yeah come on guys good evening um today is our yearly today is our year our yearly um truth and Taxation meeting um the date is uh December 12 2023 and uh Sherry Thompson will be uh taking things off so great thank you uh so yes this is our public hearing for taxes this is for taxes property taxes that are payable in 2024 uh Minnesota state law does require that school districts hold a public hearing it needs to be between November 25th and December 28th and it has to be at 6: p.m. or later it can be part of a regular scheduled uh board meeting uh we also allow time for public comment at the end and we may adopt the board May adopt rather uh the final Levy at the same meeting and um our board will be adopting the final Levy at the regular meeting following the presentation uh so we're going to talk a little bit on uh current year budget and then our proposed tax Lobby uh for uh taxes payable in 2024 we're going to talk a little bit about background uh information on school funding because it's always very interesting or at least to Bean counters like me uh we'll touch on the district's budget we'll talk about the proposed tax levy for property taxes payable in 20 24 and again we will allow for public comment the Minnesota legisl sets the funding for Minnesota Public Schools so not only do um does the legislature set um or they required to set the amount for um as far as school districts or uh funding formulas but they also determine how that tax how those funds come in what portion comes from the state and what comes from local property tax dollars uh as I said uh the state sets the formula uh there is tax policy for local schools again that is uh determined by the state and there's a maximum authorized property tax levy and when I say that it's not like we don't have a wish list we don't look at our budget and determine uh that we need x amount of dollars to make our budget balance it's all determined much of it's determined by student uh enrollment or um our anticipated enrollment uh so that is what is driven um um that's really what drives our funding uh or also we can go to our taxpayers and get authorization for additional funding which the district has done in the past the state also authorizes the board uh as I said to sub submit referendums uh for our uh to our voters for approval but the spending um does not necessarily align to the the funding that's coming in again it's high regulated and um we do not develop a wish list uh our basic general education formula that's the majority of the funding that we receive through the state uh that has been laging as in not keeping up pace with inflation for the last 20 years uh we are um we were uh awarded by the legislature an increase of 4% uh in the current year over last year uh that was approved by the legislature in 2023 that's a very large increase compared to what we've seen in the last 20 years and then uh next year we will see an increase for so for 2425 school year we'll see an increase of 2% or about $143 per pupil uh over uh the current year so that gives us a a total for 2425 our basic funding formula will be$ 7,2 um $81 it would have to increase and I've got a chart I'll show you by another $1,356 for it to keep in uh up with inflation over the last 20 years and you can see by this chart here uh the Blue Line the top line is taking that funding formula going back to 2 2003 and um adjusting it for inflation and the red dotted line shows the actual increase in the funding formula uh over the years so even with a large increase that we have seen uh that we're seeing this year uh we're still laging quite a bit uh we also have challenges uh we've talked about this whenever we talk about our budget the underfunding of special education excuse me um in fiscal year 2022 uh Statewide the special education was underfunded by 712 million in Roseville uh schools alone we were under underfunded by $12 million with new legislation and improvements in funding uh we are closing that Gap but we still have underfunding by about 48 million Statewide we're anticipating and we won't know until the current years coming complete we are anticipating that we'll be underfunded Roseville schools by about $8 to $9 million this year uh these are obviously important programs uh that our kids deserve so we invest in those programs but we need to take those resources from other General from the other general fund or the remaining general fund to subsidize these programs um I also want to point out that a change change in the tax levy doesn't necessarily uh relate directly to a change in our budet budget the tax levy and we'll talk more about this is based on many state determined funding formulas plus voter approved referendums um some increases in tax levies are Revenue neutral so for instance we can have an increase in what comes to us in property taxes but the legislature could offset that with a reduction in um funds uh that come uh to in state aid our expenditure budget um is limited by state set Revenue formulas uh voter approved levies and and our fund balance so if we have excess reserves or an excess fund balance we can dip into that as we have uh from time to time uh to fund our fund our programs but we do not receive funding um that's equal to uh our expenditures an increase in school taxes does not always correlate to an equal increase in the budget there are many factors that uh also impact uh the the taxes um I also would like to point out that there is a difference in uh local government Levy cycles for instance um the school district runs on a fiscal year that runs from July 1st through June 30th um similar to the the school year cities and counties they have a budget year that begins January 1st and runs through December 31st so while we are working we started working on these calculations last summer uh it's built uh again based on a lot of estimates so the 24 2024 taxes will provide funding for 2024 2025 so we're estimating enrollment and other expenses uh a a year before um the uh fiscal year even begins because the budget uh the tax levy and the budget will be adopted in June of or well the levy will be adopted tonight but will be funding the 2425 school year cities and counties are working on they worked on their budget this fall um and that they will receive funding for their programs or their uh fiscal year that starts on January 1st so we've got a little bit of a leg uh School District budgets are divided into separate funds and it's based on the purposes of the revenue and and the programs that are included um as I mentioned there is a leg uh of six months so we're going to talk a little bit on the budget we're going to talk about this year rather than next year our District's funds the the biggest fund is our general fund that really covers the majority of our day-to-day operations uh excuse me we also have a food service fund so that the food service fund is where we uh fund our meal programs that includes um breakfast lunch um breakfast lunch and a snack program or a late dinner program so all of our meals are funded through community service or through Food Service community service is uh our community educationr programs um while we received uh some state aid and then also some local Pro property taxes community service is also funded in a great deal by fees fees for child care uh fees for um uh classes uh so there are a lot of uh fee funded programs in community service we also have a building construction fund um we have a Debt Service fund and we use Debt Service uh and then also OPB Debt Service that's post employment uh benefits Debt Service that's uh that's how we pay off whenever we we borrow money whether it be for um bonding uh we had some uh we've had some bonding with our uh building construction in recent years so uh paying those paying those uh debts off all flow through Debt Service we have an internal service fund and in the case of Roseville schools we are self-insured on our dental program um so we fund uh all of our Dental uh claims and administrative costs uh we fund that through what's referred to as an internal service um fund uh our opab trust is um a trust that was established back in 2009 and that was uh to pay off some of the old Severance and benefit type programs that are no longer in place so we are in the process of drawing that down and wrapping that program up uh within the next uh 10 years so um here's a copy just kind of looking and again and this is based on um estimates we're just finalizing our audit uh but if we look at um uh our general it this breaks out between our general fund uh and then we have have what's referred to as a restricted fund so that includes some of our long-term facility maintenance operating Capital um and a few other items um that are mandated spending uh we are anticipating that we're going to end the year with about $3.2 million our general um other our our other funds in the general fund we estimating there that we would end the year with about $7.1 million uh our food service fund uh $3.9 million and our community service fund about 2.6 million you can see we've got all the other funds listed there again A lot of times I focus on the general fund because it is um it is the biggest fund um and then uh looking at the current year moving to the right uh with the red columns uh we are anticipating that we are going to further uh build that f uh our fund balance up in the general fund um in the current year that we're in right now so looking at um estimating about an $8.7 million fund balance for June 30th of 2024 um so looking at overall our Revenue um our general fund alone uh is is uh includes revenue of about 130 million is um again that's like 75% of the total budget our overall total uh revenue and all funds is just shy of $174 million um our building construction uh we're kind of right now we're really working on a lot of long-term facility maintenance bigger projects there and that's what the majority of that building construction is uh and we're receiving about $14 million um on that right now um annually that varies a little bit from anywhere from 11 11 to5 million a year uh The Debt Service as I mentioned that's something that's where we have to pay off debt when we um Finance uh and that's 8% of our budget and then other some other smaller components so talk a little bit more about the general fund uh again cuz that is our our biggest fund uh 72% of our Revenue this year will come from the state that comes in the form of state aid uh local is our property taxes so that's um 21% that includes uh also some other fees and then our federal uh is about 7% what I would like to point out is typically our federal funds run anywhere from uh 4 to 5% we are in the final year the 2324 uh year uh we are in the final year of receiving funds uh our covid pandemic funds so we'll see that in 2425 we'll see that percentage in the in the federal dollars um that will decrease and go back to probably like 4% looking at our uh at our expenditures if you look at the combination of salary and wages and our employee benefits that's almost um 80% of our budget we are in the people business so that is where we spend the majority of our funds is on Staffing another uh large category and we've seen a little some increase there is our purchase Services purchase Services includes the cost we pay for our Transportation uh we have a contractor that we pay for transportation this also includes tuition that we pay out whether it goes to an intermediate District or other school districts uh for tuition um to provide services to our students if we can provide them here um and in addition we have um during the last couple years we have had to shift some of our salary salary wages to purchase Services because we've struggled a little bit in um some of our staffing and some of our specialty areas like our special education teachers some of our Specialists um some of our nurses so we've seen that purchase service um category bump up a little bit as um we had to contract some of that workout our supplies and materials is about 4% and then our Capital expenditures is um 1.3% and when you see that other that's uh some of like our property and our liability insurance looking then um uh at our instruction or our expenses by program um we spend uh the majority of our dollars which we should on uh direct student services so you will see that we have an regular instruction just our general education regular instruction uh costs and the majority gu this again is salary and benefits 38 % is on regular instruction um we also have vocal vocational education Career Tech instruction and that's 1% our special education instruction is 22.3% so we are at like 64% just in direct instruction in addition to that we have what's called instructional support services that includes our media Specialists um uh curriculum um development um it also includes uh some of our support additional support uh our PA professionals uh support in the classroom uh so that's about 8% our pupil Support Services includes things like uh our transportation costs uh our guidance counselors and our nurses so that's another 12.7% or 16 million and then we have cost for our sites and buildings uh that being our buildings and ground staff and our utilities and that's about uh 8.7% uh our district support services that includes things like human resources the business office Technology support our Central Enrollment Office uh so all of those things that that uh support um Provide support and then Administration includes and that's uh at 4.6% or about 5.8 million so that includes the superintendent office includes all of our principal offices uh at each building um so yeah we're about 4.6% uh uh on Administration okay so we're going to talk a little bit about the property tax levy moving on to that how determining the levy um uh comp comparing it to uh to the current year Levy uh CH looking at the changes and how it impacts taxpayers uh thus the main reason for this hearing so our property tax background uh every owner of taxable property pays property taxes to various taxing jurisdictions the County city um School District Special Districts includes like the Met Council um so they everyone pays taxes on on or Property Owners pay taxes on where the property is located each jurisdiction sets its own tax levy um and again especially I know in our case it's based on limits in state law so uh each uh jurisdiction sets the uh looks at the levy determines the levy based on formulas uh we submit that to the state or I'm sorry to the county actually and the state in September the county does some calcul ations they send out the bills they collect the taxes uh from property owners and then uh as far as local property taxes the county then sends that money to us so um you've all seen uh this is a very generic property tax statement you uh have likely all seen uh the proposed property tax statements that just went out um in well actually in mid November so again this is not the actual property tax statement but it's the proposed based on what was submitted in September uh it in includes a comparison from uh the proposed for this next year to the current year it's broken out by jurisdiction so you can see for instance exactly what the school tax is and the change there uh and then within the jurisdiction it's broken out by what was voter approved and um and then also what is the other is basically what's approved by the state or what the state determines and at the same time that notice includes uh the time and place of um the various public hearings School District property tax excuse me um each uh School District May Levy taxes in over 40 different categories we have like a 40-page document that we need to review and enter data on um and that's what we spend a lot of August and September on uh is determinating or determining that those uh calculations and our numbers are correct uh based on the funding formulas and again calculated by the Department of Education and verified by um locally uh there's a maximum amount uh a lot of this as I mentioned is because there are formula that um that drive these things so for each uh category it is set by state law or local voter approval um that's the only way we we receive funding in a school district as far as the property tax process uh there's some processes that we'll touch on um and in all of these different steps can also impact um taxes on a particular parcel so there can be various um various factors so the first one is the city or county assessor determines for each parcel the estimated market value uh for each of the properties so you we can see increases we um increases in our estimated market value um step two the legislature as I mentioned sets the formulas they set the formulas for tax capacity meaning the rate at what uh uh Parcels will be taxed uh and and then also their school district levy limits so they determine what comes from the state and what's going to come from property tax dollars the county auditor then calculates the tax capacity for each parcel of property and again that's driven by um by market value and then total tax capacity in the district uh step four the Minnesota Department of educ ation calculates detailed Le Levy limits not only for each School District but based on the particular formulas that are approved by the legislature so we've received those in by category uh our school board adopted a proposed Levy in September uh this evening after this public hearing the board will adopt a final Levy uh in December that final ly cannot be more than our proposed Levy that was um that was adopted back in September uh ex except for amounts if we had had a referendum for instance in November um that would be the only exception uh so after the board approves the levy we send that back to the county auditor and they divide the final Levy by um The District's total tax capacity and to determine how much needs to be raised and at that point um uh the property tax statements are prepared and sent out in I believe in March so again this is kind of a visual of the process uh we received that information from mde we worked on that much of September the board approved the proposed Levy amount on September 26 property tax statements proposed property tax statements rather uh when out to all property tax owners we have the hearing um right now and then this evening the board will certify the final lovey amount so let's take a little uh a look at what that proposed tax levy is so the proposed payable 2024 tax levy is an increase from the current year of about $3.2 million or 7.1% there's a couple of categories and reasons for some um some of our bigger uh adjustments or changes so this just gives a a a comparison by category um as far as where we see changes uh this breaks it out into type uh category types but one thing I will say is a lot of times when we see changes from uh from one year to the next I'm going to have you go looking at that General column going Midway down prior year adjustments we are always projecting things a year and a half ahead of time uh typically um typically we like to see um a small uh well we like to see minimal adjustments um again our our total Levy is you know in excess of $45 million uh in the current year uh we had adjustments of 4.9 $ million we're looking at adjustments um we like to see that number less than that we're looking at adjustments of about 3.4 million for this next year one of the challenge that we challenges we have had since covid is um projecting our enrollment so we've really kind of backed off on that but um as we do our enrollment and submit our data and we receive funding for it the seat comes back and adjusts so if we over project enrollment it may it won't happen this year but it may happen a year now from now or two or 3 years from now we don't retain that funding um so we do see some adjustments so we've kind of become a little bit we have become more conservative in even projecting out some of our enrollment we also get some adjustments sometimes from our um and that follows in the general fund our long-term facility maintenance uh we do a lot of projects that r run over the course of a summer uh our fiscal year ends on June 30th so sometimes depending on how much construction is actually complete uh we have to record things we may record more expenses in 23 like June 30th of 23 for instance or if payments are made in or work is done in July of the following year then it falls into that next fiscal year so that can shift um that can shift a little bit also but overall uh we are looking at increasing uh the proposed Levy from 45.6 million to$ 48.8 million uh general fund uh voter approved operating referendum we are anticipating an increase there of about $639,000 uh some of that is due to uh existing the existing Authority that we have that our voters approved includes an annual inflationary increase so we do re see additional funding there and um the state determines what that inflationary uh increase is I believe it's about it's an excess of 2% it may be about 2.5% right now um I mentioned the general fund prior year adjustments uh so uh we saw increase um well an increase actually decree decrease in her negative adjustments so uh that is generating an additional $1.4 million uh again on those retroactive adjustments our debt service fund um this is where as I mentioned we paid off our existing debt um so um we are seeing an increase there of about 746 ,000 we will be selling bonds this year uh to finance some of our long-term facility maintenance and um that has an impact on that so that that is an estimate but it is included so that's impacts the overall Levy I want to spend just a couple minutes talking about the impact on individual taxpayers school taxes so you can see an increase in your own property taxes based on um several factors uh the first one it can be a change in your the value of your property is that value going up is that value going down uh we another factor is the changes in total value of all the property within the school district and of course our district covers seven municipalities um so changes in property tax uh within the school or in the total value Within in the school district um obviously then also increases or decreases in Levy amounts and those can be caused by changes in state funding formulas uh local needs and costs uh in in our case at State funding formulas and voter approved referendums so how does that impact um each each slice of the pie so you can see the visual up there of the district being the whole pie so the higher market value that you have um you that personel will take on a bigger slice of the pie of the district slvy and the lower market value then will take on uh a smaller slice but each property owner will pay a portion of um of the pie um let's talk a little bit more about property valuations so we can have two properties in the district and both both houses are valued at $100,000 and this could be a house in arton Hills and one in Roseville but as far as the school district's taxes um if there's a total ly of um save $500 and and if I mean if this encompasses like the whole District uh each property is going to pay $250 again because this is based on School District uh taxes uh impact of property valuations uh looking at two properties in the district and if those valuations change if the orange house increases its value by 10% and the blue house increases its value by 25% but we still have a total Levy of $500 uh the orange house is going to pay less because the value uh the their slice of the pie is smaller and the blue house is going to pay more but the school district will still generate the same $500 doesn't increase the revenue to the school district so we try to look at multiple year um comparisons on our on the uh ly um so we're going to take a look um and we have examples that are uh include um the district taxes only and then our shown based on no change and then also 14.4% increase in property value uh over the past four years because cumulatively property values in the district well and I think we just used Roseville um rather than each municipality um have increased 14.4% so sometimes actual changes in value may be more or less um for any parcel of property uh we're just trying to give a fair representation of what happened to school district property taxes over this period and these are based on preliminary estimates uh final amounts could change slightly um we never see big changes in the final um and we uh Ellers uh presents us uh we received some of those property values um estimates from ERS our District's municipal financial advisor so here's taking a look from 21 to 24 if there were no changes in property value um looking I'm just going to touch on the residential the commercial is up there as well and also copy of this whole presentation is um on our website but if for instance if we're looking at um uh a home that's estimated I'll go somewhere in the middle there at $350,000 uh in 2021 the taxes the school taxes on that home was $1,666 in 2022 after passage of of an operating Levy by our taxpayers that tax increased uh to $1,869 that um last year that actually dropped down to $1,626 and our estimated taxes for next year for 2024 is $1,675 again um assuming so it's a slight um uh a slight uh increase from 23 to 24 but if you look at from 21 to 24 um it's a very minor increase and the taxes that are proposed uh for 2024 are actually at a lesser amount amount than what we had anticipated when we were going out for a referendum back in 2021 but this of course is also assuming that there's no changes in property value and that of course um property values do change um so this is uh again uh this is a demonstration uh based on no changes and it just kind of illustrates the previous point and what's happened there it's a visual for that um again uh some higher values now um let's take a look at estimated changes in school property taxes based on a 14.4% cumulative change um so we have seen the estimated market value uh in uh increase of course over the last four years uh there was a market value change from 2021 to 2022 of 1% uh property taxes or property values from 22 to 23 increased 10% and now we're at 3% from 23 to 24 so though uh increases in property value also have an impact so um if you look at um uh the home on the left here the $250,000 residential property in um uh 2021 that had a it would have had a tax value then of $218,000 that tax value increases in 2022 23 2023 and 2024 and then you can also see the corresponding increase increases that and how that impacts that change in uh value also impacts property taxes uh I just would also like to share for the public um that there are some state property tax refunds and deferral programs that are out there uh the first one and most popular is a homestead credit refund it's available for all Homestead Property um both residential and agricultural it's on a it's done on a sliding scale it's based on Total Property taxes and household income uh the maximum that you can receive is 3,140 for homeowners and this is also available uh for renters as well and the cap there is 2,440 in addition um there's what's called a special property tax refund and this supplies uh if you see an increase if there's a gross increase um of 6% or $100 uh per o over the prior year you qualify the for this and the refund uh you receive is 60% of the tax increase that exceeds the excess over 6% um or $100 the maximum you can receive for this is uh 2,500 and then um the last program uh this isn't a refund this is a deferral the state allows people 65 years of age or older with household income of $96,000 or less to defer a portion of property taxes on their home and that deferred property taxes plus acred interest must be paid when the home is sold or the home owner dies so again that is not a refund that is a deferral but those are three programs um that the state sponsors so next steps um uh the board will accept public comments on the proposed ly I will stand for questions and then the board will certify uh the levy during the regular meeting people watching um online please feel free to contact uh is Sher at the district Center um and she more than happy to to go over anything that has been discussed or wasn't discuss I don't know what that would be but um uh great job uh we do have folks um who are here um in person so I'm going to take this opportunity if there's anybody who has a question or questions please feel free [Music] to uh ask those now okay looks like you did a good job that there are no questions so or everyone's asleep yeah thank you thank you um in that case with with that um I will close this year's truth in taxation meeting thank you very much