[3:59] anything in anyone would like to remove from the cons consent agenda do I have a motion to approve our [4:06] consent agenda so moved is there a second second all those in favor of approving our consent agenda say I I [4:14] anyone opposed our consent agenda is approved um we are now going to move on [4:20] to our action items um do I have a motion to approve our collective bargaining agreement so [4:27] moved is there a second second I would like to welcome Director [4:33] of Human Resources Sonia [4:56] sailor good morning chair allenburg Dr sanley members of the [5:04] school board um I am very pleased to announce that Education Minnesota ad has [5:12] ratified the tentative agreement that is before you this morning um for a new two-year collective bargaining agreement [5:19] effect of July 1 2023 um and extending through June 30th [5:26] 2025 our negotiation teams worked collaboratively to problem solve and [5:32] reach compromises that allowed us to provide a fair and competitive salary and benefits package being proposed for [5:39] your approval I would like to commend and thank em uh president Jason doctor um and [5:47] teacher negotiators Laura Mesler Dave Boone and Michael Smith for their [5:53] partnership and dedication to this important process I would also like to thank the district team represented by [6:00] board members chair allenburg and director Burman Director of Finance and [6:05] operations um mert Woodard assistant superintendent Dr smel assistant directors of HR and [6:13] business services Camille Sherman and Jason stagman and of course Dr Stanley [6:19] um many thanks to all of these people for their hard work and commitment during this process you have been [6:25] provided with a summary of the details of the tentative agreement d draft and final versions of the proposed contract [6:33] highlights of the economic improvements and changes include step advancement for eligible teachers in both years of the [6:40] contract an updated salary schedule that provides more competitive salaries in [6:45] comparison to similarly situated districts in the first year of the agreement and a 2% schedule Improvement [6:52] in the second year of the agreement two additional steps were added to the salary schedule to recognize the [6:58] district's most most experienced teachers namely steps 25 and 30 a 25% [7:07] increase to the district's contribution towards health and dental insurance will go in place as of January 1 2024 and a 4 [7:16] and a half% increase as of January 1 2025 in October 1st 2023 Sunset date was [7:24] added to the severance provision to allow the district to receive additional Revenue in the form of Levy for oped [7:31] expenses equal to 25% of its Severance cost for teachers this tenative [7:37] agreement is within the authority um provided to the district's negotiation team by the school board and as a result [7:44] I seek your approval for this agreement do you have any questions board members [7:49] do you have questions director gaer I do not have a [7:56] question but I do want to um thank the negotiating team um for the work that [8:01] was done on behalf of the district and our teachers I know that that's not easy work and um I just appreciate the work [8:08] that went into um making this contract thank you thank you any other questions [8:14] comments just echoing the same I'm proud of this District I'm proud to be a part of it and really grateful to all of our [8:21] Educators and to all of our cabinet members who work in Partnership thank you thank [8:28] you great um all those in favor of [8:33] um of approving the collective bargaining agreement with um Em Say I I [8:40] anyone opposed the collective bargaining agreement with em is approved thank you [8:45] thank you we're now going to move to our second action um item um is there a [8:52] motion to approve the certification of property taxes payable in 2024 so moved [8:57] is there thank you um I'd like to welcome a Director of [9:03] Business Services M Mt [9:11] Woodard good morning chair allenburg members of the school board superintendent Stanley um this is a [9:17] continuation of our truth and Taxation meeting from December 11th where we'll actually ask you to certify the taxes [9:24] payable for 2024 which will fund a portion of the 2025 fiscal year operations um we're recommending that [9:31] you certify the levy in the specific dollar amount of [9:36] 72,1 $719 and with that the recommended action is before [9:41] you questions or comments from board members all those in favor of approving [9:47] the certification of property taxes payable in 2024 say I I anyone opposed [9:53] the certification of property taxes payable in 2024 is approved thank you director Woodard we're now going to move [10:00] on to our discussion items and our first discussion item is our um annual [10:06] Financial audit presentation for the fiscal year that ended in June 30th [10:14] 2024 director Ward yeah chair alberg we are pleased to [10:19] have Mr Bill lower principal auditor from the audit firm Malloy monteu Kowski and ravich otherwise known as mmkr he's [10:26] here to present the results of our FIS school year 2023 audit um before I turn it over to Mr low just want to make a [10:32] couple remarks first to acknowledge the um dedication and competence of our business services staff um audits are um [10:39] of course expected but always a a pretty big undertaking especially as the government Accounting Standards Board um [10:45] imposes new auditing standards for us to implement and so I just want to give a shout out to them I think residents of [10:51] the district and the school board can have a great deal of confidence in our level of competence and stewardship of of public funds secondly our audit will [10:59] be submitted for the first time to the association of school business officials International and there's certification [11:04] of excellence and financial reporting program and so we're looking forward to receiving that award in the spring or [11:09] summer of 2024 and with that I uh will pass it on to Mr [11:16] low thank you good morning chair allenburg members of the board [11:21] superintendent Stanley thank you for making time for me on your agenda this morning um what I'm going to do briefly [11:28] is just kind of go over what our role is as auditor and kind of the division of [11:34] responsibility uh for the documents that you received as far as what is responsibility of the district's [11:39] management and what our role is in and what you received um I'll also go through oh thank you uh I will also go [11:46] through uh the audit process and the results and opinions that we issued as a result of that process and then just [11:52] briefly I touch on a few of the very high level uh Financial results for the year under audit which was year end of [11:58] June 30 uh 2023 um the first thing I need to do is [12:04] make sure that you understand as uh the board charged with oversight of the financial reporting process what our [12:11] role is uh all of the information the uh data the documentation the disclosures [12:19] that go into putting your annual financial report together is prepared and is the responsibility of the [12:24] district's Business Services Department uh we come in and audit that and provide [12:29] an opinion as to whether it provides uh a fairly stated Financial picture of the [12:34] district's uh year end financial position and operations for the year under audit um in addition because you [12:43] annually earn more than $750,000 of federal grants you're [12:49] subject to a single audit of those Federal grant Awards it's more of a compliance audit specifically on how you [12:55] spent those Federal grant dollars uh as part of both of those processes were [13:00] required to uh review and assess your internal controls over reporting and [13:06] your compliance uh with financial reporting and of course with Federal single audit [13:11] uh requirements and we issue uh separate report letters on each one of those uh [13:17] assessments and then you're finally also subject to an audit of your compliance with Minnesota laws and regulations the [13:24] state puts out a an audit guide for Minnesota school districts that we to and provide a separate report letter for [13:30] that as well uh as far as the results of the [13:37] audit there we go um once again we were able to provide what is referred to as [13:42] an unmodified or clean opinion on your financial statements it's the highest opinion that we can give we had no [13:49] issues uh from a financial reporting standpoint um to Echo uh what Mt [13:55] mentioned uh you did you're seeing a change change in the document you received this year uh [14:02] to submit your financial statement to the ASO certificate of excellence programs there's some extra uh [14:09] information that gets added to this financial statement to provide additional context you'll find a a more [14:15] robust introductory section uh that gives the district more of a chance to kind of put in context the financial [14:22] information included in there and then there's some statistical information in the back of that um that helps also put [14:30] that in a long-term perspective kind of see the trends over the last 10 years for a lot of the the information in [14:36] there so um it it does make it a more say robust uh Financial document and uh [14:43] hopefully provides some some good information for your users of the financial [14:48] statements um as far as the results uh over your [14:55] financial reporting um we had no internal control control matters or compliance matters to [15:01] report uh as far as the preparation of your annual financial statements this [15:06] year um with regard to Minnesota legal [15:11] compliance uh we did have one finding to report there uh one of the things we test is timely payment of claims you [15:19] have uh 35 days to pay claims from the later of the time that you receive either the goods or services or the [15:25] invoice for goods or services um two of the 25 transactions [15:30] that we pulled the test were not paid within that 35 day window um in both [15:35] cases these were early in the fiscal year when you had uh some turnover and a lot of of new people coming in and out [15:42] of your business services department um I think this is something that's pretty much already been resolved uh by the end [15:50] of the year but because it did come up in our test we do have to report it so [15:57] um then that is it for Minnesota legal compliance as far as your federal single [16:03] audit um we issue a separate opinion on whether your schedule of expenditures of [16:08] federal Awards is fairly stated in relation to your overall financial statements we did Issue a clean opinion [16:15] on that again this year uh I'm also happy to report there were no internal control or compliance matters uh that we [16:21] noted in our audit of your federal expenditures this year finally uh part of our process each [16:30] year if there were any findings in the previous year's audit we're required to follow up on those and just to give you [16:36] an update um we did have a couple of things that were reported based on the district's 2022 fiscal year audit um in [16:45] your June 30 2022 financial statements uh we noted an internal control finding [16:51] because there was some uh some audit adjustments that we noted that needed to [16:57] be uh recorded in order to issue fairly stated financial statements that year [17:02] again I think this mainly had to do with turnover you had in your business office at the time where uh some construction [17:08] invoices were missed and needed to be recorded to uh ACR some additional [17:14] liabilities uh also in our federal audit uh one of the things that have to be documented if you're doing business uh [17:21] using federal dollars with a vendor where you're spending over certain thresholds um you're required to go out [17:28] excuse me there's there's some uh resources where you can go and check and make sure that those parties uh are not [17:35] suspended or debarred from doing business on contracts that involve federal dollars uh and that process was [17:41] not being documented and we need to keep documentation that you did that uh for those vendors prior to doing business [17:47] with them um we went and retested both of those uh in 2023 and both uh came [17:55] came out clean we had no similar findings this year so both both of those were uh fixed in [18:03] 23 I'll just stop here and ask before I go on to the financial information any [18:08] questions on anything I've covered so far okay then I'm just going to go [18:14] through uh a few of the financial Trends um that uh we we look at and track as [18:21] far as the district Financial condition um this is a graph showing a 10-year [18:27] history of the Statewide uh average unrestricted fund balance as a [18:32] percentage of operating expenditures so this is a little different calculation then you use for your policy it's based [18:39] on uh the department of education's calculation for statutory operating debt but we do it just because we have [18:46] actually some Statewide data to give you a little bit of context uh so as you can see based on this calculation for 2023 [18:54] at the end of the year you had about 14.5% of your annual expenditures uh in [19:00] your unrestricted fund balance um the trend for the last five years there [19:05] based on the fund balances you've been maintaining based on your policy um [19:10] you've been kind of in the neighborhood of about two-thirds of what the average school district in the state has been [19:17] maintaining there you've been pretty consistent year to year kind of the same Trend but you've you're running a little [19:22] leaner than the average District tends to [19:28] another thing that we track is the number of students served uh this shows that information [19:35] over the last 10 years both in terms of your adjusted average daily membership and pupil units the reason this is [19:41] important is because it drives your general education funding formula and a number of your other funding [19:46] formulas um for the 2023 fiscal year you served an average daily membership of [19:53] about uh 8582 which is kind of the raw students in the seats um that was up about 218 [20:01] from the year before when you apply uh the waiting factors for the various grade levels that converts to pupil [20:07] units of about 9,392 uh that was an increase of 238 or [20:14] a little over two and a half per. um you can kind of see from the trend there uh during 2020 and [20:21] 2021 uh during those covid years you did have a little bit of a drop in your student population which we saw [20:27] Statewide there were a lot of uh a lot of uh kids being homeschooled doing [20:33] different things during that time but you have recovered nicely you had a about a 1 and a half% increase in 2022 [20:39] and as I mentioned about a 2 and a half% increase in your student population in [20:50] 2023 wrong way there we go um The District's general fund is this [20:56] primary operating fund this gives you uh some idea over the last 10 years where you've been at year end in terms of your [21:03] cash position and your unrestricted fund balances uh the blue bar representing [21:10] cash uh you had about $41.5 million in cash and Investments at the end of the [21:16] year and about $2.6 million in fund balance uh kind of [21:22] the difference there is you do get uh cash collections for the first half of your uh property tax levy which actually [21:30] isn't Revenue to you until the following year but you're getting those cash collections in in May that's why you're seeing the difference between cash and [21:36] fund balance [21:42] um this is kind of the numbers behind your your fund balances um you did see uh an [21:51] increase uh of about $2.5 million in total in fund balance this breaks it [21:57] down into the different components that you reported in in the general fund um [22:02] your uh nonspendable fund balances basically your your inventories and [22:07] prepaids other things where it's still an asset that you're able to use the following year but the cash can't be [22:12] resent on something else so that gets reported separately uh restricted fund [22:18] balances are um mainly kind of the state mandated spending restrictions that you [22:24] have for certain uh revenue streams most of the $4.3 million uh that you see [22:31] there in your case is related uh to Capital uh programs your capital or [22:37] operating Capital restriction and long-term facilities maintenance um restricted fund balances [22:43] went up by about 1 and a half million compared to the prior year uh your committed fund balance then is something [22:50] that you as a governing body have done by by resolution and policy uh to commit [22:56] dollars and that's kind of for cash flow uh you've got about 2% of your [23:03] um your your unassigned expenditures for the following year is what you set aside in that commitment uh and then assign [23:10] fund balances again are internally earmarked these are a little less formal you don't have to do them by resolution [23:16] but um you've got uh assignments of about $5.5 million the bulk of that [23:23] about 4.2 million is set aside for uh separation and reti [23:28] M um you do have about $825,000 to sign for specific uh carryover budget [23:35] carryovers that sites didn't spend uh and another a little over half a million dollars for some uh programming [23:42] assignments that you're carrying over from year to year and then that unassigned fund balance can be spent for [23:48] any purpose there's no external or internal earmark or restriction on that uh that was about $8 million at the end [23:55] of the year um so we kind of track track year to year what that is as a percent of your total fund expenditures as you [24:02] can see at the if you can see those little tiny numbers uh below the the table there you were pretty stable uh [24:09] from 2022 to 2023 a little over 11% uh in terms of those final three [24:15] categories as a percent of your annual expenditures um a little under 6% in [24:20] just the unassigned fund balances a percent of expenditures your policy you actually pay it to your budget uh um you [24:29] try to keep that unassigned fund balance between 6 to 10% of your following [24:34] Year's unassigned uh adopted budget expenditures uh and you were right about [24:39] 7% uh with this fund balance all year rate in your [24:49] policy general fund expenditures for the year were um $1 143.5 [24:54] million you were over budget by about 1.3% uh roughly $1.8 [25:01] million uh almost all of that variance came in the other uh category as you're [25:07] looking at the graph there um the kind of big things in there are your [25:12] investment income and things like uh admissions tuition [25:17] donations um things that are a little uh change changeable year to year and hard [25:23] to predict uh you budget that pretty conservatively so you're about 2 .1 million higher than budget and about [25:30] $2.4 million higher than the prior year uh as far as what you took in in those in those different areas one of the big [25:37] things there that all of our districts saw here your investment income um due to the changes in interest rates and [25:43] also the way the market was um if you're holding Investments that um have a [25:50] maturity that goes more than one year you have to mark those to Market every year so even though you tend to hold [25:55] those to full maturity and and and end up in the same place regardless uh as [26:01] the market goes up or down you do have to recognize any gain or loss even though you haven't sold those [26:08] Investments so uh in 2022 a lot of our districts actually had negative investment income because of market [26:14] conditions and that did come back in 2023 so a lot of that Improvement was in your investment [26:21] income um your property taxes were about $450,000 under budget that's kind of [26:27] another rky thing that happened this year because the state decided to use some of their federal dollars uh to pay [26:33] for some of the Unemployment uh the districts unemployment insurance costs [26:38] that uh districts were incurring so some of the levies that districts had been [26:44] doing related to that uh there ended up being some negative adjustments coming through the tax shift for that um so [26:52] that that's the big reason why your property tax revenue came in under budget for 2023 is some of those adjustments G came through in your [26:59] Levy um on the expenditure side you spent about [27:04] $14.7 million in 2023 you're about a million half dollars under budget there [27:12] um a couple of kind of offsetting variance your salaries and benefits were just about $2 million under budget a lot [27:20] of that had to do with not being able to fill all of your budgeted positions it's challenging labor market again this is a [27:26] trend we're seeing with a lot lot of our districts um so kind of the the flip side of that is your purchase Services [27:33] uh go up you filled some of that with some outside purchase services and another kind of big thing in that [27:39] purchase service area is transportation costs another Trend we're seeing at a lot of our districts um it's been very [27:46] challenging uh to keep those Transportation costs under control and you're you're no exception there uh also [27:52] your uh Supply costs were about $1.8 million under budget and a lot of that is just has to do with the timing of [27:59] some of the uh instruction technology purchases that you were [28:08] doing just briefly touch on your two other operating funds your food service [28:13] and community service funds these are smaller funds but um also very important to the district your uh Food Service [28:20] fund accounts for Your Child Nutrition program uh you ended the year uh with a [28:26] total fund balance there of just under $1.2 million that was down about [28:32] $133,000 right in in line with what you budgeted you budgeted to spend that down by about [28:38] $100,000 um one of the big things that happened there is you saw a shift back from uh the program that you were [28:45] running and in 2022 and you see from the graph there you your fund balance went up quite a bit again that's a trend a [28:52] lot of our districts saw um you were running a program in that year where uh [28:57] all students were receiving a federally funded free launch and know the reimbursement rates were higher than the [29:03] typical ones that the state program pays uh saw a lot of our districts uh an improvement to their uh fund balance in [29:10] that fund during that time um for 20123 you're kind of reverting back to the more traditional program where you've [29:17] are getting more of your revenue from actually lunch sales and the uh reimbursements are being split more [29:23] between state and federal funding um your community service [29:29] fund uh fund balance ended the year about $1.7 million uh that went up about [29:35] $98,000 again you budgeted for a small increase of about $6,000 so that was right in line with what you were [29:42] projecting um the recovery that you see there uh again very common trend for [29:48] school districts a lot of those programs were uh shut down or put on hold or [29:54] under pretty severe restrictions during 2020 and 21 and now they're opening up [29:59] again you're seeing that participation uh go back up the level of revenues and expenditures kind of going [30:04] back to a more typical typical year and then the final table I will [30:12] share with you here we go um the very first statement in your financial [30:17] statements is your District PR statement of net position this takes all this fund [30:22] information converts it to a full acrel basis which brings in some of the [30:28] long-term things that aren't reported in your funds kind of the big items there are your Capital assets and depreciation [30:36] the debt that you have outstanding to either acquire or build those Capital [30:41] assets uh and of course everyone's favor your proportionate share of the two Statewide pension plans that you have to [30:47] report p and TR uh every district has to report their share of the underfunding [30:54] of those Statewide pension plans and these entity-wide financial statements just to kind of give the user of your [31:01] financial statements some idea of what commitments are out there because part of that plan is attributable to the [31:07] employees you have participating in it uh on this basis you had a total net position of about uh a deficit of about [31:14] $7.4 million the top part of this if you can see how you get from a total fund [31:21] balances and all the funds we talked about of about $43 million to the good [31:26] to that uh $7.4 million deficit most of that is directly attributable all of it [31:33] frankly to the pension and OPB liability line you see there you've got about $121 [31:38] million liability reporting most of that is relating to uh your participation in [31:46] those State P ER and TR pension plans uh the good news is you see that increase [31:51] there of about $26.5 million compared to the last year a lot of that on in the [31:57] unrestricted category and a lot of that happened because the funding level of [32:02] those plans in the most recent Actuarial study did improve you see about a $20 million uh increase [32:09] or smaller deficit uh in that pension line up on top there that's that all [32:16] kind of Falls to that unrestricted net position line and is driving that deficit that you see there but that did [32:22] improve the state's been pushing the funding levels up uh on those plans and doing some things to try and get the the [32:29] funding levels of those in a more positive place so that was everything I had [32:35] intended to cover uh from a number standpoint questions on anything that I [32:41] spoke to board members questions [32:47] comments go yep um director Woodard can you this asbo designation um when will [32:55] we find out about that yeah so we have until I believe um [33:02] December 31st to actually submit our application it might be actually a little bit later than that um since [33:09] we're a first-time participant we might go through a more rigorous review process but I would expect that we would receive the award and it would be um an [33:16] official communication sent to chair allenburg and superintendent Stanley in the spring of 24 if not the summer of 24 [33:23] and that just for clarification that is a national recognition for financial operations absolutely um [33:31] so as Mr La had mentioned before we are raising the level of our financial reporting from just basic financial [33:37] statements to the annual um comprehensive financial report the highest standard in governments and so [33:42] the asbo will review um individual submissions to make sure that we comply with every component of the Acer and so [33:49] we'll be recognized for doing so great thank you and I want to thank you and your team as well as Mr low for um the [33:56] work that you you do for on behalf of our district because it is one of those topics where if it's going well no one [34:03] is paying attention to it but if it's not going well we really feel it so thank you to you and your team for the [34:08] work that you do you're welcome um yeah before we move on to the next agenda item I just wanted to thank [34:15] you director Woodard for your outstanding work and really elevating the Excellence in our business [34:22] operations I think it's uh such a fundamental part of our district that um [34:29] it's like an unsung hero of our district so thank you very much um it doesn't go [34:34] unnoticed by board members I really appreciate it and thank you for coming back really appreciate it so thank [34:48] you um okay we're going to move on to our next discussion item which is our fiscal year 2025 2029 Financial forecast [34:57] and assumptions again with uh director [35:03] Woodard give a moment for the presentation to [35:16] appear chair allenberg members of the school board Dr Stanley um it's that time of the year where we begin our our [35:23] preparations for the next fiscal year as well as subsequent school years today you certified our Levy so that's going [35:29] to um set 35% of our Revenue budget for um next school year um part of this [35:35] process involves taking all of our current Staffing our current revenue streams what we believe will occur in [35:41] the next one to five years and creating a forecast which will um ultimately paint a picture regarding our fund [35:47] balance for the next five years before I get into the future I'd like to take a quick step back to the [35:54] past you'll recall that last school year um I gave gave a similar presentation which indicated a $4 million shortfall [36:00] between revenues and expenditures for the fiscal year that we're currently operating 2024 at that time we immediately engaged [36:07] the budget reduction reallocation and revenue generation process otherwise known as the Berg in order to contain [36:13] our expenditures or create revenues um for a net difference of $4 million um we [36:19] were able to do that with a number of um different solutions including the right sizing of licensed staff at the middle [36:25] school um we also went to a pre-pandemic staffing level in terms of PA professionals at the kindergarten first [36:31] and second grades we applied chargebacks that were previously not done to our special Revenue funds the Food Service [36:37] fund and the community service fund and we also froze operating Capital allocations to school sites um that [36:44] process was successful in um keeping our School classrooms mostly unaffected [36:49] which is difficult to do when um 70% of your your salaries or 70% of your budget [36:54] rather is salaries and benefits most of those for um licensed staff and Pa professionals um so we were pleased with [37:00] the result we fixed our problem um we had a conservative assumption regarding what the state would do in the 2023 [37:07] legislative session we assumed only a 2% increase on the formula and no other increases to other Revenue categories so [37:14] we fixed our own situation and we hoped that the state would come through with additional [37:19] funding which they did as you'll see on the next slide there we go [37:27] so the 2023 legislative session appropriated an additional 2% above and beyond the 2% we already assumed so [37:33] that's an additional $1.3 million that we're receiving this year um next school year we already know that's going to be [37:39] 2% uh more importantly perhaps the state also decided to somewhat fix the broken [37:45] special education Revenue formula um in the years past we were receiving about 6% of the calculated cross subsidy um [37:52] this year and going forward we'll receive 44% um so that's a massive increase inrease in funding will receive [37:57] about3 to $3.5 million of additional funding for expenditures that were already incurring so that's a huge plus [38:03] a couple of additional um smaller Revenue categories were added School library Aid um school districts are [38:09] required to hire at least one licensed meia specialist this District currently staff's nine and so we're able to take [38:15] that money and just add it to our bank account um also student support Personnel Aid we're able to add a [38:21] licensed psychologist school nurse or social worker um or maintain existing position um we added a half position to [38:28] support EVP this year and so part of that funding is going there all of those funding sources will be ongoing however [38:35] for the purposes of our forecast we're assuming that they will remain flat in all future [38:45] years again Revenue assumptions as I mentioned earlier 2% we already know that's um locked in for fiscal year 25 [38:53] going forward the state agreed to tie that to inflation with a Flor of 2% and a cap of 3% um for the purposes of our [39:00] forecast we're just going to assume 2% in all years um which might seem conservative however if you'll recall in [39:06] years past when we didn't know what the funding would be most school districts would assume either zero or 1% in the [39:11] out years um just to be conservative the $2,197 in operating referendum Revenue [39:18] that we'll receive for next year which you actually certified tonight um is voter approved of course we last [39:23] approved that in 2017 that does grow with inflation um however in the future years we're only adding about 3% we're [39:30] anticipating that the Federal Reserve and the work that they're doing to combat inflation will work in the long term and will be closer to the 2 and a [39:37] half to 3% range special education as I mentioned [39:43] we're expecting that to Simply grow with our expenditures that Revenue program is directly tied to what you actually spend [39:49] in those programs and so as those expenditures increase we expect a proportionate increase to the revenue um [39:56] we'll see if the state comes through with additional funding and we'll adjust in future years if [40:02] needed there's a note there about the tax base increasing about 6 and a half% in all future years that one only [40:08] affects the um capital projects Levy or the tech Levy um funding uh that [40:14] directly increases with the tax base increase which is nice so as the city of 's property wealth increases that Levy [40:20] will increase in direct proportion important to keep in mind though that that funding is rather restricted and can only be used for um Capital assets [40:28] vehicles but mostly technology and infrastructure support which is what we use it for in [40:34] Nina so overall pretty flat is what we're [40:40] anticipating expenditures are actually historically a little bit easier to predict however in the current climate [40:46] with um I wouldn't say hyperinflation but extremely elevated inflation a tightening labor market and um extreme [40:54] upward pressure on salaries um it's it's becoming a little bit more difficult to predict um what expenditures will do [41:00] particularly as 70% or so of our expenditures are salaries and benefits um it's important to actually start with [41:06] 2024 not 2025 you'll remember that the school board approved a budget for this [41:12] school year with a $5 million deficit um after the state came through with the additional funding it was actually too [41:17] late in the budget cycle for us to deploy those funds and so we decided to let those hit the fund balance and then [41:23] reconvene and decide what to do in future years um we ratified a collective bargaining agreement tonight and also [41:29] several others over the last 12 months um that means that that $5 million will actually go directly to supporting those [41:35] staff um that we value so much and that will put us in a position where the starting point um for fiscal year 25 is [41:42] likely to be under our 6% unassigned fund balance policy um as you'll see in subsequent slides we're predicting to be [41:49] at about 5.6% at the end of fiscal year 24 and that's directly due to the um New [41:55] collective bargaining agreement agreements other Revenue Cate or expenditure categories rather are [42:00] increasing by the amounts indicated on the screen um in the outer years I think we're going to return to more reasonable [42:07] increases um the licensed salaries which make up about 50% of the um total [42:13] salaries and benefits of the school district we anticipate those are going to increase anywhere from 3.7 to 4.6% [42:20] year-over-year administrative and other non-licensed salaries we expect to be slightly lower um historically that's [42:25] the trend the and salaries tend to go up more rapidly than the other salaries um you'll notice that utilities [42:32] we are increasing by 10% year-over-year um over the last two years we've seen a 10% increase which is slightly elevated [42:39] we would expect a return to more stability in future years however keep in mind that we are adding square [42:44] footage to a couple of our facilities and so we do expect elevated utility costs as a result of that um liability [42:52] insurance a 25% increase predicted for next school year um that was our prediction last year for this year [42:58] however if you recall in June we reported that our increase was actually 36% the hardening of the property and [43:04] liability Market continues um especially as um insured values go up we do a lot [43:09] of long-term facilities maintenance in our district and as a praisers come through and revalue our properties um [43:15] the insurance also goes up as a result construction cross increase the value of the property increases we pay more to [43:21] ensure those properties um hopefully the 15% 10% 5% step Downs um occur um this [43:28] is a relatively small part of our budget though so not not reason to be [43:34] alarmed when you synthesize all this data into the more than 14,000 different um expenditure and revenue combinations [43:42] that we have you get the the following picture again this assumes status quo level Services um we're going to [43:48] continue to operate nine buildings with nine principles we're going to have one superintendent one Director of Finance [43:54] the same number of teachers the same number of ad administrators Etc so when you extrapolate all those expenditures [44:00] with the assumptions I've used as well as our revenues you'll see that in the current fiscal year rather than the um [44:05] more than 8% fund balance that we originally approved our budget at we're going to end likely under the 6% fund [44:11] balance policy and if unchanged that fund balance will simply become smaller and smaller over time about 3.9% at the [44:19] end of fiscal year 25 and a negative 19% at the end of fiscal 29 um where this [44:25] condition to be left untreated um per board policy the fund balance policy I believe [44:30] 703 um once the administration is aware that the school board or the school district will be under that 6% um cap on [44:38] our unassigned fund balance we would immediately present a plan to bring ourselves to at least 6% in the [44:43] subsequent fiscal year um so at a future school board meeting I believe in January we'll be presenting a number of [44:50] options to bring us out of that position um in order to reach 6% right on the money it's going to be about a 2.56% [44:57] 2.56 million rather reduction um I don't think that that's going to be the recommendation that the administration [45:03] brings to the school board in January we're still um discussing what that will look like however it would likely be a [45:09] higher number than the 2.56 because where we to only get to 6% at the end of fiscal year 25 if left [45:16] untreated we would immediately go under 6% because expenditures are not going to remain flat um so we'll provide a number [45:22] of different options at the next Schoolboard meeting and also our our recommendation for what we should do at [45:28] that point um we would seek Schoolboard approval on a parameter for a reduction and we would begin the more public um [45:34] Berg process engaging with different stakeholders um parents staff um senior [45:39] leaders throughout the district and we would ultimately come back with a list of containment options in February or [45:46] March so that's where we're at board members questions comments [45:53] director nibble um thank you thank you director Woodard for the update and the [46:00] forecast um I want to just Express appreciation for your continued uh [46:05] Clarity in presentation of budget information not only for our Board review but also for the community [46:12] there's always a lot of moving Parts um what I particularly appreciate is how we [46:18] are balancing uh an incredible legislative session that was completed [46:24] last year with some really needed and welcome benefits and gains with Revenue but also the fact [46:31] that that doesn't bring the district forward or just assure that there can't be any [46:37] budget cuts so I appreciate the update regarding our fund balance and just want to remind the community of our [46:44] responsibility as a board to maintain a healthy fund balance how that supports our ability to operate as a district um [46:53] and just look forward to that forecast so that we collectively can remain informed as to what's coming forward and [46:59] then make those decisions together as to how to best balance it so thank [47:07] you anything else great thank you very [47:13] much uh that ends our discussion items are there any leadership [47:19] updates I do have a couple of updates uh first of all I sent this out in my message um yesterday as well and I want [47:26] to take any moment that I can to talk about our fifth grade students who uh [47:32] their um experiment was chosen to go to the International Space Station and I'd [47:38] like to talk a little bit about what happens how they are chosen by a national team that isn't a local team [47:44] that chooses that experiment and so um we work with local experts to narrow it [47:50] down to 5 to 10 experiments we had a total of 200 and then those um [47:55] suggestions are sent off to a national team and that national team actually chose um our fifth grade students [48:02] experiment where they will be working with astronauts on the germination of [48:07] raspberries um their report made complete sense to me they explained why [48:13] raspberries are so beneficial for nutrition and how it would help anyone who who who lives on the moon so um we [48:22] are really excited about that um they were thrilled their parents were thrilled we um we're over at Creek [48:28] Valley for in um an assembly the other day uh to announce it and that was just [48:35] an incredible time the other thing is um that I [48:41] announced in uh the video that I sent home to everyone yesterday but also via [48:46] Communications uh through our Communications Department is um uh Paul pesel has now um formally agreed to move [48:54] into permanent princi principal ship he's done a great job for the past 6 months um we continue to receive [49:00] accolades whether I'm at PLC or I'm in the building talking with students um [49:06] many many of my cabinet members continue to receive acoid for him so we're excited that he is willing to [49:13] permanently become um a hornet and so um which may have been a little difficult [49:19] cuz he was in wetta for a few years there so I'm really excited about that and then finally I received a [49:27] commendation for one of our board members and I'd like to hand out that [49:32] Commendation so I received a letter it says Dear superintendent Stanley inclosed you will find a certificate [49:39] honoring Karen gabler for completing the msba leadership development program [49:45] which has been accomplished by Karen successfully attending the leadership Workshop series phases 1 through 4 [49:57] um we at msba appreciate the efforts and dedication of all Minnesota Schoolboard [50:02] members that all Minnesota Schoolboard members put forth for the sake of public school children and and um We Appreciate [50:11] You for their continued participation so there's going to be a lunch in where Karen will be honored um at the [50:18] leadership conference of the during the msba conference and I have a certificate [50:23] here for you that I would like to award [Applause] [50:32] thank you very much for that um that it takes a lot of work to go through all of [50:38] those um sessions and um we really appreciate that that that occurred and [50:45] so um other than saying oh we are heading into winter break and um just [50:51] encourage families and all of our staff and um students to just enjoy this break [50:59] you won't be able to go sleding but you'll find something fun to do and um [51:04] thank you to everyone for all you do to support our district thank you Dr Stanley um all um [51:12] all those in favor of adjourning the meeting say I I oops I'm sorry is there a motion to adjourn the meeting so moved [51:19] is there a second second now all in favor of adjourning the meeting say I I I anyone oppose [51:26] uh the motion is approved and the meeting is [51:54] adjourned