Yeah. So I kind of thought about this three phases. The first phase was still doing the work. The second phase is now working together. You know, one of the things like like we used to be we used to be on
smart finance and finance system for Alex most people are on system. Um the third phase is sort of just coaching and chat.
>> We are ready. And if everyone could turn their mics on, just a reminder to turn your mic on. Thank you. >> First item on the agenda. >> Thank you. So, thank you for being able to jump in. was great. It's gonna obviously helpful
in getting everything prepared for tonight. This is a this is a part of the process that we've been doing for quite some time since I've been here as far as how we develop the budget. We start conversation
timelines and things like that. So that's what we tonight. Um Carlo, I think I'll just sort of drive and then I might forget. Okay.
>> She's nodding her head. You can't see her right now. >> All right. Um so the objectives tonight understand process principles that we go about get this done and then like I said
to the solutions in place because those drive those uh the variables that go into creating that budget. We'll like I said review the process. We'll take a little bit of a look at our current situation. We will spend as much time there as we maybe have in the past.
We just had our taxation meeting a couple weeks ago where went through a lot of that detail. So we just kind of hit some highlights there. We'll review the timeline here in front of you. We'll talk about the assumptions from earlier. It's real similar to what
we last year and between myself and Carol this year. um that I believe our recommendations are sound and then talk about where we're going. So how we work through this this is an
overview um tonight's meeting the budget is is fine tuned and developed based on those assumptions as we talked about a lot. Our two biggest drivers for our revenue are how many kids we have and how much work for the state. Those are those are the two
biggest drivers of our side. Both of which we don't know. And with how many kids we have, we won't know that till next year. And on the state allocation side, we won't know that until they establish their uh
inflationary adjustment. So, we have some what we think are some good thoughts about where the state's going to land on that. We'll share that once that draft budget is done. We'll take a look at that over that with the
board and then uh the board if uh if there are that need to be made to balance the budget talk about that target set to do that and then at that point wheels moving as far as
uh communication strategication stakeholders uh we have a number of statutory processes that we need to follow contract actual processes we need to follow ultimately need to have that budgeted in June. So
that's that's our process. This is a pretty steady feel to many people. Um just a few bullets to kind of recap again. to this just to do a fly over after
seven years of bounced spending. We had positive balance budgets for three years. This would have been another one had not been for the spending we needed to do. So we can't say we status
reduction of million times down to about 2% 22 up over uh 10% and we're kind of hovering there tickling down a little bit. Um again
because of the deficit spent fiscal 26 we will come down there but that should stabilize basility. We have tenative improvements with our three largest groups. Um, if you remember a year ago, one of the things
we talked about in order to limit reductions for this spring, one of the things we talked about need to stick through was to um hold tight and be really smart and talk on our
how we settled our contracts. employees have been working with us in partnership on that agreements that kind of kept us in line with what we really needed to be and uh in line with our budget and that'll help us move forward.
We do have some uncertainty about the impact of the move uh for our retirees into that Medicare plan. Um there will be an increase in our stop loss that's sort of
like insurance if you will kind of protection really high claims um we're not really sure how that play out obviously affects our retirey premiums
affects our active employees and our stop loss premium certain um I should mention here uh it's I haven't previously Every two years we have to do a uh a rebate of our insurance that's on the
healthare insurance trans and so this is our year to do that. So we'll be soliciting um quotations of uh providers get three or four and after that process the
benefit committee will as far as a rate and the state budget forecast are great. Uh there's the surplus right now for the long term
good there should be an update coming in February I believe is the next budget update and this session session is there there are people even legislators don't
expect anything to get done um it's a policy that kind of dramatic and the other uh recently is that every single person
is up for election and there's not a lot of optimism about getting things done. I think from the school district standpoint it years and years and years and years and years to get our inflationary component to the state funding to
schools and our goal really is to just that I don't think there's any realistic hope to to get on top of that was the attention I think we have longer questions around
commentori had a number of meetings I could probably talk and on the details of that I won't but if I have questions about it I can certainly get into it um I can tell you that uh we have a legislative
uh preliminary report due January 26 The final report isn't due until October of this year. I believe right there's no way there will be a resolution to the compensatory revenue formula question. I
think the uh common belief and advocacy is we need to extend the whole uh clause that was in place for this year until that get until that recommendation
completely. So it's a significant it's a significant thing that that happens. So we're talking about primarily for this legislative session. That is one that I think every education organization needs to go to the wall for is that that will
harm the student. Unemployment insurance was set aside through the summer. Uh again, one time money and there are a lot of long-term questions about whether that will get
funded in the future and depending on the elections this fall in the same category. I know that one of the things that we all watching is the early access and early applications for that program. Um my
understanding is that within you know the first few days of January about 10% of the allocation accounted for within the first few days. So um and way more than had anticipated. So I the
superintendent I think as a group our opinion is that that will be underfunded and they'll need to increase the contributions. I hope the employer will decide that before too long that program to be sol.
This is the uh this is our balance graph and again fiscal 26 you can see a dip there again because of our costs that would be rolled into that fiscal year otherwise you know we would be sitting right about where we need to
sit. So much improved, but this isn't one of those perhaps situations that we could rest on. We have to constantly be mindful of where we are after being so close to this is a graph that talked about a lot.
I think that all school districts should be talking about a lot. This is updated to uh for 2003 to 2026. Now >> this shows the gap between the buying power what the formula would have
been had it not been disconnected from inflation like it was 2003 $1470 would have been on multip and you can get a sense of uh how many
millions of dollars this graph together. She shared with you at the TMT meeting I thought was really good. Uh it shows the the city of increase foration. So you know we had 2% 2% that seems to
be the target all the time. um over time that's not really with uh inflation. We can see a lot in in fiscal 24 and revenue there but that's what it looks like inflation.
You look at real life and again these things don't just schools individuals too contract again our general fund revenues predominantly from the state 75% 78% it's been the
same over time except for those funding years when funding was up to 89% that just squeezed bottom part of that graph. But you can see, you know, it's interesting. I've had some conversations with people about, you know, that great
piece of uh what property taxes look like. Um you look at over time, we've gone from 15 up to 18 uh down to the last couple years. 12 13 12%. On the expenditure side, similar
stability in terms of that story. Uh really almost stability plus or minus% over 10 years looking at this more generally most of our expenditures for salaries and
benefits. Um I've had comments from people about you know 82% that was expended to us on salaries and benefits and we had to have a conversation about as a percentage right it's always going to be 100% and so you could make that
number smaller a couple different ways if we wanted to spend more money on non staff and non staff and benefits number that blue bar get bigger that's not where we want it to go that number gets bigger
us that we try to cut us away from class as much as we can. That's why and then finally our operations revenue and you can kind of see it. You can see the years where the blow is
above us to build the flood balance. This fiscal 24 um we had strategically used our own funding um protected protected general fund dollars. We also already.
Anything to add here, we can't hear you. One second. audio. >> Right. speaker. Wonder if the volume is turned down. Let's see. Oh,
let's try this. That looks like >> Can you hear me now? >> No. >> Thank you. Sorry about that. I don't know what you just talked about. Well, you hit it on that goes down
something else. And when you look at our taxes in that such a small percent, the only I don't know ever got think was is due to more you guys know that we cannot
tax so we are really restricted to that amount so the the fact that taxes are now 12% for this year fiscal year 26 part of our budget is only because we got that that kick for the special cost
subsidy the money project and the schooling project those are bigger part of budget. It's not like we're getting less money for taxes. Um other than our decrease in our tax is what drives that but um it's not like we're getting less
money and it's not like we got more money from taxes. So, um I thought this would be interesting that you talked about that. Um and then you show the revenue expenses on if not
um and you guys know as expenses go up. We need to have that surplus to have that fun. um because percentage our fund is too expensive. As our expenses go up, our fund balance
needs to go up to maintain that. So we drop down to get to our policy. Does that make sense? >> I think that's a really small bumps here
but I think we have to like continue to call that out you know if you rewind 17% of 50 million is less than 10% of 68 million so just to maintain uh 10% fund
balance we have to have an increase uh in the fund system in terms of real dollars just to maintain a consistent percentage so it's a really really good uh point. It's a really important reason to talk about having a surplus every
year just because you know expenses are going to go up. All right. Um looking at lower detail timeline uh you approved the audit this fall
through the taxation in December timeline developed and then today shared with you um in February we have a teacher retirement notification due that's in our contract and so there's some incentives there we got a couple
retirements trickle in I'm guessing We'll see some over the next couple weeks. Um, we have another work session scheduled uh for February second
meeting that month. Additional work sessions to review reductions as they put out The goal will be if we need to make reductions do on the 13th of March. Um training occur in
March and then process other question process in March. Um if that's necessary with the target for 27 uh we're not just target the requirement that we have that
fiscal 27. Any questions over the question? So the everything really starts working backwards from June 30th. If we knew that we were if we knew we were going to be making reductions and
we knew that there were going to be no requested means of absence, we could and on June 28th make us we could let people know that they um they're not we technically could do that. The problem comes in when you
start uh when you start having requested of absence. Individuals that are affected by that are entitled to due process and that due process has timelines associated with it that start pushing back days and pushing it back.
So you really in order to not be in trouble and you have to have this stuff figured out by so that you can get those done so that you can have the hearings necessary so that you
know there are times there are districts you know that push it out a little bit further um and it's convenient for the school district to wait in order because you know it's also harder on the people that are working
here to not have a job then that's situation people in that situation on both sides if we're up and back that's great have the rest of the spring they're not worried about about that or if they need to get out there and start
working just best way to treat people sometimes Not where we want to see you. So if you want to know those two timelines
budget legislative action insurance that removal won't happen till March after landed um we have tenants like I said three groups our three biggest groups um we have a number of uh
associations and groups who u really close haven't met as many times with the next group of associations. Um so do our best as we think about this. Our
goal internally is to finish the positive balance budget again to make sure the rest of the budget is tight and that's taken care of. Uh we always use actual available. Um
our approach has been conservative and unapologetically conservative. Uh we also want to be realistic too because if we're uh more conservative than we need to be then we end up making
but um we've been conservative uh that's something we don't like we don't want to cut. we can look at those we build and then balancing our budget is the priority as we move forward.
If you look at this as an overview, we'll kind of do a fly over then dig into these one by one and kind of work right through your sheet. The numbers on the sheet correspond to the numbers that will be on our slide so we'll be able to follow along. Um, and what I'm looking
for from the board tonight uh is consensus uh about about our assumptions. Um, these aren't hard and fast and we know that some of these can change and if you remember last spring we tweaked some of
our assumptions midstream because the session started we got some information we tweaked some of our assumptions. So that could happen. But what we're looking for tonight is census to to continue to move forward. All right. At the moment our biggest
driver and many factors go into this. We went into detail last year with this group uh sort of through this. Uh Cara has has done a significant evaluation of our trends looking at um
class retention from you know second grade kids. to third grade. Looking at our current uh incoming kindergarten classes going senior classes. Uh as we've talked about last year's kindergarten class was very small and
this year's uh recommended enrollment assumption is based on the assumption that we have another small class. We don't have any data to indicate that it's going to be dramatically bigger. Um
in talking to preschool uh programs they validate that seen. So you're not feeling the only um addition to that
virtual families like at least few weeks ago. So an assumption that that will increase slightly just know that we are still students outside of the district but these are some
students that we would not if not for that. So um and the other thing to be aware of you know we watched it the last year um our classes continue to get
smaller and so when they get smaller it continues to affect their future because that came through eventually graduates for this class. So you know we graduated
and that's a big difference. instead of limited increase in what was okay. Well, that's pretty good. this uh trend I had to uh when I was actually part of the minister task force
in a meeting with state and was fascinated to hear about the state trends we are as a state and that's replicated nationally um we talked about
uh she talks about um replacement you know the 2.2 kids to keep a population level and we are at like 1.8 1.7 and I think what she had said she said
was that this was the first time that we have fewer kids um in school than we have 65 so this isn't just a school issue I think it would be much
slower to affect us but it's here and With that said, one of the things that Kira shared around meeting this I think it was this fall was back at the moment. We had a period of time um in the uh
early 2000s that um we were hit down far from this number came back. So thinky housing. So when we talk about everything in policy
the data that I show that whole state um is declining at a faster rate than metro. Um most metro districts are there are a few that are but again the rate is
just less and then um what else happens once they get out in the world and this is a little bit maybe it was a year later realize that um regional centers have been affected slower than small
communities. Those small districts have seen higher senate earlier and regional centers are starting to migrate. I think when we go to legislators compensation it's not
true um I talk stating is about reminding uh me and others that this also affects our our local sources because many of
our bas How many kids we have to any concern for this? What was our number? It was 37. >> I think it was 378. Y
>> okay so I think it was like 378 and right now um so in January I normally I have lar talking about our district and how is that going to look different.
I hope I think that we'll probably end somewhere close to 3768 37. So this 3,685 students is a decrease of 2.2%
from give or take and I hope that's a good number and I don't but just based on our it's a healthy estimate. >> I just Yes. Quiet.
I think it's conservative people like statutes. statute that drives the inflation you know this has been establish between two and 3%
based on inflation um advocacy groups mostly on top of that I don't think that's likely like I said before I think um the uh this rescue the um afterare I talked about it
based on early indicators order data um 2.7% is the number that we feel is reasonable could be three um but 2.7 is the number that you feel is reasonable
Yeah. So the federal increase to social security is 2.8%. The other thing that I did look at less inflation factor in there inflation factor for right now is at
2.37%. So this 2.7% that we're using may be a little high but that you know if it goes from 2.7 2.4 2.37 what the state comes out with in the next month.
>> The first assumption that we won't get into what the how we needed to do and I bought this inflation increase Okay. So then
please what do you feel comfortable with? >> Right. Yeah. We should I would say by our February board meeting that's February 2nd. It's possible we'll have
a number here. So um it could be just 2.7 and then adjust. Does that sound like I'm sorry. >> I put this in here. It's an assumption. Um I think you know the board's
committed to community engagement at this point. Um I don't think there's a plan to you know the plan is to continue to engage with community until the board feels like the community is interested in that. Um then we look at other state aids.
These are just sort of some particulars. Uh there are a lot of categories and we kind of wrap those up into the into the bottom there that all the other ones that we know continue at the number
I should say but those will continue as we go. The pink one here is the old harness around. And um if you look at the sheet we have
I have a little bit more kind of drawn out description of what's happened there. Um but to put it in a nutshell that the revenue is based on um
poverty and the way the district the state had previously measured poverty was through educational kind of reforms. That was the mechanism. Um I can tell you based on this task force work that
across the country uh there most states have This is like this they're either using forms or they're using direct certification which I'll talk about in a second or they're using some combination. A few years ago the state decided to
move away from Forbes to direct certification which means that our code would only include students who are receiving county some form of county benefits or maybe in foster care.
um that affected districts differently. Some districts were winners, some districts were losers. And one of the things I've learned is that there is no easy characterization of a district that was hard or a
district that um did well. Maybe the only thing you could say across the board is that districts that did a really good job of collecting forms were in general by the change. Other than
that, if you told me a metro district that was benefited by the change, I can tell you what those are. If you told me a big school district that was helped, I can tell you school districts are I can do the same. So, it's it's not like a
real clean piece of this because there's way more there are way more variables to come into play here. Um because of the dramatic scenes this caused and the distance
provision was put in that match to it. The process we went through we originally uh our associate was lo here. We changed that law came law that there was going to be some movement on that.
Uh that reduced our reduction total. Um, as I said previously, there's there isn't reason at this point to believe that this legal puzzles would be solved by October by December.
So the difference between u the difference between the top second page the difference between whole harmless happen and them referring to exclusively direct certification is about $2
million. It's a difference between 2.2 in 4.2 was a huge mutual change and again not just city schools this hits the biggest
district in the state uh part of the terms of total dollars. So I think this will be priority number one for head agencies to maintain last year's
spending level. Doesn't mean the ins maintain the spending level. Um and um I think this is I think this is a a very scenario because I don't think you know they put this task force in play for a
reason and it won't have laid out that reason yet. So this is the assumption that I feel comfortable with at this point. Do you have anything to add? technology, you know,
students and compared to what we just did for the fact 67 districts. We call this
right. specific, you know, um I think it's raising awareness that many school districts are finding themselves the spot to use
compensatory revenue to fill holes created by. So I think there are many advocates for the original intention of this
surprised that districts Um I mentioned earlier we don't have you know a large concern this summer moving out this summer that could change. So it's something you know
discussing for quite some time was legislation is either put in place to permanently fund it or to have That's what we experience
in a typical read. We're still implementing requirements for that. There is no more uh aid in that way. before is the money that's been allocated to pay for training that the
state provides. So the states the training directly but in terms of our staff there's no additional dollars. Um and then energy transition talked about this last year. This has to do with the
decommissioning power over time. This is get the decreases a little bit every year as in preparation of that property tax when something
like itreases I think it >> okay thank you. Um number five, federal funding. Um the recommendation is to assume that federal
aid will be frozen. Do you have any insight on anything else to add to basics recently? So I think just making them assumption. >> Okay, there's been discussion on
>> I don't think it is. Yeah. But um so the the change that referred to following that is a um this chatter about moving to schools being required to not any
process whatsoever. everything would have to be fresh like um I think the how that would play out very interestingly in Minnesota when you have
free school like we do um it would blow it would blow some of the water free that I still pretty
>> I think it's a good question. I mean again it's one of these concepts really for many children the schools they meals they get out of school might be they get
so we want as healthy as possible and you know raising age and it decreased amounts and had the same concerns.
So not to say a big deal. Prior to that, we used to sugar pop sugar pop machines in the hallway. That was money.
So when we talk I mean you know difference. I guess my question is per school. the main joint in I think the main
school from the other schools in the district. So like you know very remote but it's the only school in this area so you know different It was 26 the year
$740,000 right now had um adjusted let's just say 3800. So it is a significant amount per student and that is right. So when I work on the levy I have to input the distance from each of our high schools
to the nearest high school and the same elementary schools and that's how is calculated the distance between the nearest school. So the big one you know I can't tell you right off the top of my
head like 740,000 how much it is per >> so so we just res But you know the idea is and there is there is transportation
that's a separate but it's but simply in that school. >> Okay. But it's flat as far as >> I'm not 100% I'm just kind of >> All right, looking at six. Um, you know,
this is where again from year to year things change. Last year we were sitting here, we didn't have a clue what we were looking at for the next two years with contracts. This year we're in a situation where we have a pretty good
idea on where we're going to land agreements and you know the fact that those tenative agreements uh represent a significant uh portion of staff. So we can you know based on those tenative agreements and
what we've established really close to our staff. So that this is a pretty straightforward assumption and we should you know our I would say in the next two weeks we should have
the most agreement health insurance uh through the process this spring are required two I mentioned we had removal of 65 plus from the active plan our
reach out to George Vanderwe who's our insurance consultant and he's been doing this a long time in a lot of places um I think in the time that we've worked with George u
he's really serious us in your directions as far as what we need to do. We don't have to go very far back to see a health insurance fund that was restricted, but to see a health insurance fund that was on the verge of
really really big problems, then those restricted fund problems would become our general fund problems and we tune that public health insurance. So with George's help and advice, we've been able to put that insurance a stable
place uh in a place that's grown and um he's feeling that uh estimate of seven and a half% is uh a reasonable place to that >> yeah
this So this is a very very rough estimate. So that's the number. George last year I looked at the numbers from last year at this meeting we estimated. So when we talk about that
proposal increase on ours% or 90% unemployed the 10% for most of them is strictly the health insurance premium um then I did not then go into
what our cost at about a little over $4 million but within the next few weeks we should know what our monthly amount is for our retire
because January 1st is when that new Medicare supplement plan. We don't know I we don't have a number yet for what monthly cost. We don't we don't have the amount of employees that change and what
they are versus what they're supposed to change but stay We had three months.
But if you rewind, we went from this platinum plan to a healthcare savings plan and then we shorten the plan year for the next cycle with our budget and then we do this change. So every single
one of those changes has an effect on our active data. So we saw and I think George commented at our last meeting. We saw a little flurry of activity uh as I think the assumption is that we had
some retirees getting some healthcare done prior to having to jump on to the medical just like we had some people had some surgeries the plan right before we jump to the HSA plan because they were
small small amount um there are a few variables It will be nice. >> The good news is, you know, this goes back to the concept and the importance of the fundamental. Uh we've built our health insurance fund balance to the
place where we can absorb a little nuance, a little variability. because of the growth we've had over the last few years. Three years ago, I couldn't say that.
So, we're early to move. about 16 and yeah 6.7 Um, do you want to talk about how you handle
year 2.5 that works? >> Yeah. So we do four months until the budget has to be approved but just a baseline percentage there
and then I take a change in so we know that every spends because our enrollment would and you know things like instructional supplies
that consistent budget and see you know what I think is affected byation in Canada down. So
that looking at purchases you have heard from the last few months we are purchasing two this year purchased four last year so we have three for next year that
we'll just see in there for now six months to make a change um and then go to the improvements just you know try this year I don't know yet who has been hired how does thatffect taking those things into account
I But that was done should be that I'll see Yes. is probably five or six to purchase each
purchasing. I question. Are we going to talk to the sheriff's And I got this But it's difficult.
Yeah. I don't know. I know too much. Um again, There we don't have anything last year.
We spent 28,000 but we have revenue exactly 300,000 general funds out those savings. with these special equipment in so
nothing yet revenue has been decreasing the LTF long-term facilities maintainings Um so that money longterm maintenance
I would say from perspective the biggest expense we have or expenses we have um in the future are roof replacement and It was one of those um Yeah, that's something
if if those are done with air quality improvement or we can help to pay for always. And what we have is we have a map of all our facilities with
I can remove this green yellow. It's kind of like that. This should be fixed in the next five years. This should be fixed in the next 10 years. So we have we have some that need to be fixed in the next five years.
And we have a million I don't know what it's probably All right. Finally, this will go back and work on a draft basary
second meeting. have that February second meeting u I'll ask the board to approve the resolution that you've been approving every spring and even a lot of times real
production coming in place is good so there is opportunity there resolution that agenda And that reduction target will be there as well
if necessary. And then we'll start process questions. That's it. Mr. All right. >> Yeah, >> you're good.
All right. Service in the past. Oh, there it is. All right. >> Yeah. >> All right. One down, two to go. So, you know, >> yes. Yes.
quickly before Julie and I talked today about getting one of the boards like square uh able to drive a school's apartment. You need a background check um for like next Tuesday's meeting in
Big Fork. I'll be up there really soon. I'm hardly qualified to drive it. Um, anybody have a interest whatever to do that? >> Well, we already have background checks, right?
>> Still have to do something specific for transportation >> and it's annual. It's like every year, but if you want to continue, >> you can't be driving around. >> It's really simple. I mean, it really is a simple form and then a you need to go in and get bring in your ID and they do
it back over. >> It's okay that I'm here. >> Bring it to where? transportation, but I could get the form to you. >> Sorry. No, it's okay if I'm here for that meeting. >> Yes. Yep. I have you down as attending. I don't >> It'll be nice to
>> And someone will be here. I think Casey will be here to help. >> Do I have more signing? >> Nope. That's it. >> Wow. >> Yeah. >> Easy one, >> Alex. It's a delight to have you here. >> Thank you very much. >> Yeah. looking forward to it.
>> It's marketing, right? So, this is being developed. >> Sorry, I keep blowing up your email. >> We're not question that need approving in there. >> I would not worry about them. I think seeing
because I think >> I'm sure they are. >> Yes. Friday. >> I don't know why. the night with first I guess >> but that was
good. So you'll be >> I guess so. >> No, I will. >> Yeah, I mean >> we talked about >> Yeah. And it's a holiday. >> Oh. So yeah, I'll I'll probably
>> one of my questions >> lo So then it's not you haven't received that. >> I don't think so. >> Yeah, just even that's what I'm wondering.
>> Yeah. I mean, if I look at it, I like >> I can double check. >> I'll double check for you. >> I'll follow up with him because I >> I just want to give him a date.
>> Yeah, no, I get it. >> Would you mind though? Can I have your cell number? It might be easier just to >> even just send you a >> Yeah, text me anytime. If you text me tonight, I can save you as well. >> Okay. It's very expensive.
>> It's the expenses. 17 is still >> we'll find out for sure. >> I was supposed to work. It was my last day. I just let
somebody know if I decide >> to come in or >> either way. >> Okay. I'll talk to a few people and find out what there is. >> I don't want you. >> Yeah.
>> And I have a laptop I could bring. >> I'm not ready. >> I'll find out. >> Thank you. I appreciate it. So reiterate.