[3:06] good evening everyone uh this is Dr Stacy Stanley superintendent of Edina [3:11] Public Schools really excited to be here with you thank you so much for joining us tonight for the um virtual community [3:18] input sessions around budget reduction reallocation Revenue Generation Um tonight joining me as well [3:26] is good evening this is Mt Woodard your Director of Finance and ations all right and we always like to [3:34] ground ourselves with our uh vision and Mission so anything that we do in the [3:40] district is grounded in that so we're going to go ahead and get started with that so our vision for Ed Dino Public [3:47] Schools is for each and every student to discover their possibilities and Thrive [3:53] and no matter where we are um Gathering [3:58] whether it's in a leadership team or we are really working and referring to where we're at right now with finances [4:05] we really use that as our North Star in any of the decisions that we are making [4:10] and that guides our we're Guided by our [4:18] mission which is for Ed that Eden Public Schools is a dynamic Learning Community [4:24] delivering educational excellence and preparing all students to realize their full potential [4:30] and we do this in a few ways through academics activities and [4:36] opportunities we encourage curiosity Foster creativity and develop critical [4:42] thinking skills we really work to support every student's educational journey by creating a caring and [4:49] inclusive School culture that supports the whole student so um as we go through [4:57] our time together this evening um I encourage you to just keep our uh vision [5:03] and our mission at the Forefront of your minds now mert is going to start us out [5:10] by sharing some information but before we get started um I just want to give you an overview of what our time is [5:16] going to look like together so we in our district views a [5:24] process called irod and it's a decision-making process it stands for [5:30] information reactions options and decision and you'll see there that the I that are in [5:36] the O are highlighted because we are going to go through that process tonight we're MD is going to share quite a bit [5:42] of information with you we're going to have an opportunity for you to share via the link that you were given to um ask [5:49] questions your initial reactions and then we are going to give you some time [5:55] to perhaps submit some ideas that you might have for us um and then we'll come back together in the end and I'll give [6:02] you a little bit more information about timeline um as we move through this process of a uh $3.62 million Cost [6:15] Containment good evening for those who may have missed a start this is Mt Woodard your Director of Finance and operations for the school district and [6:22] I'm pleased to bring you up to speed tonight on some facts regarding our budget um this is by no means meant to [6:27] be a comprehensive super deta presentation about the district's financial situation um however it's more [6:34] meant to be a highle overview about how education funding in the state of Minnesota currently works and why we're [6:40] implementing the $3.62 million Cost Containment process for next school year that Dr Stanley just mentioned um for [6:45] more detailed information please visit our fiscal year 2025 budget planning website which is now live or feel free [6:51] to email me directly um with any questions you have tonight or anytime in the future um before we get into the [6:57] budget fact regarding Edina we're going to play a short video for you which um kind of outlines how school districts in [7:03] the state of Minnesota currently receive their funding great schools here in Minnesota [7:10] serving our youngest Learners in early childhood family education and preschool programs to our K12 programs and Beyond [7:17] with adult education districts have people working hard to maintain and build programs that help Learners of all [7:24] ages this of course requires money to operate but how exactly are School [7:29] funded in Minnesota unfortunately it's a bit more complex than some of the principles taught in an inro to Business [7:36] course funding public education is a complicated business there are many stakeholders at the table students [7:43] parents School leaders community members Business Leaders and elected officials [7:48] to name a few the money to pay for elementary and [7:53] secondary education in Minnesota comes through a combination of State collected taxes primarily in come and sales tax [8:00] along with locally collected property taxes the majority of revenue for school districts up to 70% comes from the state [8:08] the largest share of the funds provided to schools comes in the form of general education Aid which is intended to [8:14] provide the basic financial support for the education program this goes to fund things like Transportation teachers and [8:21] curriculum materials school districts also receive funding for specific categories through formulas generally [8:28] used to meet costs that vary significantly between districts These funds must be used for specific areas [8:34] like special education or a long-term facility maintenance some of these funds are tied to specific items like literacy [8:41] programs to get students reading by third grade or School breakfast and lunch programs the remaining School [8:47] District Revenue comes from local tuition and fees federal grants and local property taxes there are many [8:53] variables which impact our budget each year enrollment Community Support the local economy and Decisions by state [9:00] lawmakers the challenge is to take each of these revenues which typically don't keep Pace with inflation and meet the [9:06] needs of all of our stakeholders for our budget we take the [9:12] revenue we expect to receive and a lot the funds and buckets the largest bucket is for paying our teachers and staff [9:19] other buckets include special education Transportation operations and maintenance and administration the state [9:26] also mandates some of our spending for things like special education and basic skills other factors influence how we [9:32] spend money class size ratios aging buildings emerging technology and needs [9:37] specific to the students in our district we always need to prepare for the Winds of Change which can quickly impact our [9:44] local budget new legislation competitive enrollment teacher retirements and health insurance costs are all things [9:51] that can quickly make a big impact each year our challenge is how do we connect [9:56] all of these revenue and expenditure drivers in order to build an effective budget while taking into account [10:01] stakeholder voices it's important for us to collectively develop Financial priorities to ensure we use our [10:08] resources wisely and have the greatest impact on our [Music] [10:20] Learners as you know an education is a very staff intensive industry and we're [10:26] very much a people organization in Idina um staff compensation represents [10:31] approximately 79% of the district's $149.4 million budget which is about $17 [10:37] million in total and that ratio is pretty typical for school districts in the state of Minnesota as well as across [10:43] the country that means that any changes to staff either to the number of Staff we employ or to how they're compensated [10:50] will have an extremely significant impact on our budget again I mentioned that about 117 million of our $149.4 [10:57] million budget is dedicated to wages and benefits for staff so a 1% increase to [11:02] that is nearly $1.2 million so highly significant um a tightening labor market [11:08] and inflation are causing greater increases to wages than we've seen in recent years when the district creates [11:14] its budget it does so using the best available information at the time um every other year that means that we know [11:19] exactly what staff we're going to make however um some years collective bargaining Agreements are set to lapse [11:25] and we don't have a new collective bargaining agreement in place and years where that occurs The District administration makes its best guess at [11:31] the time as to how Those comp uh Collective burgain agreements rather will increase um this year subsequent to [11:38] the budget being passed we did negotiate new collective bargaining agreements for um some of our groups and that's going [11:44] to result an additional four to5 million of Staff compensation Investments the school district will make above and [11:51] beyond what we budgeted that's going to create a new expenditure base of course in the current year but all future years [11:57] as well um that will continue to to grow as we negotiate subsequent collective bargaining agreements and so the [12:03] district at this time needs to take measures to contain its costs and ensure long-term sustainability both [12:08] financially and programmatically an alternative way of [12:14] looking at our total expenditures from a program and service perspective um you'll notice that more than 80% of our [12:20] total expenditures are allocated and dedicated to classroom activities or services that directly impact learning [12:27] now what that means is that we're doing extremely efficient and lean job with our administrative expenses and we're at [12:32] just under 4% in that category which is among the best in the metro area um which we're proud of um while the [12:39] continue will will the district rather will continue to analyze its administrative costs and and continue to [12:45] be more efficient and more lean um the leaner and more efficient we do get uh it makes it more difficult to actually [12:51] contain costs in that area um we do need to provide a a basic level of administrative service um again we'll [12:57] continue to analyze and tighten our belts in that area but it it does become more difficult over [13:04] time um news headlines this past year reported that uh the Minnesota Legislature made um so-called historic [13:10] investments in in education funding while that's partly true and we're we're grateful for the additional Investments [13:16] that were made in in our school district and school districts across the state um it's super important to show you how [13:21] that funding compares to the high levels of inflation that you are no doubt experiencing in your daily lives and we [13:27] have experienced an education not only in the last couple of years but actually over the last 20 [13:38] years the following is a chart from the association of school business districts school school districts rather [13:44] Association of metropolitan school districts um the orange line is the basic per pupil funding that the state [13:50] has allocated over the last 20 years so from 2023 to 2025 the average increase [13:56] over the last 10 years has been about 2% % so the orange line is increasing by about 2% if you add in this blue line [14:03] however this line represents um what per pupil funding from the state would have been um had increases matched the [14:10] Consumer Price Index year-over-year increase otherwise known as known as inflation a significant Gap as you can [14:17] see from the graphic has accured over those 20 years so much so that for fiscal year 25 had the per people [14:24] funding been tied to inflation over the last 20 years we have been experiencing an additional $1 [14:30] 13556 per pupil which in terms translates to about $12.8 million of [14:35] additional Revenue um so that's a very significant amount of money that we otherwise would have received um the [14:41] school district continues to um Advocate um to legislators at the state level and [14:46] continues to partner with other advocacy bodies um however the reality is at this time um and in the future funding is [14:53] likely to lag behind inflation particularly inflation to wages [15:02] um before I speak about our our other some of our other funding sources and cross subsidies uh one of the previous slides did mention our AAA credit rating [15:10] um that's the highest credit rating that's available um to school districts that issue debt um we're one of three [15:15] school districts actually in the state of Minnesota that holds this um coveted status and one of about 92 in the [15:21] country out of 13,000 plus school districts what that means is the district is doing an extremely adequate [15:27] job of managing and stewarding U public funds and that's a direct benefit [15:33] actually to resident taxpayers because when we do issue debt we're able to obtain the best interest rates on the [15:39] market um which keeps our our property tax levels um as stable as possible um [15:44] so we'll continue to do our best to maintain that that status not only for the next year but for the next um next [15:50] several decades I spoke a little bit about increases to our basic education formula [15:57] um the state also gives out um categorical AIDS or Aids that are meant to serve specific purposes within the [16:03] school district um the main one of those that the school district receives is for special education um special education services [16:10] are mandated by federal legislation which was put into place in 1974 um it's called the individuals with disabilities [16:17] and Education Act or idea um at that time the federal government um pledged [16:23] to fully support the cost of providing special education services however um some 50 years later we are still not [16:30] receiving the full amount last fiscal year the school district spent about 26 or $27 million on special education [16:37] services to students and received only about 16 to 17 million so that cross [16:43] subsidy or the gap between actual Services provided and revenue received of about $8 million are funds that we [16:49] have to find from other sources within the school district um and that only takes away from not only what we can [16:55] provide to our special education students but to all students across the district District other categories of [17:00] funding to support English learner programming achievement integration programming safe schools Revenue um all [17:07] suffer from a similar um cross subsidy although to a lesser degree however in the aggregate we're looking at upwards [17:13] of $9 million per year which is a significant impact on on what we can do for our students and families each [17:23] year so three of the main um themes that have come across in this presentation [17:29] for me have been that a um staff compensation represents the overwhelming [17:35] amount of our budget and it's rapidly increasing and state funding um is not going to keep up with those increases um [17:42] in fact historically we've proven that it hasn't um we're glad that the legislature has um tied future increases [17:49] to inflation however they've capped it at 3% um based on the Consumer Price indexed action um wage inflation [17:56] oftentimes will surpass what the CPI increases by so we'll have to see in the [18:01] future how that um how that correlates to funding for school districts and if we're able to maintain our services [18:07] however at this time we cannot rely on additional Appropriations from the state and so we're going to enter a Cost [18:13] Containment protocol for next school year before we get into next school year [18:18] um I'll just take you back to fiscal year 2024 planning so this time last year the school district announced that [18:24] it believed it would have a $4 million budget deficit and that's some we actually took care of locally before any [18:30] additional Appropriations from the state um we were able to identify a number of efficiencies throughout the school [18:36] district and we're able to come up with the $4 million largely aimed outside of the classroom and away from Learners [18:42] about 80% of those containments were aimed outside the classroom as I mentioned a little bit [18:48] ago only 4% or so of our expenditures are aimed in the administrative areas and so we will continue to analyze [18:54] reductions in those areas however at this time we cannot promise that we'll [19:00] be able to deliver on 80% reductions outside of the classroom again at this point all areas of the school district [19:06] are being analyzed for containment um so that we can reach that $3.62 million Target and maintain our financial [19:12] stability and and maintain our fund Bounds at the level dictated by board policy at this time no decisions have [19:19] been made regarding containments that's kind of what this process is for um so we'll continue to gather information um [19:25] from those who are with us tonight and we've been at several School s um over the last couple weeks presenting similar [19:31] information and Gathering ideas and feedback a number of surveys have been sent out and so we've gotten a lot of [19:36] information and feedback from those as well and so we'll kind of compile all that information and and bring a [19:42] recommendation to the school board and Dr Stanley is going to present um kind of the next steps um in that [19:50] process thanks a lot M I appreciate that so that was quite a bit of um additional [19:59] information for uh the community to learn and I'm sure that you have uh [20:05] several thoughts that are circling through your head just to reiterate um what mer said we have held several uh [20:13] Berg meetings throughout the community um we have collected information from [20:19] teachers from our principals from our staff um and um through via the [20:24] community meetings we've actually had several people um um submit questions [20:30] and ideas as well and so again um we'll work together to summarize that [20:35] information so that we can make a determination on a recommendation that [20:41] we will make to uh the board um shortly here so I see some um comments coming in [20:51] already and so let's see Leanne hubard thanks Leanne for being on [20:59] uh her statement says is it meaningful to change open enrollment either [21:05] beneficial or less so to accept more out of District [21:10] students so mer do you want to talk about that absolutely um this this has come up [21:17] several times in in our sort of town hall meetings that we've held at our various School sites it's a great [21:23] question um the answer is is not super exciting it's it depends it really just depends on um what our class sizes look [21:32] like um we do have a a board dictated class size policy um in terms of where [21:37] we staff our elementary schools as well as our secondary schools and so any additional enrollment would have to fit [21:43] within those guidelines um if they didn't we would have to open additional sections um which then decreases sort of [21:49] the efficiency of the revenue coming in because we would have to spend additional dollars additionally um we [21:56] don't know what types of students are are enrolling in our school district um you may know that our special education [22:01] services that this school district provides are kind of renowned across the state and and likely the country as well [22:06] and so um we're glad to serve those students and we do a great job of it um however those students are also more [22:12] expensive so it's not as simple as saying okay we're going to bring 10 students in at you know 11,000 or so [22:18] dollars um ahead and and bring in $1.1 million of Revenue um we might actually [22:23] at the end of the day bring in a lot less Revenue once you consider the additional expenditure that come with [22:28] that um we also have limited space within our buildings and so all those factors kind of have to be analyzed and [22:35] determines uh I think at this moment in time we're at about 80% or so capacity which is a very comfortable um area to [22:43] operate in and it's actually near optimal in my [22:49] opinion all right thanks a lot Mark for sharing that and please do add your questions using [22:57] using the form and then I will go ahead and I'll read those out to everybody who [23:03] is on the call as um maybe you're thinking or even typing in right now I'm [23:11] just going to go back to um what M said is we begin to ask you around um for [23:16] your feedback around how we what might be some things that we can either do to [23:23] help get to our $3.62 million [23:28] um Cost Containment or um what might be some areas that you want us to really [23:35] strongly consider before we might um impact that area one of the things that [23:41] M mentioned is that um last season uh [23:46] during the leg legislative session um the [23:51] legislators um put a condition in where as part of negotiations uh for teachers [23:58] um one of the things that we need to look at is class sizes and as mer said that is something that um we take into [24:05] consideration um whether whether you know it's about Open Enrollment or as [24:11] we're looking at any of the cost containments and so as you provide your feedback one area that we have a [24:18] parameter on is around uh class sizes and what we have done to partner with [24:25] our Union is to um have an agreement that we will stay within the class siiz [24:33] ranges we have a class siiz range um for every grade level um all the way through [24:38] high school grades and that we will stay within those ranges um we will also uh [24:45] schedule some time to meet with teachers our Human Resources Director is putting that together and she will meet with a [24:52] team of individuals a few times a year just to monitor that process so that's [24:58] why we uh have that sandbox there around um the feedback in that we would [25:05] not uh be able to move outside of the class range and sometimes we get feedback that says well at the high [25:11] school level why don't you have those class sizes at 33 or 34 and um because of that agreement and [25:19] really wanting to honor that agreement uh we are going to take that off the [25:26] table all right [25:32] so there are a variety of ways for you to provide your feedback you have that you have that link that um is there in [25:39] front of you and then if you have a a smartphone sting next to you right now as you're viewing go ahead pull that out [25:46] you can scan the QR code that is going to take you to a farm we really need the [25:51] community feedback um as we move into the final uh phases of determining what [26:00] areas we might need to tap into in order to meet the 3.62 million do Cost [26:06] Containment so you're going to provide your feedback uh we we have gone through [26:12] all of the feedback that we've received thus far and it's um been beneficial uh [26:18] we've received a variety of ideas you know Community really wants us to uh [26:23] hone in and and start to think about cost containments around um [26:29] efficiency um Community we've received feedback that Community really wants us to do our best [26:36] not to uh touch par professionals so that we would keep par Professionals in [26:42] the classroom and so um that feedback is so important as we um use our vision and [26:50] our mission as as our guide posts uh and as we review the the feedback [26:56] items so so our next steps I'll go ahead [27:01] and go through um next steps and um the direction that we'll be going so uh we [27:09] will be providing the final um set of [27:17] recommendations to the board for the board meeting on Monday February 12th so [27:24] they will get our administrative set of recommendations I should say initial set [27:30] of recommendations um on Monday that information will come out in the board [27:35] packet which will be available on Thursday uh Thursday evening and then uh [27:43] we will present information we'll have an opportunity for the board uh to ask questions um we'll answer them as best [27:51] that we can and then the board will continue to review that information over the next month they may direct me to go [27:58] back and get some additional information um they may use their February 20th [28:06] session to just have some uh it's a work session to have some additional dialogue about the items that are in the initial [28:14] recommendation and then depending on the feedback that we receive from them we will make modifications accordingly and [28:22] submit the final recommendations uh that will be go to the board for their final action on [28:30] March 4th 2024 so we have we have about a month um [28:37] before we would get to the point where uh we would know the final steps of moving into for that 3.62 million Cost [28:47] Containment doesn't look like any additional comments or questions have come in um as mert shared earlier we do [28:56] have again our website um for Cost Containment it's the um listen learn [29:04] return website and it is available if you just go to the first page you click [29:09] on a link you can get right to that website and all of the information um that we've gathered as mer said very [29:16] much more detailed budgetary uh spreadsheets and overview that he's [29:22] provided to the board is available there um this it we've recorded this and this [29:28] will actually be posted on the website any updates you will be able to find [29:34] there and so um please if you want to come back and review this video go right [29:39] ahead and again uh go ahead and submit your feedback even if if a question [29:45] comes to you later because we will continue to review those again we will submit our [29:51] initial recommendations to the board and it will be posted in the Schoolboard [29:56] packet on Thursday at in the evening so thank you [30:02] very much for joining us this evening we truly appreciate it and have a great [30:20] evening