[music] Heat. Heat. Good evening. It is Thursday, August 6th, 2026 at 6 p.m. We are at the District Service Center in Cottage Grove, Minnesota. We would like to acknowledge that the land on which we gather is the land of the Midawakutan Dakota people. Midawakutan means dwellers of the Spirit Lake. First item on our agenda is 1.0 and that is roll call. Dana >> Elizabeth Bachmanber >> here. >> Luis Hines >> here. >> Ryan Clark >> here. >> Melinda DS >> here. >> Sydney Pnik >> here. >> Sharon Vanlier >> here. >> Katie Schwarz >> here. 2.0's pledge of allegiance. Please stand. >> To the flag of the United States of America and to the republic for which it stands. One nation indivisible with liberty and justice for all. >> 3.0 is approval of our agenda. Can I get a motion to approve? >> So move. >> Second. >> Motion by Sharon, seconded by Smi. All those in favor? >> Any opposed? Motion passes. 4.0 is workshop item. We do have one this evening and that is 4.1 and that is a finan financial update presented by Chris Blackburn, director of business services. >> Well, good evening everyone. I don't know that I have super exciting um things to share this evening, but I did want to share an enrollment. We always try to provide those updates. I think um it's a beautiful night outside, so I'll try to be as I think Sean's running the clicker, so we'll see how fast he makes me talk here tonight. Uh but again, up here is then the enrollment terminology, enrollment updates, we'll talk financial considerations, the budget update, um just kind of more reminders maybe than update, and then the next steps as we talk through this evening. But I always think it's a good reminder to talk enrollment um with the board and I think it's been a couple years since we've had a formal presentation. So the terminology that we utilize in finance when it comes to enrollment is we [clears throat] talk average daily membership. And so what that is is the count of residents of student resident students attending our schools. It takes the days that they're enrolled divided by the total number of student contact days and then 1.0. So if somebody attended and was enrolled all year and attended every day um they would be a 1.0 student with us 1.0 average daily membership. So we realize that we certainly have families and students that come and go during the year and then that would be result in a lower number because they'd only be enrolled maybe halfway through the year they'd be a 0.5 ADM. So the reason ADM has becomes important is then it translates as well to adjusted pupil units. So APU is the other um common acronym that we use along with our a billion others but APU is most commonly used for funding formulas. It's a weighted count of students actually served and the secondary is weighted greater than the elementary and that's been a long-standing I think when I looked back had been since like 1990 at least that the secondary students have been weighted higher. So K through six students we receive just 1.0 um and that really generates basic formula is particularly where that comes into play and then grades 7 through 12 we generate 1.2 um is what that multiplier effect is. I think the you know reality is we know secondary sometimes comes in there's a lot of electives for students to take and that comes at a higher cost as well. So, some enrollment updates. As you know, we passed the budget in June um since that time when we set budget um and staffing and um the enrollment for such to drive those revenues as of Monday, July 28th. So, we've had an updated count this week as well, but when I was putting this together, the K12 student count at that point was 18709. And so, when we take out PSO, um it's about 234 students ahead of budget for the 26 27th school year. And what I would remind the board is that enrollment is in the community is enrollment is a snapshot in time. And so we take multiple snapshots through the year. Uh we take one in January when we roll over. We use utilize that for staffing purposes. We do another one kind of in that May time frame and that we utilize for the original budget and then now we just continue to monitor and so it's always that snapshot in time. What we also know is that we always like to start the year with a positive that we're ahead of budget um because we also recognize that during the year that that enrollment will decline through attrition students making choices for u postsecary enrollment particularly and so we always try to um start out ahead because we know that just through the year that average daily membership um and that APU decline over time and so again we always it's a positive number but we always are I'll say cautiously optimistic always this time of So this slide is that reminder of enrollment all students and it just predict that has the historical in the green um kind of the current FY2526 school year that just um finished in blue. The red is the budgeted at n 18689 for 2627 and then it predicts out for 2728 through 2930. And again, just that reminder of illustrating that that declining enrollment that we're seeing right now and then really the impact that that has on budget. Um, and we know that we're already in starting the budget adjustment process as well. But this really illustrates because so much of our revenue comes from enrollment, why that importance of um, continuing to monitor that as well. this slide then I wanted to just really highlight kindergarten because we've talked a lot about declining birth rates um and impacts thereon and so this you know probably more than the previous slide which showed a slightly flatter curve um this for the kindergarten piece it shows a little steeper decline and so again as we continue to see lower birth rates nationwide as well as experiencing that in Washington County we'll continue anticipate continuing to see declining enrollment in kindergarten we also know that there's um choice programs um and other options that parents choose to make for their students as well. And so we certainly see the impact of that in school as well. This then is a lot of lot of detail and a lot of busy. So I'm not anticipating u everybody to look real close. I know even as I looked at it by site I thought I might need cheaters just to read numbers. Um but it does reflect the K12 enrollment by grade level for the historical years um 2021 through 2425. again that revised budget um 2526 school year ended our current budget and then the projected out for the next three years. The reason I wanted to highlight that is to talk just a little bit about how we do enrollment. And so we certainly use a 10ear continue to use the 10-year cohort survival methodology where we take for example the kindergarten class we roll that how many come from 25 26 how many are going to be in first grade in 26 27. We take that average across 10 years and we apply that um all the way through grade 12. And so that we know we call it kind of the capture rate or the cohort survival. How many of those students moved into that next grade the following year. We know that some grade levels we gain students and some grade levels we certainly lose students even in that 10-year average. And I would remind uh again that when we do that certainly it smooths any you know we know there was some hiccups during the pandemic some maybe unanticipated losses of students and that kind of smooths that out to provide a real u good predictor but it certainly doesn't always predict actual some days I feel a little like the weatherman where I'm like well it's going to be sunny and you know 80 today and you're like oh well it was 65. Um the danger is that we certainly can come in higher which is positive but we can come in lower to um than those rates. And so hopefully that tenure smooths out any of those bumps. The bottom then I'll would see you talk too quick uh or I talk too slow. The revenue change due to enrollment is just reflected in that bottom in red. And so again, as we look particularly at budget adjustments, I wanted to highlight that and just again that continual decline that we're anticipating to see in enrollment. So the implications of enrollment in general, each student in South Washington County Schools generates about $11,879 in state aids and levy dollars. This includes operating levy. Um, it also includes restricted funds such as operating capital, basic skills, um, which is includes English learner and compensatory dollars as well. We always talk about 84 students equaling $1 million in revenue and that's continues to hold true right now. Um, and certainly that includes that restricted dollar. So that doesn't mean we just get to spend those dollars for strictly classroom. Certainly some of that comes with some strings attached to it that limit what we can spend that on. And again, we never want to talk about students being a dollar number because certainly we're in the people business, whether it's our students or our staff. Um, but the reality is that's how our revenue is generated predominantly. In addition to receiving funds for the K12 students, we do receive early childhood special education funds. Um, and about for those they're based on hours and so we receive about 25% per um ECSE student. voluntary pre-K or the VPK programming. We do receive funding for seats and that's a seatbased um that we receive on those and then they generate ADM and then we also receive extended time revenue which largely is um targeted services. So it's kind of before school and after school and we can generate up to an additional 0.2. The caution with that is if we only generate maybe a point8 on that ADM then we'll only generate up to a maximum of 1.0 for that student. So we still generate more than we would have but it um we can generate up to 1.2 but that doesn't always mean that we'll generate 1.2 funding is also reduced by postsecary enrollment students and so what I'd point out is that um just remind the board that we have the contract directly with Century College and we save thousand dollars by doing that. Typically when you contract directly rather than going through we retain all of our state aid and then we negotiate with Century College for a per credit dollar amount and so that's paid to them. Typically we have more than a dozen institutions that our students attend and right now that's our only direct contract but we're continuing to explore um some some universities and colleges won't contract but we certainly try to always explore is there opportunity in some of those others where students may be taking significant credits financial considerations. So the Minnesota state legislature as we know sets the state formula basic formula per pupil. The amount is multiplied by enrollment to determine district revenues and again that would be the APU that adjusted pupil unit. The bas as far as a percentage of our revenue the basic formula state aid comp comprises 43% of our re total revenue in general fund and then all state aid revenues comprise almost 72% of our total revenue. I'll say that why the 43% is important a little bit. U if we look at that basic formula increase again that 2.69% that we received this year is only on that 43% of our revenue. So if we have when we know 78% of our expenditures are people um if we negotiate maybe total package compensation increases of you know 3% or 4% we're exceeding that already. So that's that challenge sometimes that we face fiscally being underfunded historically. State aids then as a reminder increased largely through either additional enrollment which is the primary driver and again or if the state would elect to increase that basic formula or other aids and then most of our revenue is derived um the other revenue is most of it is from our local levy including the operating um capital projects and again we've had a very supportive community and are super appreciative of that. This slide is just a I call it kind of the reminder of where we were at for the uh both the revised budget for 2526 and the original budget for 2627 and the revised budget was just shy of $ 1.5 million deficit board approved and for the 2627 approved in June we have are predicting this next year um starting with anticipating an $8 million just over $8 million deficit. I would just share that we'll start the audit and so those actual results for 26 2526 we'll know better they don't come until um October really kind of late October this year and so um we'll certainly as we work towards that have some updated information with that and we'll continue to monitor this slide then is general fund revenues and expenditures both actual um from 21 2021 through 2425 and then the revised budget original budget and really it's intended to highlight that even though we know that we're seeing that growth in revenue and the growth in expenditures just that that is you'll see it those last two columns where those expenditures have now outpaced and so we know there's that structural imbalance um some is the enrollment kind of that perfect storm of enrollment declines um costs rising you know we talk about it costs more to do the same right we're just seeing experiencing that um locally and then the state has continued to be underfunded historically and so those kind of create a perfect storm of where we're at today. The unassigned fund balance projection then um and again that has actual historical data going back to 201718 all the way through 2425 are actuals and so we exceeded fund balance um starting in 232 24 and 2425 our fund balance policy again is 16.6% 6% and that policy does very clearly talk about or predicted to go to below that in 2627. And the policy does very prescriptively um discuss action steps that are needed when we are projected to go below fund balance. And so that um is certainly aligned with our budget adjustment process that we're beginning undertaking now to bring to the board in November. Next steps. So we'll continue to monitor enrollment um all the way through this fall. again will take 101. The October 1st count is another big count because we know that the start of school there's a lot of even between now and then. Student information s um services is you know just always hopping this time of year with both incoming and outgoing. Um and so we will continue to monitor that. October 1st is typically a count that the state kind of a I'll say like a cut date that they take a look at enrollment as well. And so we'll really take a look then because kind of the es and flows of start of school where maybe you know parents made other decisions or families did or they're incoming um that we might see those we know kindergarten sometimes the bus rolls by and people like oh yeah kind school starts soon. So um as they start doing those early runs so the audit of 2526 begins we've already had the auditors on site uh just for some preliminary work and they'll continue that and as I said they'll come on site for two weeks in late October and early November. Um the school board will approve levies in December. So I'll bring that we'll start it in September and we'll discuss um at next month's meeting which is hard to believe that's next month already. But then they'll approve those levies in December. The audit is presented to the school board in January. And some is the lateness of our audit um the timing of that just to align with only having one board meeting in December. We've usually moved that just to January as kind of a regular practice so that we can have opportunity to have robust discussion. And then in 26 27 we'll revise the budget. Um typically we'll bring that in March for schoolboard approval. Again we'll update enrollment. We'll update if there's any other changes to staffing, if there's other, you know, actuals, right? Did we fill all the positions? Did we not um and so that'll be reflected in that revised budget and then we'll begin work on the 2728 budget. So when I tell people that we have two seasons, budget and audit, this kind of reflects that. I should probably add levy into there a little bit as well. Um, with that, any questions? >> Any questions down here? >> Nice. >> I I just had one question. So, the 30% of the state aid that is not part of the basic formula that we receive the revenue. >> Um, the basic formula changes every year. How frequently does this other 30% of our revenue or 28% or whatever of our revenue change? >> I would say kind of depends. So some of them, so for example, the biggest I would say the largest outside of that is the special education revenue. And so that changes based on our expenditures. So right now we're reimbursed on that prior year look back for expenditures. And so I'd say roughly we receive about 80 cents on the dollar for expenditures. So as expenditures rise, we would anticipate that that revenue would also rise. um while certainly knowing that the state has a kind of a statewide cap and so the potential I think last year during revised budget or a few times we've certainly experienced that already that they've prrated that amount um at least temporarily until legis um legislative there was legislative action on that um and so we would anticipate again that will continue to rise but knowing that we may um run into some perhaps issues with that and again some of those other aids so they don't always proportionately free and reduce lunch counts are primar primarily utilized for the compensatory revenue calculation and that's um being proposed to maintain um currently anyway and they're looking at perhaps moving to an income based um using state department of revenue data instead but right now that's the best um I'll say proxy maybe for that achievement that they want to attain and so you know some of those other just because there's different factors that they're based on but I'd say that special ed is by far the largest other source and so again would rise with expenditures Okay. Thanks. >> Yeah. >> Okay. Thank you. >> Oh, I was I needed a second to think, so I appreciate that. Um, question for you and potentially Superintendent Neielson about this. Just wondering, do these numbers sort of shift anything about our thinking for five-year plans and like the kind of plans that we've been making and just wanting to just get that out there. Um, because I really appreciate the numerical update and I know you incorporated a lot of my questions into your presentation. I really appreciate you explaining them so clearly. >> Yeah. So I would say at this typically what happens with enrollment again we'll certainly incorporate into revised budget but there's always a hesitation to incorporate it this early. What we've found even last year if we go back and look and I would say the last few years we've typically started a fair amount higher over budget student wise. And so certainly that is a promising sign. However, when we look at that budget what we know the adjustment process right now with our current target of 13 million in general fund for adjustments doesn't quite get us there anyway. And so I think our reality is that while that's still up, we're positive about that, optimistic about that, it won't change that number right now. Um, and again, we'll certainly incorporate as we look to revised budget and as actuals, right? And we'll take a look and do we still have that need? I would anticipate that number won't change for that target just because of our current realities. And I would just add, Elizabeth, the other thing that we want to be thoughtful about is having to do budget adjustments two years in a row. And you know, just what that does to the culture and climate climate of a district versus if we're able to take a big chunk now and then work on some of those five-year plings, whether that's an operating levy, capital levy, um, so that we can balance the system out a little bit. >> We certainly have seen districts that have that and that gets very challenging. So, >> yeah. Thank you. >> Thank you. Okay, we'll move on to 5.0 and that's our information items. We do have one this evening and that is 5.1 and that is the first reading of proposed policy changes and that will be presented by Julie Nielsson, superintendent. >> Thank you. Um and very routine and regular bringing forward seven policies. Um I do want to thank our policy committee because I think we've gotten in a real good pattern and real good routine um and making sure that we are always reviewing policies. Of course, the policies that are due and in handbooks, we did those in February or March. We had all those approved, so those are all through. Um, this evening we have 515, protection and privacy of pupil records. There are some grammatical and legal updates to that policy. 516 is student medication and teleaalth. There are legal updates and just the overall organization of the policy. 516.5 overdose medication. There were no proposed changes in that policy. 519, interviews of students by outside agencies. There were a couple of grammatical and legal updates. 520, student surveys, just a couple of minor updates. 530 around immunization requirements, there were grammatical and legal updates. And the policy that I know uh the policy committee spent at least an hour um having questions answered um was our responsible use of artificial intelligence or AI. That is a new policy for the board. um at the recommendation of our uh professional organization MSBA. And so um I will share so that community can hear that our policy board members um spent an hour with questions. And the real goal of getting this policy in place is to make sure that as the school year starts, we have some regulations in place as staff students utilize AI. um our plan with the AI policy. Um, of course, we will take questions on any of the policies this evening, but in October, our director of technology will come back and he will talk through the implementation of the AI policy with the board and hopefully make it clear for the community. Should at any time we feel like we need to make adjustments because this is a new policy, we certainly are open to bringing this policy back at any time after that. So with that, I would just open it up to any questions around the seven policies this evening. >> Any questions? >> Any questions? >> Okay, thank you. >> Okay, we will move. What? >> No. Oh, nobody else. >> Oh, >> anybody in the audience? >> There's nobody in the audience, so I just assume nobody had signed up, but I can ask anyway. Dina, do we have anyone signed up for policy questions? Okay. So, then we'll move on to 6.0. And that is our reports and comments. Julie, >> um, you know, with the month being long and Labor Day being as late as as it possibly can be, uh, we haven't changed our meeting schedule much internally. And so this week we invited all of our system leaders back and we're like, oh, it's so early, summer's over. But then we were reminded that there's like another week somewhere tucked in there. Um, so we welcome back our system leaders this week. Um, in addition to throughout the month, we will have our school improvement planning retreats with our schools. We will have um safety. So, a full day spent on conversations around safety. Um we will welcome back new staff on um August 24th. Um in addition uh construction, we get asked a lot of question around construction. Mostly it's around the roads in Cottage Grove and Woodbury. Um because not a lot of people have been out on sites. Um but our schools uh and sites, some of them are very messy. And so we are doing construction tours with city officials, legislators, public safety, school board members, and any executive cabinet members. We will have those on August 10th for Cottage Grove and August 18th. So anybody watching at home, unfortunately, you're not able to ride the school bus with us. Um we have just a set limit of people we're going to take into the school so that we can actually see a little bit of the messy, but just really get a look at the investment of $200 million in our school district and what those facilities look like. And I think the members who go on the bus tours are just going to be very impressed with um how our schools look from the added space to the cafeterias to the safety considerations. Many of us have been out at these sites already and they are just well done and our students are going to come back and it's just going to be incredible to see their faces as especially our high schools as they they enter those new cafeterias with those windows that are never ending. They're going to forget that it actually was light outside. So we're so excited. that August 10th and 18th, we'll be doing those tours. And then finally, just to remember our community and board members, uh we are in the busy season of parades. This Saturday [clears throat] will be the Newport parade. And then um next Saturday, the 15th, we'll we will celebrate St. Paul Park Days. And so look for the frisbees. Uh board members just got a Frisbee tonight. Um and so those will be passed out. And for the community, Linda, can I have yours? For the community, as you get this, it talks about planning for the uh future. And on the back is our QR code for all of the information around our five-year planning. And so this is the kind of the first opportunity and the first roll out to our community that the website is up and running. Thank you. Thank you. Board members, do you have any uh reports on any upcoming events for any of the committees? I know we're probably not even meeting. So, okay, we will move on to future meeting dates. Uh, August 20th is a schoolboard business meeting here at the district service center at 6 p.m. September 10th is a schoolboard business meeting also here at district service center at 6 pm. And with that 8.0, we are adjourned.