Mhm. >> Mhm. >> 2026 number 137 is the Jackson building.Present at this meeting are school board members, Superintendent Tucker Cale andour voting ex officio member and assistant school board clerk Ms. AnnKrieger. Ms. Krieger, will you please call the roll?Director Barlow? >> Here.>> Director Cook? >> Here.>> Treasurer Kaplan? >> Here.>> Director Marvin? >> Here.>> Chair Nathan? >> Here.>> Clerk Whitefoot? >> Here.>> Vice Chair Wilson? The board acknowledges this site and allour meeting sites are situated on the ancestral land of the Dakota people andwe honor the Dakota nations and sacred breath of all indigenous people.At this time we offer the opportunity to be able to say the Pledge of Allegiance. >> I I allegiance to the flagof the United States of America and to the republic for which it stands,one nation under God,indivisible, with liberty and justice for all. >> Our next agenda item is adoption of thepublic school mission, vision, and values. For members, I would like todraw your attention to the connection between learning and today's agenda. Iknow it's in our mission, vision, and values, and I welcome your comments onthis and any other connections during our agenda item discussions thisevening. Uh our vision uh I remember when ouraction plan for action item on the proposed budget for next year explicitlyconnects this budget to our RPS mission, vision, and values. The budgettranslates the district's strategic plan into fiscal terms. Every dollarallocated represents a choice about educational priorities from class sizesand course offerings to student support services and facility maintenance.Resources follow the district's educational mission, directing fundingto student outcomes while making necessary tradeoffs transparently.Our next agenda item is approval of the agenda. Are there any changes to theagenda? >> Move approval.>> Second. It has been moved and seconded to approve the agenda. All those infavor say I. I. Opposed? The agenda has been approved. The agenda and documentsfor this meeting are available at rochesterschools.org/assembly. Our next item is comments to the board.The school board welcomes communication from our stakeholders via email, phonecall, and here at comments to the board. The purpose of comments to the board isto give community members an opportunity to provide input directly to the schoolboard about issues that fall within our authority.The board and superintendent do not respond directly to the speaker'scomments during the meeting, but may follow up with the speaker if requestedand appropriate. Persons who want to make comments to theboard must fill out the online form by 5:00 p.m. the Monday before the schoolboard meeting. It's available on the RPS website and on the Simbli main page.Comments to the board are governed by policy 206 and procedure 206A. And byparticipating in the public comment period, each speaker agrees to abide bythis policy and procedure. Members of the audience are remindedthat clapping, cheering, booing, vocalizing approval, or vocalizingdisapproval for a speaker is prohibited during the school board meeting,including including during comments to the board.Speakers, when your name is called, please come to this table. If you havewritten materials for the board, provide provide them to our assistant schoolboard clerk, and she will provide them to the board.Choose a microphone to speak into and be seated. Please direct your remarks tothe school board. You will have 3 minutes to speak, and the timer will bedisplayed on this timer in front of me. Please begin your remarks by statingyour name. Our speaker tonight is Jared Locker. >> updates. Does any board member haveupdates from their committees or any other information to share? Dr. Marvin.>> Well, we have been to a number of graduationsand ceremonies this last week. The three major high schools will begraduating on Saturday, but there've been so many special programs that wehave in Rochester with amazing students and incredible opportunities for thesekids. And it's been our pleasure to be able to attend and celebrate with thosestudents as they graduate. Um at tonight we do not have a student school boardmember. Oh, sorry. >> No, go ahead.>> Um Moving on. Umpresent. It'sthe end of the school year and they have things to do. Um but I do want to saythat our last meeting um and Sarah Louise Henry working with um Mr. WillRuffin have been amazing at guiding this program this year and uh the studentshad a chance to reflect on two things. One, the superintendent came in andasked put on a specific aspect of thestrategic plan and as always they had plenty of opinions and I just so admirethat he really listens to what they have to say about whether it's a good idea,bad idea, needed to be modified. And the other thing that struck me asthey were uh looking back on what they had accomplished this year and they havecome a long way and done some really important work. But the one thing theysaid is that they were glad that to be on the student school boardanybody can apply. You don't have to be an A student. Youdon't have to be a teacher's pet. You just have to want to make a differenceand that because of that we get a really good cross-section of students. Um thosewho love school, those who want to change school, those who have a lot ofideas, those who want to learn from others and I I hope um and I know thatthat model is going to continue. >> And I had the pleasure of talking tosome of the student school board members when I was at Century for another reasonand heard also not only their enthusiasm at seeing Dr. Marvin um and talkingabout the last meeting which they said was just amazing and how exciting howexcited they are and I was at they're going to continue on student schoolboard that they weren't graduating seniors. But we also saw them in thecontext of their multi um lingual learning class. Uh Jen Warnementfrom Century invited us to attend um an end of the year umuh read uh reading of letters that they had written telling their stories aboutwhat they had experienced the past year. Um and they were asked to write it to adecision-maker. So it could be local decision-maker, it could be a nationaldecision-maker, it could be an international decision-maker and all ofthose are represented. Um it was uh it was quite um an experience. Um we wentto two different classes. They also illustrated each of their letters andall of those are going to be gathered into a book that is going to be sent toall of us and all of the decision-makers that are involved. And umthe fact that they were willing to share such personal stories um of theirstruggles this past year and some really concrete recommendations forimprovements in the school environment and in relationships between students inthe schools and in communities and the world, frankly.Um and between going to the graduations of our programsthat we went to last week that multilingual learning class andtoday um Director Marvin and I were on a Zoomcall with our MinSync guys um ASD students. Uh we pop into their partiesquarterly and to see how the teachers are using this technology to serve someof our students with um high needs and the engagement and it in every singlesituation, the students over these past few weeks they're impressive all year,but particularly seeing it all uh one after another after another,especially those who have overcome challenges to achieve what they'veachieved this year, and how our staff is just pouring themselves into supportingtheir success. Um it was a great way to end our connection with students thisyear, and certainly is something that I keep in mind. Uh visiting there issomething important for me to keep in mind when I'm sitting here. So, thankyou to all of you who are inviting us and having us come. Keep doing it cuzthey're great opportunities. Anything else, board members?>> Dr. McFarland. >> Um so, just to mirror that, uh yes, itwas wonderful to be at the graduations. Also, as school is winding down, I justwant to remind our families out there that we have lots of community eventsthat are coming up. Uh Juneteenth uh has a couple celebrations that are coming upin the next couple weeks, and it's so good to see young people be involved,which is why I'm bringing it up. We'd like to see continue to see our RPSstudents at community events. Um and then the date has already been set, Iknow a little prematurely, for the backpack um event for this next upcomingschool year, and I believe that's August the 17th, but you know, that just showsthat education continues, and we want to continue to be involved with ourfamilies, um because that's part of what makes RPS so great. So, I'm lookingforward to seeing all the families over the summer as well um in the community.Uh I think those are great opportunities for us to connect, so if you wereunaware, please uh check your calendars, and hopefully we'll see our families atsome of the social events this summer as well.Any other reports, board members? Then we will move on to the consent agenda.Items 5.1 through 5.5 um are on the consent agenda. Would any board memberlike any item removed for separate consideration? Point of information from thesuperintendent. >> Um uh thank you, Madam Chair. I knowthere was uh at least one uh board member who noticeda coffee shop at John Marshall um uh on the the and I wanted to just givea little brief explanation of that. Um that is an effort that will be fullyfunded by our student nutrition services fund, which has got a significantsurplus in it, and the state of Minnesota has only very recently givenschool districts flexibility to spend some of those dollars on functions thatare um related to nutrition services. And uh more to the point of the questionI got today, what about um Mayo High School and uh Century HighSchool? And so we're planning to put the same in with the indoor air qualityupgrade at Mayo. And eventually we'd like to do the same at Century. So webelieve in coffee parity. Um we also hope that the students will beable to use it for fundraising and student entrepreneurship, butthey will have to follow the healthy snack guidelines. Thank you, MichelleObama. So but that is the that is the source ofthe coffee shop. Um and the students are are very excited.They've been very involved in the design at JM, and we anticipate that we'll dothat at Mayo and Century as we get around to that.>> Thank you. All right. Umhearing no other discussion, um all those in favor of the consent agendasay I. I. Opposed, the consent agenda has been approved.We will now move on to our prep for action item, approval of the 2027-2028district calendar. We're scheduled to take action at the June 16th meeting.Superintendent Bicker. >> Thank you, Chair Nathan and boardmembers. Um our executive director of human resources, Karl Bakken, is comingup. Karl, once again, ably led the process of developing this calendarproposal that we are recommending that you approve. Theuh proposal was developed in collaboration with the RochesterEducation Association and the Rochester Principals Association. I want to thankthe representatives uh from both of those organizations. We had elementaryand secondary representation. They were extremely helpful. Umuh In many ways, this calendar continues structures that we've put in place overthe last several years, but to a a that uh we've had at the board table. Iam recommending that the holiday of Eid al-Adha that falls on a school daynot be a school day in this year because we have seen as Carl will mentionsignificantly higher absenteeism on those days as students are celebratingtheir faith and so that our lawyers tell us is an appropriate reason to notschedule a day because those studentswe know from multiple years of evidence will be likely otherwise engaged. So,Carl, thank you for bringing us to this point.>> Thank you. Let's keep it further away from you. Thank you for the introduction as as Dr.Bacall said said I'm here to review the 27-28 calendar which it seemshard to believe to be saying those dates, but it's they'll be here beforewe know it. Umas Dr. Bacall said we have a team of principals, teachers, Dr. Bacall andmyself were on the team. We met three times inMarch, April, and May with this group and they took some of the draftcalendars back to their group, got us brought feedback, and we made somechanges based on that. As you see in theassembly there just to highlight some of theproposals on the calendar back to school week would be the week ofApril I'm sorry August 16th, 2027. As we've done the last couple of yearswe would have the step into elementary school on August 23rd as as well as there-branding of the step into middle school for sixth grade students only andthen step into high school for ninth graders.Then our first day of school for secondary would be August 24th withanother that would also be the second day of step intoelementary school at the elementaries. Um and then August 25th would be thefirst day for elementary students. The last day for this school year wouldbe May 26th, 2028, which is a little earlier than normal. Normally, we pushinto the first month of June because of where the winter break fell and wherethe holidays fell within that and the little bit earlier start, couple of daysearlier in August. That's why we are finishing beforeMemorial Day this year as proposed.This is our fourth year going to a semester calendar. We've been on aquarter calendar, then we were in trimesters for a while. This will bein the fourth year with a semester schedule.And then we will continue the plan is to continue to have the four designatedcurriculum and development days. And those will be on September 29th,November 2nd, January 3rd, and March 27th.And we anticipate these days will be approximately approximately 50% forprofessional development and 50% for teachers to review data and makecurricular adjustments. We'll have a professional developmentday, which we've done traditionally on President's Day on February 21st. And asDr. Bacall mentioned, new for the 2027-2028 calendar May 5th, 2028 wouldbe a non-duty day for instructional staff and a non-student day due toexpected lower attendance of students whose families observe the holiday ofEid al-Adha. Um we've been tracking that student attendance. There's asignificant drop in student attendance on the day leading up to the holiday,the holiday, and the day after the holiday.And with that, I'm ready to take any questions.>> Dr. Rader. >> Uh just one comment of appreciation. Iknow years back when uh students uh initially approached us about the E- uhthis uh particular uh day. Umuh I'm I'm thankful that we did theresearch. Questions were raised as to the attendance. Was it up, down, flat?Uh I appreciate the fact that you that the district did its research andit only makes sense to move as this calendar reflects andjob well done. And I think it's also important thatnot that messaging needs to occur, but but I thinkthere's a value to be derived by uhuh student participation and and for methat's where the impetus for this occurred. And I'mthankful that our students are I can kind ofremember seeing it as a brother and sisteruh you know who spoke before the board and I justappreciate the fact that and I hope they'restill a part of the district or they will hear about thismomentous decision. So, thank you uh uh Carl for uh working with the unionand community to allow this to to occur. >> Just thank you Dr. Barlow. I want tothank Will Ruffin also who was key in bringing some members of that communitytogether for the conversations as well. >> Dr. Marvin?>> Yeah, I just want to echo Dr. Director Barlow'scomments about Eid. I think that's really really a good decision. And alsothanks to you and to also the Education Association for getting these calendarsout so far in advance. We have busy families. They they need to know,employers need to know, and having this calendar ready to be certified nowis is really useful. So, thank you. >> And I also appreciate the creativitywith scheduling the CAD days. Um that we have themabutting or at the beginning or tail end of some of our breaks so that some ofthe concerns that parents have shared with us about having them mid-week umuh is resolved and can tie into um other plans they might have for that time offof school. Um and I agree having having these calendars out 2 years ahead oftime I know uh personally we're being asked to talkabout vacations already for 2027 and 2028 so many people are in that sameboat so this will be really welcome news for our families. So thank you.Anything else board members? Director Whitehorn.>> Oh, I just want to say again I was going to also mention I like that thethat we don't have a lot of days in the middle of the week. I think that'll begood for parents. And I'm also glad to hear about the Eid that we were able tofind a day. I know that was one of our concerns early on that it'snot a set date. So I'm glad that we were able to come to a consensuswith their faith that will work for them which we did so. >> Anything else?All right, this will come back to us for action at the next meeting.It's out June 16th. Thank you. Our next prep for action item isapproval of the fiscal year 2026-2027 budget and we are scheduled to takeaction on this at the June 16th meeting. Superintendent Picault.>> Thank you Chair Nathan and board members. You can see our Director ofFinance Andy Crockstead is coming up and he will be walking us through a verycomplex budget proposal one that I think meets the needs of the district'seducational agenda while also being a responsible fiscal stewards of thepublic's resources. I want to thank Andy and his whole team for really Herculeanwork. For the second year in a row as boardmembers are aware we were reinventing the airplane while we were flying it.This year redesigning the central office cost structures that govern how weallocate resources that are not directly in schoolsfor the most part. And last year, the team led the redesign of the budgets inthose schools. And so, it has been a full court press for 2 years running,but one that I think has brought us to a good place. There are also difficultdecisions in this budget as the board is well aware. So, turning it over to Andyand then look forward to the conversation.>> Thank you, Dr. Picault, members of the board. I'm very happy to be here andpresent this budget. Before we get started though, I wouldlike to again take a moment to acknowledge behind me. As I said at theC-BAC the other day, I may be up here presenting to you, but without a solidteam working on this behind the scenes, itwouldn't happen. Just so you know, part of the costcenter work required us to go through each and every general ledger account wehave, even if it's not a general ledger account being used in this currentfiscal year, but in order to provide historical reporting, we needed toupdate all of those by attaching a cost center. And there'sover 90,000 account codes in in in historical database. We're using about19,000 of those account codes in this budget.So, that took a lot of time. It's not as though they had to do one by one, butthere was some mass editing, but it took a lot of time. And we're finding somesome accounts we still need to move around. And we're going to continue todo that through the course of the probably the next year as we begin tospend some of those funds. But again, my my appreciation to thatteam. They're an incredible group of people and this wouldn't happen withoutthem. Oh, there it goes. Okay.It looks like the font got a little This was built in PowerPoint and I thinkwe might be using it in Google. The font got a little screwed up, but Ithink I think generally it's going to show up okay.These are just some of the highlights I I want to make sure that we touch ontonight. Of course, I know a question is going to be around the budget gap andwe're going to touch on that as well and and how we address that.Um what does next year look like? How do we spend those dollars? So, just some ofthe key points we want to make sure that we uh land on in our discussion tonight.I know that generally these um discussionsare followed with questions. I would have no concern if it would beokay with the chair that maybe questions be asked while we're on a particularslide if that makes sense. That's up to you, but um certainly that's your yourchoice, but it may it may help the conversation as we review individualslides as opposed to maybe going back, but um I I certainly can be interruptedat any point. So, first of all, we're going to talkabout the general fund, and of course, this is the district's main operatingaccount where all of our Well, almost all of our day-to-day operations arefunded with the exception of uh school nutrition services and the communityeducation fund. That fund uh is expected to generatealmost 1,300 or 1,300 316 million dollars um offset with expenses of322.7. Therefore, that's the 8.3 million-dollargap that we spoke about previously last July when we brought that forward toyou. Initially, it was much higher. It was at 13.5 million.And And we'll review what's changed, but obviously, that was the gap that weneeded to look at this year for next year. Uh and that was based on anenrollment assumption of 17,441. And I know we've had a conversationabout our enrollment uh projections for next year, as well.And we'll get into that in just a moment. Uh but but some of the thingsthat changed, obviously, um the reduction. Why did that change? It'sbecause we had increased enrollment this year, which we anticipate carryingthrough to next year. And so, those are dollars that we didn't have in thisyear's budget. They became available to us because those students becameavailable, and we anticipate them rolling forward, obviously.Um we also had, if you recall, our audit produced an additional $2 millionunassigned fund balance from last year's fiscal year. And the board decided toalso use that $2 million in addition to the other $3 million that had beenpreviously committed from the unassigned fund balance to help help um in thefiscal year '27 mitigation of some of those reductions.And finally, as Dr. Bickel mentioned, we expanded the balanced budget model toall of the central office, and we'll get into some of those details.As we all know, enrollment is everything. Enrollment drives all ofalmost all of our our revenues, um our tax levy revenues are generated are arebased on uh enrollment or I should say our operating referendum revenues.Uh our state aid is based on uh enrollment, and so it's really criticalthat we one, maintain enrollment, two, that we maybe I should have said it theother way, we gain enrollment, we maintain that enrollment, uh and thenmake sure that we're we're uh building upon that to the best of our ability.As I mentioned uh last fall, we came back to this board and and we're happyto produce um or say that we had uh on October 1st almost 500 students morethan we had anticipated for this school year.And that in and of itself has generated that additional revenue that we havethis year. Again, we anticipate for next year.Those numbers then became the baseline for next year's enrollment projections.We had previously used different numbers, numbers that were almostentirely based off of our demographic study,um or excuse me, our enrollment study done by the former state demographerlast spring, Hazel Reinhardt. We had used those numbers initially whenwe produced the forecast for you last July.But in October of this year, now, this school year, in October, whenthat enrollment was up, we made a determination that that became the newbaseline. And so, what that allowed us to increaseour revenue projections for fiscal year '27.It's still a decline. We're still expecting a decline over our enrollmentwhat it is today of about 340 students. But, that's stillsignificantly higher than what we had anticipated having for enrollment nextyear because of this modeling. What we did do with the enrollment fromOctober 1st, as we projected out for next year, we did continue to use what Irefer to as the attrition rate, just basically the change from day one to theend of the school year. That is about 2% at the K through 12level. So, for every 100 students we have onOctober 1st, we'll lose about two of two of them at the end of the year,therefore affecting our revenue. We also then for kindergarten used theenrollment study because we felt that that time it was still the best numberswe had for kindergarten enrollment projections. Of course, though, thoseare the most fluid at this point in time. And you can see where we expect to be.Where we are this year is that that top line. You can see we went up slightlyfrom last year's 17,581 up to Excuse me. I'm I'm having a hard time. 17,358 up to17,441. And then,the box is where we expect to be. Now, the decline is still the trend thatis projected in the enrollment study. However, we are hopeful. We're notcertain, but we are hopeful that our October 1 numbers this next school yearmay be similarly improved. And at which time we would likely, and we may likelyanyway, want to do an additional or do another enrollment study to say, "Maybewe maybe the curve has been bent. Maybe maybe the decline may not be as steep ormaybe we will see begin to see an increase in enrollment as as opposed toa decreased enrollment as we're projecting right now. But justunderstand those years further out are still based on that enrollment study andhave not been remodeled based on any current enrollment numbers in thisschool year. So, the budget gap. As you recall when we came to you inJuly, that was about 13 and a half million dollars. In January, we cameback to you with those other um uh additions of the $2 million, someadditional revenues, and therefore that reduced it to $8.3 million. And again,this is really more of just a snapshot of of how things changed from a year agoto this January to where we are today. So, it was really the January forecastthat we built our budget from and used those numbers asum as our baseline for uh the balancedbudget. I should noteum that that point below, again, we did notthink a single year of enrollment increasecreated enough of a certainty in our budget projections that we shoulduse those numbers in perpetuity. And so therefore, we continue to useuh our past enrollment projections. The board did authorizeuh strategic use of fund balance. And as we think about the unassigned fundbalance specifically, those are the dollars this board has to use at itsdiscretion. And so this can be used in any purposeyou so choose. They're not restricted in any wayother than by law. And so therefore, we had previouslyagreed to $3 million, uh the additional $2 million.In addition to the unassigned fund balance, the board also did approve theuse of reserved restricted dollars. Now, although you approved the use of thosedollars, those particular expenses automatically get charged tothose restricted accounts. And so, what you'll see in the budget is we actuallyare using more restricted reserved than what was authorized. And I would sayauthorized, we really used that 2.2 as a mechanism to balance the budget knowingwe would draw from the reserved and restricted dollars in some way. That wasour best estimate at the time. In in reality, we're drawing more restrictedand reserved dollars for those very specific purposes in this budget.What that does then is lessens the amount of unassigned fund balance usethat we have in this budget. And so, you can seewe we still project a very healthy fund balance into the future even with theuse of these dollars. This is the unassigned fund balance here as apercentage of our general fund expenses. And we we we expect it to stay againvery very solid and healthy, well above the 8% that the board has authorized. A little deeper into the reductions. Andso, we categorize the reductions into two buckets, learning sitesand cost centers. Really following the model of the balanced budget model.And so, therefore, in terms of the overall budget for fiscal year 26, theyear that we're in right now, we simply said, "What's the percentageof that budget that's been allocated to the learning sites? What's thepercentage of the budget that's been allocated to cost centers?" We took thatsame approach then in terms of the reductions. Those same percentages werethen used and backed into the $8.3 million. And you can see here wherewe've come up with some of those savings.I would add at this point that the C back had some conversation aboutvacancy and budgeting. We've chosen to use historical vacancyessentially at the bottom. Essentially, what does it look like if we bring itoff the bottom? And there was some discussion aboutperhaps that shouldn't even be considered, meaning you shouldn't evenadd those dollars into the budget to begin with. There may be someconversation about that in the future, but we maintained this philosophy thisyear because one, we started it last year and we do think it's prudent. Andwhat I'll I'll say about those particular positions is we we have theprincipals chose positions, central office chose positions, cost centermanagers chose positions, but we know historically not every position will befilled 100% of the time every single day of the year.And we have that history. We do those calculations each and every year todetermine approximately how much of every position that's requested willactually come to fruition. And so those positions at the learning sites, sowe're talking about general education staff, ESPs and teachers, there's abouta million 75, 1.75 million of unass- or excuse me, unfilled positionsthroughout the course of the year. That doesn't mean it's a position that goesall year long, but it's the aggregate value. It's the total value of unfilledpositions or what I would say vacancy throughout the course of the year. I'm just going to hop over to the costcenter side and talk about that for a minute. On the cost center side,remember that cost centers include uh positions that aredetermined and allocated from a cost center from a budget manager at thecentral office, but those positions go out to the sites. They serve the sites.So special education, health services, uh advanced learning.Those are examples of positions that are determined in terms of quantity andlocation. That determination happens with a central office budget manager.But those positions go out and work into the sites. And so we've broken thosenumbers out in the memo. I don't think we have it in here, but it is in thememo in terms of cost centers how many FTE are what we would deemcentral office. So that would be really district operations. And how many costcenter FTE go out into the buildings. It's it's certainly much larger. I thinkit's about 11 I I'd have to look at my Actually, I dothink there's a slide. We'll get to it in a minute.Capital projects and so let me I'll finish on the costcenter historical vacancy first. That that primarily or large part is specialeducation. And Mr. Bocking can also speak to the fact there's a tremendousthere's a really a a tough it's tough to fill some of the ESP positions in thespecial education world. Certain other special education positions become moredifficult to fill as well. And so historically there's been a large amountof unfilled special education FTE remaining at end of year, which means wehave budget that we've not used up. We also have certain positions within ourmaintenance and our operations teams as well that again through just normalchurn those dollars are available or I shouldsay are unused.Now, I'm going to head back to the learningsites because those two things go together. I wanted to make sure wetouched on those together. Middle school staffing ratio adjustment.In year one of the balanced budget model,we determined that through the reallocationof title dollars middle schools became along with high schools, basically everyschool became eligible for title one dollars.In addition at the middle school and at the high school, we also adjusted theirstaffing ratio. So what is that student to FTE ratio both at the middle schooland at the high school? At the middle school and high schools,what we do is we take that enrollment, we divide it by that number, and we say,"Principals, here's how much FTE you have tofill your course schedules or to to accommodate your course schedules andthe other needs that you have from a teaching perspective." When we did that work with our middleschools in year one of the balanced budget model, it became clear that thereduction of the student-to-FTE gave them an advantage at the middleschool level that none of the other level that the elementary and the highschools did not have because of the addition to the of the Title 1 dollars.High schools uh continued to be very, very tight, and we had one that um waswas really tight in meeting their staffing needs last year,and and this year again a little bit better, but that was not a concern atany of the middle schools in year one. And as we looked at how much FTE theyhad available to them, and um some of them actually had unusedcompensatory dollars at the end of the budget process,um the balanced budget committee, uh made up of Dr. Braquel and severalothers, this was one of the recommendations we made to the board interms of how in terms of how we are umare making the reductions. And so, these two two two particular items onthe left side were recommendations from the reductionum budget reduction committee that wasformed in the fall to look at the learning sites. Wrapping up on the cost center side,capital projects alignment, essentially that's just taking our expenditures andaligning it to our revenue. And in doing that, we have less revenue available tous through the umLTFM levy next year in the general fund uh than we have had previously. So, thatmeant we had to reduce our expenditures that use those revenues. And therefore,that was ultimately a $1.3 million reduction.That $1.3 million reduction was in the forecast. And And because it was in theforecast, we had the ability to pull it out without impacting our operations.There just simply isn't matching revenue. Now,one of the reasons why that's occurring is because we are bringing in additionalWe are issuing additional bonds and taking on additional debt out of ourconstruction fund to do some of these really large IAQ projects. And so, inorder to maintain a fairly stable tax impact to ourour community, we are adjusting what goes into fund oneunder what's called paygo. Essentially, we get the money in that fiscal year. Wehave that fiscal year to to use those dollarsversus the dollars that go into our paying off our debt service. Those areboth levied dollars. They go in They They have two different uses. One paysfor projects in the year for the year. That's paygo. The other one is the otherlarger amount is the debt service. Andin order to again to maintain that tax impact,the the philosophy has been we're going to adjust those two numbers to keep thatimpact as as flat as we possibly can. Accounting for taxtax value growth and its other other factors.>> Uh budget manager adjustments came up with several others. Again, out of 53cost centers, they were able to arrive at another million 46 in cost savings.Uh various various things. It It was It's salariesNot salaries. It was supplies, materials, contracted services. In somecases, we cut some We're able to reduce some software subscriptions, things ofthat nature. Nothing that was essentially FTE driven.One thing that we did do though, um in some of the sites were able to do someof the budget managers were able to do is make some adjustments by utilizingrestricted source funding for some of our,um, our FTE in the cost centers. And so therefore that lessened the amount thatlessened the impact on the general fund. And so in some ways there was atrade-off, but ultimately it did impact the general fundpositively by moving certain expenditures that could qualify intosome of those, uh, restricted uses. And then finally the one that, uh,the the reduction that the board made, um,a month or so ago with the central office leadership reorganization thataccounted for, um, a little under half a million dollars of reduction as well.So, uh, that's a that's a a long explanation, but I think it wasimportant for us to focus on how did we get to the $8.3 million? Um, and, uh,and I think this, uh, this lays it out. >> Dr. Whitehorn.>> Quick question. So, with the middle school ratio adjustment, that just kindof puts us level with the other schools. You said the elementary and the highschools are about at this level. >> ThereWhat it does actually, and I should have mentioned this, it puts the middleschools back to where they were. So, 2 years ago they were at 24.75.They went down to 22.86. We moved them back. So, it wasn't a it was a 1-yearincrease, and then we just put them back to where they were.They also did retain the Title 1 dollars on top of that as well. So, they stilldid get that additional Title 1 funding. We just re-stabilized their FTE tostudent ratio. >> And I guess my question around that isjust around class size because we've had so many discussions about it and so manyof the studies brought forward. I just wanted to know is there going to be anyimpact on that or is are we not really going to see much?>> Superintendent. >> Um,yeah, thank you, Dr. Whitehorn. Um, at the middle and high school levelsdue to our contract with Rochester Education Association, we actually don'tstaff out class size in the same way we do at elementary. It's each teacher cansee um the 260 students. Did I get that number right?>> 160 160. >> Let's raise it further. I'm kidding.Kidding. Kidding. I don't I want it lower, too. Um Now,there is a class size, but it's not we allocate more by number of uh studentsper each teacher. Essentially, what this change did, I mean, we would always likemore money at every level. Essentially, what this change allowed I'm confidentthat our middle schools are all able to fund their core program, um includingDakota, um with their more innovative program, which they were nervous aboutbeing able to keep, but we were able to work with them to make sure that theycould still maintain it. Um At the high school level, we might have had somesignificant challenges to uh because we also uh made a change last year where wecouldn't keep double funding them for post-secondary options. As you'llrecall, we allocated teacher positions to the high schools like the kids werethere, but the kids were at RCTC or University of Minnesota Rochester, andwe were essentially paying twice. We had to back out of that. That's not how PSEOwas designed. For most of our high schools, that was about 7 FTE last year.So, the high schools were really tight. We really couldn't go deeper in the highschools. The elementary schools, as you correctly note, class size is anexistential issue there, and so we didn't want to change things there. Um Ithink this was an acceptable uh adjustment at the middle school level.Would would I love to have kept them where they were last year? Yes, um butin the big picture, I think that um our leaders made it work. >> Thank you.>> Moving on now to um the balanced budget model. Just talkinga little bit about that. Of course, that's our kind of North Star in termsof our budgeting. How How do we do this within the district? In year one, uh Iknow we've talked about, but just to review, it really was focused Well, itwas all focused on our learning sites and working with our principals inestablishing uh that uh process at our our learningsites. Year two, now this year, um obviouslywe've talked about the cost center establishment. We'll get into that alittle bit more in a moment moment, but what it it allowed us to do with theestablishment of cost centers is really provideuh hopefully transparency to those budget managers, who each cost centernow has a budget manager. One, they can see exactly how they'respending, where they're spending, and they're making the decisions on where toallocate their dollars. So, the way the process worked iswe, finance, worked through the reductions and cost center by costcenter provided a target number for them to do or to make, rather.The reductions at the cost center was ver- were very similar to how we handledthe the whole shift, and that is a cost center, what is the cost center'spercentage of their overall cost center budget? So,what's their prorated portion of all cost centers?And that was the percentage we asked them to find, to the best of theirability, reductions within their cost centers to that to that number.And I would say they all did a really good job. For for year number one, Iwould say they all did a really really good job. They took it very seriously.They came up with some great ideas. Um I know that next year we're going todo some things a little bit differently. Uh always a learning opportunity, butfrankly, um I'm really happy with how year one uh transpired with with all of them. The other thing that we did this year,and I know we've talked about this, so I'm not going to talk about it a wholelot. We made a couple of changes with the supply budgets and moving some ofthat into the principals' decision-making authority at the timethat they're doing their staffing. Also then, the compensatory revenuereallocation. We talked about this at a couple of different board meetings aswell. So, um I just wanted to remind you of what this did. Essentially, itallowed us to take some compensatory from schools that hadthat had a lot. One could argue it's appropriate. I'mnot going to make a argument one way or the other, but they had a lot and we hadcertain schools that had very little to none. And so, what we were able to do istake some of that 20% that the district is allowed to retain, we reallocatedthat back out to some of those sites that did not one qualify for title, andnumber two had very little compensatory dollars because we know they have theneeds as well. They have students that can't read well. They have students thatare struggling as well. So, so that was again another one of the components thatthe BBM committee determined was appropriate. We also thenwere able to with the retainage of that some of those 20% dollars at thedistrict level, we gave back the sites general fundmoney. That was one thing we heard last year. If you recall, we had thisconversation earlier where they had these compensatory dollars, but becauseof the restricted uses in statute, it reallyhandcuffed them in some ways. We gave all sites back some general fund moneythat just kind of opened up the horizon for them and they could use those in anyway they wanted to. We then figured out how touse up the those those compensatory dollars that that were left at the thedistrict level. So, those were sort of traded dollars, but principals reallyappreciated that. I know at the high school level and the middle schoollevel, especially where they have assistant principals, that's onecategory that's not permitted along with clerical. And we know that there's moreof that staff at the secondary level than at the elementary. And so,this was a much appreciated and I think this went over very, very well.A couple of the schools that I can, without naming names, that that weresome of those low compensatory earning schools,I I heard nothing from them in terms ofproblems meeting their staffing needs. That was different a year ago. So, thisthis I can tell you worked. Let's talk about the revenue side of thegeneral fund now. Um we obviously uh plan to earn about 350 almost 316million dollars. As you all know, the vast majority of that or the vastmajority a huge percentage of it comes through our state generally and otherstate uh funding including including special education and some categoricalaids. Uhour local dollars account for about 21%. That's made up of our operatingreferendum and our other property taxes that we generate for other um boardapproved levies. What rounds out then is the uh federaluh at 3% and and a little bit of other local. The other local dollars are goingto be things such as um uh sports fees, registration fees, justmonies that we earn, interest, things like that. That's those are local otherlocal dollars. On the federal level, let's touch onthat for just a moment. Uh the federal level um weCongress as you you likely know did appropriate similar levels of funding inthe title uh and special education areas.We We have received our allocations for title uh from MDE because all thosedollars flow through MDE and they were similar levels as past years and sotherefore um we were able to adjust our revenue target our revenue up from whereyou were a year or excuse me in January even we adjusted it up because wereceived those allocations from from MDE since uh the forecast in January.We had originally planned on about a 20% reduction in the federal funding and solittle therefore we we essentially uh trued that up to about 100% of wherewe've been in the past. And so, although it's not umthe largest share, it certainly is impactful at over $9 million. And so,it's important that we continue to receive those dollars.Anecdotally, I will say there seems to be there seems to be at least generallyin terms of the at least title one and special education,pretty broad support for those particular programs within theadministration, at least from what we can gather. On the expenditure side now of ourgeneral fund, it should be no surprise that staffing is our number one cost.That's about 80% and we're expecting that to go up almost 3%. That's aboutwhat we put in the budget. Actually, on average we put in a 3%salary cost of living adjustment, but then certain categories of folks go youknow, are a little bit higher, a little bit lower, but as a whole that equatesto about 2.9%. Excuse me. I did want to point out the benefitsthough. Obviously, I know we've had some conversation with all of you as well interms of some of our benefit costs. Benefits in this category aren't justhealth and dental benefits or life insurance. It also includes anythingthat's a payroll tax. So, our FICA, workers compensation. So, as oursalaries go up, those are all percentage based and so, those are going to go upas well. It's paid family medical leave or the new state program. So, thosethings go up as well. But a large large percentage of this increase is directlytied to all our health care costs. Not exclusively, but buta pretty large share of that. We are currentlyas a finance department, our employee service led by our employee servicesdivision, Laura Holman, we're in the process of looking at everything. Andone of those things that we're doing right now is is actually we've been umworking with four different insurance brokers. These are the folks that go outand help us find the carriers and we're interviewing them.We're trying to see who who can provide us with some additional ideas andconcepts and theories about how we can um make some changes within our healthuh plan costs without changing benefits or or anything like that. And so,we're going to have a larger conversation about our health care, youknow, in the in the coming uh months, especially as we close out fiscal year26 and understand uh what our fund balance looks like.But, I I just want you to know we're working on this. Um we have we have somethings that we're thinking about how we can address it.But, we're not any different than anyone else. Uh no other school district is youknow, is is solvent Well, they're solvent, butno everyone is experiencing similar issues nationwide. The trend right now,um we we learned this morning uh is anywhere from 8 to 11% increase umfor next year in terms of just costs. And so, what does that mean forpremiums? That's yet to be determined. And then you'll see where we also willhave some additional um our purchase services, supplies, etc. and where we'vemade some reductions. Um you may ask the capital, and I'lljust touch on that real quickly. That was simply a movement of some debtthat was considered that that was coded as capital uh expenditure within generalfund. Uh that debt moved over to our debt service fund. And so, that happenedthis fiscal year uh and uh is incorporated into nextyear's budget, and this was part of our our levy as well. We discussed thatduring our levy uh certification uh earlier this year. Or I guess it wasUh the time all runs together. When was that? December?>> Yes. >> So, these are these are the high-levelcategories of our our general fund expenditures. Of course, there's moredetails in the the memo. >> Uh just quick question.Director Whiteford. Um so, there has been talk about thestate taking over the health care for the educators, would the numbers stilllook the same and have we considered that in the projections if that were tohappen? I don't know where>> We're not right now because it's it is still just a bill and bill language andum frankly we don't know when or if thatwill occur. Um therethere's uncertainty around what that will looklike for us. There's there's the proposal includes language in terms ofof course all of us contributing and that a portion would be paid by thestate. That would be the challenge. How is thestate going to come up with some additional funding? Obviously we wouldstill have our district contributions. Um we know of of it, we talk about it. Iwill tell you that the three consultants that we've been working withor talking to in the last couple of days, this hasn't I wouldn't say it'snot on the radar, but it's not something that's imminent. We know that we haveprobably at least a couple of years for sure because that program would takesome time if it it was if it was even approved or passed, it's going to takesome time to roll that out. So we have some of our own work to do in the healthcare space before that would ever happen. But weare aware of it, we're following and monitoring it. Our employee servicesmanager Laura Holman has has attended a couple of webinars onthat. There could be some positive for us, there could be some negative for us.I think it's right now just a little too fluid. >> I'll refrain myself cuz I'll take a stabdown the rabbit hole, but I'm glad you're watching this. It's a very veryimportant issue and um an under appreciated reality of thediscussions in the last session is that there was bipartisan support for this.Um it's a major priority for our friends at Education Minnesota, which Iunderstand. They did have Republican support for it. So I think it's verymuch something for us to be watching for. In anyscenario it would be a massive increase in the total cost of funding for healthcare. The big question is who pays for that increase?The proposal suggests that the state would kick in for it. The fear is thatthey do so by reducing our general fund allocation for teaching and learning.So, I'm glad you're watching this. It's going to be a very big deal next year.>> As we've said, there's still only so many dollars at the state level tospread around. And so, what does that mean for our other funding exactly?>> And I just had another question. Um and I I may have asked this before,but I'm not sure and I know I'm going back a couple slides, but with acompensatory funding, um is there is there a use by date? Idon't think I've asked that. >> No. No.No. I mean, we we allocate out to them and we allow them to carry that over.There is a restricted fund balance for compensatory aid. And so, therefore, wecalculate that. If they don't spend it, we give it to them the following year.>> Okay. Thank you. >> Let's get into our staffing levels now.And this budget is proposing 2,622 total FTE. That's across all of ourfunds. And so, that's going to include community education. That's going toinclude our school nutrition services group as well, even though they're notfunded out of the general fund. So, this is everyone district-wide.And as I mentioned, you can see those first two blocks are the cost centers.So, together there's a you know, about 1,450FTE in cost centers. So, those budgets that are cost center allocated budgets.But, the largest share of those folks are going out to service students in theschools. Again, I mentioned that previously what those folks what thoseemployees are. The rest of them then, the 11,100 1,174,those would be FTE that were allocated to the sites as part ofthe balanced budget model and the formulas included in the balance budgetmodel. And then it would also include those FTE that principals umdirectly chose based on the uh the dollars the the al- umwe're trying to change the normal the district allocated dollars. So, thedistrict allocates dollars and FTE. And so,those that number includes the combination of the allocated FTE plusthe uh again the positions that principalschoose on their own. And uh again, it'sit There's There's more detail in here. There's a cost center breakdown in thememo. There's a learning site breakdown. There's comparisons year over year forthe learning sites because it was year two for them. We were able to do some ofthat comparison. As a whole, it's a 27 almost a 28 FTEreduction from where we are today. Um it's important to note that's notThat is different than where if we compare year over year.But, we added positions throughout the course of the year based on some grantfunding and some other revenue sources. And I'm not suggesting those positionsnecessarily being redu- reduced, but as a whole, the entire district um will bedown about 27 almost 28 FTE from where we are right now. >> I guess I'll ask that question. UmSo, the the those represent people who werein positions. Um of that 27.7 FTE,I try to ask this question every year and I never know if I get it right. Howmany of these people did we lose from RPS or were some of them able to findpositions elsewhere because there was an openingsomewhere else? >> Uh it's in flux.>> Okay. >> Actually, because this is looking aheadto the next year. So, right now at this point, we can just tell you that it'sthat it's a couple dozen FTE. Um, as we have the full staffing uh,process, it's complete. But, for us to do that analysis, people the transferprocess has just finished. And so, the the the dominoes are still falling intoWhat dominoes is a bad Dominoes falling is bad. What what whatever metaphor isof things falling into place are still happening. We can certainly provide thatfor you. As Andy notes, there's a there's a certain signifi- significantshare that we're pleased we're able to find other employment. Um, but therealso are some difficult reductions in in here, and I want to be um, obviouslyclear about that. We know that's very difficult for the people who areimpacted. >> Thanks. >> Next, I want to talk about site-specificand this kind of um, uh, reallyfocuses on them and the balanced budget model. Um, I I I flipped these slidesaround from our CBAC, so those you know, um,those uh, board members who are at the CBAC, I I felt it was important to talkabout this first. And let me talk about this particular slide.As I mentioned, we we are able to calculate and allocatedollars from the central office to sites for them to then make theirsite-determined decisions, site-based decisions.This year, we're able to increase that number across all sites by a little over$3 million. And you can see how that broke out by by level.And this leads directly to the next slide,so I thought it was important to stop here and just make sure that we wefocused on this first because this FTE count that isthat is um, funded, the FTE that's funded by thisamount is directly included in these numbers.And so, you can see as a district-wide total, uh, as part of the balancedbudget model, some of this is enrollment based. There was a reduction across thesystem of 2.2 FTE. So though though again that would be theallocated portion that is given to the sites.Now however, because we were able to increase by over3 million dollars, sites had additional dollars to use for site determinedor site based decisions. That increasedthat number was 12 a little over 12 FTE. Therefore, accounting for an additionaltotal across all three levels of 10. And soyes, a little bit of reduction on the FTE because of those additionalallocated dollars. And so the model of balanced budget drives the allocatedFTE. So that's that's formula based and that's what enrollment says and that'show that's determined. So once we make that determination, wenow know how much that's going to cost and we're able to say, "Okay, now weknow how much that's going to cost, how much we have to spend." We had a littlebit more money to give to them then for some of the site based decisions. Thatactually is met with with greatSites like that. They they enjoy that additional flexibility. They use thesefor ESPs especially, other support staff, umintervention teachers, reading teachers, really the supports.There is some added classroom teachers at the elementarylevel. There were just a handful this year.And so they're using in a broad a broad swath. There's a there's a lot of waysin which the the sites are choosing to use those dollars. Um but we're they'remaking the decisions. We give them a budget number for each position and theydo the work of saying, "Okay, how much can I afford with the allocation thatI've been given?" And they make all those decisions.>> Good night. >> Um uh,thank you and and um, this came up the other night at thecommunity budget advisory committee, um, and directors, um, McLaughlin and Cookwere there and I'm grateful that you were. Um, there are certainly, we didn'ttake a vote, but there's certainly a significant number of members of thatcommittee that are urging us to go further with this model and provideadditional site determined flexibility. Um, while I think Andy's correct when hesays that, um, they, uh, like this flexibility, it'sprobably fair to say that principals like this flexibility and we have hadsome pushback from some other groups. We have a very important discussionawaiting us next fall to, uh, come back to this conversation and so I'll bebringing a recommendation to you about this. Um, I just want to also own thetension that there are some folks, as you'll remember, school counselors I hadinitially recommended, uh, making a site determined, uh, position and thenconcluded as we received some feedback about the very ambitious post-secondarypathways work we have going on that I could not adequately uh, explain howthat work would be moving forward, um, if there were more site determinedflexibility. I didn't say I was never coming back with that recommendation,but I took the point that we had more homework to do and that's just oneexample of it. So, I think Andy's absolutely correct, there have been manypositive aspects to this, but there's an inherent tension and I think next fall,um, earlier than later in our process will be a good time to bring you asboard members some, um, analysis of what Angie's Andy's justdoing off the top of his head. How have sites used this? What have theimplications been? Um, cuz I think next year I would submit is probably, I hope,our last design year for our budget model. At some point you got to land theplane and you and you just have people know the rules and so that last yearmight be the, I mean, nothing's ever permanent, but that last year might bethe last year we'd be making major design tradeoffs and I think this wouldbe at the top of my list of things to come back to you with. But I but I haveI agree with Andy, I've been pleased with how sites have used umthis in the big picture relatively modestflexibility, but it's been meaningful, I think.>> Yeah. >> I mean again, it is total is 30.5million, 30 and a half million dollars. So, that's a lot of money uh in this inin on the grand scheme of of the general fund, that's you know, 10%. So, it'sit's it's meaningful, though. And and andit's incredible to see how principals are making these decisions and they'rereally doing these tradeoffs and uh if I getthis and that position costs this much, I can get this or I trade this for that.So, there's a lot of thought that goes into that. Um and uh we're there alongwith them to make those decisions and also uh Eric Johnson and Jackie uhPeterson were tremendously supportive in that process and frankly, they did a lotof that work day in and day out with these principals trying to balance andget them within the framework of their allocation.>> And I know it wasn't part of the requirements this year, but are westarting to see principals talk about their current skipsas they were making these considerations this year?>> Yes. >> Absolutely.>> Great. >> Not uniformly.>> Right. >> Absolutely. >> So, let's wrap it up with the totalbudget because as we obviously come forward to you in 2 weeks, you'll beapproving the entire budget. We spend most of our time talking about thegeneral fund, but obviously there's an entire budget to to approve. And andhere are the numbers. And you'll can see again where we are expecting to useabout 7.4 million dollars of fund balance. If everything uh played outexactly as we budgeted, we know that's not going to be exactly the case. Uhyou know, there were there will be um three budget revisions done um like wedo now. There'll be three budget revisions for uh essentially, theyreally budget revisions really should be and this is something I'm reallyfocusing our team on trying to make sure that our budget revisions are driven bynew revenues. So, if we have new revenues, we add that. That means wehave some additional expenditures that we're able to put in the budget as well.Um and so that's the focus of of of our team andand how we handle those revisions. Uh but anyway, uh again, we expect thereto be that particular fund balance use acrossall of our funds and you can see fund by fund where some of that uh use is going.Uh in total, um you know, we're expecting $475.8 million of revenue withthe $483.1 million. And so it would be that $483million that we're going to be looking for an approval um from youuh in 2 weeks. Well, finally, uh I know one of thethings that we put into this memo this yearuh was sort of anticipating some of those questions that well, and they'renot even anticipating questions where there are certain questions we hear aswell. Obviously, number one was uh you know, why are we still having to makereductions when we had the referendum? And I know Dr. Pichel has some somethoughts about this likely as well, but just honestly, uh the the cat the cutswould be catastrophic without that additional nearly $20 million.So, you know, think about that in terms of the $8.3 million. Add almost $20million to that. That's what we would have been looking to make reductions inthis now for next year without those dollars.And so uh I know the commitments that we'vemade in that referendum are still being I mean, we're still making thosecommitments and we'll be be providing that information um like we did lastyear uh line by line and and ensuring the public that we've continued thosethose um those promises. Uh but again, um I Ithink it's important to note uh that as we think about our enrollment and andwhere it's heading, we hope that it's going to be going up. We don't knowthat, but uh in case it's not, we better we we you know, we need to take somesome measures today. And so I don't know if Dr. Pichel has anything to add onthis particular topic. Okay. What about facilities? Um, you know,the group this group will have a presentation next week about a afacilities report, some additional changes at the facilities level. Um,frankly, we're working through. Um, we've identified funding strategies. Wehave a little bit more work to do in terms of fine-tuning that funding, uh,but we know how to do it. Um, we just have to get a little bit more detailaround the nuts and bolts of that. And, um, I don't know that that will becoming to you next week. Uh, but the plan I understand as it exists in sortof getting a lay of the land, so to speak, of of whatchanges would be proposed um, would be part of that uh, that discussion nextweek. And we will highlight broadly the funding sources, um, but wethink there's a probably some additional detail that this board should havebefore moving forward with final decisions in terms of the fundingmechanisms. >> And then In any event, they would not beuh, uh,expen- expenses for the 26-27 school year.>> No. >> Right. So, we're not presenting thatto you now because it's not in this year's budget, but we'll talk about thatum, next week. I'm looking forward to the discussion.>> And just to remind the board, there there was $6 million allocated into a acommitted fund balance, which means it has to be spent at your dis- We asfinance can't use those dollars. You determine how those dollars are used.And so therefore, those dollars remain uh, tied primarily or sort of earmarkedfor facilities and technology. We anticipate using them a lot of a lot ofthem for facility work. Cross-subsidies, that's a questionthat's asked as well. And um, we in 20 fiscal year 27 will bethe first year of the English learner cross-subsidy. We refer to it in adistrict as multilingual learner. MDE continues to refer to it as EL, Englishlearner, but this uh, this budget includes that first year of thatcross-subsidy reduction aid, and that is about a million dollars. So, um, we'regetting a million dollars back uh based on ourexpenditures um both in or in the um our EL uh services. And of course, then wecontinue to have the special education cross subsidy. And that did increase infiscal year 27 from 44% to 50%. Now, we do know there's a blue ribbon committeestudying special education and reducing special education costs across the thestate. Where that lands, we are not sure yet. How this cross subsidy may beimpacted, we are not sure yet. Um next legislative session, of course, is abudget year for the state, and I think a lot of this is going to be um dealtwith, well, we hope that some of it is at leastdealt with and we have a little clarity on where they anticipate this going.Uh but certainly, those are things that we keep our eyes on because those areareas uh we know the state wants to make some reductions, and those would have adirect impact on on our budget without a doubt.And then, fiscal year 27-28, um and I'm just going to go to the next slide, andthat really looks at um future years. With the context around this is stillbased on FY28 and beyond is still based on the projectionthat we did in July. And so, we will do another projectionafter October 1 numbers this year. We'll do another projection for both next yearand then 4 more years after that.And that enrollment, again, I keep coming back to enrollment. There'sobviously a a pattern here, right? We want to see what that enrollment lookslike, and that will uh drive what our forecast looks like um for those thoseout years. But ultimately, we have not changed these projections for thefuture. We we we we still anticipate needing tomake some reductions. Even if our enrollment grows, it would be hard toimagine it would grow to the extent that we wouldn't have to make some reductionsstill in the future. Uh we hope that they're less, though,and that's what we're hoping for when we see those numbers in July.Excuse me, October. And so here's just a summary slide. I'mnot going to go through it. I mean, it's basically just summarizing everythingwe've talked about. Uh but that is that is my presentation. And I I'm happy totake any additional questions. >> Dr. McLaughlin.>> Um I hadn't really thought about this before, but the budget managers that youtalk about, are those in people in the finance department or are they spreadthroughout the district? >> They're spread throughout the district.They're primarily those Well, they are all those that are uh closest to theprograms they serve. And so uh special education director, uh our advancedlearning coordinator, and that uh that director over that area. So we purposelyand and rightfully the budget managers are the closest to the programs and knowhow those dollars should be spent. >> Um and a little bit different question,the compensatory revenue reallocation. It occurred to me that the timing ofthat might be an important part of this process that I don't understand.That if the principals are working on their balanced budget model and creatingbudgets, what is the timing of that compensatory revenue reallocation? Whendoes that happen? >> That was included in this year's budget.And so therefore, when they did their planning in January and February, thatwas in there. >> They already had that. So it just itdoesn't come like midstream or something like>> That's included. What they will get later on in the year is basically a trueup. So, you know, if they had $500,000 ofcompensatory allocated to them by MDE and only spent $400,000, we're going togive them another $100,000 to be used as they deem appropriate and allowable bystatute. But that's already included. >> Okay. And then one final question that Ithink I asked this in our Q&A question about the purchase services. It jumpedout at me that tuition obligations to out-of-state education institutions. I'dnever heard of that before. What is that?>> Well, we pay we do pay and and I think actually I probably should haveNot only is that an an increase, so we pay for students who are placed inout-state um facilities sometimes for treatment treatment programs. And so, wepay for those programs out of our general fund dollars.Uh in addition, that particular object code 394 is also used for PSEO. And weknow PSEO costs are rising as well. So, I should have probably included thatitem in the memo as well as I reread that today. Uh but that's that's um theout-of-state You know, we have some place in in Wisconsin, for example, andthat's just how MDE requires us to code those expenses.>> Okay. Thank you for the clarification. Um I wanted to aska question about um the stability in the expenditureprojections. Umyour base uh you're basing them on ourhistorical and then in increasing them by what you think they might cost. Howmany of them uh like we through the the foodcontracts and the milk bids and all that. So, that's a certain because wehave a contract. >> Mhm.>> How much of our expenditures are that known because we have a contract amountor we have a contract amount with inflation versus we know we're hearingabout increased costs in the economy for various factors.>> Mhm. >> How much of our expenditures could beaffected by that? >> Not as large as you might think simplybecause of our staffing, how much of of our costs are staffing related. And forexample, our teachers contract is in place for next year. So, we know exactlywhat each teacher at each step in each lane is going to make. So, we can factorthat in um exactly. Um I I wouldn't say to the penny. We do a little rounding,you know, but to make it to make the math Not to make the math work, but justto keep it simple. But those particular costs um we can we can really clearlyhone in on. Um contracts that are not yet settled, again, we have a we have aninflation factor that we build into. One of the areas, and this is one of thereasons we did want to include our contingent or increase our contingencyallocation next year, is transportation costs. There is a a fuelescalation clause in our contracts, and obviously if the fuel costs continue tobe increased and high as they are right now, we would be paying more for ourcontracted services beyond what's alreadyin the contract. And so we put additional dollars in there incontingency to cover that along with utility costs. So those are probably thetwo that really are kind of unknown. Transportation is a huge hugeI I shouldn't overemphasize. It's a large dollar amount. It's not thehugest, so I don't want to overemphasize, but it's a large dollaramount. And of course any fuel escalation on top of that wouldwould would be impactful. So we feel like we've saved those dollarsfor that purpose and and and are fairly comfortable with ourour estimations. Of course we're only, you know, we onlyknow what we know today. We we hope that we would had haveadequate contingency to cover in those cases. But otherwise the vast majorityof like our contracted or excuse me our software subscriptions, that's anotherlarge. We know that they generally go up about 4 to 8% a year. So we put thatcost in there. Some go up a little bit more, some go down a little bit more,but in the whole they they they balance out. So I would say thevast majority of the things we're able to reallyget close. >> Superintendent>> Um which I'm pleased about the the oneexception to that also that I don't know if you mentioned is health care in thesense that I remember a couple years ago when wehad a big increase and I sent out a note trying to explain it and I notedwe have some people who take their health care from us who have very veryserious and very expensive medical conditions. And I am thrilled asactually someone who had a spouse terminal diagnosed with terminal cancerwith young children that we are able to support them. But they are oftensix-figure costs. And when I sent that out, I got a good amount of angryuh messages back saying it seems like you're shaming them for that. And I saidthat's the last thing that was my intent, but a lot of people don'tunderstand that theuh cost of the treatments that individualemployees um receive, which we are pleased to provide, shows up in ourpremium increases quite directly. And so, it's kind of explaining that hardreality to folks. And uh it's something that umis going to be part of this discussion that um Director Whitehorn was uhforecasting about a statewide pool. Because the bigger your risk pool, theless the impact of two dozen employees with expensive conditions has on asystem even of our size. >> I would I I should have in included thatas well, right? We are The budget includes about a 19% increase inhealthcare costs for fiscal year '27. Um this year, the premiums went up 17and 1/2%. I see no I don't see any way in which it will beless than that next year. Um simply based on where the spending isto date and the the unfortunate negative fund balance we're running right now inour health trust. And so, therefore, it's possible it could be higher than 17and 1/2%. Um that decision will be made later in the year. But again, those areall the strategies we're trying to um to work through with umpotentially a new insurance consultant. We're going through that process. We'retrying to just flip over every rock and and turn over everything to see what wewhat we can do. We have our geographic location, obviously increases ourhealthcare costs. Umutilization is way up. And and Dr. Picquelle touched on the the highclaimants. That's exactly what it's for for them though. And but we know thatthat does have an impact on on the health trust and ultimately our totalcost. And we do have a larger share of those premium increases than we did 4years ago. >> Um both in the slide deck and in thememo you mentioned um that looking ahead to next year that you're going to beusing zero-based budgeting for our cost centers. Can you just>> We hope. We hope. You know, we we have historically aslong as long as I've been here when we've had to make reductions, theprocess has been starting at your top and saying how much how how what do Icut out? What do I cut out to meet a to meet a a target?I think the better way to do that is saying here's your target, how do Ibuild up to that? How do I have everything that I need or as much as Ithink I need or every resource possible to get to that number. Um it's aphilosophical shift frankly. Um it may not be something that we can doimmediately across the board, but I think ultimately it's about building abudget and not breaking a budget down is the philosophy I really want us to getto. And ultimately we need our budgetmanagers to also think at a very granular level account by account byaccount as opposed to this large massive cost center. And that's going to take ussome time to train them and get them to that level of understanding. Um and sowhen I say we're going to roll it out, I think it's going to be in bits andpieces. Um but it's also it's ultimately justlooking at everything within a cost centerboth staffing and otherwise and non-personnel expenses and determiningis it appropriate, isn't it appropriate? And if not, we put it aside for now andthen we we work on what is and then we bring these other things in depending onwhat our level of of um our capacity is yet based on our ourtarget. >> And my last umI guess comment question um well you talked about the Blue RibbonCommission and the the legislative $250 million cut special education when thesuperintendent asked board members for feedback about what they wanted on theABCD for next year. I asked that we have either a study session or agenda itemwhere we really dig deep into what our special education funding looks like.It's very complicated. I was on a Zoom call with MSBA this morning.I everyone is terrifying when I talk about when they talk about the subjectand the very limited um the very limited ways that are availableto avoid some serious consequences of these cuts.But I thought that maybe once the Blue Ribbon Commission comes out with theirrecommendations, we can really dive in so we understand what those implicationsare prior to the legislative session because I think once the legislativesession happens, things are going to start happening very fast. You'llalready be in your budget um discussion and we may need topivot on a dime depending on what the legislature does with that. So, I I havewe have that on our list. And same with compensatory funding, I I would assume.Dr. Barlow. Quick question. Um The FTE by billing contract groupsbackground information you provided umI had hoped to perhaps see theuh change from yearuh I have received and I'm sure other boardmembers have received um letters of concern regardinguh some of our uhuh non-teaching third covered by contract group but uh not necessarilyteachers and uh reductions umand I was I suppose I was looking to see wherethose would appear, but perhaps they aren't This particular budget isn'tdesigned to show that. And I'm okay with that, but I was nonetheless just curiousum to see what the actual impactuh what the actual numbers were. Uh and and maybe I can just talk privatelyabout that. I'm not sure this is a forum designed to to bring it up.>> it may be in the memo that I see Andy pointing out that we may need to pointit out for you. >> Yeah, there is some Dr. Barlow on page20. And on page 20, that that particulartable again looks at what the budget includes in one column and then both acomparison with where this year's budget started and wherethis year's budget is ending. And soum ultimately, if you take a look at the the very last column in terms of wherewe are today, you'll see there's have been a reduction of one cabinet, we knowthat. There's been a reduction of two .7 clericalum 24 and 1/2 ESPs. So, that is from where we are today to where we willstart the school year. It's 24 and 1/2. And if you move down, you'll seeoperations professionals, there's a decline of 2.8. Um SNS went up 3.2.Again, there's a different fund for them. Um they monitor their growthclosely, but there's some additional needs and you can see then the teachers.And so, there there was reductions kind of broadly across the board.>> And if you're Dr. Barlow wondering about a subset of any of these groups, I I'mguessing teachers, um that is something we could provide you with.>> Yeah, well, actually, um social workers >> That's I I assume that that is whatyou're thinking. Um Uhas as >> That I think is in one of the one of theattachments as well. There's an FTE detail.>> It's it's one of the really >> detailed list that will have>> ones. >> Right.>> It will >> It's detail, it's called.>> Yes. >> Okay, thank you.>> You know it's my favorite one. Yes, actually.>> She did that just for you, Charisse. in there.>> Your wisdom is proven cuz I said, "Kathy, no other board members everwanted that." And look what I was wrong about.>> Yeah. >> Thank you.>> You've been redeemed. >> Yeah, no, you Yeah, and if you haveother you know, we are coming back in 2 weeks. So, if you have other questions,I'd be pleased to answer that. I get some of those emails, too, and Irecognize that we need to have responses to that. >> Any other questions or comments? Anything to share from our CEBAC boardmembers? About how that process went?Feeding into the budget? >> It could be perilous to try andsummarize cuz we didn't ask the committee to vote on anything. I mean,it was I think it was it was a very productive discussion. It was standingroom only this year.The group, I think, agreed that they want to dive deeper into a limitednumber of subjects next year. And so, we're beginning to think what that mightbe. I don't know if Director Cook or Director McLaughlin has ahas a different opinion, but you know, I I myself would be nervous aboutcharacterizing the opinion cuz it was very much individual.>> But it was useful in the development of the>> extremely useful. Um and I think the group has learned a lot, and so I thinkwe will get to the point next year where we ask them to take votes on stuff.Um we haven't been at that point uh with their learning curve and with ourunderstanding of what would add value in my recommendations to you, but I can seeus getting there next year for sure. >> Um my feedback was that I thought theywere very engaged, um which I wasn't necessarily umexpecting. Yeah, to that level.>> It's an engaged group. The The one thing we haven't talked about at length uhthis evening that the the CEBAC committee definitely spent some time onwas uh understanding the enrollment projections and the uhthe ramifications of a a deviation from theReinhardt study um in kindergarten next year and how that would sort of play outin terms of these budget numbers um and the 371roughly uh student reduction that is forecast in terms of the the revenueside. Um but I I think most of the rest of theconversation has already been reflected here. It certainly is an engaged groupof uh uh valuable perspectives that are represented, so.>> That's great. >> I would add to that, too. It seems likeperhaps the future value that they can add isas community members, their reflection onthe assumptions that we're making about enrollment. I think they may have thingsto uh assist us with there from theirperspectives. >> Well, if nothing else tonight, boardmembers will have at one more chance at this when we take action at the July16th or June 16th meeting. And I would say, "Thank you, Andy, foryour service." But we know you're up again next.>> Yes. >> Our next agenda item is an action item.Approval of issuance and awarding the sale of 33,800,000general obligation facilities maintenance bonds series 2026A. >> Thank you very much. UhI'm sorry, did >> Go ahead.>> Okay. I didn't know if Dr. Kill had an intro. I'm sorry to jump in there.>> Uh we we um as as the memo states, we umhad a bid opening today for bond issuance. Uh we had some some very gooduh bids and some good results. I'm going to turn it over to the expert, JodyZesbaugh from Ehlers. She uh is the expert. Uh I'm not As long as I've beenhere, Jody, it's usually been Aaron. And so, I appreciate JodyI appreciate Jody being here and we we love Jody and we love the Ehlers team.They've been incredibly supportive of everything we're trying to do in termsof our finance uh funding and financing needs.And uh again, she can walk through everything that you will be voting ontonight and um we can ask questions after that. Thankyou. >> Great. Thank you so much. Nice to behere again even though I haven't been here since Andy's been around, so>> But that hasn't been that long. >> Yes, okay.So um these bonds are being issued as part of the long-term facilitiesmaintenance program. You approved the plan, a 10-year plan as part of theprogram by July 31st each year as required by law. So to finance theprojects that are included in your 10-year plan, there are three differentrevenue sources. One is the bond proceeds, the second is your annuallevy. We often refer to that as the paygo levy which is included in the levythat you certify each year. And then the third is state aid, so you do get abouta million dollars of state aid as part of the program every year, which isgreat. There are a lot of districts that don't qualify for state aid, but you do.So that is the way that the uh the projects are financed, so we'lltalk about the results of the bond sale that we had this morning. As Andymentioned, things turned out very well. So we're financing health and safety anddeferred capital maintenance projects that are included in the 10-year plan.Um we did go through the rating process, which is required every time you issuebonds, so that's with S&P. Um and Andy and Andrew participated in that programand did an excellent job of representing you and the school district, so thankyou for all of your work as part of that process. There's a lot that goes into itand you kind of feel like you're in a little bit of an interrogation session,I would say because they're firing questions and so the two of them reallydid a a great job, so we appreciate that as part of the process.Um the Minnesota state credit enhancement rating that is issued by S&Pas part of their process is the highest rating that they give, which is a tripleA. That is the same rating that our state has, so under the state programyou get that triple A credit enhanced um rating. There's no cost to participatein that program, but they do guarantee the payment of your debt should you notbe able to make a payment. So, that's why you get that nice high rating. Yourunderlying rating is also very high at a double A stable, and that was affirmed.So, that's the same rating that you've had and will will have us will have uspart of this bond issue. You received eight bids. We generally like to seethree, so when we saw eight bidders signed up, we assumed that was reallygood news. You can see the rates that we received. The low bidder was Mesirow outof Chicago. Their low bid was a 3.87, and the highbid was a 3.95. So, very close, all under 4%, which was nice to see.Uh the estimate that we had in our pre-salereport was 4.30, so we are under that. And the lower interest rate resulted inprincipal and interest payments that are about 1.1 million lower than what was inour pre-sale estimates, and I think Andy went through that report with you atyour May 5th board meeting. So, we have a resolution prepared byyour bond attorney for your consideration tonight, and I will justwalk through some of the attachments that are included in the report, and Iassume you're all seeing it. Oh, perfect. Okay. So, thefirst attachment is the bid tab, so that's a couple pages long because ofthe eight bids that we received. So, again, Mesirow out of Chicago was thelow bidder, and then you had bids from New York, Dallas, Texas, a few bids fromNew York, Minneapolis, Piper Sandler of Minneapolis locally, and then Baird outof Milwaukee, and then the high bidder was TD Financial Products out of NewYork again at that 3.95% rate.The next schedules are the same schedules that were included inthe pre-sale report, just updated with the results of the sale today. So, wehave our sources and uses schedule that shows the amount that will be availablefor financing your projects. Adetailed debt service schedule on page four.Our detailed long-term financial plan on page five. It kind of looks like thelevy report in about size four font, but it's just um showing all of yourexisting debt, your uh this current issue, and then our future funding,which we Um if you turn to page or if you look at page six, the bar chart, ourgoal is to keep your tax rate for your debt and capital levies nice and level,and then we do have a couple drop-downs um later in the schedule to provide somefuture capacity. The final attachment is the ratingreport, and I'll just point out a couple of things on that.Um in the credit highlights at the bottom of sale day attachments pageseven, mentions the district's strong financial track record, itssophisticated management with robust long-term planning, and its economicstrength due largely largely to the presence of the Mayo Clinic.And then um there's some more detailed information throughout their report, andfinally, you'll see on our attachments page 10 some metrics that they trackwith respect to the district. So, that is everything that we have.We're certainly um very pleased with the results, and we certainly appreciate theopportunity to be of service to the district again, and I am happy to answerany questions that you might have. >> I I am a little curious ifuh umif you could tell us something about the the entities that place bids for thesebonds. Um if there's any qualifications in orderto hold bonds of a public school district or if there's any diligencedone on the purchasers or if we know anything at all about them. Justwondering. >> Yeah, so we do see these underwritersvery regularly. So um most often they are umunderwriters that are um active in bidding on municipal bonds. So umthey are required to sign off on a couple of things as part of the proposalform which I think um the chair and clerk will sign off on tonight too, butum otherwise there's you know it's kind of an open bidding process, butwe we do generally see kind of the same group of bidders. Um they don't oftenbid we don't often have as many as we saw today, but certainly these are allfirms that are that we recognize and that have been around for a long time. >> Thanks.>> And I should have mentioned too that we did have rates that had kind of jumpedup for a while. Rates have been a little volatile, but they've been coming downover the last week or so. So the timing worked out pretty well in terms of thethe rate that you received today. >> And what do you attribute the increaseof bidders to? >> I think there's a lot of demand. Therehas been a lot of demand and maybe not as much supply in the market lately. SoI think they're interested and generally when there's a little more unrest interms of the stock market and that sort of thing we do see more bidders onmunicipal bonds because it's a nice safe investment. So>> Thank you. >> Mhm. Anything else board members?Before I read the resolution? Dr. Cook?>> Yeah, as long as you're here, umbecause this the the school district strategy is to continue to issue bondsthat are similar in scope generally on a sort ofannual basis to finance some of these long-term uh facilities projects.Um is there anything in particular that you would uhcounsel the school district to focus on in terms of our finances in order toreceive uh favorable results like this in future offerings?>> Absolutely. So, there are some things that are within your control and otherthings that are part of their rating methodology that are outside of yourcontrol. So, certainly maintaining the level of reserves is something that theyfocus on. We talk about that a lot. Um you'll notice in the detailed creditopinion that they mentioned your operating referendum. So, that was acredit credit positive for you for sure to have that support from your localcommunity and know that you have that additional funding now secured for atleast 10 years. Um so, that was positive. And then,outside of your control is really the local economy and some of thoseindicators that you see on the metrics. And, you know, not much you can do aboutthat, but you're you're really strong. So, um I don't think there's anyconcerns or any worries going forward. But, really from a school districtperspective, keeping your eye on the um reserves is a is a big deal to them.>> And if you read the ratings report, um you will notice that there has been someuh downgrades with cert- with some districts in the state recently. And so,we are in a very positive situation here um within our own district and our ourcommunity. So, um I'm happy for that. >> Very true. Yes.>> Thanks again. >> Anything else?All right, then I will read the resolution.Be it resolved that the school board of Independent School District 535 doeshereby authorize the issuance, awarding the sale, prescribing the form anddetails, providing for the payment of $34,788,694.50 general obligation facilitiesmaintenance bonds, Series 2026A, and authorizes the execution ofdocumentation relating thereto as provided in attachment two.>> Move approval. >> Second.>> It has been moved and seconded. Any final discussion or questions?Hearing none, all those in favor say I. >> I.>> Opposed? The resolution has been approved.>> Thank you very much. >> very much.>> Thank you. >> Thank you. >> Next, we move on to other business. OurABCD, the current version is available in the agenda item for reference. Andupcoming agenda items for June 9th, we have our school and program relocationsand changes. Uh that's uh study session. On June16th, a prep for action on our social studies curriculum adoption. Our schooland program relocations and changes is an action item.2027-28 school calendar proposal and 2026-27 budget proposal.Any other items board members would like to raise for consideration for futuremeeting agenda? Hearing none, our upcoming meeting datesas I mentioned, June 9th a study session, June 16th, July 7th, and July21st are all regular meetings and they all begin at 5:30 p.m.And hearing no other business, this meeting is adjourned at 7:12 p.m.