because the homestead relief the relief is related to your local taxes so when we get our local taxes that's local Revenue but if you qualify for appli for and receive the homestead Farmstead um tax relief program the money that we get from from that comes through state revenue so sometimes there's just a little bit of a blur line between State local and even Federal in one example um our local funding this is the majority of our funding this is that is the case for um many of most school districts in Pennsylvania um the majority of our funding is it comes from local funding that is our real estate tax our transfer tax and then that one tricky one um Ida which is a federal
006law we get a pretty small amount of idea funding that is federal funding but it goes through the IU and then the IU it passes through the to us so it ends up showing up in local Revenue so again there's just some you know we we'll use generalizations where the money comes from but sometimes from a budget code it might not all add up perfectly to what you see because of these uh small variations and then we also will have so we also have Federal Federal revenues which is Title One title two title three and title four in addition to that I Ida funding that's pass through the local um again we'll we'll talk a little bit more about that and then we have other funding which is really small um other meaning so we
007have a general fund almost everything we will talk about here today is about general fund that's that's our primary revenue and expenses um but we also have some other funds including like our food services are paid from another account and it sort of lives separately but sometimes you get reimbursements from that account because you know the the general fund pays for something but it's actually um should be coming through the F services so it'll be it'll pass through there as well and that'll show up other um you know or potentially sale of assets which we had a major one this year so those are those are that's a background on the revenue and where they come from and sort of how they fit into the whole p on the expense side you know the majority
008of our expenses are instructional the instructional expenses come in the forms of uh teachers support staff Administration supplies programs Etc we do have pretty significant operational expenses you know we have four buildings now that we operate and um between uh custodial maintenance um utilities is really the largest of those um you know we we do have operational expenses as well we do have a pretty large bucket that is Charter tuition that's both brick and morar and Cyber Charter tuition we have always just around 100 students um typically in one of either or combined pardon me in brick and mortar Charter and Cyber Charter we'll talk a lot about that but more about the Cyber Charter later in the presentation and then we also have a pretty big bucket that is Debt Service um you know
009we have for quite a long time we've always had some Debt Service we're paying back on loans that we have uh taken out over the years for building Renovations um and that that we need today and we're always right now hovering a little bit above $2 million a year of our full budget that goes to De service um so just kind of wanted to again wanted to set the stage for where our what revenues and expenses are where they come from and where they go so this this is the title page of sorts that has of 20 at 224 2025 that is today this is what we're looking at as our I say starting point public starting point we've been monitoring this internally for a long time but this is sort of our starting point
010here if you are paying attention if to are regular guest or pay attention to our agendas or our minutes in our board meetings you will see that we adopted a preliminary budget last last meeting um that included a balanced budget right it was it was a balanced budget mean our revenues and expenses were were equal um we explained at that meeting that this year um to to because there's so many unknowns we we have two different options through act one we can adopt a resolution that says we will not go above the index the Act One index which is 4% this year for us in cown and then that's it we are the board has the authority to to uh increase taxes up to 4% through um the state law that is act one for
011that year if we do not adopt that resolution in our in our situation we actually descended that it leaves other avenues open if we need to if the board were to seek those additional options one the first one is that we can apply to the state for exceptions to the Act One index we qualify for one exception to the Act One index and that is because of our special education costs so we can apply to the pde where then pde Pennsyvania Department of Education cly um can then Grant based off our expenses that the board then has the authority to go it's a little bit more than 1% over that act Point index making just just over 5% the board would then potentially we we don't have that approval yet Bo would potentially have the
012authority to go 5% doesn't mean we have to we just G that Authority anything above that would require ire a yes or no um item on the May primary election right so that would be the residence of the cooks en School District granting the school board the authority to raise taxes beyond that five and a little change percent uh from act one plus the uh exception the special education exception but what you would seen our last agenda is we that was a balanced budget so it did not have a $1.9 million deficit but that's because it included a 12 almost 133% tax increase okay that is um not a realistic scenario you know let's just be honest but to file that paperwork to the state you have to do it to a bounce budget that
013you know that just makes sense if you're going to send that paperwork to the state they want to see what would it actually take on your numbers right now the balance of budget so um just kind of again reviewing all of this what this represents is revenues including a full act one which is the maximum 4% tax increase which Nets us $874,000 385 based off of today's assessed value local assessed value and we just we needed we need to start somewhere in numbers um that we can chip away from and understand what a tax increase below that might be or what a tax increase above that might be um so we have we're going to we're going to talk about revenues that total of 37 million 842 484 expenditures at 39 m78 4,262 which results
014in a deficit of 1.9 million so going back to our revenue and expense here's our revenues by Source um and as I explained there are some sort of variations in this but our revenues by Source uh so revenues local is the blue part of the pie chart and that's 26 million okay so 26 of the 37 comes from our local taxes um then the red portion is State that's 11.2 million comes from the state and then finally the you can't really see it but 1% is federal that's 465,000 the reality is just slightly more than that because of that I Ida funds that I said I think that's about 50,000 that comes through oh okay so actually a little bit more than that closer to a little over 200,000 um that comes from through dciu
015but it's still federal funds um but it's all they're all chopped up into parts and then that other which I explained as the food services and there's a few other little pieces that's 52,000 very small part of our revenues but the vast majority of our our Revenue comes through local taxes it's difficult to see that that's 69% and the state is 30% with the our local is is almost entirely dictated by the military is and our overall sense B right um then that state piece a larger chunks of it are related to there's parts that are pretty consistent year toe but the larger chunk of it comes through our basic education funding and our special education funding and it's always tied to it starts in February with the governor's proposal and then there is the
016legislative process to approving a budget usually sometimes in July or August and we kind of Follow that process along to see how much funding we're going to get increases or decreases in recent years we've had pretty significant relative increases you will see um headlines like historic increases in education Investments and you know on the overall that has been true and remains true today but we'll talk a little about what it means to us this year in a different way um in basic Ed the governor's proposal to compared to last year we're looking at an increase of 57,000 um 831 you know so that that's that is the increases that we are proposed to see um last year there was something called the charter school transition fund that was the first time that ever existed and
017it was a means that was negotiated at the legislative level to provide some relief to the Charter School expenditures that districts have and that included 107,000 that we received um special education funding there's a small increase from The Proposal from last year this year of $6,300 for us we have flat ready to learn block grant money um and so when you take that total based off of the governor's proposal for the state budget we are set to receed 43 almost $44,000 less than last year because of that Charter School transition fund um you know as anybody knows operating a house a business uh organization like ours an educational organization on less money from than last year is just not feasible you know that with contracted increases in addition to inflation increases Etc unfortunately that's just
018not realistic all of this is up for negotiation through the legislature over the course of the next several months like you know State the governor's proposal will not be the final result um you know will there be more money put into the bef and SEF formulas rather than the adequacy formula which you'll hear a lot about not so much from us but the adequacy to talk about that there was two years ago there was a court case well started years before but there was a court decision um called the fair funding lawsuit at least that's it's called in the education circles uh where there was large ADV advocacy in a lawsuit stating that the state was not holding up their constitutional duty to fund Public Schools uh the courts decided in favor of the school
019districts in general the methodology then to resolve that uh took some achievement scores and cost per people scores and and set some Cuts Cuts where school districts who were sheving we were and school districts who had pretty high ranking um cost per pupils they set that as a Target rate and then we're trying the attempt was over seven years to boost all school districts up to that cost per pupil rate through increased State funding right so what happens is there's hundreds of millions of dollars that are being put through the adequacy funds and districts like us that do right so it's going to kind of flip that over time if that would have continued for seven years in my opinion um so we receive no adequacy funds there is a tax Equity a smaller tax
020Equity component of which we don't receive any um we're close I think to receiving a small portion of it but if we don't receive any of the tax Equity Fund that was a methodology that was added to that that is alleged to um send some money back into districts in which uh the residents are paying disproportionately high taxes compared to the uh value the evaluation of assess properties in the district we don't qualify for that either so we're we're you're going to see headlines I think I'm jumping ahead a little bit you're going to see headlines of historic Investments none of it is coming to us right yeah I'm sorry I jumped ahead here a little bit that this is what I was talking about headlines to our reality uh the current proposal has 494
021million in adequacy funding uh for 348 districts there are 500 school districts in Pennsylvania uh with an identified adequacy Gap right so that that was the what the term was that gap between what they were spending per pupil and what you know was determined to be the low level of per pupil uh there's 32 million in tax Equity funding for the 50 districts with the highest local property tax efforts and that's tax effort compared to its local effort they have a complicated formula for how much tax you're paying compared to what the again the overall assess value of the area is per per student um there's 70 million in the basic Ed funding which gets distributed through a formula based off our ADM our average daily membership the average daily membership is our enrollment and
022then there's some factors for poverty uh for English language Learners there's a small one for for sparsity you know in theory there's cost more to educate students in a uh low population density area so there's a few different factors it's not it's not one for one enrollment there's some other factors that go into it and then $40 million increase in special education funding so you know you can do the math there there is a lot of State money being proposed to put into education but only 110 million of it is being distributed to all 500 school districts the rest is related to Fair funding and and uh tax Equity so again at the bottom there I just reiterate that despite all of that as you'll see it in headlines what it means for K Down's
023reality is 4 almost $44,000 Less in fund local Revenue challenges these are just some you know discussion points here um you know 2425 with the first tax increase since 145 and over those years we managed that through reducing positions through the use of fund balance over when when necessary with had a couple years where Esser came in that was Federal funding that we were able to to use to limit that um and then you know again this year we throw the fund balances Max atani sale which you know was there was many right reasons for that to be the next step with Max atani but certainly Financial Financial component of it wasn't important um again some stuff I don't have there but just to since 2018 the cumulative increase of expenditures in C Sound is
024a little over 12% the cumulative increase percentage increase in expenditures uh in Burks County the average cumulative of all the expenses in Burks County from the other 17 school districts is 22% the cumulative in the state is 22 and a half% so we are 10% below since 2018 the cumulative increase over 5e period and that's um I suspect it's actually even a little more than I would bet it's more more than that that is from 2018 through 2023 that's the last like Mass data we have from the um that we have everybody's data in that way but once 2425 comes on 23 24 and 2425 come on will be even a little bit um be more of a gap than that 10% difference over that time for a cumulative percentage increase so again we've done
025and all that to be said it's both sides of the coin we still rank very very high in per per student expenditure I mean and even despite that 10% difference of increase over five years there it is really if you're going to look at districts that rank very high in per student expenditures districts like us are going to be around the top in that you know top quintile because we are um a smaller District that is is fairly well resourced in terms of what we have in our local community uh from from an overall assessed value for student that being said the overall assess value over the course of the last 10 years increases on average by about a little bit less than 1% per year you know so what does that mean if you
026left the same millage rate what how much more uh Revenue you receive it's typically a little less than 1% there's been a couple good years of 3% a couple bad years of negative um but overall it has stayed relatively flat there was a a very small peak in 23 24 since then what has happened is we've had a uh pretty significant amount of corporate assessment appeals the common level ratio in Burks County which essentially is set because when it's to account for the difference in valuation of Residential Properties versus um industrial corporate business properties you know everybody kind of knows you know that residential property values have going up you know the cost of the house is going up where you know um indust Industrial and Commercial properties have stayed relatively flat so that common
027level ratio is set to account for it but it can be used to get your um tax assessment appealed and reduced through some type of a settlement so just since 2324 assuming flat tax rates from this year we have we are receiving $350,000 less of local taxes because of assessment appeals of just a handful of properties you know that's so that that is a local challenge um what I think is the it is just the universal it's the uh truth of the funding system local challenge is that there's never a good time to increase taxes you know there's never a point where it feels good to increase taxes yet it's necessary because of increased costs inflationary costs you know or any any costs that get so it's almost an assumption costs just go up they
028do I don't think anybody thinks that 5 years from now we're paying less for things than we are now but costs go up for residents they also go up for the district but yet the only mechanism the district has to really get more funding is to tax the residents that is the conundrum of it all um and I think what makes any of these decisions just remarkably challenging for the nine members of the board you know we make recommendations uh based off what we believe we need to do to turn on the school district but the only the only mechanism for increasing revenue is really local tax and just a conversation point the role Industrial Development plays in Revenue State L if you take all the school districts across the state and you look at
029their Financial Health and their ability to generate Revenue you have a couple small urban center I mean large Urban centers but just a small number of school districts that are Urban centers you know where their local tax base support about 15% of their overall revenues you know again we're at 69% local you'll find some of those it's down in the teams they kind of are outliers and they're funding um their funding profile looks different than ours then you have the rest of the school you the rest of the school districts and you either have districts that are really challenged financially because they have not had industrial or corporate growth or you have those that are thriving financially because they have an industrial or corporate growth you take that 78 Corridor you can go District by
030district and you can see where the warehouses are and you're doing well financially you see where the warehouses are not and they're not doing well my it's it's pretty simple as that you can take a drive and as long as you know the imaginary lines that are the SCH distri borders you would have a pretty good sense of what tax increases and expenditures have looked like in the district over recent years you know we have and kown we are by far the lowest cumulative tax increases in the last 10 years there's one District except for one district one district below us who has actually reduced their taas in the recent years and it's toah hawen it's a small district with a lot of resources and a lot of commercial grow so it's just it's the
031same story in every community in Pennsylvania you can go see the profile and it's pretty obvious um you know that being said I I completely understand 100% all the opposition to the proposed warehouses and in our communities in Maxon and Green Township specifically because of you know the Farmland preservation because of the roads because of the traffic um you know the beauty of our area it makes perfect sense for all those who are opposing it as school district leader that's what will change the financial situation for us and you know so it that's as I might be the only person that wants to see a warehouse up every exit that we have but I do because I just know that would make our jobs a lot easier make the board's jobs a lot easier you
032know because we would have Revenue um you know for example there was recently a warehouse there actually two warehouses that are part of one company that was approved in green Wich Township um and they project the company projects that we would receive 2.5 million of local revenue from from that operation lo I suspect that's a little high but still even if it was 1.8 million we be talking about a different situation um you know that all that being said I you know it's going back a couple years but the original Duke properties out in Max atani I think they were projecting 2.6 or 2.7 million of Revenue you know from there so you could see how that type of commercial Industrial Development just changes a budget situation instantly um so my hope is that there's
033there's help on the way in terms of Revenue coming through that level of development um while completely understanding respecting those who are in opposition to because it's just different perspectives here our general fund expenditures by category um salaries and benefits 65% at uh 25.8 million purchased Services is 8.5 million supplies is 2 million and other expenses uh 3.3 million but again most of those come through salary and benefits and what we'll show on a later slide is something that um purchase Services is any contracted service that's when we pay any company to do a service for us increasingly in recent years that's also include some Personnel Services so that the salary and benefits piece in charts a little actually a little under represents the overall cost of our employees because we do have quite a
034few that are through Contract Services we pull that out later just so you can see that that's another number but from a budgeting standpoint and an auditing standpoint has to fall under there we're not paying an individual payment company then pays their employees so again the vast majority of our um expenditures are the people who work with our students every day and provide the most value to us every day that's just where our I say later slide it's the next slide um just again looking at some of these highest level percentage changes and then the dollar amount changes uh looking at salaries just salaries again that is uh Kutztown area salaries only of our employees um we have a uh projected increase of 550,000 um that that reates to a percentage of 4% that looks
035like we just applied four to it it's not actually that simple um we have a percentage that we apply to our largest group which is our teachers group we have a percentage that is applied to our support staff actually a couple different percentages there we have an admin percentage there there's a variety of percentages and they all just kind of added up to 4% um or some are higher than that some are less than that our benefits which benefits includes obviously health benefits um and other benefits we have uh tuition reimbursements Etc anything that falls on through that benefits package we are projecting a 7% increase there the bulk of that our Burks County Health Consortium this year uh health benefits is a 10 there's a 10% increase for all member districts so again the
036others we are projecting go up much less than that but that's so that's what's drawing that down to a 7% overall and $752,000 change um contract Personnel Services again these are this is Personnel that falls that doesn't fall on that salary and benefits part of the pie chart other contract Service but these are Personnel again represents 1.1 million um we have a 3% change represented in there those are contracted through the different employee vs or contractor providers that we have and that total represented 37,000 so again you start looking at a number like 1.9 million how does it get that high well you know right there um and you have 1.3 million of increases in salary and benefits which just Falls in line with that same theory that most of our costs go into the
037people that we have so um this all assumes level sapping as of where we are today you know it's a level Staffing for next year so there's no Staffing changes represented in this in these numbers um one of one of the topics I've probably talked about too much sometimes from this standpoint but for us it matters very much um there is a proposal so there's a a little bit of and I'm not going to say slight at hand but in the where I shared the governor's proposal said there was a transition fund it was titled the transition fund for a reason that we had last year we got 107,000 from they are not he is not recommending the governor that we um that they funded this year but he is recommending a flat rate for
038regular education students at Cyber Charter Schools knowing that that would get us way more than that 107,000 so hence strategically being called the transition fund so the assumption that there was a transition to something else and then to make this proposal um that's bll number one the proposed discontinuation of the charter schol transition line a new Cyber reform proposal establishing a Statewide base Cyber Charter tuition of 8,000 per student and that's regular education student there's still a differential for special education um and I'll break down those numbers for you at a moment but that that's the proposal if adopted school districts across again of the 500 school districts it would realize the net Savings of 278 billion and you know so again when you're looking at big numbers we showed a whole bunch of big
039numbers on the money being put in be proposed to put into the budget this would also be money that districts would have but it actually comes from their expenditure side So currently um our currently the this is what the reform proposal would look like from an impact from us um we have Cyber Charter students we have 58 currently the current base rate is 18,990 there is a differential so you know for a special education student we're paying 36 but the proposal is only a change to that regular education base so pretty simply just take the difference between the base of $1 18998 you make it eight you know that's that is a savings or a less of an expenditure of$ 10,992 per student for us that would represent $637,000 of less expenses I mean a
040massive impact for without putting more money into State money into public education you know I think The Advocates on the Cyber side would say well how are we supposed to pay our bills then um if you haven't you know I'm not going to read your reports here but there's been two recent reports one was the speaker report from an independent advocacy group and the other from the auditor general which was released maybe last Thursday or Friday you know where you can see about the expenditures of some of the Cyber Charter programs um I believe Pennsylvania I think our country I think we are all growing in the idea of SCH choice and you know so our argument is not against SCH choice I understand that that families have that choice it's the funding formula is
041a problem in Pennsylvania it's not about the choice it's about the funding formula and I always say this I think I feel like I'm the only one that says this I have another problem with all that is that our we're going to spend this evening and several other evenings throughout this spring and we're going to have to talk about really really difficult decisions where we can go line by line if we wanted to through the expenditures of this school district and the board can determine yes that's right for us yes that's not we spend $2 million annually on Charter Schools both cyber and brickin border and our board has no oversight of that so it's it's really a subversion of local control in my opinion you know where it should just be separate completely you
042know but the other side of that is they are our kids they do live here within our boundaries you know and we believe in the community is responsible for all of our students they fit into that though it's it's just a funding point of problem it's we don't want to make it more dramatic than that but our board has no say over what happens there where the elected board local control has say over what we do in our schools and just this might be obvious I didn't say it so I should call it out is any savings from a potential reform are not included in that budget right now those numbers that we have right now because we don't know if that's going to happen and timeline wise June 30th is our deadline the state
043has a theoretical deadline of June 30th they have never in my career you know passed the budget by June 30th this piece could happen the intent you can tell by the governor putting it as part of his overall education funding is that it would be passed as part of ominous bill this bill that is passed with the budget that always has some pie education but in theory this could happen tomorrow it could happen with the budget it could not happen till October it could never happen you know so we just don't know that but that's that would require a legislative action if I'm not mistaken every school district pays a different amount per student right we do because it's based off of um your overall expenses you know so every every school district does pay
044a slightly different amount you know so again your amount goes up every year because your costs go up every year um so you it it is different but it's based off of what you do spend so I mean it there's a logic to it it's just when it started there wasn't as much Choice there weren't as many schools there weren't as many students you know so it had a small impact it just grown so dramatically over the last 10 to 15 years that it became a major budgetary issue for every school distri in Pennsylvania um this is why I kind of stuttered a little bit before the last slide because this should have come before that slide I think but the this is giv us our current roster in a sense of number of students
045enrolled U regular education versus special education and the cost so this year's cost for special education is 34,7 um the for Rick and morar you'll see a different number for the cost for pup for the um Cyber Charter and that is because as of January 1 they changed the calculation in District's favor where it used to be based you know you take all the expenses and special education and ultimately would there would be um you would divide them by 16 at that time uh 16 was at the time an average percentage of students who are identified special education in the state um what they change now is you divide it by the threeyear average that you're actually percentage which our percentage is around 21 22% you know so that reduces the cost per pupil but
046what you see 29 it didn't reduce it quite as much because it only represents half of a year because it didn't go into effect on January 1 so again we will have a a slightly reduced expenditure next year for students but it is you know it's marginal um compared to what true reform would do so um you'll see our Cyber Charter numbers are pretty well in line with the standard range of other school districts we do have a larger percentage of students who are involved in Brick and mor Charters than many do and a lot of that is just because of proximity um we must per law to a brick and mortar School transport a student to any school that with is within a district Which is closest border is within 10 miles of of
047our district so at any point of our entire border if a charter school the district that a charter school is enrolled in is within 10 miles bars we transport you know so it's just provides a little bit of extra tour because of our location we have a Leigh Valley um you know and our largest sending brick and word charger school is uh Circle seasons has been for a long time in Northwestern Leigh so it's we share a border there's no miles between our borders on then um but again there's there's no conversation about changing that formula for brick and mortar again brick and mortar they're operating buildings just like us the Cyber Charter when you read the AUD General's report has spent a lot of money buying buildings in recent years but that's not really
048their model based work so off my soap box for that but if you get a chance to talk to any of your legislators um Senator schwank representative Barton um they're very well aware of the issue but hearing from you you know will always help it is a funding issue that you know when we equate those potential savings to we can equate them to uh percentage millage increases later and it's very very significant in summary again we we can talk about the details forever and will as as questions arise but we want to get back to this projection um where we see our revenues and that includes a 4% tax increase so in you know in reality um you that we're talking about 2.7 that is zero you can we talking the next slide about what
049that means in between um we believe that there's some potential for good news on both the revenues and expenditure side over the next couple months but there's just a lot of unknowns that we have at this point um this is something that I think is really important to show when we project out over five years with some assumptions um we'll look at our assumptions first this includes annual tax increases to the act1 index so that again at 4% this year and then there's there's projected numbers for future years um it includes Personnel salary increases in line with what we shared so it's an average is out to 4% um and through all the different categories and including level Staffing as of today you know and I I'll talk about the colors in a moment because
050it is kind of small to see um it averages health insurance cost at 10% and every year in the projection every year in the projection now some years we've had 0% some years we've had five some we had four six whatever this year it is 10 this includes 10% annually um instructional budgets are stable for this year in this projection and then 3% after um we have a 10% Transportation increase in this year's budget um and then it's flat after that or there's there's a small increase for a yearly increase after that part it's not FL at 10% for the first year and then Debt Service there is a Debt Service piece that is decreased in this model because when we borrowed money several months back for some Renovations that need to take place here
051um that was a part of the plan all along so sometime this summer we would restructure debt and it'll drop down um the current what would be on papers that service right now so those are all assumptions in here and with that um you can see our revenues in the purple and are expensive in the green you know and um the yellow line then represents fund balance you know because we it assumes that you use your fund balance to make up the difference between the revenues and the expenses any every time it happens and with that model you know we see again 2027 which isn't that far off is the year when our fund balance would be gone so it's not a happy tale to tell U what I share is I always have optimism
052there's a lot of work that we can do in the meantime to to improve that um both through this year's budget and looking out into the future and different ways that we can reduce expense expenses um [Music] and this is a chart we added all the way up to that 12.9 to because that's what was on the preliminary budget we usually don't go that high usually stops the index is but just so you understand what percentage um some sometimes you he refer to more Mill I tend to talk percentage just because that's what we've given to us from the Act One the Act One numbers um what does a percent represent in terms of additional Revenue based off again today's assess value if the assess value goes up significantly because of some kind of development
053that changes those numbers completely um right now the 1% is 218,000 and each per goes up 218,000 roughly that 4% that is baked into it into the uh current model is $874,000 that 5.01 183 represents uh the act one plus the central education exception that P can grant and then that really large number of 12.92% so and I have there on the parentheses just you probably can be this a little bit small just say any increase greater than 5.01 requires resident approval by referendum vote at the May primary elections just so again reiterating that that's the only way it could go higher than that is if the residents truly voted the grant board already to do that um not a realistic option but something we have to put on paper at this point many any
054unknown factors here in February 2025 I put s Char reform at the top because that's a big ticket item we do you know we are um we have we're currently in negotiations with some of our largest contracts which would be kada and transportation contract um you know campus configuration is something that sent out an email on Friday I think you know just about that that's something we'll be discussing again on Monday because there are some potential to of longer term savings looking at eCampus configuration um spends money on the front end to that we have borrowed for those purposes um that's a decision for the board to make State funding is unknown although I would not anticipate anything you know that radical to happen on our ends um I think there's going to be a
055large push to reduce the amount of money that's being put into public education in the budget um there was budget hearings from the house committee with Department event today and I think that's largely the tone is but there'll be a negotiation back and forth I don't think it's going to radically change our our situation um from that minus 44,000 even it gets us to level funding from last year or something I don't it radically different and um one piece that we put in there that's just really difficult to predict that is every every year we we can predict our special education costs largely but occasionally we have out of District costs which is um maybe some students that need a level of support Beyond District can provide you know and and we say that because
056we can predict based off what we currently have but Theory and not happens all the time somebody moves into the district who might have that LEL of need and all of a sudden you can be looking at an $80,000 tuition bill plus transportation and you know now we're talking $100,000 Plus for one student it it happens um you know it's that's that's all public education serve is to serve all so you know it's just something that we don't really have a lot of control over it's an unknown factor one what students need to questions comments thoughts before that is post um so again this is intended to just be that starting point knowing that um my intention as it says there is to come back with a significant number of recommendations I'm not sure if
057it's going to be a full 1.9 million but a significant number um trying to at minimum cut that in half at the March meeting um through through some recommended items that we have uh from cost standpoint um at this point just as far as what goes into it what questions you would like to see the administration consider along this process um first I would open up to the board before anyone we have um a rough idea of where we're at in our current fiscal year projection act uh budget actual for there another question in the meantime what what do you think is the likelihood of this charter school report I mean if you had to take a stab of the dark that's a big number I think I think the most likely scenario and this
058is an optimistic view but not the most optimistic is that something gets done but that number goes up from 8,000 right like I think the negotiation process could I see it landing at 12 11 or 10 you know I I don't want to put numbers there because if I was putting numbers I would say seven or six or five or whatever helps our bottom line but I just think the most there's been enough conversation the timing of these reports that have come out I think are are certainly helpful because they're damning to the extent to which it is overfunding I mean that's it's daming because we are overfunding we're seeing some of those talking about cyber charter schools that have doubled and doubled meaning hundreds of millions of dollars in their fund nums where um
059you know that's that's evidence that we're overfunding and um in addition to some of the expenditures that include things like you know sponsorships at professional sporting events um you know where again if we're just paying for our kids education because they live here okay but we're paying for a lot of other things that are not just that so there there's a need for change so I think that's there but there's going to be negotiation to that number is for sure not about 400,000 however that includes the the sale of the building um without the sale of building probably fund so so most of B portion of excuse me B portion of proceeds of building there questions thoughts oh I'm sorry yes um so the question was where what do we say budget to actual so
060you know we we approved a budget in June on June 30th or before and that has a projected um we had a projected uh deficit going into it but where are we looking now um Mrs S said right now everything going in and out revenues and expenditures the projection out to June which will change in some way between now and then has us about $400,000 in the positive with $400,000 going to our fund balance but remember that includes all the revenue from the Maxon sale which when that came in after all of the costs was a little under 1.5 yes yeah a little little under 1.5 so we're talking about um now we had a built-in deficit in addition to you know we are def the def spending is above that but we're looking right
061now at a net of 400,000 going into our fund balance but we sold a building and Reed about 1.5 now so there 1.1 million difference between that just what was our deficit approved last year was about 900,000 yeah yeah we approved the $900,000 deficit yeah so we were were 200,000 shy meting that 200,000 over we're spending $200,000 over when you look at from a percentage standpoint that's the couple percentage Point how many years in a row now we've been about2 200,000 a few yeah sever so it's fair to say then that the budget present and the projected expenses that you folks have been presenting have been pretty accurate pretty straightforward there's not a in yeah we're within we're within 1 two 3% and it's we've been in the bad side of it spending more but
0621 two or 3% you don't think that's cost control you think that's because your projections have been pretty good I think yeah yeah I mean we can we could show that like I said we could show that we are we have a more than five years but I'm calling out five years of increasing by more than a percent between 1 and 2% less than the average across the state and then we're staying within a percent or two of that number in our expenditures so I think our projections are accurate and we are also this process that in Spring is grueling you know where we are it's a grueling process to get us down I'm talking about $44,000 in the red on state funding I know that many school districts across the state don't even look
063at their state they they build that in as a cushion they don't even look at their increase in the state funding when they get increases they don't even put it into their budget on the revenue side because they look at that as a cushion we just the charge here and I think it's it was it's been the right charge again you go back 10 15 years and our cost people was skyrocketing some of that was because the denominator was going down because the students were you know student decline going back to 2012 is um and we have slowly been bringing that number closer to our peers through very efficient budgeting you know we are down uh FTE is again we just wrote a bunch of AC but that's full-time equivalent in teachers we have 10
064less teachers now and at 117 than we did when I started here you know and that's just every year we have evaluate eval there's a little bump in that Co year where we had to hire a few extra people but if you just look at it longitudinally we are reducing staff every single year because that's where our expenses are and we need to so well our expenses are you're projecting right now an increase of 1.34 million in total Personnel expenses and yet on a yearly basis this portaling is the ability to raise 800,000 right I um where I said that like going to be over budget a little over 200,000 um the bond issue that we had this year um had additional the bond interest came 210,000 so um while there were a lot ofs
065Rue and you know Revenue going over and some expenses going over that that so most years I put up a a table here that says well if you went to the grocery store and you wanted to spend 300 you spend 35 that's about the difference between where we are in our projection to our actual this year it's like 305 cents not5 a difference except a decision was made to borrow money so that we could take care of some of the things that need to be taken care of here you know um yeah we have end of life heing ventilation systems in a couple of our buildings and they just cost us more than maintain every year it's it's really and that you could speak anybody and say okay call out somebody to come look work
066on your AG tax system and those numbers are going up every year too you know it's not it's not just us it's everyone so the unfortunate part is our only place to get revenue from the same people cost don't up in their homes um we've talked you know a lot from the AY side but just there is it's probably time to really just look at a new funding system but there's so much fear related to it because um how do you run business in the first couple years of projecting an unknown system that's just sort of a challenge and yet we don't have what we're playing you know what we would be playing a guessing game with is students education it's too it's too vital it's too precious to you know upset that current funding
067system so that's the unforunate piece is that I think in many communities there are many communities CR like us that the funding the overall funding of public education right now it worked at one time is not working but also we're in this position now because the school district did not have any tax increases for a 10-year time period so know absolutely yes so if we had that cumulative um on track you know to uh index increase every single year for the last 10 years we could play it out it's not that I think if we were raising taxes 1% every year you know we would be we would be in a completely different financial situation it's just you know in the moment I don't I look back at those those conversations with all those boards
068and they would look at our cost of people and they would say our enrollments you know how do we raise taxes now it it's just a really difficult question every year dur this I understand it's a difficult question but it's also again it you know I think I no one wants any tax increase again I get it but we're not here because these are easy decisions to make I I do think you know again the 12% is shocking for many folks almost 133% but again within the broader context div by 10 right there also been been no tax div we're talking about so I I guess you know there there also is a conversation to be had in our community on what is the value of public education of our families and of our students
069and and you know we talk about pride and educational Excellence you know we're top of the charts in in terms of of sending students out in into the Working World in multiple Pathways who've achieved and and done very well in parts that is because of the the teachers and the community that we've built and every year this conversation seems to just be a well how much tighter can we squeeze it and I do think that there needs to be a little bit of a of a um Community conversation to be talking about hey if this is something that we value the answer is not cutting teachers every single year and so I you know I I do think that that when we look at the expense reduction recommendations right we we should be looking at
070a range of options some of which include you know a a more serious than anyone would want uh you know tax increase to help to help right siize the ship of the nine 10 years in which folks were fortunate to not have any increase at all so I I am not comfortable with a continual conversation of it's always about giving less to our students and it's always about you know pulling back and decreasing what we're offering to our students in our community because you know I personally benefited from from having an an excellent kown education because consistently year after year you know my grandparents my parents shouldered the burden of a reasonable taxing increase over time and sadly we've not seen that happen and so now we're talking about putting putting on the shoulders of
071our kids you know the the pain of of a lesser education and less support less teachers Etc because we've not taken that fisal responsibility as a community seriously for 10 years yeah and and I mean you're 100% correct that just we know the real story the real story would happen is the population declined and then there you know so you went through a 3 four to six year period were reducing makes sense right because it just for many students and it just became the norm and I mean that's that's the truth of what happened we all know that I think I think most know that if you know a little bit the history of it um and here we're kind of on the back side of that Cur the impact so um agree with the
072100% I don't think you'll find many school around and have a greater sense of community Pride about what the district can provide for their students I mean you know there's a Friday night how many people 520 coming for the caufman chicken barbecue and I think Cas is a great example because of just the level of support that there is in the district because it it hits so many great levels it's not like a one sports team this massive program wide um when there's a call for support and um our tradition of support I is what that is the the kasma dinner and some the iterations over the years it's just one example what great pridor is um and I mean I think your point is well taken the the conversation um is always like it's
073always my job to talk about what could prod um but I do think we do we need a true range of options right because again there there are people who reach out to me and say I'm willing to take on a tax increase because again I I want a positive and and increasing education for for students so it again I understand on a personal budget level it is it is difficult for some it is also for some welcome and and an open conversation so I don't I don't want to be painting these broad brushes of no one is willing to have a tax increase or no one is is willing to take on a little bit more because that's that's just not true so let's let's see a true range of options so that we
074can really evaluate and and look at them and and get input from our community on what we TR value doing that I'm not sure we the way just ask for clarification when you say a range of options are you suggesting that we should be considering taking it to a el rendum above the% I think I think we need to consider that as an option yes yeah and I don't I mean I think again pragmatically the the realistic of something like that passing I is is very low but that's not to say we can't in those presentations say well this is what allows us to keep I mean that's that's just that's the cost benefit analysis anything right we'll look at it and say sure we can not lose X Y and Z but that would
075require us and that's that's that's the range of option the the challenge is if you only if you already take a referendum off the table then your options are are really only again all about levels of cutting and then nobody is going to ever say oh I'll take the highest cut right so and I just I do want to clarify one thing is I did say that that was my might Works um you know that it's not a realistic option you know but to be fair so far we've taken every step that we must take or can take to leave all those option that was my so so that's where I am asking yes we should always be presenting the referendum option or two versions of referendum options next to other expense cutting options and
076again we can we can all come together to decide on what we vote for but I I don't want to pretend like you know there are people in our community who do not want to see teachers come the only aspect of that though is the vter referendum won't be on the ball till May May first so we need to start looking at our numbers before that and historically there has never been a vter referendum approved in this state since they' been doing it so that's you know a big problem there oh yeah yeah I mean that's that's all true um it presents even more challenging timel well I mean I guess we can talk ourselves into that right so even if it were to happen we would still have to have this is what essentially
077saying this is what happens if it's approved this is what happens if it isn't because it's may we have to post the we have to post our budget review 30 days before the approval we're up against the deadlines for so um I don't I don't think um that substantially changes the work that we need to do between now and then it just changes the it changes a little bit the presentation I think that's all so because essentially that's always going say if we eliminate X it saves this much well we can all you know be you can always take words that's the short I think the other thing reflecting back on last year you know we we were talking about increasing taxes up to the index and then at the very last minute in the
078very last meeting right you know it came back to oh no got cut back from there and I think that that really is a strong disservice to the community because they didn't actually have any meaningful heads up that that is something that was being evaluated or considered by the board so again I I do think that we should show to the community the full range of options and what that would mean so that they can stand up here on March 24th and 28th and March and May 27th so that we're not giving them the impression that it's going to be an index you know hike and then at the last minute saying oh no we're actually going to have a fund balance and we're not going to balance the budget and we're going to come
079in under that so I I don't think that that's fair and transparent to our constituents as well I I think we need to again truly show a number of columns that show a range of options so that can actually come in and weigh in and again this would be a great opportunity for us to show that range of options and and try to do some education and also ask for you know some survey input from the community as well on that range of options yeah I agree I think that's like I said I think that is a it's it's a presenting in a different way but I don't think it changes I was what's what's my work from today until that's you know if I don't process it that way I don't know know how
080to get a job I guess but um it just changes the presentation um we are definitely trying to accelerate some of the processes this year I don't think we get any really hard recommendations until the end of April last year and just another timeline thing is these are official like additional Budget Finance meetings typically at one or several of our already scheduled meeting we might talk more about budget because it just makes sense on that uh timeline to you know to add some of that information in there uh so we we certainly talked about budget other meetings as well it's the most important thing fortunately we'll do most important have a graduation on May 28 and um but we from a business at the board so for 25 um um just one last request on
081the expect side can you just show like what some of our biggest like unknown like expense increases could be like specifically like transportation and then the contract yeah I there're the two biggest right now where you know so we put the increase for teacher salaries right now we used is what the historical has been under the current contract the current contract B on June 30 so you know that's a huge unknown um you know the current historical for this contract represents an actual 4.6 again assuming everybody's the same assuming it's all the same staff which we actually already know that that's not true because we do have a few retirements Etc in there um but the numbers here assume everything being the same as it was last year so um yeah we can break those
082down a little bit more uh the transportation is a is a smaller number but it's it's it's a larger known same timeline for the contract um you know and that's uh still Prett significant cost for us so do we if we're um legitimately considering going for a recommendation what is the deadline to file paperwork to have that question presented Yeah March 21st um you know but that again we are we're moving forward because those timelines happen not nearly on budget cycle we're moving forward with all of that just so everything's in line be downit min so I don't know when our drop de dat is our next be we have to notify Mar person unless we're told not to do that to notify we're just going to continue doing it even if you know right
083up until the last moment that we don't have so um we're just going to keep that option open because that's the only way to maintain an option you know anything else from board members um or and anything from community members or guests this evening questions thoughts always open you know to a email phone call to to discuss any part of this uh from anybody in our school Community just you know it's a it's a complicated process um developing the budget and really looking to identify areas who increased revenue or reduced expenditures and um you know even if it's a question or thought somebody online or somebody you talked to later said hey did they think about this I'd like to say we probably have but never know maybe we haven't so I would always be
084open to that email or phone call to just discuss it because even if maybe there's a third idea that generates out or something that we've already thought about you have it's something between so I appreciate any feedback or questions from community members any thank other questions we have a motion toour all in favor I