Oh, all right. We are good to start. Uh, welcome to the November 20th, 2025 Minnotonka School Board study session. Before we get started, I want to welcome our student board representatives to the table tonight. We have Tatum Angerson over here and we have Ana Samir. So, thank you for joining us. Um, the first item we have tonight is citizen input. Citizen input is an opportunity for the public to address the school board and any topic in accordance with our guidelines. We do have one card here from Jennifer Lipsky. So, if you want to make your way while I readines, >> yeah, you can pick a seat in front of one of the microphones. Uh, welcome to the Minnitankka School Board study session. In the interest of open communications, the Minnitankka School District wishes to provide an opportunity for the public to address the school board. That opportunity is provided at every study session during citizen input. Anyone indicating a desire to speak to any item about educational services except for information that personally identifies or violates the privacy rights of an individual during citizen input will be acknowledged by the board chair. When called upon to speak, please state your name, your connection to the district, and topic. All remarks shall be addressed to the board as a whole, not to any specific member or to any person who is not a member of the board. If there are a number of individuals present to speak on the same topic, please designate a spokesperson who can summarize the issue. Please limit your comments to three minutes. Longer time may be granted at the discretion of the board chair. If you have written comments, the board would like to have a copy which will help them to better understand, investigate, and respond to your concern. Uh Dr. Dr. Mike is going to run our three-minute timer there. Um, during citizen input, the board and administration listen to comments. Board members or the superintendent may ask clarifying questions of you in order to gain a thorough understanding of your concern, suggestion, or request. If there is any response or follow-up to your comment or suggestion, you'll be contacted via email or phone by a member of the board or administration in a timely manner. Please be aware that disrespectful comments or comments of a personal nature directed at an individual either by name or inference will not be allowed. Personnel concerns should be directed first to a principal or executive director of the department, then to the executive executive director of human resources, then to the superintendent, and finally in writing to the board. All right. Uh now, uh Miss Lipsky, the chair, the floor is yours. >> All right. Good evening, Superintendent Law, members of the board. My name is Jennifer Lipsky and I am president of the Minnotonka Teachers Association. I am here tonight because of the proposed change to district policy 429, leaves of absences without pay authority to act. Specifically, the proposed change that intermittent leave must be taken only in 8hour full day increments. I am speaking not only on behalf of our teachers in the district, but as someone who has witnessed what makes our district special. For years, we have prided ourselves on being a human- centered district, one that recognizes that supporting the people who care for our children ultimately supports the children themselves. Tonight's proposed policy to restrict intermittent leave to a minimum of eight hours fundamentally changes who we are. I have also sent you an email earlier today that this proposed change is a term condition of our employment and must be bargained. Right now, our employees take only the time they need. No more, no less. A teacher who needs radiation treatment in the afternoon can still spend the morning in their classroom with students, maintaining a strong, consistent learning environment for them. A teacher who needed to go to periodic chemotherapy during their lunchtime can return to teach. a teacher whose child unexpectedly goes into respiratory distress some mornings and needs a multi-step treatment, but she's still able to arrive in time to teach students can still do so. These are not hypothetical situations. These are real teachers in our district, real families and real students who have benefited from being able to take leave in less than eight hour increments. Under the proposed change, all of these teachers would be required to be out of the classroom an entire day rather than a partial day. This is not only more expensive for the district in subcosts, but it is unquestionably worse for our students who thrive on consistency and connection with their teacher. This policy would remove our educators from classrooms far more often than medically or personally necessary. And it sends a message that efficiency on paper matters more than compassion in practice. The benefit of leave and how we are able to access these types of benefits are terms and conditions of our employment, which means that the district must negotiate changes with us, not unilaterally change them through policy. The MTA has always worked collaboratively with the district to do what is best for kids. And part of what is best for kids is taking care of our people. Our district's strength has always been our educators. When we support staff through life's hardest moments, they bring their very best selves back to our students. That is how we retain highquality educators. That is how we create stability. That is how we honor the values that we proudly claim. I urge the board to pause, reconsider, and reject this policy change. Let's remain the human- centered district we say we are and the one our community expects us to be. Thank you. >> Thank you very much. >> I have um >> you have some written. >> Yeah. >> Thank you. >> Thank you. >> All right. Is there anyone else present who wants to address the board during citizen input? >> All right. So we will move on to the next item on our agenda which is a presentation by Vantage students in the public policy strand. Superintendent law. >> Mr. Chair, members of the board, one of my favorite meetings of the year is when our students tackle a challenging problem in the community or across the state or even in our school district and present to the board. This year, Vantage students were tasked with the complex task of studying public education funding and making recommendations to help end some of this the discrepancies between school districts across the state. So, I'm going to welcome our public policy students. This team was among a group of teens that presented and they were selected as the top team worthy of a presentation to the school board. Welcome students. I'm Satie Sters. >> I'm Danny Beg. >> I'm Isabelle Chin. >> And I'm Jack Arrington. >> And this is our Vantage public policy project. To quote the former US Representative Steve Kagan, "If we get public education right, everything else will follow. But if we get it wrong, not much else will matter." >> With that in mind, this is an equitable solution to the funding crisis currently in Minnesota. >> Here's our agenda for today. We will discuss the context of Minnesota school funding, the solutions we considered and why they didn't work, parts one and two of our solution, and how we plan to implement them, and then a summary of our ideas. As many of you know, there are three layers to Minnesota school funding. First, uh compensatory funding and equity funds from the state, then local property taxes, and then federal aid. According to this pie chart from the Minnotonka annual report, only 1.8% of Minnotonka public school funding in 2024 came from the federal government. >> But how does our current system factor in equity? According to an edf funded policy analysis, currently our state assigns additional weights for factors such as students located in rural or isolated districts, students with disabilities, and English language learners. However, previously we measured the number of students from lowincome backgrounds from the number of students that were eligible for free lunch. However, because lunch was made free for all students during COVID, it's become much harder for the state to accurately assess and thus allocate compensatory funds to districts. So clearly this is an issue. According to NPR news, 63 districts are currently underfunded that affects students of low income, students have disabilities or students of color. There needs to be a solution to this issue. And that's what we are going to give. And that brings up the question, what would be the most effective legislative solution to the issue of school funding in the great state of Minnesota? >> To answer this question, we considered various solutions. The first was increasing the referendum cap and anchoring it around the state average and per pupil spending. However, we did not choose this as our final solution as it does not properly address the needs of each school district student population. >> The second solution that we considered was limiting open enrollment as we saw that a large reason why many urban areas were losing funding was because many of their in district students opted to open enroll instead. However, this was ultimately not considered for two reasons. The first being that limiting open enrollment was not a historically precedented solution. The second being that it wouldn't benefit all the stakeholders involved. Schools would still lose money and students and families would lose that option of choice. >> We also considered improving current property tax relief programs, but currently the state legislature is in no position to make adjustments to those programs at this time. So given what we have stated so far, we figured a two-part solution was the best way to approach this issue. Our solution combines reforming the current referendum system and ensuring that voters are making an informed choice when they go to the ballot through a new awareness campaign. Part one of our solution is referendum reform to increase the referendum cap according to the needs of school districts. Our objectives for part one of our solution are to keep the referendum cap adjusted for inflation, to address funding differences between districts, and to allocate more money for special programs. What would this look like? The needsbased cap would be calculated by multiplying the regular referendum cap for that year adjusted for inflation by a needs multiplier of one plus the weight of the needs of the district. For example, in this case, special needs, English language learners, and free and reduced price meals. Each characteristics weight would be multiplied by the percentage of total students in that category. For example, a district with a student body of 10% special needs times of uh a multiplier of 0.4 4 equals a weighing value of 04. Using these example weights with the new formula, the needsbased cap for Minnetonka in 2024 would would have been $2,468 per pupil compared to 2211. The new cap for Minneapolis would have been $2,849 compared to 2211. This formula also applies to local optional revenue, further increasing funding for students. These characteristics and data were taken from the Minnesota Department of Education report card database. However, possible factors to account for very widely and these weights are placeholder values that we use for the purposes of this presentation. There are many benefits to this solution, especially from an economic standpoint as they will decrease the gap in funding between districts like Minnotonka and Minneapolis and it will allow districts to allocate funds according to the number of students who apply for special programs. >> However, there are some limitations. The first being that districts that have historically been unable to pass voter approved referendums may not necessarily benefit by implementing this solution. The second is that it would require district or state legislators to spend additional time calculating and then assessing and implementing those weights. However, current or previous funding formulas could streamline that issue a bit more. Given that voters are actually the ones advancing these referendums, it's very important that they're making an informed choice when they go to the ballot. Here at Minnetonka, we have many forms of community engagement. We have regular newsletters, emails, even a podcast, but we can't be sure to reach every voter with these. One place we can reach every voter is actually at the ballot. About a month ago, the state senator Steve Schwazinski came to our class and informed us that whenever a referendum question is placed on a ballot, it always includes a note that a yes vote will increase property taxes. To counteract this in a way, we need to make sure that the school board, who initially writes these referendum questions, is writing them in the most informative and clear way possible as to also inform the voters what the yes uh the benefits of a yes vote will also be. >> Informing the public is also an utmost importance. informing them through social media campaign such as the one we're going to discuss, but also informing them at different platforms, not just through Instagram, but through LinkedIn and other resources will really help to inform the public, not just within Minnetonka, but throughout the state. Minnitankka does a great way of informing families and voters on the current issues. I think it's a great framework for other districts to use as well. The major benefits of increased voter awareness is that it's usually going to drive up voter turnout if more people are aware an election's actually happening. And given data from the Peter Leatherman Institute, motans generally support increasing funds to education at a rate of about 60%. So usually more voters here in Minnesota means more yes votes. >> One limitation is it's difficult to get access access to everybody. Some people don't have computers or phones to get that um techn techn for the technology to be accessible for all. However, creating infographics and posters throughout schools will also help benefit that. Another b or limitation is that local election officials cannot be lobbyed. To implement part one of our solution, we envision a multi-year rolling period to index student demographics and weighing data and to re uh refine the new formula. This will help aid analysts at the Minnesota Department of Education by giving them the necessary time to compile their research. >> Uh, as I mentioned earlier, in order to ensure that the school board is writing these questions as inform these referendum questions as informatively as possible, we can influence them through monetary and non-monetary means. Non-monetarily, we can use our freedom of speech like we're doing right now to attempt to influence the school board. But groups like education Minnesota provide financial resources to districts to run general awareness campaigns on awareness uh on referendums and support the campaigns of pro-referendum schoolboard candidates. >> Implementing the awareness campaign. This is one infographic that we created just through Canva. It's free, it's accessible, and it's easy. One way is to create even short content. I mean, we see content from Mr. Ericen, Mr. Law as well. And so creating those infographics will to increase voter turnout for eventually hopefully voting for yes on the referendum. >> Yeah. And furthermore, having students even take the lead on advancing this awareness campaign can a increase representation but b make it more persuasive and convincing for all because students are the leading voice of this campaign. Now what are the key takeaways? First on referendum reform. In times where the state or federal funds are un insufficient, it's absolutely crucial that we give the people and districts a choice to raise enough funding for themselves. Secondly, by implementing this 3 to 5year rolling period, we are taking the first step in Minnesota to accurately factor in more equity into our funding formulas and to improve the quality of education all across the state on the awareness campaign. Firstly, by reforming the ballot, we ensure that there's more transparency reading the vote the reading reaching the voters. And secondly, because we value education, not just for students, but for all district and state residents, that means making sure voters are more informed overall help create a better state and quality education. Thank you. >> Thank you. >> Thank you. >> Thank you. >> Thank you. Oh, questions. We can sit. >> We're not through with you yet. >> Oh, no. >> Board members, any questions for our presenters? I'll jump in and say thank you for tackling this important problem. Um, this is one of the key issues facing the board uh today and into the future is to how how to assure the financial stability of the district. So, um I I appreciate the input. Um I'm curious about the formula you devised. Um did you can you tell us a little bit how you reached those uh those waitings of those various items? >> For sure. Um honestly, uh we I just came up with these waiting values as I think that when I put them into the formula, they fit pretty well. they weren't too uh low or too high. And um I chose these three uh demographics um because they were available from the Minnesota Department of Education report card database. Uh I chose this or I chose this type of formula because um it would there's no possible way that it could decrease the referendum allowance uh for a district. If a district has any percentage of students that fall under whatever category, um there will be some sort of multiplier. So, it'll really help out every single district based on um the amount of help they need, the amount of support, financial support they need. >> And I'd like to also add that I'm pretty sure the state can also reference the current waiting factors for adjusted per pupil unit when calculating the like needsbased multiplier in a sense. And we also know that it can be applied for local optional revenue as well since that's something that's mandated by the school board or state. >> Thank you. >> Any other question? >> Any other followup? >> Okay. >> Well, thank you very much for presenting. You've given us a lot to think about. >> Thank you. >> Thank you. >> All right. Next on our agenda, we have review of new course proposals, changes, and deletions. Superintendent law. >> Mr. Chair, members of the board, each year in about the November uh study session, our teaching and learning department brings forward proposals to uh improve our high school course offerings. the I I'll not to steal too much thunder from the presenters, but this could reflect changes in industry, student interest, department recommendations, or enrollment. So, tonight, uh, our director of instruction and learning, and high school assistant principal will be here to talk about these changes. Ala, >> thank you, Superintendent Law. Good evening, Mr. Chair, members of the board and community. Um with me is assistant principal Emily Rosen Rosenrren from Minnitankka High School and we're happy to be here this evening to share a bit about some upcoming changes to our courses of study offered to M uh Minnotonka high school students. Um this process actually starts in the spring. Um so it started quite a while ago and this happens for many reasons. Um at times new courses have to come through due to changes in the Minnesota state standards or legislative requirements. there might be department um or administrative um requests and so it's a little bit of a longer process and some years we bring forward a few things and some years we might bring forward many. Um with that the courses before you this evening have been through a comprehensive process including administrative and department chair review. We've met with our student teaching and learning advisory council, our parent teaching and learning advisory council and tonight we are here before all of you. We wanted to share with you that both our students and our parents on both of those advisory councils provided a lot of great feedback and asked a lot of wonderful questions that were very thoughtful um that we did actually bring back and make some changes because of that. Our students are very engaged um some even intend attended both meetings. Um so this is really about the students their experience and we have some very insightful and engaged young adults. So, with that, I'm going to turn it over to Emily um who is going to share some of the details on those course updates. >> Hi everyone. Thanks for uh having me again this year. Um we have a short list of new courses that we'd like to propose for the high school for next year. I'm going to talk about each one and then if there are questions, we can come back and talk about individual courses. Um the first course that we'd like to propose is AP African-American studies. This course is um an exciting one. It meets a need from the state for us to offer an elective ethnic studies course. And this particular course offering is one that provides a framework that our teachers and our students are familiar with. It offers an advanced placement credit which is very appealing to students. Um the course itself is uh an exploration of African-American history but also um cultural contributions um etc. So, uh, there's more in your board packet about the details of what might be included or covered in that. The second course that we'd like to propose is another AP course, AP business with personal finance. Um, again, the state uh requires us to offer personal finance to our students, and this fills that need. It also fills another need, which is for an uh a business class that exists outside of Vantage. Um, so we have lots of students obviously who are pursuing Vantage and we still have students at the high school who are pursuing other fields of interest to them and want to add business on and it's hard to always make our Vantage opportunities fit with every schedule. So this would be a place for students to get some um advanced business experience or business class experience um within the confines of the high school building. also again an AP credit uh which is very compelling for kids and families. The next course is also an AP class. It's cyber security. Um we have a variety of computer science courses and uh our computer science department has done a lot of thinking and rethinking about the ways that they provide access to computer science education for our kids. Cyber security is obviously um a field that is going to probably continue to be in great demand uh within the field of computer science. And the students who pursue this AP course would come out with a certification uh kind of an industry recognized certification in cyber security uh and their AP uh cyber security credential which is pretty great for them. So again something that uh makes this uh course particularly compelling and appealing. The next course is an architecture course which we would offer through Tonka online. We have an architecture course in our high school right now. This would be a half credit uh one semester elective course through teched and it would be offered completely online. So one of the questions we got um from the teaching and learning advisory was kind of what is the scope of this course like is it theoretical is it practical and it's a little bit of both. So there's some basic architecture stuff uh vocabulary and kind of the basics of design and then there's also the theoretics of residential design and layout trying to create a project within a budget which is relatable. Um, and then there's some handd drawing and some CAD components too that students can do on their iPads. So, that's a Tonka online class, which is good news because Tonka online is always looking for uh more electives so that kids who pursue that as their primary route for receiving their learning have a lot of really rich options to pick from. Uh, the next class or on your list is aviation maintenance. This is going to be kind of a continuation of our aviation program through Momentum. Um, it's a full credit, so one year uh teched elective credit. Uh, it's going to offer students an opportunity to work with in the field of aviation on aircraft maintenance. Um, we have lots of partnerships emerging with aviation where kids would be able to do some of that work on site in our auto bay and some of that work offsite. uh working with some of our industry partners. The course includes um a recommended prerequisite. It's not a required prerequisite. Uh and either one autoc career investigations or what we now call power and energy, which is a small engines class. Um students who take those classes are going to be super equipped for aviation maintenance and kids who choose not to are going to be met right where they are. So aviation maintenance is uh is exciting. Two more. The next one is fashion merchandising. This uh course is actually it's a course correction which is a pun. Um anyway this course is a course correction. Uh we had uh fashion merchandising um added to our fashion strand advantage. there was uh as that strand kind of unfolded, there was an issue with the sequencing of the courses where some kids were ending up uh duplicating some concepts and content that they'd already learned. So, this course is actually meant to fix that and eliminate some of the redundancy. This would make uh that strand kind of a a one, two, a one and a half uh semester credit uh situation where kids would have fashion design one, fashion design two, and then this additional class which would be fashion merchandising for a half credit more. This would be a fax selective too, family and consumer science. And the last one, Z, the last one is another Tonka online class. It's called Zoologology and Beyond. um insects, birds, and paleobiology. Exciting. So, this is a cool offering for students who perhaps haven't had a lot of chemistry yet. We do a lot of biology at the high school that's human biology. Um, this biology would focus on nonhumans, which requires a little bit uh less chemistry uh and encourages kids to pursue their scientific curiosity a little bit earlier. So when it was created, kind of the target audience were 9th and tth graders who wanted to get at something within the field of biology, but weren't quite yet eligible for the very many human biology classes that we offer that are typically more aligned with our upper classmen. Um, yeah, so something for our younger scientists to think about and pursue. That was a lot. What questions do you have, >> Sally? >> Thank you very much. These course offerings look great. They're just such a great mix. Really appreciate it. So, two um two comments from my kitchen table. Okay. >> So, my husband who's in the skilled trades when I told him about that we're now going, you know, looking to on board the um aviation u mechanics course, uh he's he said he would like to come back to school and I did point out that that is not allowed. um definitely are now but but he was very excited to hear that that opportunity is coming to kids. He knows how important that is um >> to offer that. And my son when I mentioned the African-American studies course >> was pretty sure that that's something he's going to register for. >> And I just wanted to also offer that not only does this meet a state requirement, but we actually have students and young alumni who have been asking for this for many years. and I am really excited for the opportunity um that this could be an offering and that I can report back to them that this is this may well be coming to fruition. >> Yeah. Yeah. >> So, thank you. >> Thank you, >> Megan. >> Um I was just going to add that uh I really appreciate that you guys took the feedback from the teaching and learning community. it I you reiterated a few things that I heard from that conversation and you brought them back and I think that's great that that committee was used in such a productive way. Um for example that zoologology class when it was presented at teaching and learning I think it said 9 through 10 and one of the parents said my incoming senior I think would be really interested in that but would be deterred if it said 910. And so I I really appreciate that you guys heard that feedback and incorporated those suggestions and uh I think it was a really healthy discussion at the uh teaching and learning committee and there was broad support for all of these. So >> thanks >> Dan. Um agree that these all look uh fantastic. I see that we're we're suggesting adding seven and removing nine. I'm just curious on the budgetary front if we know if this is a net increase or decrease for expenditures for the district. >> So we will have budgeting for the AP classes and the others. Part of what the teachers provide to us is the costs. So we do do weigh that. There are a lot of tradeouts in terms of some of the AP courses. Those are the ones that often cost us um at times the most. The AP cyber security course actually has an extremely low cost, particularly for an AP course because it is mostly online. Um, and then depending on if this class runs, the teachers will start to build out the AP African-American studies course. Um, there are four texts that the teachers can choose from that are approved from the college board. Um, and again, those vary in various prices. Um, but I have spoken with Dr. Leoo and we will um be able to yes, keep those within our our budgetary restraints. Do I need talk about the other questions about the courses before we shift to the next two pieces? >> I had a question. Um I'm not sure how this weighs into it, but the comments about how the first two, the African-American uh studies and the personal business finance are both state requirements or coming state requirements. Um I'm wondering about that and the choice to make those AP as opposed to a regular track or whatever we would call that. I wonder if that would uh dissuade some students from participating in those courses. >> Right. So, the standards that have to do with ethnic studies, ethnic studies that were obligated to meet are embedded into all of our social studies classes, but we're also required to offer an elective ethnic studies course. So, it's true that a student may feel intimidated or nervous about pursuing an AP class. they're also getting ethnic studies in whatever social science class they pursue. Um, I don't know if it's a particular kind of student that would find that pathway really exciting. Um, but it wouldn't mean that students who didn't choose that option weren't getting exposure to ethnic studies. So, the AP African-American um course will offer a deeper examination of those benchmarks in that subject area, whereas in the regular social studies course, there are fewer benchmarks, touches um on the threads of the era that they're in, but is not as intense. And so, we're required to offer this elective course um and students can make that choice to take that. >> Does that clarify that for you? >> It does. My question applies to both of those courses. I'm also uh cognizant that we've talked we've heard many times about how uh students are very interested in wishing they had more of a personal finance and business option and I'm wondering how the same question how making this an AP relates to that uh interest we've had from students over the years. >> I think that personal finance is let me back up. I think that's a really good question. The course that we're proposing is a pathway for students who want more advanced business content and personal finance, but personal finance as a general class is offered in multiple content areas at the high school now. So, it's also something that kids who might not pursue an AP pathway, they're still getting it, too. So, it's I think that in that way that course is leveled really appropriately to make sure that everybody has a way forward just depending on their own choice. >> Thank you for the contact. So to clarify, this is just one option to fulfill a personal finance requirement and they have multiple other options. >> Yes, >> Patrick. >> Yeah, sorry. >> I I had similar question u and so thank you for answering it and I I I thought about it both both sides a little bit of wow we're we're offering these great opportunities but we're making them AP classes and and so and you actually look and I think it uh exemplifies a lot of what Mana is about. If you look at one of the analysis you in the in the belief statement it's it talks about all students can learn at high levels. This course provides equitable access to high demand high skill field encouraging students of all backgrounds to explore and excel. learning should connect to the real world and character and integrity matter and if if those things aren't what we are all about with our goals and all of the things but I had the same concerns is like if we're and I know we have the different classes and so I think offering the AP and combining it really we've always talked about um you know getting students to at least try one AP class and I I think it's something to look at um for future boards and if if these courses aren't running or if there's other things but you know somebody might want to take one of those classes and all of a sudden they get access to an AP class and you know this board um what last year two years ago you know I think we we we looked at some of the barriers and remove removed that with with get you know they'll get a weighted grade with a passing grade and not necessarily have to take the test. I mean, I think continuing to offer this stuff. So, I was a little bit on both sides both sides of it. I knew that there was a personal finance and some of these other options. So, I was more on that side, but I think a great question and something that we should we need to continue to look at. >> Thank you. >> Yeah, I think it's I think it's helpful to know. I appreciate the context because I do I do think it's come up uh >> both of those particular subject areas come up time and time again. So, I'm glad to see the the offering. >> All right. >> Um, we also have a couple of proposed title changes which I think are also included in your packet. Um, those are just uh meant to simplify things. I uh mentioned one of them already. The current small engines course that we offer at the high school is called power and energy. We want to change that to power and engines, which is actually really helpful because a lot of people get confused. I thought that was a fied class for years um when I was teaching. No, it is not. And somebody else thought it was physics. So, um it's a small engines class. So, power and engines will be the new name. And then we're going to adjust algebra uh to a little. We used to we've always called it higher algebra and that's created some confusion with colleges as kids try and submit their transcripts. They're not exactly sure what we mean by higher algebra. So, we're going to call it algebra 2 like lots of other places on Earth. And then uh we're removing some courses that just uh haven't run in the past few years or uh have been offered to students as part of our skipper log, but there hasn't been enough student interest to um run them. I mentioned that the computer science department was really looking carefully and broadly at what they ran, what they offered, trying to make sure that with their new cyber security course, they were creating something that would be um in demand from students. So there are a number of computer science courses on there that uh either are outdated now where kids know more about app development than we would teach them at an introductory level. So some of those are going away. Um the science class that Sarah Earth and space systems that has been replaced by the nth grade requirement for science child development is a class that uh have been on Tonka online and just runs better in person. And then we also lost um a couple of AP French higher level very higher level French and Spanish classes um where we either haven't had a lot of student interest or students who are pursuing immersion have found a different um either IB or AP or abonio avenue for their continuation of their language skills. >> Any questions there? >> Okay. After this board meeting, these courses in order to be available for students to access for the registration guide for next year, these courses will come to the next board meeting on the consent agenda. >> All right. Thank you very much. >> Thanks very much. >> All right. Next on the agenda, we have uh some policy reviews. Superintendent Law, >> Mr. Mr. Chair, members of the board, uh we have many policy tens and tens of them and they are reviewed on an on an annual basis for a whole variety of reasons. Some of them are legislative changes, some of them are changes within uh our existing system. Some of them are just their time to sunset because they've been so outdated for many years. So, executive director of HR and legal counsel has been going through policies on two accounts. some that are haven't been reviewed in a long time and some that are due because of other uh external pressures. Tonight I will have her walk through the five policies you see in front of us providing the rationale and the changes as flowers. >> Thank you superintendent law. Good evening Mr. Chair and board members and student representatives. I'm here tonight with Kristen Turnblad our director of nutrition services. So, the first policy I'll be starting with is 719, the nutrition services policy. And there are not many revisions to this policy, but we needed to clarify lunches versus meals. And beginning with if you go down to requirement um 3B on the first page, you'll see that we actually updated to reflect that all students are eligible for free meals even if they have an account balance. That was a legislative change and that was something that we wanted to be clear in this policy. The other changes you'll see on page two, those revisions are changing it from lunches to meals since breakfast is also free. We just wanted to be certain that when people see that they realize that it includes breakfast and lunch. So, um, we updated those to meals. And lastly on page three, we updated Miss Turnblat's title to director. Any questions for us? >> Okay. >> Thank you, Kristen. >> The next policy I'd like to review with you is policy 535, students assignments to schools. And this policy is being updated as part of our regular review and um process. So if you starting I'll wait is everyone there? I don't want to start until you're >> I'll catch up. >> Okay. Okay. So beginning with the purpose, um we realized on this policy it didn't have the standardized purpose that we have in all of our other policies. So we made that more official. Um still just keeping the essence of what was there and clearly stating that is to provide families information about which school is in their prescribed area of attendance. Other clarifications throughout um for example one a um we struck administration and put superintendent. So there are several changes in there where we say administration or superintendent just to clarify whose purview that section is under. And also in B the language was stricken. Students in the Clear Springs Elementary attendance area are allowed to enroll at either Minnitonka Middle School East or Minnotonka Middle School West, but their home school is MMW. Given the the growth enrollment capacity, um we are assigning families to the home school of MMW. That's not always a choice that we can provide. So, we wanted to be clear on that. that's been a practice and we just wanted to update that in the policy. >> Yes. >> I would just add one other piece that all students in the district are allowed to request to attend a school outside their boundary. >> This language made it appear that there was only one option to do that. Any elementary school can request another elementary school. Either middle school can attend can request either feeder school can request to attend the other one. So this is just clarifying that that option is open to everyone as described below. And this this doesn't reflect a change in practice. Correct. The way I understand it is correct. It's just updating it to reflect current practice. >> Right. >> Yes. >> Uh the other changes that you see are consist of a good amount of language cleanup, exceptional assignment in section two. Um it just says the district may assign a pupil to a school other than their their regularly assigned school including Tonka online. Tonka online was not in existence when this policy was created. So, we wanted to add that as well. On the next page, um again, there's just there's language cleanup in one, two, and three. And in three with that strikeout, it was just moved up to number two, uh because that's what it applies to, those students that we're referencing. language cleanup and the new 3A be um just throughout. And where there was a a change actually made, if you go down to letter F in that section for special case, we added safety here be because that is a reason that is just more tangible and easier to understand other than extraordinary and unique. it's it's hard to measure that. So, if we're reassigning, it's going to be for that education or safety reason and that is practice and we wanted to just make that clear in this policy. And on the last page, um E is just again language cleanup and item four that was repealed and replaced by open enrollment. So that is stricken. Any questions? >> Megan, >> um I had a question about the parent option plan. Um, and I don't know if these if this is how it's done currently, but it says um if a I'm looking in section two right now that uh if a if it's overcrowded that the student would be moved back to regular assigned school. I think it's in uh D1 and then it says Seymour. So, um, does that mean that a a student could be accepted as a pop student, but then the week before school be told, "No, you have to go back to your home school." Or am I reading that wrong? I >> I think now, we haven't done this since I've been here, but I think the intent of this is um in the event that some school gets unusually overcrowded, you could send pop students back before they start school. We our practice wouldn't be to do this. This this is likely year-over-year saying fifth grade at school X has exceeded expectations significantly and there's no more classrooms. We need to send the pop students back to their home school. That would be allowed in policy. It isn't current practice and I would update the board before we would take that practice on. >> Thank you. The next policy I'd like to review with you is conflict of interest and fiduciary duty. Um, this policy is more comprehensive than our current conflict of interest policy. So that's why you'll see that that one is completely red line. That one was focused more on just purchasing and we wanted to cover more areas of of conflict of interest um like most traditional policies do. This is revised as part of our our regular review and everything is new in this language um new policy. So we have the purpose in here to uphold the integrity and partiality and public trust in the operations of the district. our general statement regarding ethical standards for everyone and our purpose is to prevent conflicts of interest. If you go to definitions, conflict of interest, it clearly defines what that is. So everyone is clear what that looks like. A situation where personal, financial, or familial interests interfere with the impartial performance of official duties. We clarify district personnel. We clarify close relative. And we go on to talk about the general standards and responsibilities acting in the public interest and avoiding any real or perceived conflicts. Not using positions for personal gain. Not disclosing or using confidential information for personal benefit. Managing district assets with integrity and prudence. and avoiding granting special treatment to any individual or entity. We also clearly state the prohibited conduct for all personnel. Um engaging in transactions where there are close relatives or friend close relatives may have a financial interest. um accepting gifts on the next page and that is in reference to statute using the position to influence decisions, recommendations, um political activities and things of that nature. We also want to clarify uh engaging in outside employment that if interferes with district duties or uses district facilities. the nepotism um policy. We are looking to sunset that because we are covering it in this policy and that it's very clear and direct that no employee shall be directly supervised or evaluated by a close relative. No preference shown in hiring and if a familial relationship arises post employment, there's a possibility that someone may be reassigned. And although it would be rare if there are certain exceptions that we need to make that would have to be taken to the superintendent. Uh purchasing authority and vendor relationships really clarifies that the executive director of finance and operations is the board designate responsible for all purchases. We go on to discuss disclosure requirements if there is a conflict of interest to the superintendent or designate and reporting and investigations. Um how all of that would work. And if you go on to the last page, disclosure to the Minnesota Department of Education, we were missing this piece and we are required to report to them um if there is any conflict invoiding contracts, leases, purchases from related parties, financial or personal interests and district transactions and relationships that might compromise impartiality. And we are required to put that procedure in there and how we would report. So that is why you are seeing that and this is something that we will give employees annual notification about. >> Any questions? >> Just a quick question. As this is mostly new language, what was the source of the new policy languages based on the old policy on some other >> outside? Yep. Looking at the old policy and making sure we weren't losing any of that. looking at MSBA policy, looking at some policies from other districts. >> Thank you. >> Okay. And lastly, policy 429, leaves of absence without pay, authority to act. This policy is being updated due to paid family medical leave uh being effective January 1st. We wanted to be sure that our staff were clear um on some of the parameters and how things would work in the event that they have questions and be transparent. The first change you will see is item three, concurrent leave. Um we can require that the leave is taken at the same time and run concurrently. um just like it is now. FMLA and Minnesota pregnancy leave can run concurrently. Paid family leave can run concurrently as well and the statute allows that. So we did include that in policy. Um next is leave requests for paid family leave must be provided 30 days in advance if foreseeable or as soon as practicable. And for employees safe and sick time, we're asking for 7 days in advance or when it's foreseeable. And this is all in alignment with statute and almost the direct language. The changes you have on the next page that you see u just Minnesota statute just some lang language corrections in A and B. Um, indeed, employees are expected to use approved leave exclusively for its designated purpose and should consult the district if they intend to obtain other employment during the approved leave. What we're trying to avoid here, for instance, is someone taking a leave from the district and going to work for another district during that time. So, we just want to be sure that if you're you're requesting a leave and saying it's for this purpose, um, that's what we're expecting it to be. And if there is something else, we would just need to have a conversation about that. Lastly, on the last page is intermittent leaves. And in alignment with statute and deeds guidance, intermittent leaves um can be we can set a minimum parameter on leaves up to a full day. Um so, and that's what we have here, no less than eight hours. and leaves, including intermittent leaves, are ongoing. This would not be for say a doctor's appointment or needing to leave early or any of those things. Um, staff can do that. Staff does that. This is ongoing intermittent leaves to avoid disruptions to the classroom and students. Um, for instance, you know, someone could under intermittent leave, under paid family leave, you could take that throughout the day if you wish, the beginning of the day, the middle of the day, the end of the day, how however it would be. So, we want to be sure we can staff it and we want to be um sure that it's the least disruptive to students. >> Just Yeah. So to clarify, nothing about this language prevents any employee from using their existing sick time for a partial leave day. >> No, it's not. >> No, this is only leave. >> Extended paid family leave. >> Yep. Typically, >> they would be taken in full day increments. >> Y >> typically um that's going to be for some type of medical condition. Um we we see it under FMLA and we have a fully complete FMLA policy separate from this. But yes, it doesn't prevent anyone from taking off early or coming in late to go to an appointment or tend to something personal if the principal has approved it and they do. Um, our principles and administrators have been very flexible with employees um and they continue to do that. >> Thank you. >> Any questions? Yeah, I think the language though um and as MTA President Lipsky has pointed out, it is it is confusing. I think the reference to the intermittent leave when like I as an employee might assume that that means my um you know paid sick time or something like that. I wonder if there's an opportunity to clarify this further to distinguish those things. >> I could certainly look at that. um many of our employees they are you know familiar with leaves I mean it's a leave policy but certainly we can look at that and clarifying it more so that there's not any misunderstanding >> okay >> seems like there's at least some so seems like a good opportunity >> any other questions okay I just had a clarification clarification So this is under unpaid leave, right? >> So is the difference that this intermittent leave would be um like unpaid because they've exhausted sick time. So I guess I'm a little confused also on the difference between intermittent leave versus appointments that they can use sick time for. >> Yes. So for sick time and just taking off generally, those aren't leaves. Those are just requests to to take time off to come in. Like I mean those happen casually all the time. Um unpaid leaves. All of our leaves are unpaid unless someone's using you know they can use basic leave. They can use vacation. Um but that would be something that they would submit. Does that answer? It seems confusing to me that there may still be an instance where an employee would have exhausted and maybe maybe I'm wrong about that. Yes. But so one assumption I'm making is that employees would exhaust sick leave. >> But if you don't have any sick leave and you want to take time off for various medical conditions as the example was given in community comment. Um is that a is that a problem that could that this language could create? No, that has been allowed and it's still allowed. Um, I mean, it literally is applying to ongoing leaves. >> This would be an extended period of time. This is not those day-to-day leaves where you just need to adjust your schedule. >> What's the benefit to the district of having this intermittent leave set at an increment of no less than eight hours? >> It helps us with staffing to get substitutes. Uh it helps us with there being less interruption in the classroom to students. Uh because if a whatever leave someone wants to take underpaid family leave or in intermittent however they wish to do that if it's less than 8 hours um it can be disruptive like it can be split during that same day throughout. And if say it's 2 hours are we able to get coverage for something of that nature? It just makes it more challenging. So it really is just focusing on the least disruption is students but happy to add something to clarify that this is this is not for non situations. Yeah, it might it might just be defining what intermittent leave actually is because it see it it it seems easy to conflate with all of these other regular commonplace scenarios that we do have solutions for and are accommodating >> and the the definition just seems vague. >> And intermittent leave can be Thank you for that. it can be taken. So, we're talking about the the daily pieces of that, but the intermittent leave can be taken um for weeks at a time, um days at a time. Someone under paid family medical leave, someone may choose to take 3 weeks, come back to work, take another, you know, few weeks or whatever. So, that is an example of intermittent leave. It also could look like working a few days per week um during one month, two days per week during the next month. There there's just a lot of flexibility with it. So, it's it's much easier to manage if we have that that eight hours there as best as possible. But yes, happy to to clarify because that is not the intent. It is the intermittent leaves um that we're clarifying underpaid family leave. >> Yeah. I would just say I think the idea of it being unpaid and intermittent at the same time is where I'm I'm just not familiar of a scenario like that. That's where I'm getting a little tripped up. But >> so underpaid family medical leave that is paid by the state. So the state will be paying. So the intermittent is just a type of leave that they would be taking like it can be continuous or it can be intermittent and that would be up to the the employee or what the physician or medical provider is saying. So it's the type of leave if that helps at all. But paid family medical leave they have a calculation so they will be paying for the leave. >> Super general. Huh. One of the main reasons this we're struggling to find examples is this is new legislation. Correct. This is it begins January 1st of this year. So we're not able to provide dozens of examples of what it looks like in the past because this is the first time the state has provided this legislation and this um and you know this language would need to be applied. we can bring this back for board review clarifying that question about some examples of what this might look like. Um it is very uncharted waters and we're trying to figure out how to uh be flexible with teachers to the extent possible and still provide consistency in our classrooms. >> So intermittent leave is defined in the statute in in the FMLA the new or it's just a category. >> Yes, it is. It's clear. Um, yeah, it's in the statute and it's clear and it's just it's just it's a non-ontinuous sleeve. >> I mean, I would think or you just refer directly to that. So, it's >> I mean, I I don't know that you're ever going to be able to clarify it because you without giving examples, but as long as you're >> I mean, this is in response to new legislation, >> not something that we're just adding. No, but I I get I get all of that and um >> yeah, that's >> so yeah, maybe adding non-ontinuous leave something like that to clarify. >> Yeah, next. >> And adding in I think what Chris is getting at is adding the the statute into the cross references listing so that people can refer to it directly. >> Yeah, Megan. >> Um yeah, I think the definition like Dan said, I think would help a little bit because I that's where I was getting a little bit hung up. I think also um but like a hypothetical. So let's say an employee knows that they're going to have a treatment every 2 weeks >> on Friday and they're going to be out. Would this then require them to take the full day on or is not that not considered intermittent because they could just use sick time with their principal? >> Right. They're not required to take a leave to do that. >> Yeah. I think I think you have to meet the definition of FMLA first >> for for those before this to even kick in, right? I mean, we all have policies at our works with with for FMLA, but this is different and it's an you know, it's a it's a public institution, so it's different on how you have to do it, but you still have to meet that and there's requirements in order in order to get that. You have to use so many hours of sick, right? I mean, so so that's all fairly well known. I I've never heard intermittent leave. I'm sure it's in my policy at work as well. Uh but I've never had to look at it. So, um I Yeah, it's you have to meet certain things. And if somebody had a my understanding of it, if somebody had a treatment every two weeks for two hours, you wouldn't even require you wouldn't you wouldn't be able to get FMLA for because it's not an extended enough leave. So, you'd have to use sick time. And if you ran out of sick time, you wouldn't be able to use FMLA anyways. So you'd still have to take it unpaid. >> So that's where the I think the definition piece or or the link to the statute or whatever just to make it definition. >> Sure. >> Yeah. There's enough conversation to see if that >> absolutely >> is clear. >> Yeah. We want it to be clear. >> Right. Right. We're all figuring it out right now. >> Yep. Appreciate it. >> Okay. Thank you. Okay, I think that works through all the policies. Is that right? >> Yes. >> All right. So, we're on to review of fiscal year 25 audit financial statements. Superintendent law. >> Mr. Chair, members of the board, on an annual basis, every public school district in the state uh to meet state statutory requirements goes through an audit process using an outside auditor. Uh tonight we're going to hear a preview of our FY25 audited financial statements kicked off by executive director of finance and operations, Mr. Paul Berswis. >> Well, apologize while we uh have to uh get the tech set up here. >> Worry not just in case. All right. Um, >> good times. >> Darn. All right. Thank you very much everybody. Um we have with us um Troy Gabler and Grace Tro >> Troinski. >> Trozinski. Thank you. Uh from Clifton Larson Allen who are our uh main audit uh personnel that have uh given us the uh once over, twice over, three times over this year on our FY25 books. So I'm turning it over to them and uh letting them run the show. >> Thank you much, Paul. Superintendent Law and board members, we are happy to present the results of our uh fiscal year 2025 audit to you. Um, of course, some of you got a little preview of this on Tuesday if you have to be on the finance committee, but um, we'll go through this. If you have questions as we go, you certainly can stop us and we can talk about it then. Otherwise, there'll be a slide at the end for those as well. Um, my name is, uh, Troy Gabler, as Paul introduced. I'm the principal. I'm a principal with CLA. Um, and I've worked on the audit for the last few years. >> And I'm Grace Tresinski and I've also been working on the district for several years now. >> Right. I got Oh, look at that. I can figure that out. All right. So, here's our agenda. We'll go through some of our required communications, um the audit results, uh we'll talk about some financial trends and results that we're seeing, uh and then touch base on a couple of the upcoming Gazsby standards. Um Gazsby standing for governmental accounting standards board. All right. Uh so with required communications, of course, you'll get a governance letter when we issue the audit as well. Uh we just like to highlight some of the key pieces there. Uh this first piece is talking about the type of assurance that we provide. Uh through the audit, we provide uh reasonable, not absolute assurance, which means we don't test every dollar or transaction at the district. Uh that wouldn't be economical or timely to do. We'd never be able to issue on time. Um things of that nature. So we take a risk based audit approach. Uh we interview board members, we interview uh members of management. Uh we certainly interview some of the key financial folks as well that we work with. Um in addition, we'll also look at trends in the industry. Where are we seeing fraud? where is it happening? You know, what are governments experiencing? And we really uh create a testing plan around that and where we believe the risk is um with the district. Uh we also like to highlight the couple of significant accounting estimates that go into the report. Uh of course there's lots of accounting estimates. You have depreciation and things like that. Uh but some of the ones that might be a little bit more volatile. So here we have kind of called out the other post-employment benefits uh liability and that just changes if you you know if the interest rate changes um you know the money you might get on returns and that changes um the amount that it projects the liability to be over time um changes in line with that they just call it a discount rate instead of an interest rate. Uh and then actuaries also can get updated like mortality tables and things of that nature. Uh and so those can change drastically from year to year. Uh the other piece we have there is your self- insurance um claims liability. Uh everybody knows medical um claims go up each year, sometimes significantly. Um but other than that too, you could also have just larger claims one year than another. Um each year is not like the last and when you're dealing with a lot of different employees necessarily. So um just something to keep in mind, those estimates could change significantly yeartoear. Uh the couple of counting policies or the standards that were implemented this year. Uh the first one is governmental accounting standards board statement number 101 for compensated absences. Uh and so that'll actually have um kind of a different u you know significant impact on your governmentwide statements. Uh really what that did is that has cause a district to acrue more for um think like uh sick time that wasn't severable in the past. So uh I think a good example would be say you had a teacher with 500 sick hours and 250 of those were severable should they leave or um you know exit the district. Uh in the past you would only acrue something for the 250 hours that were severable. Under this standard now uh you will also make an estimate with the remaining 250 in what's more likely than not to potentially be utilized prior to their retirement. Um and so that increases the liability. Most districts saw that triple. Uh your district was similar to that. So, um you'll notice there's a prior period adjustment in that particular statement. Um in this case, it's not a correction of an error. It's just a retroactively applied uh principal change um accounting principal change. So, uh we just restate that beginning net position and that makes the reports a little bit more comparable. So, we're not running all that additional expense through the current year um expenditures on that governmentwide statement. uh governmental accounting standards 102 risk certain risk disclosures. Uh that added a couple of sentences um really related to uh your school if you have a strike that can impact operations. Um and so it's really talking about the legal environment in which you operate. Um here we have some changes uh just kind of highlights on what we had for um uncorrected misstatements or any difficulties. So we didn't have any uncorrected misstatements. Uh what that means is there wasn't anything found by CLA or the district during the audit where then it wasn't corrected if it needed to be. Um sometimes you'll find small adjustments that are um difficult or there's a reason that they don't want to adjust them. We didn't run into that this year. Corrected misstatements. There was one adjustment to the food service fund revenue and receivable. Uh it was increased by about $179,000. Uh this is just due to how some of the clicks claims get reconciled with that revenue um in terms of tying it out for federal and state. So we had no difficulties performing the audit. Maybe a bit of a highlight because you've had some turnover in the finance department. Of course you still have the same folks leading it. Um but thank you so much Paul Pton Ash. Um sometimes when you have uh turnover like that, things don't go so smoothly. Um, so that was great and thank you and I know there's extra effort that goes into that when you have that happen and we didn't have any disagreements with management. So none of the results here uh weren't approved or reviewed by management prior to this presentation. All right. Um audit results overall our audit opinion is unmodified. Uh that doesn't sound great if any of you haven't necessarily seen these types of presentations but that's the best you have um is unmodified. So an unchanged opinion is the best we can issue. Um you wouldn't want a modification. What this means is every transaction class or balance that we audited we had very good support for. We're able to see that um everything had uh proper documentation and controls around it where we didn't feel that there would be a material misstatement um that we couldn't get assurance over. Yellowbook compliance. We didn't have any compliance issues with laws or contracts that would have a material effect on the district. And then the internal control item we have here is just related to that adjustment with fund two um simply to adjust that uh one reconciliation there with the claims reports. And then for the single audit, we did do a federal single audit um and there weren't any findings related to that. Uh I'd say most of the districts that we do single audits for have issues with procurement um and documentation issues. So I'd say that's a pretty big highlight. Um usually there's a couple of things that pop up there. And then with Minnesota legal compliance, um there's one item related to it's basically two sentences that weren't in a couple of contracts due to like an old um template getting utilized and so that's already been updated and it deals with the subcontractor language. So all right, I'm going to do the first couple of slides here and then Grace will kind of go through the rest of the financial results. Uh this first one just touches on fund balance of the general fund as a percentage of expenditures for the year. Uh that uh blue line is your total fund balance and the green line is your unassigned fund balance. Um I think the key here is just you can see that has a steady decline over the last five years. I know a lot of that is a budgeted spendown. I know with the increase um in students for FY26, the expectation is that will start to go back up. Um so I believe it's already being monitored but continue to do so. uh your fund balance policy I believe requires a 6% and you're at 8% if you're on assign. So you are meeting and exceeding that uh minimum fund balance policy as well. All right. Um and then for the uh students served this is just showing the trend of the kind of the students that are enrolled with the district. Um you can see it's been steadily increasing. you know, that is the result. You guys have been expanding your ability to serve more students um with a lot of the building projects you've been doing and obviously you've been successful in retaining and um getting people to want to come to your district, which is not always a trend you see. So, um obviously speaks um positively along with some of the results that you guys highlight in your reports. So, right um >> you can just >> I'll just click through it. You let me know. >> Okay. On this slide, we're taking a look at the total expenditures by object code for the general fund. We are comparing the final budget, the actual expenditures, and the variance whether the district was over or under budget. Total expenditures for the general fund were roughly $1 million over budget, which is approximately only.5% higher than the budgeted amount. Being that close to the budgeted amount is something very commendable to both the district staff as well as the board for having disciplined budgeting as well as effective resource management which will only continue to set up the district for future success and for future planning. On this slide, we're reviewing the food service fund. It shows the total revenues, expenditures, and the resulting change in fund balance. As a reminder, the free meals bill was in effect starting in fiscal year 24. And as a result, the district has seen an increase in both revenues and expenditures for the past two years. This again is due to all meals being free for all students, as well as the district starting to operate a breakfast program starting in the prior year. For fiscal year 25, the district had a deficiency of revenues under expenditures of roughly $95,000. This is primarily driven by increased meal costs as well as higher salary and benefit expenses related to nutrition services staff. The good thing is though that fund balance in the food service fund remains very strong which means that the district is able to cover any capital purchases or any unexpected emergency purchases and do so with ease. I would like to emphasize too again just the fund balance in here being so strong. A lot of the times that some of the other school districts and charter schools we see the food service fund can operate at a deficit which means that other funds such as the general fund has to kind of subsidize for that loss through a transfer and I don't think historically that has ever been the case here at Minnetonka. So just shows how well managed and operated the food service program is here. >> On this slide we're taking a look at the total meals served to students by the different categories. As I mentioned on the previous slide with the free meals bill being in effect for fiscal year 24 that explains the large increase in the total number of meals served from 23 to 24. And we're anticipating for this slide going forward it will show a more reliable and steady trend as right now you can see we still include 21 and 2022 data which was during the co9 pandemic when all meals were free because of that. And then for 23, I'll call it the kind of oneoff year when all meals went back to being full full priced after the CO 19 pandemic and before the free meals bill went into effect. I would like to kind of still highlight that um the reduced meals category. You will still see those meals called out separately. That is because families are still able to apply for reducedpric meals under the federal program and since it is a federal program, those need to be tracked and reported separately to the federal government under that program. On this slide, we're taking a look at the community service fund. Again, showing the total revenues, expenditures, and the resulting change in fund balance. The district has continued to see increase in its community programming um year after year, and that has resulted in increase in revenues each year. Similarly, for expenditures also increasing, that's due to the increase in participation as well as the district being able to continue to offer more classes and more programs to continue to gauge that interest from students and from the community. Here we have the balance sheet for the district's governmental funds. It's a snapshot of the total assets, liabilities, deferred inflows of resources, and the fund balances, which actually fall onto the next slide. But we've already kind of t touched on the general food service and community service fund, but wanted to make sure that we also took a few moments to talk about those other two funds. So here you can see the summary of the fund balances broken out by the different categories. Specifically for the capital projects fund, you will see that a majority of the fund balance is restricted for a specific use. This is restricted for ongoing constructions that the district has going on as well as for long-term facility maintenance. You can see that fund balance ended up around uh almost $11 million. Um and that again is just a well-maintained fund balance which means the district is able to continue to complete its planned projects that it has without it um impacting any of the other operating funds such as the general fund. Similarly, for the debt service fund, you will see that it's also restricted for a specific purpose and that is restricted for future um principal and interest payments on the district's outstanding long-term debt. Here we have a summary of the revenues and expenditures for the district's governmental funds. Again, we want to just touch on the capital projects and debt service funds since the other funds had their own slides. Specifically for the capital projects fund, you will see expenditures related to capital outlay. These are for costs associated with ongoing and completed construction during the current year. Um, if you ever wanted to look into more of where those expenditures kind of end up for your assets on the governmentwide statements, you could take a look at your capital asset footnote and that breaks out by the different asset categories including by additions kind of where those are being allocated to. And then for debt service, you will also see expenditures related to principal and interest payments. And these are being these payments are being paid in line with the bond repayment schedules. And the district has been able to continue to meet its obligations on its long-term debt. This is a continuation of the previous statement, but a section a separate section called out as other financing sources and uses. These are revenue and expenditure like items, but don't technically meet the definition of revenue and expenditure. So they have their own section here as they still ultimately impact your net change in fund balance. We specifically just wanted to call out here is that you can see that the district issued bonds and certificates of participation during the current year. One of those debt issuances as well was a refunding of old debt. So you will see that expenditure like item of the payment to refunded bond escrow agent. Here we have the statement of net position for the district's internal service funds. These funds are used to account for services offered to other parts of the district at a cost reimbursement basis. So for these funds, we have self- insurance as well as the OPED revocable trust fund. Activity has remained relatively consistent with no significant fluctuations. The district did have a positive change in net position, which I'll kind of talk about those factors on the next slide of what led to that, but still wanted to highlight that having such a positive net position is, you know, very admirable to the district. so that the district is able to continue to operate these internal programs without it putting pressure on your other operating funds like the general fund. This is the summary of revenues and expenses for the internal service fund. Starting at the top with the operating revenues, you will see those increased from the prior year and that was due to increases in both health and dental insurance premiums. for operating expenses, those slightly increased from the prior year and that is due to higher health care costs related to inflation which has been a similar trend to other entities and school districts in the state of Minnesota. The last category there non-operating income that's for earnings on investments that the district has and those also significantly increased from the prior year which positively impacted your net change in net position. And on this slide, we're taking a look at the expenditures per student served. Um, we're using the comparative data here available from the Minnesota Department of Education. We're comparing all districts, 7ount metro area, and enrollment greater than 4,000 students. Specifically for that last category, I know the the enrollment number is not specifically like super related or ties with the total enrollment for the district, but that was the largest category available, so we still wanted to include it for reference. We're also using 24 data here as the 25 data is not available yet due to the UARTS deadline being at the end of this month and audits not being due till the end of December. You can see that for Minnotonka expenditures per student is less than the statewide average except for just that all districts category but even then still relatively um comparable and just a little um bit more. kind of taking a look at the individual categories, you can see that for regular instruction that the district spends more than the statewide averages from an audit perspective. I think this just ties strongly into the the district strong academic performance as well as its test scores. So just a positive correlation to see overall and I think of all of these categories, citizens and people in the district would expect that to be where your expenditure should end up for um regular instruction. And then you can also see that the building construction is also slightly more than the statewide averages and that's just due to maintaining and improving facilities to in order to continue to meet enrollment and operational needs going forward. But you can also just take a look at the other categories. There are categories that the district is spending less on such as pupil transportation and some of those other categories as well. and then I'll pass it back to Troy to talk about upcoming Gazby standards unless anyone had any questions on any of the the financial results or trends or we can save them to the end as well. >> Wonderful. Thank you. Um so the upcoming governmental accounting standards that we have um to implement in the coming years uh shouldn't be as uh they won't be as time consuming as the past few years have really continued to just add complexity to various auditing areas. Um so statement 103 uh is some financial uh reporting model improvements. Uh really this is just going to change the first it's probably the first like 20 pages of your report maybe 30 is like your management discussion analysis and it'll take a little bit more of the focus off of explaining why there's like a year-over-year increase or decrease and it'll be a little bit more like policy and maybe like long-term vision. Um so we'll have some changes to some of the verbiage in there. Um, in addition, it will require all budgetary comparison information to be reported in required supplementary information. Um, some districts have it as part of their basic financial statements. Uh, this Minnetonka as a district has moved that a few years ago to the required supplementary uh, information um, in anticipation for this change. Um, and then there will be some small changes to the proprietary funds. So that internal service fund and the OPED revocable trust you saw uh if there was ever um a subsidy for that. Um so if there was ever a way that uh you brought in money that would reduce premiums, say that you'd pay um charge for self insurance or something like that, we'd call that out. Or if you were subsidizing those with transfers from another fund, it'll essentially just have another category. Um those aren't typical ways that you're funding those items. Uh but that'll be a requirement and a change there. Um there it'll also redefine a little bit about operating and non-operating revenues on those statements. Again, given the simplicity of the types of ins and outs of those two funds, I don't think you'll see a lot of change there either. And then statement 14, uh we'll just require all districts and governmental entities to break out their financial statements uh when they have their foot fixed asset footnote. Um you'll have to report it similarly to other districts. So, right now you could kind of combine leased equipment with um your normal equipment and you could have subscriptions kind of um put together all on one line if you wanted to and it'll really require everything to be broken out. Here you already meet that requirement. We already break it out because it's easier to tie to the different parts of the report. Um but then it'll be a little bit more comparable if you're looking at other districts or entities to compare to. Other than that, we welcome any questions or feedback that you have on the process. Um, we always like being able to present. Uh, you guys have a very nice district um to work with. Uh, and our teams really enjoy working with the staff here. Um, and you guys always have a lot of interesting stuff going on as some of those presentations ahead of us. Of course, no half as many people listen to us, but maybe the numbers aren't as fun and that's fine. So >> board members questions thank you very much for the presentation. >> Absolutely. Thank you for having us. >> I would just like to add one thing about our staff if possible please. Uh we have had uh had a really good uh person as our coordinator of accounting Jess Hullet who was responsible for the books through the course of the year. Uh she was able to move on to another uh promotion uh in in July. Uh, and we brought uh back uh Payton Zipovich who had worked for us before and it's kind of like the Vikings bringing back Adam Teal and we knew that he was a good a good player and he did a really great job stepping in after being uh gone for a couple years to uh Alabama in Florida. uh but then also uh Ash Mooney who's our coordinator of budget and uh financial software and he's actually in the middle of leading the charge on a major uh software implementation uh for the first time in 35 years and Ash has been stepping up doing that but he also stepped in and was working on the audit significantly in the gap between when Jess was gone and Payton uh was able to come on board and then but also working with Payton and and working through that together uh and They did a really great job and I just wanted to acknowledge their efforts because they just did a superb job. So, thank you. >> Thank you and thank them for their efforts. >> Okay. >> Thank you. Thank you. >> Um I find myself in an awkward position where I could really use a bio break. So, let's take about five minutes and come back and cover the next item after that. >> Okay. All right, we're we're going to get back in action here. The next item on the agenda is our review of the fiscal year 26 amended budget and fiscical year 27 general operating fund projection. Superintendent Law. >> Mr. Chair, members of the board, um from July or actually June when the uh district presents our budget for the upcoming year until about October, there's a lot of reconciliation that happens at the state level. Because of that, it's important to go public with our updated budget based on new information that we have and then project how that new information impacts the district's budget on the outy years moving forward. Tonight, executive director of finance and operations, Mr. Paul Bourgeois, is going to share that amended budget based on reconciliation that we have from the state on a variety of topics and how that has impacted our budget moving forward. Mr. Bourgeoa, thank you, Superintendent Law, uh, members of the board, Mr. Chair, members of the board. Um, yeah, and we went over a lot of the general operating fund uh, during the board retreat, so I'm still going to go through that. So some of that will look familiar and then we'll hit the other funds uh which are a lot simpler uh on a on a fund by fund basis compared to the general operating fund. Uh I throw the throw this first slide in here mainly because of the bolded item in and towards the bottom is we uh had our operating referendum. Last operating referendum approval was November 3rd of 2015. uh uh under current statutes. Uh since that time, we've been actually trying to get our capacity increased at the legislature because the state has us at at a capped amount. Uh we were able to extend that uh in 2024 to go for another 10 years for fiscal 27 through fiscal 36. So, it's in place, but uh we don't have the ability to go for another uh chunk of money like we did in 2007 where we picked up $436 or in 2015 per pupil or 2015 where we picked up $340 per pupil in 2017 and another $340 in 2020 on a two-step referendum. Excuse me. the uh uh this is just a historical slide to show how excuse me the district uh I was all quiet while I was listening to the auditors talking just sign a stranger I don't have a cold um excuse me and uh uh in in the early 90s uh there was a change in in funding that took move move funding away from property taxes and at that point in time a lot of school districts started having difficulty because the state was going to pick it up through state aid. And of course, we know the history of state aid funding uh compared to uh what what probably the needs are. And uh so our district had gone through a significant period of budget reductions. And in 200 uh six, they had a 5% reduction of their budget, which would be like an $8.5 million cut. now, but the um uh the school board decided to go move ahead, right, with open enrollment, and the combination of open enrollment and some operating referendums uh created a virtuous uh virtuous cycle that for an 18-year run of no budget reductions in our general operating fund. Uh we've had a couple of years of general operating fund budget reductions, uh totaling about $8 million over the two years, a total of about 4.7% over two years. Uh and then there's a little bit of a precursor, but we'll talk about some more, but uh right now based on the updated information we have, uh we are looking at uh not having to do a budget reduction process for fiscal year 2027. Uh this next slide is um our numbers for uh that we get on a per pupil basis. The big thing with uh school business on the uh re on the revenue side, it's really is is how many pupils you have because of these these types of things and then what's the inflation amount on the uh on the basic revenue. Uh and that is those are the two two big things. Everything is also uh how much special ed revenue you get. That those are like the three major drivers of of revenue. And uh then on the expenditure side, it really is how many people you employ and how much you pay them. Uh that's school business in you know in five numbers. Uh our general operating fund budget for the amended budget uh is 178 million uh 385,000 and change. That's actually an increase of of 5 uh 269 million from the FY26 adopted. Expenditures are up an increase of 200 two 2,35,868 or FY26 adopted. The net surplus of revenues to expenditures is up from what adopted budget was at three at 684,000 uh to actually 3.9 million uh with an unassigned fund balance projected to be 21,915,000 and a 13.5% uh fund balance uh percent. Now, one of the things you might be asking yourself after having just heard the auditors say say, "Hey, your your general fund fund balance is 8.8%." Uh and we have to remember we talked about this uh at the at the retreat. The general fund for EUARS includes our general operating fund which is the biggest chunk and where we have our operations and a bunch of other funds in it uh uh that you see in the financial statements that are audited. They it's rolled up. But when we work uh for operating our schools the general operating fund is is what we focus on. And that's that's basically a subset which is actually about uh 70% of all of our activity. Uh and uh and so we that's where we we are operating. So when you hear school districts say, "Oh my gosh, we're cutting the budget by X. We're cutting the budget by Y." They're not cutting those other funds. Those are all kind of self-contained with ins and outs and you have to stay within those resources. But in the general operating fund areas, uh those are the ones where uh revenues and expenditures vary and and u or and and expenditures tend to go up faster than the additional revenues provided by the legislature. I did include a waterfall graph in here to show you what the changes were. Um fiscical year adopted uh surplus was 684,177. Uh we picked up 147 net additional students from what we had budgeted. It's actually a couple of uh overall it's a couple hundred up from the prior year but from what we had budgeted we had budgeted a little bit of an increase and we exceeded the increase by 147 students. So we picked up another 1 1 million30,000 on the basic revenue because of the 147 from the adopted budget. And then that also those number of students go into those other categorical formulas for an additional 637,000. Uh we we got a fiscal year 25 special education revenue final true up and that money comes in FY26. So this that's onetime money is of $711,000. But then uh on November uh 13th, the afternoon November 13th, I opened up I checked for it and on November 14th and so we were able to include it from this Friday into this presentation. Um we got we we had our final FY25 un audited actuals uh for special education reported in and the way special education revenue comes in is they will fund approximately 60% of your personnel uh costs not benefits but personnel salaries and and that type of compensation. Uh the basis or your actuals from the prior year become the basis for the current year. And uh so all of our final numbers had been input and then uh because we had been projecting actually off of an August uh well we had been been projecting off of we off of last year's number we took it up by about three and a half% for the adopted budget but then uh there was an there was actually a report that came out in August after the first Mars reporting and um uh it it was up uh several hundred,000 but then with the uh November chain uh next Mars report and CEDRA is another system. Those are all acronyms for for reporting systems of various expenditures to the department of education. Uh we picked up another $2.8 million uh uh based on that. So then we have our MTA settlement which happened after uh the end of the fis uh before after our we had uh adopted our budget and uh any other miscellaneous additions and personnel additions to help with 147 additional students. So that's where you come up with a $3.9 million a amended surplus. And while that sounds like it's a a lot to us, each one of us individually, at the same time, $3.9 million surplus is basically about 2%. Uh and it and it um it doesn't happen very often. So our amended general fund operating uh revenues you can see uh general ed revenue that's the basic formula at about 93 million and our operating referendum at about 28 million categorical of which the biggest chunk of about 23 almost 24 million is is special education is 38 million. Um and then uh federal revenues are grants we get very few federal revenue uh dollars compared to most other school districts. Our local optional revenue $724 per pupil at nine million. And then uh miscellaneous revenue that includes all kinds of fees. It includes a couple million dollars worth of interest uh earnings that were at uh work that we should be acrewing and uh all those other you know various items that come into into the budget. So on a percentage basis generalled formula the basic revenue 52.7% our operating referendum is a key 15.9%. And you take that pie slice out and we'd be we'd be a lot different district without that additional revenue. Uh local optional revenue at 5.2 and categorical at 21.4. On the expenditure side, we're looking at teacher salaries and benefits. The big blue uh kind of like sideways Pac-Man chomper. There is uh teacher salaries 116 million. And that's the way it should be. It's about twothirds of our budget because we're all about teaching students, right? So teachers salary and benefits are our largest cost and pair of professional salaries and benefits are about 12.8 million. All other salaries and benefits uh so uh central office staff uh principles custodial grounds crew um uh clerical those all all that other staff is 22.8 million. Uh purchase services is about 7.5 million. Uh supplies are about 6.3. I have examples of these a little bit later. and the and transportation about seven just under eight million and then that transfer is actually uh transferred to the uh um to the art center fund and uh we keep track of those as separate funds. All those actually roll up into the UFAR general fund but so it pops out like that for us the way we track in more granular detail. Uh amended budget operating expenditures again about 67% teacher salaries and benefits 7.34% um pair professionals. So those are two categories that work the most directly with the students. Uh and so you talk about that at at about 7% and 67. It's about 75% of our of our re of our expenditures are on basically direct SCU student contact. Uh so again all there's 13% and then the various percentages. It's interesting. Uh transportation, we are actually about, if you look at our per pupil amount, we're we're about $3 million lower uh than if we would have it be expending at the same level as the state average. This is a summary of what our uh of what our general operating fund long-range projection looks like, the revenues to expenditures. Uh I've got the revenues in green, the expenditures in red, and then at the bottom is the the the the difference. So you see the 3.9 million for FY26 for FY27. Uh it's also the virtuous cycle of having additional students because those additional students bring in additional revenue this year. But if we stay at that level, they bring in additional students next year. So we're higher next year. And uh this projection assumes we stay at the at the current level of 11,52 students total including E12 uh all the way through this projection. And um um so we're looking at about $3.6 million of surplus next year. Uh and then we have um uh we dropped down to about a negative $1.7 million. We would be very close for fiscal 28 to being balanced in this projection. But one of the things that the legislature did last year was they uh uh basically adopted in statute they established a committee uh to look at special education funding for the 28 to 29 uh bienium and they gave them a target of $250 million of reductions and if they don't identify anything they're going to basically at least it's in law now so it doesn't could change but it's that's what's in law now. uh they would take uh uh $250 million out of the cross subsidy aid. And so for us that would be about $1.6 million a year. So the biggest chunk of this negative $1.7 million projected deficit is uh that cross subsidy uh reduction or aid because of the basically for special education because we know that that's in statute. So that's what we do is we put in what's in statute into the projection before we got the additional revenues uh for special education. That's ongoing revenue and that if we keep and we will keep spending at that same level because special education like other costs keep going up uh never drop. Um but we were actually looking uh on the on the adopted budget we were looking at you know something in the range of about $4 million. So again that additional revenue going forward helps us out going uh you know in the long run. Uh and then you see expenditures going up about $2.8 million a year over exp over over revenues going out based on the projections we have. I mentioned uh the the various uh aspects there's a trans um uh the total package for MTA at 5.1% for 26 and 4.08 for FY27 and then 3% total package going forward for all other groups. Um transportation we're at 5% for 26 and 27. It's the last two years of our four-year contract. So, uh hopefully we'll be able to actually work that down a little bit lower going forward. And this is this is a very hard slide to read, but this is all the all the the various categories I've just gone over. Uh the uh um kind of magenta colored line is is the uh uh the bottom line. And then at but at the very bottom is where we have our unassigned fund balance. And again, that's our unassigned fund balance in our general operating fund, which is one of the funds that rolls up into the UAR's general fund. And so, you can see that we're looking at at the end of the year general operating fund, unassigned fund balance of 29 21.9 million and 13.5%. Uh, and then we turn a surplus again in 27. Um, we will if we hit that, we would be at about 25 million. So, 15% and then it starts starts deteriorating from there. But um you know the the uh near-term uh finances are are are much are looking stronger than they were as as of the adopted budget. This is just a chart to show what that unassigned fund balance for the general operating fund would look like. And I'll quickly go through some of the major categories. General ed revenue. Our resident pupils bring in about 58.7 million of that and open enrolled students bring in about 35.2 2 million of that. Um they bring in similar amounts, open enroll students bring in similar amounts for all the ones that all the formulas that are actually on a per pupil basis. And every year I calculate after the end of the year what uh what the contribution of open enrolled students is to um our general ed to our resident students in terms of being able to increase instructional oper uh opportunities for them by having additional revenue. And uh for fiscal 25 uh after after paying with the revenue that our open enrolled students generate after paying for their incremental costs because they don't have to pay for um you know we're going to have the same number of maintenance people in the buildings. We're going to have the same number of people in in the u um central offices and things like that. Um but uh they actually cover all their costs and then there's enough money left over that we can spend an additional $2,000 uh on our on our resident students per year that we otherwise wouldn't have if we were just a standalone district of 7,000 students. So, it the the the uh if anybody ever asks what is the benefit for our our our students of open enrollment, it uh it's basically up to over $2,000 a year per resident student is a net benefit. So, you see some of the categorical areas in there. 27 million for special ed. Uh this TR pension adjustment is interesting. It's $2.2 million that actually has been climbing uh every year. And the interesting thing about that is is it's an in and out. We get revenue for that. And when that was adopted, they uh they were saying, "Oh, it won't cost you anything because we're going to give you revenue for it." Of course, at the state level, they look at any pension contributions and things like that as part of E12. So, if they put money into pensions, it's not money that can then be taught for used to help pay people who are in front of students now. So, uh you know, it all competes for the fed for the the the dollar at the state capital. voter approved referendum revenue uh 15.9% 28 million and our local option revenue nine. The other note uh on the latest available uh comparative data, Minnotonka ranks 300 uh out of 329 school districts on the latest comparative data which is FY24 that um Grace mentioned before during the presentation um that she used for for the the comparative data. uh we are 321 in terms of if the district with the most revenue per pupil is one and the least revenue per pupil is 329. We're 321. So we are you know we're down in the bargain basement so to speak. Um so our the Minnotonka received uh $10,024 per pupil in state aid. That's $2,194 less than the state average in state aid. Um uh the so I got my I I got a typo one there again. I always seem to find a typo or two. Um but the state average was the state average was basically you know uh 122,194 above that. So it was about $12,350 approximately, but we are $2,194 less than the average school district in state aid. And we make up for that try to make up for with operating referendum. But that $2,194, if we were just getting state aid at the average, so not of of the highest district, but just at at the average, our district would be getting about $27.6 million more per year in state aid. So our finances will look a lot different. Uh so again, when when you take our operating referendum and you add that in local local contribution, that gets us up to 167th, just below the median uh in terms of these 329 school districts. So we're middle of the te the pack thanks to the operating referendum. But um the uh you know the conventional wisdom that oh Minnotonka is up there. We the people in their head across the state think that because our students are doing so well that we must be like number one in the money that we get and we're not. We are just with be thankfully because of our local residents giving us the maximum on the operating referendum. We're in the middle of the pack. Um but we are we are at the bottom of the barrel at the end of the line whatever other metaphor you could think about or slogan uh in terms of getting dollars um dollars in state aid. uh general operating fund uh major categories salaries and benefits 87% our purchase services there's a a pop paria of items there utilities about 2.2 million we are uh energy star district one of the few in the country um but you know so we try to squeeze everything we can out of each BTU um we spend about a million dollars on maintenance repairs we have 1.8 8 million almost 1.9 million square feet and 210 uh or 260 I'm sorry uh acres of land. So you know it takes takes some money to do the small repairs. Um our property and liability insurance is actually went down a little bit from last year but uh the interesting thing about that is we are insured at about $800 million for the val replacement value of all our facilities. So um it it makes sense to keep them up. uh various supplies uh 2.9 million in various types of instructional supplies uh maintenance supplies that's what we spend on paper products primarily and um transportation at 4.6%. Oops. Okay. Um so that gives the general fund. I'm going to kind of scoot through nutrition services here, but we've been operating at at a surplus. Uh this year our our our budget is 386,000 uh of deficit, but whenever we have a deficit, it's because we're putting money back into the replacing equipment. Uh in fact, this year for FY26, we expended most of the equipment replacement on some on some larger projects at at Minowashta. And that's why we have a a a deficit budget. We're taking some of our surplus that we built we're building up and even then we're still at about 40% surplus but uh we plug plow it back into replacing the equipment and that way we don't have to take uh money out of the operating capital fund uh to which competes with other things that we have to buy uh for for our our schools and uh so it's it's self- sustaining in that regard. So, uh, again, a year ago, uh, in the audit, we said we we were down about n $95,000. That was all 100% because we were replacing some expensive pieces of equipment. So, just plowing it right back into the general fund. Community services amended budget about 16.2 million and expenditures about 16.3 with a a slight surplus or slight deficit there. Usually by the end of the year that turns into a positive. Um but 7.3 million fund balance or 45%. On the bottom, it's just a really important thing about how robust our community services um uh funds are because they get about 6.7 of their million of their revenue or percent of their revenue in a little over a million dollars in local tax revenue, about $67,000 in state revenue. There's 370,000 in federal revenue and then about $14 million is class and various service fees and then some interest on their cash balance. 87% 87% they they are a very entrepreneurial fund and 87% of their revenue is based on people saying I'm going to buy your product. I'm going to enroll in your class. I like what you're doing. And so it's a real tribute to them that u they're running such a robust program. capital expenditure budget includes two funds, operating capital and instructional lease levy. Um and our our our revenues are about 6.4 million of which about 2.9 is operating capital. And then uh um the remainder of that is um uh primarily payments on classroom lease levy bonds for some of the buildings that we added on to over the years uh to be able to to accommodate open enrollment. Uh new thing this year is an intermediate 287 lease levy pass through. There's $281,000 in revenue and $281,000 in expenditure. So that's a zero that we uh as a member of two intermediate district 287 we pass through some money to them. Debt service uh uh we have to uh by law uh we have to actually uh levy 5% more than what is required uh to make the actual payment. And that is because uh it's a it's a buffer in case there would be delinquencies across the the district. They would that we still should have enough money to make sure every one of our debt payments are there. And it's one of the one of the reasons why we also it's kind of a backup for every school district. But uh Moody's likes the that fact when they're looking at all the factors related to uh what our bonds are rated and um uh so over time that actually builds up a little bit. And about every other year, every year or sometimes every third year, we actually then get to use this excess fund balance on a future levy to reduce it some. So this $1.8 $8 million fund balance. More than likely when we're setting a levy a year from now, we'll take a chunk of that and use it to reduce the levy for the uh 26 pay 27 levy because that just that 5% just builds up over time. Interesting thing about our debt service uh fund amended budget is it has the last payment from the 1996 general obligation building bond referendum. uh that was the that was passed on April 23rd, 1996, which is the last building bond that was passed until the one we just passed a couple weeks ago. So, um all the other building we did in the meantime was done out of existing resources. Fiduciary funds, these are donations, $1.8 million of donations uh budgeted and uh we just assume that we're going to expend most of them, but that actually does tend to build up over time little by little. But these are donations where people give us some dollars for specific items and we have to spend it on those spec those specific items. So you talk about the generosity of the community. Uh this is one way where I mean there's a lot of other school districts that would really really like to have $1.8 million of donations every year. Athletic equipment fund. We pick up about $55 per participant from the various uh uh activity fees and that goes into a fund to replace equipment when needed. You have various uniforms, uh, soccer goals, um, just, you know, whatever they need. Um, whistles for the coaches, I don't know. Um, self- insurance fund. Uh, this is a a real successful program. Uh, about 22.6 million in revenue that comes out of premiums paid by the employees. Uh, expenditures of about 22.6. So, we're budgeting uh, basically break even. Uh, we did did uh, break even or we actually had a slight surplus last year. We are carrying a fund balance of about 6.9 million. Uh it's very successful in that uh we have about 2,413 covered lives. Uh we increased our premiums 5.25% in for this year. Uh the average of this self- insurance fund since it started in fiscal year 02 is a premium increase about 4.1% when the national average has been 7% 8% 9% the high single digits. So it's been very successful. And the the other important thing about this this insurance fund is and you don't necessarily realize it until something bad happens to you and you really need it because if you are in this fund you literally can go anywhere in the country you can go to Mayo you can go to John's Hopkins you can go to the Cleveland Clinic if you have something ser you can go to you know St. Jude, if something bad happens to you and your family, you have you can go to the best places in the world with this fund. So, if you stay healthy, that's awesome. And you're never going to notice that if something happens to you and you really need it, it's like you're going to be so glad that we have this fund because and and as the administrator of this fund, I can also approve experimental treatments. And I' I've done that a few times and it's one of the most uh gratifying things I I've been able to do because I can literally say that are say that this fund has saved the lives of some of our people. So it's it's it's a it's a great thing. um art center. This is another unique thing where every other school district in the state probably would would really like to have a situation like this where uh we basically fund staff and daily operations are supported with a transfer from our our general operating fund. Um but then uh the revenues from ticket sales and plays covers the costs of the of the plays and actually uh any excess goes into a a uh u a trust equipment replacement trust fund. So, if they need, you know, if they're going to have a cast of thousands for some type of play, um, they can get more microphones and more costumes and all that kind of stuff and, uh, or they need a bigger soundboard, which they did a few years ago, about $40,000. They replace the sound the soundboards. Uh, but they have a a replacement fund of about $255,000. So, you know, we've tried to set up a lot of things with long-term uh, stability in mind wherever we can do it. Dome operations gets about $393,000 and we spend about 239,000 directly. We're still paying off a bond payment on the original dome. Uh that last payment is February 1st of 2029. Uh but we did use um uh our long-term facility maintenance funds because the dome is a big giant roof. So we replaced the roof this year. And so we got a nice shiny new uh white and blue dome. I guess there was a US Bank commercial being filmed in it filmed in it yesterday. So, uh, I'm not sure how what they did to make it look really, you know, like a amusement park or something. I don't know. But, um, you know, it's a it's a great asset. And, uh, the nice thing about this is once this blast bond payment is made, if the dome is still picking in kicking up $400,000 of revenue every year and our expenditures are well managed, all of a sudden there's a surplus of 155,000 that you'll be able to do something with every year. Aquatics program, uh, $1.2 $2 million in revenues and million dollars in expenditures. Uh they have a chargeback for bond payments from when we originally built the um the the um aquatic center. Uh turned it from a six lane three-foot deep pool into a state-of-the-art actually a fast pool. And if I had more time, I'd tell you how you can build a fast pool because we did. Uh because once we built it, uh we ran out of tickets for the uh the state uh state club meet in Rochester because the kids were swimming so fast. Um, but it's a very successful program. It generates fees. We have a negative balance in there right now, but this actually is part of the overall UFAR's community education fund. During COVID, they had they were not able to make their payments. And so, um, we just kept it there because we know they're going to return to surplus mode and eventually that will erode or not erode, it'll be reduced over time back to basically a zero balance. Um, this also has uh 12 more payments remaining on on the principal. Um, and that'll be done in um, 2038. Pagel Center. We bought the Pagel Center. We're one of 13 school districts in the state that actually owns our own ice arena. And we have revenues of 642,000 expenditures of 728,000, but that includes capital expenditures, too. So, um, what you see in the fund balance there is is $1.2 million, but that's kind of a a unique um, uh, situation because this is what's called a reimbursement resolution. We incur the costs, then we submit for reimbursement through the levy, and then the levy is collected the next year. And in so two years after we got the cost, the money shows up to reimburse us for the cost. So this fund balance represents two years of activity in which we're in the process of getting reimbursed for. So I always say if by some terrible accident, uh, ice hockey stopped being played in the in the state of Minnesota, two years after that happened or or our our our arena was hit by a meteor or something. two years after that happened, we would be um back up to zero here because we those collections would come through uh you know in the subsequent years. Long-term facility maintenance. This is what we do to uh keep our buildings up to date. Uh the uh this is all 100% uh maintaining our buildings which have uh we actually have about 75% of our buildings are actually aged 30 years or older. if all any of you own houses or have had houses, you know, it's like got to keep putting some money into them. Uh, but we also have about 53% of our facilities are actually 70 years old or older. So, like the core of Minnitonka High School was built in 1952. So, it's 73 years old, but a lot of people don't know that because we've done put a lot of money into it to keep it up. So, this is all self-contained. We have a list of projects and then as in a 10-year program and we just keep chipping away every year just keeping putting a little bit of money. The the buildings have good bones. They'll be around for another 60 70 80 years maybe more. Um and u uh so we we fund this and and the expenditures for the projects come out of this and it's just kind of a self-contained fund and we try to make sure we stay in budget and then if we do have project savings we can just move up another roof project or something like that. Um, our building construction, this one is is unique uh this year because we have the revenues from the pro projected bond proceeds for the 2026A and 2026b bonds that will be sold, 2026A in um in January to pay for the design and permitting for the two middle school projects that were part of the overall bond referendum approval. And um then we are going to actually send um just before we actually break ground, we're going to actually issue $50 million for the construction on the uh the MME and MMW projects. Those are the two biggest ones of the $85 million in in in bonds that were approved. And so that's what you see here at at $60,950,000 of bonds. And then expenditures. We had expenditures for those other projects mentioned there about converting the 18047 Delton Road conversion to parking and Veterans Field, the retaining wall replacement, uh, and the restroom concession stand building that will be built upon it. We're up to row 11 out of 16 on the big retaining wall today. So, I'm hoping they finish before the big freeze hits. Um and uh so but this is a situation where you get money from from various bond issuances and you do the project and you spend them down and if you ever got to the point where you're doing no more construction it would be zero. So everything self-contained for specific items. This is our tech fund capital projects. We are um at $13.1 million worth of revenues expenditures of about 11.3. And so we actually have a surplus in there about 1,856,000. uh that is going to help us do uh future pro uh projects. I know there's still a lot of classroom of the future work to look at. Uh we have a lot of turnover in terms of of uh uh software that's in process and on the horizon. There's always costs associated with that. Um you know, we also um fund all of our iPads out of here um any any laptops, network infrastructure, etc. So, it's a it's a very critical fund and and we're so thankful that the community actually approves that and we have a reasonable fund balance in there of 949,000. Uh the reason that it's saying, "Hey, wait a second. That's surplus of 1.8, but it's only 949,000." There was an accounting change that we had to do this year as part of the audit, uh we typically would pay our our iPad leases that are due in July of about $900,000. uh we would pay them in late June just to make sure they're there on time because that the payments are like June 3rd, June 7th, June 5th. And so we pay them we pay them in June and we typically would would acrue them as as a prepaid expenditure which is what you do in what we did for 10 years but also what you do in the private sector and things like that where you if you paid something ahead of time and so it stays on stays like for lack of a better term it stays off your books and then you recognize an expenditure when the revenue then becomes available. Well, they told us this year our auditors um uh Troy and Grace said that um uh there's this little nuance in the Gazsby rules that says if you're not sending it to a trustee, you have to expense it right away. It's like, okay. So, we did that and we're going to do that going forward and we're going to make sure that we actually send the payments on July 1st. But that's a situation then we're so we're trueing up. So, we end up having a net surplus of 1.8 million because the expenditures were spent last year. But this basically brings the fund balance back up to 949,000 from from being negative because of that one particular uh item that we had to do the accounting change. Our other post-employment benefit benefits trust fund. This is the operational aspect of it. Uh investment earnings of $1 million a year. We typically exceed that to some degree. Uh and our benefit payments are are $1.3 million based on uh actuary estimates. And uh so we got a we're projecting a $15.5 million fund balance. The other post-employment benefit liability that's for uh uh perpetual but lifetime health insurance benefits that were committed to by the district for employee groups prior to July 1st of 2002. So we started out when we set this fund up in 2008 there were one there were 615 active participants at the start. Of course mortality does what mortality does. uh you know they say you know father time or mother time is undefeated right um but 180 active participants so um we've also uh have been able to uh dis disperse some funds that were excess uh for the vantage momentum building but we've actually pulled $22.7 million out of this trust fund uh 12,68 $865,000 actually on the annual oped uh liability payments and back in uh um uh a number of years ago, the the the stock market had gone way up and uh the we were we actually had $30 million sitting in that fund and so the board made a decision to pull some money out of it and use that to pay for about three-fifths of the Vantage Momentum building and put it into a long lived asset. So it's been very successful. At some point in time when the liability is gone in at in 2039 or so 20 somewhere in there 2040 um this fund will still have have have uh uh revenues coming in and you'll still be able to utilize it for uh making benefit payments or or benefiting the the uh uh the general fund in some way. And then we also have debt service on because we originally funded the trust fund with with bonds as allowed by statute back in 2008. So those will be paid off in 2038. So that is a lot, but it's it's, you know, it's it's a lot. We uh we have, you know, if you add them all up, it's about $220 million worth of um uh about $220 million worth of activi of financial activity with all funds. So um we will have to review this, but we'll review much short just the general fund and a subset of it at the uh next board meeting. and uh for for approval. But uh now you have you you at least have a background on the whole gamut of everything that we're doing. So thank you. >> Thank you, Mr. Bourgeoa. Board members, questions, comments? >> Dan, just want to dig into the assumptions side of general operating a little bit. Um two few points. um 11457 running with that as our enrollment assumption going forward. Have we traditionally based our enrollment assumptions based on this year's actual numbers? Okay. >> Yeah. >> Um >> and and the other thing is the difference between 11 um 457 and the 11502 is that we typically have 45 early childhood. >> Yeah. >> Um okay. Because I just I I look at this and I'm like I'm always concerned about the unassigned fund balance dropping over time and I know we always find a way to to recover and get it there and I just wonder where where is the line in the future where it's time to be more proactive about protecting that unassigned fund balance. Um my only other question we we mentioned once this contract runs out we're assuming 3% increases. Mhm. >> Correct me if I'm wrong, but our last contract, like, wasn't the inre increase increase pretty high? >> Um, yeah. Well, and it was high because we had a really good contract before that, but um we we put up for bid every four years. Um we didn't get any other biders, so we had basically one. Yeah. >> And we had a um let's see, we were I think we were at I think we're at 158 um five and five over the four years. Yeah. Yeah. I just want to I just want to make sure that 3% is realistic based on >> what we've seen recently. >> A lot of it depends on, you know, what the cost of fuel is, what the cost of prices are, >> but um it could be it it could be higher. So, right now, what we have in there for um FY26 and FY27 is the 5% that we have locked in >> and then three after that. Yeah. >> So, well, and if we if we end up going up by another 3% on $7 million, it'd be about another $210,000 a year. >> So, >> and then when do we typically approve our final budgets for the next fiscal? That's like May, June. >> June. Yeah, >> June. >> Okay. So, I'm just looking down the line like the next time we have a legislative budget session will be in 2027. will be approving a budget for fiscal of 2028. So that's sort of the the next line where we'll really know what the state >> right >> wants to do and how they want to invest and what we're facing. >> And then on December 4th, uh the November forecast is coming out. So they're going to project the rest of this bienium and they also project out the the 2829 bianium. So we'll also get another barometer on that one. It >> should be fun. >> And we we know that it's probably that one's going to be very dicey. >> Yeah. All right. Thank you. >> Okay. Um All right. Uh nothing else on that item. Then we'll move to review of 2026 legislative position statements. Superintendent Law. >> Mr. Mr. Chair, members of the board, this is a preview of of items that you've seen before and some new ideas, but really what we're talking about is how do we approach our legislators to communicate what uh board member Olsson just shared that three, four, five years out, our budget looks tough. So, we're going to need some legislative relief beyond what we typically get. So, tonight, Mr. Bruce W is going to run through our long-term financial stability from the perspective of asking our legislators for help. >> Thank you, Superintendent Law and members of the board. Of course, we've talked um over and over again. It's I mean our own version of Groundhog Day on the operating referendum. We've been trying since 2017 to get the cap raised and we have not had any support from our legislators on in that regard even though it makes total sense to us for whatever reason. uh it it's doesn't play with the logic of the legislature in St. Paul for whatever reason. Um so uh we have a few items that we're looking at doing. It's a little bit of a change from from that but similar but different. So on the uh on the um local optional revenue is something that was uh actually done in two stages. $424 was pulled out of our operating referendum in 2014 and at that time they left the oper the operating referendum cap open which then allowed us in 2015 to go for more money. So um in 2019 they did another $300 pulled out of our operating referendum and put on local optional revenue and at that time though they reduced the operating referendum cap by 300. So, um, that was something that was just kind of there was no reason to do it because everybody else got $300 and we got zero. Um, and and we didn't then even have the ability to ask. So, I'm kind of getting a little bit ahead of myself, but this is part of it because the other thing about pulling money out of the referendum, which is actually inflation adjusted according to our voters, they approved that. But local optional revenue, we've been losing on the inflation aspect of it. So, us and all other districts in the state have been losing on this. So the $424 and the $300 if you adjusted that for inflation using the Bureau of Labor Statistics inflation calculator um should be to just have kept its purchasing power it should be $979. So $255 more. So uh this plank would be to request hey let let us uh levy for the inflation aspect of it. Let please let us put up to $979. This is all local levy for us. It's not all local levy for most other for a lot of other districts. They have state aid. So that's what makes it challenging for the state. Um although I I have posited that you could put a third tier on for the difference of $255 and just say it's all 100% local and let school districts decide. But that hasn't that that hasn't gained traction anywhere yet. But um maybe it will. So that's the first one. Then the second one is related to that is uh rather than go for an a an operating referendum cap increase of of $1,000 or $500. Uh we would ask to have the operating referendum cap capacity that was taken from us in 2019 of $300 per adjusted pupil unit put back. So don't you don't have to, you know, take it from the the current $2,300 up to $3,300. just put it back up to, you know, put it back up to 2600 where where it would where it would be if they had not arbitrarily reduced it. So that's the second one. Uh the uh interesting thing is is I I also um kind of related to this and actually both of them I went back and I looked at the uh um how the legislature has support education comparing to 2003 uh when that was the last time we got 4% and 4% on the formula with Governor Ventura. But uh where we were as a percentage of the overall state budget and then where in 2025 were were we as a as a percentage of the overall state budget and in that time the state budget increased 140% from 2003 to 2025. Education increased by 129% from 2003. So you're going 13%. Well that that 13% doesn't sound like much but it's $861 per pupil. If we had $861 per pupil, I'm sorry, $831 per pupil. If we had $831 per pupil, we would have another $10 million and our financial picture would look totally different as would most other school districts in the state. They did not, you know, and and I've just kind of made the note of there's one thing in the state constitution that is mandated and that's a public education system. So, and the legislature has to make choices. Um but it's like well they could still make a lot of choices and still have money left over for a lot of things and we still would be a a smaller percentage of the budget uh you know compared to everything else but u they've made choices to slowly reduce our percentage of the overall revenues available. Then the last one is uh increase special education cross subsidy. So this one really is tilting at windmills kind of given where things are. It is supposed to go up to 50%, but another 4% for everybody and special ed is it's still hitting everybody hard would be another $500,000 annually. If you take this $500,000 uh the um uh $300, which is about $3.8 million, so 4.3 and another 3.2, so about $7.5 million. Even these three things, our financial outlook would look a lot better. We'd be stable through 2030. So, and I this is my I got to use one more time just for for you, Chris. Um, but um it's just it's a good metaphor. You build the best possible sand castle you can because nothing's permanent. And you fight as long as you can, as hard as you can to keep the waves from washing it away. And um so, uh you know, you never solve the funding for for the long term, forever, but you can you can solve it for a while. and with the state helping us a little bit, we could solve it for for for the you know the medium term for sure. So those are three recommendations for uh platform planks for 2026. >> So can you take us back to 2019 when the $300 was taken from us that way? What was our response to that? And what did we hear in return? >> Well, we just said, "Hey, wait a second. We're not getting anything out of this." And it was But it was pretty much, well, yeah, it I guess you could say they gave us the catty shack line. You'll get nothing like it. Um, so we we it was just >> that's the way it was. >> There was there was no dialogue. That was just it. Okay. I I feel that I want to lead with that. like keep reminding people, hey, wait a second, this, you know, this was done to us and was not done anywhere else and we aren't the only district that was situated the way we were. So, um, it I keep feeling called to that um, every time this comes up like I really want to be lead with that. I know we've got a kind of second as you know, do this and if you don't do this, do do restore our 300, but I want them to restore our 300 anyway. >> Yeah. And you know these are they're not necessarily in any particular order. I just >> okay >> that's the way I wrote them up. So we can if if we want to put together and we probably should work on these put out like one pager together >> and and we can you know put anyone lead at the top if we want. Okay. >> Say this one's our priority >> and and then further on that >> I would like us to somehow visualize this have some kind of a graphic depiction of what is happening here with this and what we're asking for. This is a lot of words. Um, and I just might be easier for us and our legislators to take it in if we could do something more graphic for them. >> Yeah, this is this is it has a lot of detail in there so that you would have the detail. >> Yes, of course. >> But yeah, >> just an idea that's >> when we go to legislature, it is it's sound bites and pictures. We got to get it to sound bites and pictures. >> Thank you. >> I think having been involved in the last four years I think this marker marker is wellought out but the sales job is always I think your comment about what they have done. Fantastic result. >> Yeah. And we have amassed, you know, growing enthusiasm to back us. I think some of these education pieces and the graphic pieces are needed first and foremost for our own community members so that they can really rally around this and and internalize what has happened and what is go what is going on um so that they can back us more even more enthusiastically. So yeah >> thank you You're so talented. But I found the typo.