##VIDEO ID:nlIUiULHZFk## long agenda today yeah short but long H short but long uh big thing on the agenda is the FY 26 budget and mat I'll let you jump in and start there and car I assume you're at the ready we are um thank you so the I sent a slide deck out this weekend or um I thought it was I thought it went on Friday and I don't know did you did you get it Friday I received it on Friday so I think some did some didn't I don't know what happened for sure but um I didn't send all the slides Friday because some of them were like didn't make a lot of sense without context and it would have been you know a million pages and so some of it didn't make sense that's that's you know my uh my deal my fault on that um I just wanted to get you enough to get some some background coming in to today and have questions uh ready for then uh yeah so this is this is fresh this is what we'll look that on the screen um that kind of thing and K and I are hoping that you'll answer questions or ask questions along the way today because the the goals today we can be in a spot where Cara can finalize that budget that puts us in a spot where we can move forward with other decisions coming up this spring and I'm going to say all that and I'm going to say there I don't want to say more than ever but as much as ever this Situation's really evolving and a really good example is we're sitting here today um and the state in the 23 session changed the law that bases per pupil funding on inflation we don't know what that number is yet the commissioner required by law to tell us what the number is at the end of this month the fourth quarter 24 number is supposed to come out Wednesday um and that would enable him to do the calculation so my point in all that is like we're going to show you a number today that we feel like is safe that number could change a day after we meet next week and that changes our you know changes it changes signicant yeah so it it you know even if it changes every tenth of a point it changes it uh $30,000 so you know if it goes from 2.4 to 2.5 that's a $60,000 deal and all of that matters in the context especially if we're talking about reductions because we want to cut enough um to be responsible and help us meet our obje objectives but we don't want to cut more than we need to um because ultimately that means we have fewer resources for kids so there's a lot of nuance this spring uh probably more than most years because of things like that but it will be between two and 3% right it will be between two and three That's the Law the floor is 2% the ceum is 3% so yeah y uh so we're kind of we're going to review most of the most of the time we're going to be reviewing the current situation we're going to just talk quickly about the historical reductions um we'll talk about the timeline quickly I'll share some referendum information that's not a decision for today obviously but um eventually it could be and what's important to know is what decisions the board has and what decisions the board doesn't have relative to that um and then we'll talk you know the other 40% of the meeting will probably be the budget assumption pieces and where that leaves us and how those budget assumptions affect our corresponding reductions all right so there's a number of uh graphs in in here and so again if you have questions please take time to a ask those um and uh started car you want to kind of with this you and like Matt said jump in and ask us questions anytime um sometimes I want to save my question then I forget it I was important at the time so just feel free to interrupt anytime um I did hand out our year to date so I do this every month I check our finances see where we are your today budget compared to actual so when you look at this we have for me it's very helpful to look at where we have been um what what are our trends like Trends mean a lot most of the time unless it was during Co um so we have our 23 actuals our 24 actuals our original budget that was approved um June last year our working budget which I'm going to ask you to approve um coming up and then where we are year to date so um at the top it says you know at 12:31 we were 50% of the way through the year so you know most items should be close to 50% a lot of them aren't and there's a reason for that and the important part is I know what that reason is and if you have questions about it ask me um on the second page something that's specific to school districts and I try and do this in a semi acral way so I the state holds back our AIDS so in our in our budget on page two under State AIDS I'm estimating we're going to get $4 49.7 million in state AIDS the state holds back a percentage of that um and they hold it back for good reason in case our estimates are incorrect if our students change um circumstances change um to balance their own budget they balance their own Budget on a cash basis so they hold back these revenues help balance their own budgets um so I have a $9.5 million receivable in there for State AIDS um the other part is uh and you can see our covid money for the past um two years 23 24 and then the 533,000 that is it that's the end of the covid money we spent it um that's all we're going to get this year just quickly on the state holding back Aid something that um something that hasn't happened for a while but the state has used that piece to balance its own budget uh and it's completely manipulating the budget but instead of paying us 90% this year and 10% next year or whatever is that still is they they shifted at one year to be 70 so they could book they only booked 70% of those costs that year which made their books look better and then they made it kicked it even more the next year well as school districts we didn't have the ability to do that with our employees we could be like pay Seven so a lot of districts especially those that have didn't have huge reserves had to cash flow borrow uh to make up for that so the state can do that they have done that um haven't done for a long time probably goes back to you know 15 16 years ago it has happened 62% yeah yeah they yeah so so I mean the if you think about that there aren't that many analogies that work from in a personal level but you know if if if you think about that from your own employment or whatever and be like oh we're gonna pay you 62% of your salary this year luck we'll pay you the rest later gladly pay you Tuesday for a hamburger today kind of thing so anyway sorry um yes at any point in time the money that they're holding back um we can use that yeah and then when okay I know what I'm trying to ask so at any point in time when they hold that money back we can ask at any time for that money or do we have to wait for a particular time frame to say okay now we need that money no we don't get to ask I mean we can ask but it'll be like okay um yeah they will give it to us in due for so what that means is we will the hold back is normally 10% and it's never exactly 10% because there's all sorts of estimates that go into this um they will give us uh about 30% on August 30th another 30% of that hold back in September 30th and then another 30% which is only 90% And then the rest will trickle in throughout the rest of the year so like Cara said there's some there's some reason ableness to doing that because if they're paying us based on enrollment right we don't know like final enrollment enrollment until the last day of school and so they they couldn't prepay us for that number so that it makes some sense that they I mean you do it in contracts right that's exactly right that's exactly right with hold until the projects closed completed right certification that's a good analogy um on page on the next page under extendor and I'm just kind of cruising through this and you're welcome to look through this and ask me any questions now or later um for the salaries um we pay our um nine month and we pay our teachers and our counselors and um some of our principles on a 9month schedule so they work nine months starting in September through the end of May till June and we their contract starts in September but that budget year starts July 1 so um we start paying them and we I need to acrw part of that salary because we know we're going to end up paying them after year end so I bring it back to a real time like what are we acre we paid them out a dollar but we really owe them this amount as of now so I put that acral in there too so we know where our salaries are um compared to our revenues and they actually don't they in their contract get the choice of receiving it on 12 a lot of times or most of them I would say nearly all receive it over 12 months um I don't know that many take it over nine months um we did start something new this year July 1 um we used to annualize our hourly employees salaries so for instance um a ESP that may work a few more hours few Less hours we said okay what's your salary estimated to be for the whole year you know let's say $20,000 well if we break that out over 24 pay periods and pay them over 20 which thinking about accounting Wise It's Kind of a nightmare um finally our employees agreed and now we pay them as they earn so for us it's a little more money upfront but now that we have a fund balance that's okay um it's not we're not holding off till the end and it's a lot less input and like I said they're getting paid when they ear it and we had to make so many adjustments on the time was gone or AB then we might have overpaid them under so all of that being said um our first situ our first graph our situation um Matt and I both started in um I started April 2020 and Matt started June 2020 July 1 and we walked into a situation where we had been deficit spending and there was a chain and change in accounting principles up there so it doesn't quite look like a um but um it had been we had been deficit spending and you'll see that further on in our fond balance which is basically our health our savings um covid happened um fiscal year 21 um that is the fall when parents held their kids back they didn't start kindergarten um and we had to go to um remote learning so you can see we've made a real effort starting in 2021 as far as Cuts go and we've been cutting since then um and you'll learn why um but in the past three years we have balanced our budget and had operating surpluses in fiscal year 23 and fiscal year 24 so we have kind of gotten our arms around the situation which is part of learning what is our situation if you don't know you can't fix it and then um just living with the results now the 10% we don't have to have that on a yearly basis we just need to have it as an overall right you can hold it from so I mean we're we're not going to be in no no non compliance here by being even this you it as long as we're still above the T because our it keeps kind of growing our budget a little bit so you gota but yeah and we that's a very good point we need to add to our fund balance to be in compliance because we're at that 10% that denominator continues to grow so it's it's a factor of that so yeah but it's not like each year you have to be p no it's you know because here again I'm used to the business side right we get rid of everything because you get taxed on I mean we give everything out to employees you're taxed on so you don't want to walk into the next year you're just giving it away otherwise right yeah so the the fund balance is like the net of the gaps of all those things right that's what the fund balance essentially is it's the net of the difference between and the Beautiful Thing is back in 2021 2022 it was stressful making payroll because our fund balance was so low imagine we're paying $50 million do out over the year two million to 2.5 million each payroll we didn't have that in cash in the bank so it was kind of a game well you you did mention you took debt at some you did you mention that I thought somebody mentioned you ended up taking a debt on one of those years for a little bit you went negative for a little bit had to take that or did you not no we had not in these years okay but if we didn't have that fund balance where we started I can tell you we would have had to borrow and you were down to 2% I think remember right but you never did okay yeah yeah fiscal 24 is like this kind of we we've shown this graph a few times and you see this blue bar just kind of jump and you know there's a few things that go into that one uh fiscal 24 was the first year of the effects of the 23 legislative session so there was 4% put on the formula there that's 1.1 $1.1 million right there was a huge change in special ed funding that was well over two million um there was was the other two compens story went up by two million you'll see that graph so that $5 million over five probably over $5 million yeah well over $5 million just those three categories of Revenue jumped up and then that's when Cara booked the the majority of what was left of the co fund so that's why that blue bar is so big for fiscal 24 um and why it comes back down because of the co funds so were you able to control covid funds is that what I'm kind of you were like this big bucket and just said use it as you need it type or no I mean if it was that simple I think we ended up with 14 different covid grants with all different deadlines different spending parameters um there was only one Grant I wasn't able to use and that grant leted us establish a testing site at our district like we were in the business of everything there testing for covid so we hired nurses and we weren't able to use all of that Grant um but the rest of it we did use and the final grants were big buckets and so I asked can we pay for our health insurance like we supplanted which was allowed thankfully um we didn't create new expenses we said this is you know onetime money let's use it to the best of our abilities and we did this is where our money comes from so the state aid is the largest percentage of our Revenue um Federal AIDS very small this is fiscal year 20 um5 in the past in a in a followup chart you'll see that state AIDS have been 7even to n% the last few years um but this is very realistic of what state AIDS typically are they're not a lot of money you would think it would be a lot more it's basically special ed and um title funds we do get a little bit of Indian Ed and our grip Grant drug free Grant is also Federal so that's it taxes is um and other local is um County apportionment it is the tax revenue um some tanite money in there there's just these little you know amounts from the county related to taxes that we get that make that up and then fees donations miscellaneous yet that's a that's a lot of items and that can best be seen on this um year to date all these other revenues but this also includes our tuition payments we bill out for um nor homes there is we serve a lot of students that aren't are so that doesn't go in the F pup not showing anywhere per um it like if you were to ask what you will see that coming up when we look at our total for people for 2023 that's it's all in there so it it's deceiving because we are we are serving these students a lot of people would get it you know serving students they get it in state aid we get it in tuition so it's coded somewhere else Minnesota does not make it easy to uh code your revenue or expenses so um there's all sorts of buckets where this goes the other big one is ma money third party billing um I'm budgeting $700,000 this year and we build for PA PCA Services um Physical Therapy speed y OT y all sorts of therapy probably most of the stuff in here a good part is building right in this building no we actually only have one staff that handles the third party billing so it's a lot of responsibility on the people well I guess I'm sorry not by billing but fees let's say yes the leases and rents we have well well in our agreement with Hill City and whoever else is in here right we'll have Billings to them for some of the students in herec yeah ALC I'm sorry ALC I'm sorry I'm acon I'll get them sooner or later right the alc all goes through our state dates okay because that Hill City kid when they come to the to the area Learning Center they are our kid oh okay so they actually a a student transfer basically en open en that's basically right y but that's not the case at the correction facility or the right soct is getting aid for them them back okay you build their home District yes then in Turner we build for um the PSO or is that we are that can be a shock when it goes the other way too it can be I've been on the other end of a bill from you know I remember getting one of from Fargo and it was this tuition bill from kid that have been placed there and I was like are you kidding me right now I'm not paying this my business manager is like what do you want me to do I mean yeah can't fight the man on this one so the thing um I was an auditor for 10 years and when I look at our chart um this is kind of our reality but what this chge says to me is we have very little control over our revenues the state tells us where our money is coming from with 78% of our Revenue coming from State 4% from federal our local the money we have control over you know fees and donations 5% and taxes we can't increase those so that's what it is also we have very very little control over our revenues I was curious and just for my own yeah are there you know again 5% are the you list donations are there any significant donations I mean I guess you know I mean there's probably a million little on yeah kind of curious you can take a look at this um this this list um which page I'm sorry um this is the first page y yep our endowment is very generous they um our teachers apply for Grants and they are very generous at a grants to our staff which is nice they award them for things that normally we say no to because it's not the have to have it's the night TS and it's good that our staff and students can have those and then donations um we have gotten some and I honestly don't remember what's in here that's fine kind ofous yeah we do get donations y I think one of the most recent school War meetings there was a motion to accept is it every month that we accept them or quter quarterly this is where our Revenue our sources what what our makeup has looked like over the past 10 years and um that state aid amount has fluctuated and the majority of why it has fluctuated is because of the covid money um that that covid money um affected our revenues significantly um taxes like I said we don't get to control our taxes we get what we Levy which it's set by 39 pages of formulas and is there a cap to that ly like we can only go oh for sure yeah is there a percentage that I'm saying that out loud because I know that there is but because this is a recorded yeah um meeting I just was wondering if that is something that is it the same every year or is that something that changes changes based on um any changes in statute but it also changes based on our enrollment and um it can change based on tanite production I mean increase in tanite production increases tanite production ta tax increases uh Revenue that we get to offset our prop local taxes so I mean yeah things like that again play into this that you know we don't have any control over but it's mandated and set yes is there a number per se that we would ever be able to tell the community like this is how much we are able to Levy from you as a community I know that I just want sure sorry just trying to like get it out there into the universe kind of thing yeah and there's no inflation factor in our taxes so for instance our um school resource officers we use safe school levy to pay for them the safe school levy has been between 152,000 and 155,000 for probably the last 10 years no change but our fee charge from the city goes up because they're paying staff more but the money we get to pay for it does not go up so um it's why if you watched you know the last couple years tough decisions about school resource officers bucket of funds that we have been able to afford two out of and all of a sudden we can only afford one so those are the kind of tough decisions that come out of really not having control and you know again we've said before but the city and the county have a whole different relationship with their Levy as us if the county wants to give 8% raises to all their employees they can just Levy to give 8% raises to all employes we don't have the ability I do think like just so we don't you can see that yellow bar maybe it goes without saying but the yellow the yellow bar got bigger during covid and then it gets smaller you see right back to where it was 10 years ago this is the breakout of our expenses um Minnesota school Finance dictates where we can code things there's a very very complex system of coding which you probably saw in our dispersements our checks um and that is tested it's in compliance with State Statute how we code these so there's not a lot of manipulation that can go on here what you can see is that instruction category we continue that continues to be a larger piece of our budget and that means more ex more money more spending in the classrooms which is fantastic but we can't forget about our infrastructure our buses you know 1900 miles um our buildings I don't remember how many hundreds of thousands of square feet that we a million y so um to maintain those it's important um the Administration has decreased and um just pointing this out we did hire two people in administration support help because um we took on the financial duties for is which is our special ed and early childhood Co-op and also nashak Katon so we get paid from those two organizations to do the accounting and HR work for them so we hired two more people yet our expenses a percent so bringing money in which is on the revenue side expenses are here now again when we do that that's a fee does that show up in the fees y we're charging each of them approximately $140,000 need to do that um and then we we use this um to show what percentage of our budget is um um salaries and benefits versus all other expenses like buses utilities supplies salary and benefits is just that salaries and that's it so 82% of our expenses are people so when we cut it's really hard because it's hard to cut without touching 82% of the budget the Department of Education because everyone needs to C in a specific way um has profile reports and what these profile reports do anyone can go out on the department of Ed's website and look up any school district in the state of Minnesota they can see their revenues where they're earning where they're spending so the average school district in Minnesota spends 67% of its money on instruction and instruction includes um everything classroom CTE um special ed that's instruction operations and maintenance is buildings utilities um Capital Transportation obvious and then admin support um technology accounting admin board um that's average District of Minnesota Grand Rapids we spent 71% of our budget in the classroom um even though we are the third largest Geographic District in the state of Minnesota we only spend 9% of our budget on Transportation um admin and support 9% like the state average and then operations and M and maintenance 11% um and we are spread between two campuses that are pretty far apart so um you might want to jot on your notes this is for fiscal 23 because this is the last fiscal year for which this D these data are available we just finished fiscal 24 and most people just wrapped up audits in December and so once the state gets all that they'll they'll get the profile reports out so if you go back if you were curious you go back a couple slides where you see back fiscal 23 instruction 71 instruction 71 so that's how that ties back but I should label that on the scrap so you know and I I give you a lot of chicken scratch I apologize but um and it's when you're doing averages right um but you know obviously it's always great to see we're putting it towards instruction right but then the backside of what makes you nervous is okay we're doing Less in Ops and maintenance right we're doing Less in transportation or five years down the road is that going to burn us so that we're making up for it right you you know so the way I look at that is I say well we got new build well relatively buildings over I mean I know big Fork's got some older portions and we've got some here and there but in general overall we're doing where do we compare to the state average on you know because there's going to be less maintenance on buildings if they're newer and high school's 50 years old yeah y portions right obviously there's you bring a up a good point and and later on in our assumptions one of the we'll talk about it then too but one of the things we've been doing to kind of get by is to cut back on how many buses we've been buying yeah we had I mean it's a good example right we we've been we had been in a rotation of buying four to five buses a year 10 or so percent of our of our routes not even of our Fleet um and we had cut that down to one or maybe none um and so this year we're proposing that we consider buying a couple buses um because we're you know we are probably 10 buses behind at this point if you accumulated what we've pushed off then the we're gonna have to answer that call at some point right I mean so have we acrew or did any sort of analysis on how much deferred maintenance we've recruit maintenance debt like pushed off you s journey is our building and grounds director facilities director and he has a very good handle on where we're at he will um give Matt and I list occasionally big list of things that he recommends we do and I have come to say to him is anyone gonna die or is a building gonna fall over if they don't do this and I hate asking that but we're kind of at a point right now we have issued some bonds for deferred Meats um which has helped us with those projects and that's always an option we're we're we don't want to do that I mean unless we have to but that's it's an option if something Le and that is you know again that going back to what we can or cannot do we get money every year to take care of facilities um and we have to use that money to take care of sings we have to spend that money to seal C seal coat and we have to spend that money to fix Windows and recall you know we just did last summer we recall in Tock pointed our GS um so that stuff Darren's done a really good job like Cara said of sort of like these are the big ticket things coming you know like one of the big things that he would like to get done is to swap out the boilers at Big for they run on they run on fuel well that's an expensive deal um so we're kind of not the spot to pull the trigger on something usually like that uh a different example at Big Fork is um that building because of a controls failure uh on this old system got to be over a 100 degrees in there uh because it just the boiler just ran wide open for like the weekend and so it screwed up the seals on the number of uh pipes water pipes and so over time they're leaking um so we've been using our long-term facilities maintenance to fix those pipes as they as they leave so we have money to take care of some many of those things some of the big ticket things we don't but sometimes that's where we end up Bond and that money that you're talking about Matt um is not in our general funds correct comes out of restricted funds so that's something that we like you said we have to use it for those very specific things we can't just say oh well we have this amount of money here we can put it back over in this area and those those funds tied to specific years as in use it or lose it or can we hold those over for larger projects yeah we can and they're based on a formula uh that that includes our that's kind of based one of the drivers of that formula is the average building age so you even think about the last few years went East and West open our average building age won't weigh down which meant that our ltfm Revenue which I mean to some degree makes sense you know taking again that's why that percentage right right yep yeah um it's just another way to look at our operations um the blue line is our expenses and green is our revenues less any Co revenues so this kind of just to show how we tried to use our Co money the best we could to help with our operations and if not for that Co money you know we would have had to cut a lot more in 23 um to even um break break even so um against her will I had Cara make the chart again and kind of expand it so you can kind of see the nuances of those those graphs um she didn't like manipulating the scale which I appreciate respect did confuse me a little bit I'm like is this the same one picked up on that actually read the title a few times and looked at the scale on the side and I'm like oh we're starting at 40 on this one that's my fault I doing but you can see it better yeah no it does stretch it a little B this is our fund balance this is this is a measurement of our health um uh the state has a very strict way of measuring this this is our this is in accordance with our District's fund balance policy um our policy is we want to have between 10 and 15% of our unassigned fund balance to our expenditures so if we take our total expenditures and we excuse me we divide our our unsigned fund balance by our total expenditures we want to be between 10 and 15% um we will have a surplus but because our expenses are going up um we're still going to be at around 10% if that makes sense I had asked car of that question this morning and like so for gonna have a surplus at the end of the year how can my percentage is dipping a little bit I'm like it's like Oh Mr math teacher your denominator is getting bigger yeah both numbers are changing on right yeah that's right yeah yeah you wish you had one steady yeah I was like oh so when we were at 2% that was pretty scary um again you know can we make payroll you know that was that was really hard and now we're in a good place where we can breathe um I think you know the the this graph's really meaningful and and pro to a lot of people but I think for um especially for people that have had to live through these reductions just hard like people can handle hard things if it's it's making a difference matter right um and so to see our fund balance come around like uh I think we did this we did this as a district the board was able to accomplish this by making it a priority and that showed up um through doing the hard work of balancing the budget but also the board committed to budgeting $650,000 for fund balance um uh for building the fund balance they built it in as a line item not all districts not all boards are willing to do that and that really was a key part of getting this fund balance back to where we need it and the the thing that I try to describe for folks and you probably all get this but you know when you're sitting at 2% there's no margin for error there if you're you know we're making we have we're talking about eight or nine assumptions today there's another 15 that are sort of you know nuanced in there or buried in there that are smaller but you can't afford to be very wrong um on something that's really unpredictable if you're a whisker away from going below zero well that boiler you talked about big yeah right that's right right that's exactly right goes out and 10 below you don't have any choices that's right yeah so having that fund balance in place and you know it's not like 10% is extravagant either uh you know Auditors would say you should have they prefer three months of of Reserve uh which is a lot more than 10% and the state average is 20 um through a little bit different calculation but still much more than what we have and you know we the other thing the board did that I don't see a lot um but I was a a proponent of is to also put a ceiling on because if our fund balance is 25% that means we're hanging on to money that we should be investing in children uh and to make their experience better and improve learning so there's some some of it that's that too um just the comment I you know for me I flipped between this and our in our general I would have lik to have had those two closer together right they were about 10 pages FP flop them and you could see that picture a lot better sure Mak sense what went on there yeah um the state here mentioned this briefly state has a calculation for fund balance that's a little different than um you know the one that she referenced and so when they're doing calculations for statutory operating debt or other things it's a little bit different than than this um but it just creates complexity with the graph it's the same shape uh it's just a little bit different scale all right to to put some of this into perspective I've sharing this with the community as I've been out as well uh there's a sign there's a a funding gap for us the difference between what we need and what we get and there's a number of reasons why that is and I want to just kind of walk through that the first one is this Gap that was created by legislation 20 years ago that disconnected the formula from inflation now they just changed that 2023 20 years later but some damage had already been done and so if we look at this Gap between what we would have been receiving 8645 and what we are receiving 7281 so you know that that that's about real dollars right uh spendable dollars that Gap is $1,364 so in 2003 we had $1,300 more buying power than we have now per student so we have this we have that inflationary Gap okay that's one of the things that districts are struggling because everybody else's costs you know our costs went up we had less buying power um many districts have reconcile this or work to reconcile this by passing operating referendums the average referendum Authority in 2025 is 1,036 so that Gap is being uh you know whatever that is 80% 75% filled by operating referendums in most communities districts that didn't have them a number of them went out this past fall the average ask that they had was M over $1,000 were're funded less than State average you can see in the table and I I added per student here because it's complicated if if you don't know if these numbers and context with these numbers we spend less than the state average per student about $1,300 less we get less than the state average per student from our local community and local taxes local Revenue $875 less we also get less from the state $439 less per student so if you look at how much total we're getting less it's about $1,300 and the the point that I'm making when I'm in the community talking about this is like there's this Trend here right like it's this, to $1300 1,300 Gap in inflation we receive $1,300 less we spend $1300 less um most districts have filled it with a, plus uh additional local Revenue we don't have access to any of that so something that I've been trying to message to our community we get less money than average we spend less money and you know philosophically uh you know a person could make the argument well good we're really smart and good with our money um the second argument could be well if we're trying to be excellent um we're not even keeping up to what the average spending is so uh there's a dynamic there that that I think speaks some volumes and and is worth addressing hypothetically if we were to go out if you're out in the community and you're saying that's that number $1300 is there and and you're talking to them about a referendum and we're asking for x amount of dollars is there any way to say you know each Community member on average would pay this much in their taxes based off of the school district's portion which would then get us to not just this number but then a little bit higher would we be able to tell the community you should be looking at approximately this much of your taxes going up yeah when we did the referendum we that was one of the things that we communicated and people could look up even um if we were going to make that up and this next slide we can come back for questions but our ask in 2023 was $1,100 so was our community open to hearing that and doing that they were not they just they spoke loud and clear uh and that's okay that's part of you know democracy but our number wasn't wasn't irrational I think if you look at $1,300 thousand like all of those data points indicate that that $1,100 wasn't out of line it was not what people were willing to do and again that's that's the the point of the vote to to answer that question for it means that our students have less academic opportunity than the average given state so when we look at operating referendums right I mean right now um I think the stat is 70 or 75% or whatever I think it's further in here right have have operating referendums right now but like outside of Metro or I mean it's like 90% of the Metro correct yeah or it's significantly higher in the Metro right right um and I'm just kind of thinking oh excuse me if I not making a lot of sense but um I never do go for it yeah go ahead when we look at that that's also bigger schools right I I mean significantly typically larger population you know fora type schools and all of that so really when we talk about that offer operating referendum and and that that Gap it's skewed towards larger schools right now too right and I'm just trying to understand the data and know what I'm looking at trying to find patterns right you know because don't don't don't take this wrong right but right now we're doing everything better than everybody and and we can't be right and I'm not trying I'm trying to be Devil's adate a little bit here right and I appreciate everything you've done but it doing everything better than everybody and we can't be doing everything better than right you know I mean we I don't think we are I I've never said that okay well it just feels that way when I read some right because we're doing it for less and you know um um so I'm just trying to understand that data and look at it and understand if there's a tie to population of schools obviously there's always going to be an economies of scale and that's the challenge right when you start talking about start talking about an elementary group right you know we want to hit so many pupils per class and if you if you there's going to be a point that you can't go to that next but you're stuck here and obviously it's going to cost you a lot less to operate there and the next one you're a full-time equivalent over right you can't split a class in half if you what I'm saying right you know you know so there's always those economy scaled and where those steps are that those economies hit and I'm trying to correlate that well that I I need you to talk more about that because if like again I'm kind of talking the bigger yeah I mean the bigger districts have more economies of scale like they're able to split classes and right spread that out even more so I mean it seems like if we're talking about that they would need less Revenue per kid not more and the other Nuance I mean this whole thing's full of nuance the highest the highest referendums in dollars per pupil are in Old State Minnesota like floodwood has a $3,000 for pup operating well they have 200 kits so when we talk about averages that also makes creates a bunch of nuance in there so so even though the highest percentag is in the cities when they exist out state they're actually a higher amount not as a whole not as a whole okay but the highest ones the individual highest ones are y if if you looked at the whole overall the top ones that's right right yeah I think there might there's even a couple bigger than three R okay know you do the math and it's like man that sounds like a lot then you're like that's $600,000 because there's only 200 kids you know it's it's just and then you look at 600,000 in a community like that is probably so it's it's really complicated going yeah I mean yeah it's uh the the whole thing is sort of like a you know this I don't even think it's an onion that you can peel back that's that tidy um where you have every 100% of the districts that don't have referendums are more than 30 miles from the cities all of them the closest District to the cities that doesn't have one is is either St Francis or St Michel just this is the graph Minnesota rural Education Association provides this beautiful I've seen have you okay if you go their website you can click on each district and see what their Authority is so the big biggest ones Matt's talking about are up here that Northwest they're huge referendums per kid yeah but here we are and here's Nash yeah and they're probably the least dense area 100% that right and all other than you start going in the very opposite Northeast you got but those Northwest ones are sparse with Agland true true which now that's a separate corre tax they only pay on 10 acres and and the Northeast might hit a lot of tanite relief probably right still in probably all the East is so it's really complicated my only my point in just in this Tom is just to illustrate like we don't get as much as everybody else we don't spend as much as I mean really that that's it and to illustrate the point that we're trying to create above average outcomes by spending less and getting less and that's not easy to do I I understand you know just like I say and it's Devil's Advocate maybe I'm just a GL half full time sometimes right but I don't think you get better if if you keep patting yourself on the back and I'm not trying to me yeah no I trying to okay no I appreciate that so so far I'm curious what you notice and what stands out about the data we've sh shared so far do you have a question back one more time well what one thing on this slide too this this separation here on this uh the other thing I did for myself that kind of helped me and I don't know if you're planning on using this ever again right or if this is the end of this but I ended up drawing a line in here because all our others really reference from 2016 on right yeah so I so I really wanted to look at this relative to our stuff right the rest of our stuff and where that is and and obviously you know there was a pretty good separation a few years in 2011 was where they started really seeing their separations right you know 2010 to 2011 is where that thing really started diverging right and and I wanted to see where that was relative to ours and where the next Divergence really kind of happened relative to our stuff yeah right the the rest our district numbers sure yeah not that I cleaned anything out of it but I'm trying to yeah yeah understand our number yeah right comments thoughts what did you kind of what are you gleaning from the information so far stands up to the average person to you well sure um sure yes um what would what could I go out and say like somebody's going to ask well how much money do we get per student without understanding all of these grph without understanding you know where the state ended up um cutting out that inflation formula what does our district get per people just every kid we get how much money 7284 formula but in total and I apologize I'm not having this just I should know this you know it's uh between 14 and 15,000 per kid I mean it says right there I was just wondering if that you know oh yeah y yeah thank you yeah no I just want no and that's why I see it I know it past year like oh no no and I see it and I know I know that but I think it's like when we're in this room together and we are having these conversations we have all these members in front of us but and of course this is all public information people can ask they can call Cara they can call you um but you know that's not always available to give to the average Community member when they're asking they may not they might not understand what all of this means anyways but they do understand that one simple yeah how much well and it's the trouble is um my next question would be is how old is the kid because we get more revenue for for 300 seniors then we get for 300 so and then that's the other part of it too so it that though is not usually the follow-up question but that would be then something where how do you explain how do you go down that path and explain that to the average Community member and letting them know Well it's not just this set number but it's then you know it depends on the kid and or their grade their age and so yeah but I think that's the the the risk and the challeng is to over simplify it is and then people make assumptions based on that and the 14,000 includes all the revenue right not just instructional Revenue everything yeah so then you know math can get completed that's not real math and there in Lin the challenge I'm trying to explain because I think what you said earlier is important to it depends you know this is a number putt or Master risk yes and that's the thing generally those questions and like you're saying to simplify is it can get dangerous sometimes but generally the question is just well how much money are we getting per kid you know and then there's nothing to follow it up with they just hear that one part and that's okay too um but it it opens that door of communication or that line of commun and have them ask more questions they might go back home and think about that and then there might be some more things that they start notice or realize or understand and soting a seed if you the thing that P stands out to me is that our students have less opportunity than the aage Minnesota here um the numbers don't show the stress on the system they don't show a classroom Authority they don't show um you level of Staff burnout yep uh you know they don't show things like that we're looking just at numbers here and as a board I think we need to consider impact on the whole system you know what impact do the numbers have on operation of the system that's G like on you know yes we get this much money per pupil however that doesn't mean that we then have enough money to bring back our programs to bring back staff to bring back you know and then the list goes on but like I think the thing stands out too is that yeah we do get less and we do spend less but I don't think it's because we want to spend less I think it's because can't spend more right and I think our the tours that we did and I appreciate the tour last Friday um is to be in the buildings and to see the people that are working 1.2 FTE or 1.3 FTE and not able to maybe spend the amount of time that they want to spend to do the job that they would like to do but because the system is so stressed now luckily thankfully we have incredible employees that are stepping up to the plate um but burnout is a real thing and you know I think that's what stands out to me here is we've made the budget work but there are tradeoffs like deferred maintenance like running people hot and that's not sustainable I summarized some things in the slide deck and I think I shared these with you so that you know these are just kind of some summary pieces I'm going to read them to you you can do that later um we probably talked about these before you've heard us talk about them before but just some just some observations and summaries here um some other important information so this this this kind of expanded pie included new slide deck we have four ways to balance our budget kind of on the yeah four ways to balance our budget get more kids um and en rural enrollment is going down state enrollment is going down and our enrollment is has been going down since the 201920 school year uh and there are some things we can do about getting more students like one of the things we talked about with the principles last week was looking at cranking up um an online school to to draw some kids maybe that have made that choice to go online to draw them back um and so those are some things we can do to get more students without actively recruiting that's a challenging a challenging thing and you know there's lots of talk about Economic Development you know potentially in the area but um more jobs more housing um things like that when you talk about online school um did you know because obviously when we went covid we were on is there is there reusable curriculum there somewhat for lack of a better term or you know or is it or is it pretty much you'd have to create it just there's probably I mean in some spaces I'd say there probably is and maybe even Beyond curriculum there's some skills that got veloped during that time right um so and our you know our high school curriculum here in town and in the big big 4 I there there's a lot of curriculum that is online now like my daughter is a senior most of what she does is done in schooly or done through schooly or through an online platform so some of that is out there where we don't really have anything in place is at the elementary and that's a probably a spike that we've seen or a change that we've seen over the years as more online elementary kids oh really yeah and it creates a little bit of a uh philosophical Paradox where I believe the be the best place for kids to you know a second grader to learn is in front of a great second grade teacher um and so do you acknowledge that that choice is being made because it is that those decisions are being made some and that it's not like you're going to stop that potenti really from happening so do you make it more convenient do make do you make a choice that you're maybe not crazy about more convenient um and that's not to say that learning can't happen that way uh it can and if you have the right situation it can but um that's something we're looking at a lot of programs especially at elementary and some degree secondary too they're using some curriculum that you could buy and kind of import um so that's something we're looking at as far as getting more students but it is it is tricky so so when we talk about our decline since 2019 right has it I mean is it that is it a decline suppose it's combination of things but but I mean are we seeing just people moving out of the area we've had a lot of job losses in the area and people moving out of the area is it people choosing to take kids out of public education is it homeschool is it I mean what all of the above and all we've had two private schools open in the last you know four years that's you know 100 and some kids uh homeschool our homeschool number I don't know is like crazy out of whack compared to other school districts but you know if you take two 2% is sort of like the normal average but if you take two three 4% to 4,000 uh you have 160 kids homeschooling times 14,000 or whatever the general number like those are real dollars um and and is it an age group or is there any skew towards an age group or is it pretty much even across age groups that you're seeing to Define to with homeschool or just in general just in general the decline I mean this year is is really weird this year we have lost nearly 80 students since the start of school um through the school year you've lost y wow Y and we and I appreciate your question about the enrollments and so I have some a graphic for that coming up so you can see what grades have decreased from the prior years so that's part of you know the work that we do is looking at our enrollment updating those estimates like I take I Matt and I check our enrollment weekly and if I need to update our budget I'll do that for the number of students that we have so we the online schools unfortunately are so easy for kids to get into um you know who doesn't want a kid you know and they're being funded with state aid so our kids can jump on a lot of different districts and um we've seen that a lot lately on online in fact one of our local private sending all their sixth through 12th graders to an online school public school and they could just be using our school but um you know that's what we want to try and bring back because if you're enrolled in a another school online you can't be a part of our Sports so um that's kind of the draw you can't be in our activities we have seen some kids online schools Minnesota connect connection yep um they want to be in bands they want to be in choir so then we have to have tuition agreements with the online schools so our kids can so our residents can participate but it's not so much residents um moving out of the area we do have some of that but it's mostly online schools or School connects to Minneapolis School District or Faro yeah Minnesota Connections Academy connects down to the Minneapolis School District we chose that as our alternative for during covid and that's we had to everything that we did we had to go through their school district as far as any questions or concerns or anything so yes that I just remember that so I'm thinking the funding go straight to the Metro who doesn't actually I don't read that really but here we are yeah so we can get more kids uh that helps on the revenue side we can have state and federal funding go up um Federal projections are not good and we'll look at that in a little bit I've got a a table there that shows kind of some title pieces uh State Pro projections are not positive the state budget forecast most recent one wasn't good long-term term structural imbalance uh some shortterm Surplus onetime money uh we know like Dave said earlier we're looking at two to 3% we can make budget reductions it's another way we can balance our budget that's sort of the you know the button we've had to push over and over and over again because we couldn't really make the moves we needed to with a& B uh there'll be more reductions coming again and you we'll talk about how that doesn't happen to be the case uh forever and you know if the state wouldn't have made some of the decisions they made it wouldn't necessarily have to be the case rest this next fall um and and maybe they'll fix some of that this spring we don't know we can get more local investment and that's the what a lot of other student districts have done and we're not categor yet and but we talked about the average Authority and the Gap that that's filling many school districts this gets to your question a little bit earlier Tom to their average Authority in the Metro is bigger but the biggest ones are okay so the biggest in individuals are but the average overall is higher yeah mat what's the 235 for fisal 20 uh 235 school districts of 330 that stat that I mention so there are there are some anoun State obviously like us that don't um but all the ones that don't are old St and you know the this gets to a lot of things geography demographics broken ROP Equalization tax uh capacity and we shared during the during our referendum how just the inequities that exist and what was the district by Bloomington Richfield Richfield ran a referendum for almost the same amount of money as ours was going to cost their taxpayers much much less for the same referend because their tax B structur that's that's just anity has nothing to do with our kids in in school here or people that are calling this place it's just just a funny yeah and the fact is we you know a challeng in town of what's been going on with other local tax increases that right and again some of those others didn't necessarily have to go to supps even right yeah we shared you know last we did kind of a debrief and talked about some of the learnings from November 2023 and I think we learned the timing was just really brutal we heard that from lots of people you know we had lots of phone calls and a lot of people said this was just the worst time to try this because we just got hit you know um we had a lot of people that said we're not we're for schools we just can't do this right now so timing was tough the amount was more than people were willing to do um and it was it was complex the structure was complex so you know we learn uh we move on the request was it question one was for how much for people 1100 and that was an operating ref and the second one was a capital project slby that would have freed up general fund money in a way that um uh seasonal recreational properties have to pay on a capital project so one of the things that we heard when we were doing some freeor was we heard from the community members like you know everybody should be PID not just the people um and so that was question it was an attempt to sort of spread that spread that out a little bit um and then it just I think it just got to be too much too hard to explain that was something that was discussed at the lunch with the legislators Senator barnor um he's one of the co-authors to that particular bill um for the taxes on the recreational property yeah they are going to be reintroducing that in this particular 25 session see what happens it almost got a C but again that only applies if there's Opera that's right that's right that's it makes it more you know like if you're Nash walk and you're sitting here with one uh the cost of those taxpayers is will go down or if you're going out to run one the cost of that refer will go down so I you know it just to get a frame of reference um uh $500 per pupil referendum on a $200,000 house was 12 bucks a month now uh if that legislation passed it would be less so um those kinds of things would help right the legislative session uh they won't fix you know what we have going on I mentioned that state oh look the timing will be too late uh you know that uh they will be done till May and our budget will be much track at that point um we have to have our ulas unrequested leave of absence contractually uh kind of wrapped up or communicated by mid April uh they have to be completely done by the end of June and there's there can be some um um challenges to that that have some specific timelines that we have to do and hearings things like that so we really have to have these backed up at that March timeline and they M won't be so they're just won't happen even if we got all the money from them long term it still would be tough when I look at legislative uh advocacy groups their kind of planks that they're working on they're focused on fixing things that were broken in 2023 or they're affecting us now and I'm I'm really on board with that uh specifically unemployment stor to talk about all bit those two things were fixed in spot we're going to do more talking about compensatory right yeah we are yeah graph on that some more yeah yeah for sure and I've got um kind of a deeper dive into that too some more create some more context there uh you'll see a little bit later but our staffing costs are estimated to go up 932 th000 just with steps and Lanes um and that includes the health insurance uh estimation so that's why that I had that that as because we're that 8% is an assumption too um we're in the fourth month fifth month of our uh insurance plan right now and we I think what you told me today that George said by March we should have our insurance number done well again there's not really a way to so we're using industry average we're using projections that we have now utilization projections we have now funding projections that we have now to say we're going to estimate made 8% based on that 8% we've got 932 th000 costs if all employees got zero and zero um and got their step in Lan longevity kind of increases noral salary matrix adjustment better revenue is expected to be flat the house is really coming after title big time the Senate is more or less saying let's just freeze it um we don't know where that'll end up obviously a lot of interesting things happening there Co funding we talked about it's gone here's a chart Tom B compensatory so this shows like this historical piece and it's really radical when you look at what's happened and so if you rewind the clock back to fiscal 21 as sort of a uh a look and you go okay what was happening Co happened fiscal 21 fiscal 22 parents didn't have to fill out forms anymore so what happened when parents didn't fill out forms we got less forms our free reduced went way way way down which is what compensatory was based on so our our the amount that we were eligible for and paid on compensatory went way way way down and then for fiscal 24 they had to the forms out again because they had to pay for lunch again and so and we hustled on forms big time um so our compensatory went up $2 million which again going back to what we talked about earlier when that blue bar got bigger in fiscal 24 it was $2 million of it was that um continued to work hard in on fiscal 25 and and then the law changed in there to uh I think go through this here oh if you look at um your sheet the one that's stap and if you go on to the bottom where it says assumption 4 a it talks about their the change in how compens story funding is calculated so it went from being based on your District's free or reduced percentage which is calculated by taking all these forms that families fill out and turn in and calculating how many students would be eligible for free reduce lunch I think the intent of the change was to make the process less cumbersome which that's a noble intent and my frustration has always been the government knows how much everybody makes they fill out property tax or they fill out income taxes so why do we make people throw up more forms um so in an attempt to simplify this process they came up with a new formula that's based on students that are direct certified and I listed the categories that that uh results in direct certification SNAP food benefit food benefit program um M the distribution program on Indian Reservation foster care Medicaid those things those categories if someone fits into one of those categories they're determined to be direct certified they automatically become eligible for free reduced lunch so it went from something that the District was controlling or controlling could hustle on I guess I would say to get forms turned in um and we had we had over 90% of our forms being turned in which is unheard of I mean we had one building that was at 99% of their parents filled out their form that's unbelievable when that the last couple the last two years we had you know we had put some incentives in place and the the coming to the the activity pass was like the golden ticket and it was really really working and not everybody was eligible to fill out the form obviously but it created a habit for people to just like oh school's coming for and we were being I don't want to say rewarded we were just getting the money that we were entitled to um that we're a loser uh in the new formula and I think it's because we work so hard in fiscal 24 and fiscal 25 to maximize that Revenue if we would have been collecting half of our forms and our number was $2 and a half million dollars it'd be like oh we're gonna be go to 3.4 great for us uh but we would have missed out on $3 million over a couple fiscal years because we weren't getting our forms so there are some districts are going to win here we're going to lose uh based on all the estimates we've seen so far to the tune of 7 4 million and I should say that this form 7.4 million uh 740,000 yeah the state normally puts this uh calculation out in October so this this calculation for next year is based on our October enrollment so these are all so in 25 we WE schools teachers work their butts off to get those forms for the next year's Revenue um we had lived through those budget cuts and staff did what they could to get those forms in to build up this Revenue um so um where was I going with that um prior year um forms affect the next year's um Revenue so lost my thought but so we talked about that that 21 to 22 is really a they they changed it they didn't make it mandatory correct and that we went down was it mandatory in 23 correct so stayed down 24 is was it mandatory or you just made a concerted effort to try to no you didn't have to you got everyone got free meals last year okay so in 23 we collected the forms to get the money for 24 and in 24 when meals were free everyone ate for free we still still collected the forms to get the money for 25 and this just shows our parents commitment to this District but but I guess what I'm asking is you know so okay we we expected it to jump up there but it jumped up a good million beyond what it was historically before we had the forms but the thing is not everyone was here so we didn't know what initiatives were in place so the forms we started during Co when enrollment dropped where people ate for free and right the money we got in 21 was based on the forms collected in 20 we didn't know what happened in 20 then it was free so then why turn in forms so then it was everyone all hands on deck to get these forms in to build this Revenue up and this amount this formula changed also well that's what I was trying to get at so there was more than just the formula change in that period no it changed it 26 it did not change prior to that but each year that formula the amount the basis of it is 88% of the basic formula amount so but the formula changed so that if you have a higher concentration you get more money in 26 so but you don't get credit for all those students that hand in those paper forms so I mean it's kind of like a double whammy all Tom it seems like the question you're asking is is the difference between what receive we received in fiscal 24 so much bigger than fiscal 20 just because we collected way more forms or was there something else going on exactly because here again we know that you know we know that down tick was because forms just weren't collected right weren get well the the natural explanation is you would expect that number to come when you get that participation and start demanding it the natural SWOT come back to was where you were before that right we went significantly above that so what else happened is it that that high before it wasn't that high before but there was a law change for fcal year 25 was all these little caveats sorry um they held harmless schools because of what was it Matt there was a hold harmless for something but it did not really affect us because we collected the forms the amount of money the amount of more money we collected was significantly Changed by the efforts to get more fors like that was like the biggest variable yeah but even still it's more than you would have thought that would even be I think I mean you think yeah I mean because you know I would expected it to return back to somewhere you know that 2 million not the three and a half you know 3.8 so now the 3.4 is based on these all these assumptions here the categories those categories yeah and so met with share met with the county today because that's where these programs sort of kind of come out of right and so I think we're all trying to figure out like is there any way to improve improve Pro that we know we I mean the thing that I I it's frustrating to me is we don't have a community that has more money now than it did before there are just as many kids um in these programs as there were before uh so there wasn't some big demographic change that result well that's what I was trying to ask is there a demographic portion of this that we're missing well I I don't I don't think well it's possible there is right it's possible that there are students that are in families that are eligible that aren't somehow so that's why we're having these conversations but I I really believe the majority of it is the fact that we were collecting a much higher percentage of our of compensatory funding that was due to us because we had a higher rate of return on our forms if you were a district that was collecting 60% of your forms or 50% of your forms so your free reduced number was way under represented you're you're going to come out a winner in this new formula and you're going to think oh great for us and that is happening there are districts whose number is going up um because the pot of money that the state gives out is fixed so this is all how is this pot of eight you know okay so this is going to be a fixed pot on the state side on the state side it's fixed so this p is getting so they're just you they just did you know the the part on the right side of the equal sign stayed the same and it's not it's not a per per per student basis it's a it's a it's a you get a your percentage of the pie changes to our percent of the P changed because so so so bottom line even that let's say that that downtick we could see could be attributed to the fact that other districts saw the success that some of the other others by doing due diligence and get forms in and may have done a more concerted effort on their standpoint except it doesn't really matter anymore okay and the forms not for compens yeah haven't put the calculation out mde would put this calculation out starting in October so we it' be based on our October 1 calculation those students so we had a student in December it doesn't matter they weren't here in October 1 they don't count towards this they haven't put the calculation out for the entire state yet because there's a bit of controversy around this because so many districts are affected by this so they kept promising it each month and we still don't have it because it's such a big deal the winners the losers so there's keep hold armless at the legislature I mean well January right correctly and we were supposed to have stuff on October from the state and they pushed you off that five months here we still don't have it well and they I mean I think they they didn't put it out in October because they didn't want it to have political ramifications yeah that's why they um we're well past and I think part of it I think a big part of it like car was getting at this formula is broken like it's it doesn't work uh well it doesn't work for a lot of districts some of them like I said there are districts that are going sweet we're going to get more money to pen story next year um and so the ad you know what I think the key is here the advocacy is about there needs to be some hold there needs to be a hold harmless until you figure this out I'm not proposing that we stick with free reduced lunch forms as the best measurement but clearly this isn't the best way to do it so until you figure out a better way to do it let's not create Havoc here um and and let's fix that fast soon um because fixing this in May June not June fixing at May at the end of the session the ships Le left the dock at that um people could be without jobs because of at that and not just here mean I was talking to the super from Big last week they're in the same spot and he's having the same conversations we are there so this is a this is kind of a sore spot um and you can tell it's funny in a room where you get a few soups that are agitated about all this and then you have a few that stay very quiet know they're on the right side they're they're coming out okay on U so this is this is really big because you know this is factoring into the number we're going to eventually need to reduce if this would have been zero change we would be reducing 7 $40,000 less that's what this means in real in real time and I assume that we haven't pushed like if the state says okay just kidding we're going to stick with those forms now the year is half over so we would so are we not pushing the forms that we have in the past we push them still did Even though most districts this was a surprise like I remember reading something about this and the initial calculation they that came out they estimated every District in the state of Minnesota for the next two years like what would you be ours showed a 3% decrease that's all ours was going to go down by 3% and this is what we ended up with um so most districts collected the forms the paper forms the paper forms are beneficial to us we get eate money for Technology based I'm sorry what eate eate is um we get a percentage of our um communic it's our Paul bunan bill it's our um with the F Federal Telecommunications Act they basically years ago um if you look on your telephone bill uh there is a tax that you're paying on your telecommunications bill that goes to eate and some of that money goes to schools schools and libraries and it's based on our our poverty rate so the higher poverty rate the more money we get um and this number goes towards our poverty rate so it's important to collect those forms still and so the the form collection just if I can ask this question the form question um people that is it beneficial for us to collect the volume of forms or the forms that apply you know what I'm saying yeah like there are people that it probably doesn't matter right right but does it still help plus a great deal to get those forms I mean what it does is it normalizes it okay so if every it in and yeah it doesn't benefit us if qualifies but it says okay student a student B student D everyone turned it in sure turn yours in like this is a this is a group effort is part of what we do around yeah get your sports pass you know sure sure sure the interesting thing about the sports pass too I remember you mentioning once and I hopefully it's still true uh there was a concern that those Sports passes would decrease the gate Revenue it has the kids are bringing the parents yeah my kids acket game by she'll run crazy so so there's a there's a c right there there we go so there's compensatory Revenue um taking a look historic Al at reductions and you can see uh you know the amount of money the amount of FTE associated with those and the totals in the bottom right uh these are the totals for for that fiscal year so if it says fiscal 23 those are the reductions that were made for fiscal 23 not um in fiscal so over 9 million over 80 of tees I mentioned this in here uh you know what happens when uh teachers obviously whe we reduce their higher class size few opportunities principles um slower response times T their you know their primary job is to be instructional leaders and that's a place where they have to really limit themselves um you kind of see these obviously longer ride Le Rose Le r as far as a timeline this is uh what I've mapped out um it's subject to change based on things that happen I think if we you know we learn something new e e e e e e e e e e e e e unless there's a real effort to get those done early which we did last time too as uh Cara and I have made a number of recommendations as far as these assumptions go the board's not going to proove anything tonight um that's not the goal but uh Cara and I are sharing some recommendations with you things for you to think about we'll take a deeper dive into this next uh next Tuesday but this is sort of the mindset we had as we were looking at our recommendations we're committed to a balanced budget I think that's what's gotten us uh to The Improv position we are uh to use actual data and actual knowns when we have them to make assumptions that are conservative but real istic again we've always I think uh been trying to be on the conservative side of things so that if we have surprises they're too benefit not detriment um but we also don't want to be so conservative that we're cutting more than we should or need to um this is this is our fifth year reductions or sixth year reductions sixth year reductions six year reductions I think um and people are weary it's wearing people U mentally emotionally it's hard on people and so our lens as we've come to this is to we're going to prioritize minimizing reductions whenever we can with the decisions we have uh that lead to that some of them we don't necessarily you know we're making an assumption about uh health insurance our perspective on that doesn't have a direct impact on the reduction our perspective on salary settlements does our strategy did um and then five balancing that fiscal 26 budget looking into the future and making decisions that cuts necessary to do so so those are the lenses that K and I are kind of bringing forward this is a flyover of the recommendations uh and we'll take a deeper dive into all of them um 3,811 is what we're recommending for an enrollment uh assumption 2.4% inflationary increase only again that means that when they roll out the state rolls out that that they'll be at 2.4 uh could be higher I don't think it'll be less um but that there won't be any other increase on the formula no additional referendum Revenue in the fall um I mentioned that compensatory Aid decrease unemployment Aid decrease and we'll talk about that in a little bit uh federal aid Frozen staff salary this is a big one um how are we going to handle that and when we come at this from the mindset of minimizing reductions uh our perspective is a soft freeze and what that means is that uh anything that someone's guaranteed in their contract as far as steps lanes and Longevity that that's attributed to them all employees but that we don't do anything with salary matricies or base wages um and that again this will be this ultimately will be up to the board um but we're going to talk about starts from the perspective of that to minimize reductions we're talking about staff does that is that all staff every employee yeah um health insurance I mentioned the 8% increase other increases there um and then that we would reduce what we need to B the much so taking a deeper dive into enrollment when we're looking at enrollment there are a lot of factors one um how do the grades transition from one to the next uh we dig into birth rate at times we look at prek how many screenings are we having um knowledge of new kids if we know there's new families we try to keep that in mind open enrollment PSO those have been big effects that kind of thing um let's see Cara you mention to graph enrollment it's the next I don't know why it doesn't show up I don't know where it went well slides in the presentation m I don't see you not the same one I in I different are you looking um there's two um budget the next two slides are budget numbers it's after this that looks like the same one I have oh I wonder mine has been like loaded for a long time to upate yeah that's what happen I let's try this okay cool oh i' look I like to look at TR like where have we then to figure out where we're going that sometimes works and the point of the lines is to watch a grade in 2016 our Kindergarten class how does it change as it progresses down to the 10th grade next year of estimated 275 kids but looking at our attrition in each of the grades as we go is part of our enrollment um estimates um we also you know that kindergarten class coming in plays a huge part of um our overall and you can see what's happened to our kindergarten class 23 25 very low um probably the lowest up there now we like Matt said we do have um a new two new um non-public and one of the non-public opened an additional kindergarten classroom so um we lose students to that also the online option um we border 11 school districts Grand does it's that large we border 11 so we get open enrollment in and out which we are normally an open enrollment winner kindergarten is not normally one of the biggest classes for open enrollment but it's a part of it so overall we're estimating 3,811 kids but you can see the first column's early childhood and the second column's voluntary preate and in fiscal year 24 the legislature opened up several um additional VPK seats and Grand Rapids we didn't have VPK we only had it at Our Big Fork site now we have it at West they awarded US 58 more seats like Matt said earlier kids um in grades seven through 12 are worth more to us than the younger kids and I don't like saying that but they're my little widgets so just think of it that way um a little widget in bpk is only worth 6 on the formula they only count as A6 pupil unit so we only get that much money for them whereas a kid in 7 through 12 is worth 1.2 so we get 1.2 times the formula Amal for those kids with the additional VPK um we we didn't have that 33 is the prated portion of the 58 um even with those our enrollment is going to go down and in 2026 based on the attrition it'll go down again and projecting that so the next slide is um where we lose students so 2425 you can see this isn't from the beginning of the year to the end of the year this is um what we lost in that class so 224 25 first grade kids from kindergarten to first grade how many did we lose we' lost six um if you look at the the higher grades this is you know a little bit different um grades seven through 12 we have lost you know quite a few from you know moving from seventh grade to eth grade e8th grade nth grade um quite a bit so the average attrition rate that I'm using is for years 1920 22 23 and 23 24 here's 2021 and 2022 you can see our net change between those two years was a plus seven but that was Co and I you know I could include it in my equation but that those two years were just very abnormal so I don't um so the average change from year to year is another equation that I look at when I'm coming up with what our is the nice thing is and you can see in grade seven seven um we do get get quite a few students and that's because kids from St Joe's are coming over TOS again something happened this year and I I think a lot of it is um our expanded um P private schools and online but this is where we're at right now the changes for 2425 so this is how we look at enrollment we look at enrollment every month we get reports every week on our enrollment that changes and I see every single change that comes through in the email so we know what's happening and this year it's just been kind of a sad story when we do lose students for whatever reason do we do any sort of exit interview or something to understand where they go so we can know that I don't know if it's done at a school level um at Central enrollment we do not normally that's initiated um at the schools um so I mean that's definitely something we could do I do see every reason why like if the students moving to a different state or if they're going to open enroll or if they're going to an online school or if they're going homeschool or if they just haven't shown up for 15 days we drop and then it's you know at a certain age they can do that um so we have it at that level at District level but then more specifically of I went to this specific school that would maybe be at the school level yeah and Matt do you know we do that you do like exit interviews like why are you leaving our district to go here what you would we would have data as to move to another District uh uh to a neighboring District right that that is part of the code that goes in when you you know lose enrollment on them okay is that what you're asking yep uh not necessarily I didn't like this teacher or didn't like this policy or whatever but more so exit interview of knowing where the people are going just to understand when we say we're losing 68 people kids um 10% is this 15% is that tell you most of it is um going to online schools home schools nonu well no this helped a lot right and when you say most throw a rough percentage which I'd probably say like 60% leave for that in we should have uh Linda right now our Mars person is working on some data that shows you know online student by grade so we can as far as working through that decision about on my school all right State funding um I copied and pasted this right out of the statute so you can kind of see see where this goes uh this was put into place in 2023 they stipulated what 24 was like uh and fisal year 25 and then you can see fiscal 26 and later that plus or you know 2% to 3% change uh you can also see in the chart there where this has been and then that bottom left piece is that thing that describes what the uh Commission of education is set to do here by so say in January of the calendar yeah so in January and I know that that update is supposed to come out on Wednesday so uh we'll know more Wednesday or Thursday on that one um so that's uh that's where we're kind of starting from 2.4 um you know when car and I look at the landscape the msba Masa the suits Association the principal everybody's advocating for 3% on the formula I just don't see it happening um that's forever money and in a state budget that's already estimated to be structurally imbalanced so um I don't see them putting money on the formula especially when there's going to be an inflationary increase they weren't supposed to treat it that way but I think they will uh especially when groups are also advocating for these other legislative fixes for mandates that were put in place like unemployment like a compens you know mess that kind of stuff so so so what did you mean by forever um because yeah like you know if they put 2% on the formula it's there forever uh as as opposed to next year there'll be two in that oh they don't get to yearly twoo they do get to choose it but it compounds right your new base yeah that becomes your new base number yep yeah the statute says 2 to 3% every year right yeah yep so yeah your base kind of climbs up and up and up and up and up so yeah yeah but also that Divergence has climbed out out no because right so I mean if you're gonna try to make that up you try to right boost it initially right that's what you that's what you yeah I hear I hear I just wanted to understand what you meant by forever yeah um so Karen I's recommendation again for the board to consider is that uh for our Baseline work Baseline look at fiscal 26 we only include that inflationary 2.4% or eventually whatever it ends up being um just because we're we just don't feel there's going to be any more money than that right now in the levy calculation that was done in December um the state had 2.43% as an inflation factor in that calculation so I felt comfortable going to 2.4 but I don't want to go over that that's the number that comes out on Wednesday you think the the Consumer Price in index update for quarter 4 24 will come out and then he's supposed to do an average of the last two quarter fours and then you that as the driver for that number so um yeah it'll it'll just be how long does he take to do the or his people to do the math so when we so these assumptions that you're you're recommending then at some point as a board we'll yeah de next Tuesday at that work session um it's going to be okay board where are you at uh where are you at on this uh assumption number three and this is you can kind of follow along in that stapled sheet if you want there's some background there too for you to refer to later uh all districts currently have the ability to include in their Levy and again we make Le District levies every year um and included in that Levy is optional local optional revenue and um but there's no indication at this point that it's going to go up that is an advocacy item for some groups to have that go up it hasn't gone up in a long time the purpose of it originally was to close the gap that we were talking about tonight between the districts that have referendums in the different districts that are unable to pass them um so there are groups advocating that that goes up to like 975 or 974 or something like that um but again uh the legislature has been pretty resistant about uh increasing taxes and so it seems like a a tough a tough sled there so um our recommendation is that we're not assuming any referendum revenue for PID 26 um the board hasn't had any discussion about anything for the some other state AIDS we talked about the compensatory Revenue already uh our our estimates right now show a decrease of 740 um recommendation 4B this is the other one that's really challenging and frustrating for for us for people in schools and we go through that a little bit more deeply on on page two of the that stapled sheet but again um in that 23 legislative year the legislature changed the exception or exemption of 9month employees and unemployment so that those employees qualified for unemployment they did not fund it permanently they put $135 million in a fund and essentially said when it runs out it runs out and it lasted through uh 24 lasted through 25 or last through 23 lasted through 24 is that and uh it will run out this summer and so we're being advised to plan on picking up uh six uh 40 to 50% of the costs this is an unfunded mandate um and it's going to be qu of a million dollars based on what we know right now um this is a really frustrating one for lots of reasons I just shared some information with leg Lors this week I think it's uh irresponsible to put something like in this in law without a way to pay for [Music] it so if you look at if you look at these two coupled together 4 a and 4B here these two impacts the compensatory formula change costing a 740 estimated the unemployment change costing us 250 we're almost at a million dollar of increased cost to our school district um by or as a result of this legislation and you'll see in a little bit the effect that that would have on reductions um on its own it's almost a million dollars in reductions but when you look at where we've put ourselves positioned ourselves we're in a position where we would need to reduce uh if if we held to the other assumption we would would need to make any reductions at all if these two things weren't in place that's how close we are to being elal without uh again if we hold to the other recommendations so it's especially frustrating when as a district we've worked so hard uh to have the legislature put us you know put us back with some million dollars I have a couple questions um the first one is the unemployment for the 9month employees that's done licensed employees so professionals secretaries tonians that might be n month bus drivers bus drivers yeah service and do we know uh like a percentage of the people that does everybody yeah the first year there were um there was probably 10% of the people that didn't apply for it okay um but I would say this last year close to 100% app applied for it and many went back and applied for the year before when they didn't apply because they can retroactively you can you can apply for anything I mean we had there are people in the there are individuals in the state that applied for unemployment over Christmas break and mea um that's how unemployment right you can apply for whatever and there on the call I was on last week they indicated that some some of those claims were paid but not all of them um or was inconsistently applied and you know the Gary Lee from msba was like under no circumstances should obviously it's called out right in the law actually that a break like that doesn't qualify our current Clin um so then the next question then is so it says that um we're going to have 225,000 or 250,000 um as uh on rebirth cost the district 2027 then we'll be on for the whole am we'll be on the for all of it so we talk you know when we talk to these legislators about fixing this like this is a big deal and you know the as I look at it as a superintendent there are really three options this is what I shared with the legislators in my email uh last Friday they can repeal the law and you know you know the individuals that took the jobs were talking about took them knowing they were nine Monon jobs that was part of the that was the job that people took it was a nine-month job um and it's not only affected you know us it's affected employers counting on that summer help um and the other thing that we've had happened not just incidentally but a number that's significant enough where it's hard is resignations in August great collect unemployment then resign right before school we had a bunch of that this year districts all over at 100 um but they can repeal the law go back to the way it was forever we can Levy for unemployment so if we you know terminate someone or put somebody on unrequested leave cut their job and they qualify for unemployment we can Levy for that cost now somebody's paying for it right our local ta taxpayers are paying for that um but it's not coming out of the funding that we would we would be using right now to pay for kids in classrooms okay but but that would be option two to treat it like all the other unemployment um and the third would be to fund it and where that money comes from I don't know uh I know there are some legislators that are looking at free free meals and going maybe that wasn't such a good idea to give everybody free meals because there's money there that's that is State money um and I don't know how that would compared to what they're spending on or we going to be spending on unemployment but uh you know three is tough because this the the long-term Outlook is structural imbalance so are they going to want to commit to funding unemployment costs forever so I it'll be interesting to see what they do uh they do have some Surplus right now and I could see them going or use some of that one time money put some more money in that bucket that's about empty and that just delays the problem we'll still be having the same conversation in a couple years um the difficult part about letting us Levy which you know that would be I just want somebody to pay for it if it's a benefit um Charter Schools I ask collaboratives they don't have any way to let before it so then they will be coming to their member districts in charter schools I have no idea how they would fund it so everyone's susceptible to this so because they can't ly we would have to give permission to LY for that right I already Levy for regular unemployment but not the I can for yeah so we would have to you would have to change permission from the law would have to change and so you know there's been a lot of talk about unfunded mandates things like that and you know people can get too worked up about arguing about how many there is um and I I'm not one of those people that worries about how many there is because I know there are uh a handful that are really problematic to us these are the these are the two I'd say that are the most problematic as I look at it um because these are longterm and big numbers so just so I can completely understand and make sure this is on the record we hire somebody for nine months for a 9 month job Y and then they file unemployment the three months on the that's correct yep and as of next summer it will be all our we'll be on the hook for all of them and and based on unemployment they're supposed to be looking for a job correct that's the terms of unemployment which just blows me away yeah I think it's a how does that get to be so and what I think is like really um I be careful here a little bit but I think some of the groups that advocated for this didn't think through the consequences of it because it could significantly affect their own members because it's going to affect how many people these organizations can employe and so by extending benefits to people who never had them and never expected them when they applied or were hired they're going to end up feeling the pain of that in their current membership you start you know you start looking at these numbers and in terms of people again K talked about earlier 82 82 cents of every dollar we spend is on salary and benefits on people and that number's gotten bigger because the other side of that's gotten smaller you know only cut you know so many light bulbs or so many whatevers right you start looking at these numbers and thinking about how many people fit into that 225 um there you know faces and names there when you start making reductions and most of what you have to reduce to people and you know so that's why in my communication to the legislators last week it was this needs to get fixed and it should get fixed soon um but you know you look what's happening in St Paul right now I'll editorialize here a little bit they're so busy fighting about who's going to show up um and who's going to vote for you know who's going to be appointed to the chair of these committees that they're not even at all worried about getting work done and leading and as a result uh we're dealing with this so U I think that was any political statement um but it doesn't change what we're do uh Forest prur State Ford will apply you know whatever else we know about State AIDS and costs that we're aware of you can see some of the ones care listed uh or came up Ed us of in this document read act that was a mandate um you know good bad or otherwise created new requirements there's some funding it's onetime money long-term requirements energy transition a is very interesting that has to do with uh you know mpnl showing my AGI saying that Minnesota Power in that transition um uh the rest of the funds there the difference between that 418 and 100 will go to thatt service so it's not like that will affect you know people classrooms that type of thing and that's goes to zero over time by federal aid this is a chart I was talking about earlier with the House and Senate hous is really looking to make some cuts out of Title One title two title three these are programs to support children title one is a program that supports children that are behind especially in Reading uh reading math uh the Senate is kind of holding steady on all these we'll see what happens um but our recommendation is that don't for any kind of an increase here this is similar to what the appropriation proposal or the spirit of the appropriation proposal uh in the past and when they started doing negotiations and end up kind of so our recommendation is at Fally sit tight contract settlements uh are big it's a big part of our budget and one of the things that is historically been challenging it's historical thought that doesn't play out the way that it we've kind of been in education conditioned to think and that is that you know the state gives 2% on the formula that corresponds to 2% salary increase it doesn't work that way um because 2% on a larger number is more than 2% on a smaller number so um and when you're starting at 932 th000 like I talked about earlier that's if we have a soft free steps and Lanes longevity things that people have attributed to them the contract and health insurance that means we're starting at 9:32 before we do anything so you can see that 2% on the formula is 612,000 or approximately 612 in new money but 2% on all salaries across the district is much much higher than ,000 so that means that if we're talking about assumptions reductions balancing the budget uh if we look at some examples here and these are some rounded numbers of course uh a soft freeze would result in a reduction Target based on the rest of the assumptions of between 950 and millions to balance the budget based on the rest of the assumptions so if what Cara and I laid out there the board said yep we're in agreement with that and we have a soft freeze we'll need to reduce between 950 and a million again remember 900 plus thousand of that is unemployment Convent St without those we're just about washed out uh we're about even so it's really frustrating more than ever that those kinds of things affected us a 2% increase in salaries on the other hand if we add you know um add in there all of a sudden we're talking about a much much larger reduction to balance the budget and you know I'm I'm using the term soft freeze uh that's not a simple thing it's complicated there are consequences to that it's not easy I've been at the negotiating table when that's where we were it's really hard because I'll just say it as a superintendent I am asking people to do more than they've ever been asked to do before they're doing 1.2 1.3 people's jobs so uh it's a difficult position to be in I also know people are really really um tired of cutting and uh so that this is kind of the the decision in in front of the board is where do we want to land and again not for decision tonight and not that it even needs to be a decision that we uh technically have to make next Tuesday but we need to be in a position where we clearly understand the impact of our strategy around around negotiations cuz it directly correlates to reductions and you know so when you say a 2% increase in salaries are you saying that's like an average across different bar yeah that's right so if you took everybody's everybody's base wage right now and increased it by 2% yeah in the last contracts the the last contract uh the 2023 and 24 uh the it was a 4% and then the next year was a 2% and again there was some the strategy at that point had had to do around health insurance change getting rid of a h or the the Platinum plan we were on and also expediency getting done quick um so there that was part of the strategy around that um yeah so that's yeah when we go back to this this one that you're showing that Delta the difference between your red and your blue is simply that 950 right is what you're saying where're you're just trying to demonstrate what a what an effective 2% that's right that means to us as a district right yeah a staff reduction and you know do our staff deserve that they absolutely do I look around and see what they're doing every day uh app they do um there's huge consequence to all of us depending on how we end up here um Cara and I's approach going way back to the beginning of our assumption was about how do we move we're going to present recommendations that limit reductions and so as we're looking at this uh our recommendation is that we go into negotiations limiting contract settlements for all employees to the soft free not because we think that's what people deserve because as a school district that means we can limit reductions are all employees represented by some barain un or another no um there are uh there are most are probably 95% um there's uh if you actually if you go back to the um the negotiation sheet that we looked at last Monday there were maybe 10 12 employees that so y so I'm not Cara's not um Casey's not Julie's Julie's of she's her own Association we've heard it was in Str yeah that's right um but we'll start so if for those people what that would be separate outside of this or you know what I'm saying because they're not my expectation is they would all do the same thing it's everybody softas means soft phrase across for everybody yep that's the I Cara all those people that you just and that's that's what happened when we went into negotiations last time um my request to all those people is that we we settle first um to set the bar with for where we're going to end up sure I appreciate that respect if you're gonna ask for something demonstrate actually a few get for two I got zero zero yeah but again you're ask people to do tough things and in my opinion as a leader you better willing to step up so that's where we're at again not because we think that's what people deserve but because that's where we're at as a school district you know unfortunately that's kind of what's happened World some point you know right yeah yeah um a few other things the health insurance we are self-insured uh so that's something that's unique and you know to be honest with you it took me a bit to sort of get used to that um we have a fringe Fringe benefit committee that is composed of representatives from our bargaining groups as well as a few other people they watch plan performance over the course of a year monitor cost and utilization patterns uh also that group's done a really good I mean a really really good and hard job over the last few years they are that's the group that worked hard on coming up with this High deductible health plan that we shifted to uh it wasn't popular you know wasn't a popular shift for most employees that came you know through a lot of hard work from this committee um we've had two years that were really I'd say not great baselines the F the first year was the first year of a high deductible plan and everybody's like well is this going to go do I have enough money in my HS like uh so we saw I think nonnormal spending patterns or utilization patterns and then this year we have a shortened plan year because we wanted to get onto a plan year that was more aligned with our fiscal year so that we're coming in budget season having a better handle on what our projection was going to be rather than not know till September Pro right right so um at this point I mentioned earlier the best information we have has our increase uh going up about 8% so that's what Tera and I are recommending that uh we should know more definitively in March this is the year actually too where uh we are required to go through a bid process every two years uh the health insurance transparency act requires us to go to do an RFP for providers so we'll get we'll solicit bids and we'll get Mo cross we'll get Health Partners we'll get people like meder one and whoever else Peete the public employees insurance people to throw their name in a hat and give us you know a bid and that kind of thing so and so virtually all employees are under that same plan oh yeah we only offer one plan um and it's you theal healthed through partners and when we started um this fund was also the fund balance was below stat limit so um we changed consultants and um the committee like Matt said made very hard decisions and we had to increase our insurance premiums by 25% the first year and 18% 18 and 25 it was horrible absolutely horrible so now we've gotten our fund balance up again to a better place where we have a little more fluctuation um where we can fluctuate a little a little bit but um it's been very difficult employees have gone through a ton yeah with with the position we were in so um I mean this is something they take very seriously so the 8% is what our consultant our consultant said 7.5 six3 or something like that is what he was telling his groups I put it at 8% um so you know hopefully in March it's lower than that are bids coming lower we don't know so all this will play out that Fringe committee will you know uh look at the the data they'll make a decision at that committee but ultimately that increased percentage will come to the board for decision um and you know the French committee like I said has done done the hard work made tough decisions so that when they came to the board they were needed to happen um but but it it's been it's another place where employees have really stepped up yeah and you know when you're self-funded it's it's I don't think because it wasn't a place that the fund had been before uh if there's not enough money to pay for health costs in a self funded pool uh if that Reserve fund doesn't have enough money in it it's going to come out of the district general fund to pay for healthcare costs so we were I don't say that we were like right on the doorstep of that but because our fund balance is below statutory uh levels for self-insured pools like ours we were trending in the wrong direction and had we not done had that committee not done what it needed to do uh we for sure would have been there and is there a so is there a is there a third- party insurance for like high cost and or more permanent longterm type that'll fall out of the self-funded portion or something right we do have stop loss Insurance y we do have that yep yep so that's another thing that no that's that's good uh a lot of people don't know about that so we that was another thing that our uh consultant brought in and said you need to readdress your stop loss Insurance here um because you know whether it's your coverage or your cost right longterm that's right major event with your pool you don't have a yeah how big is your pool of people probably between 850 and a thousand yeah that's probably about the minimum you can get byy with something like this on almost isn't it for just you can have quite a bit less but where we're very unique and we're we I don't want to say struggle is um we have a lot of retirees on our po okay so um nearly every staff that's retired that was able to take our insurance has taken our insurance so how long are they able to do that um till they pass away okay depends contract depends yeah true depends on their contract as at depends on their year of higher oh year of higher okay there's been a couple different sun setting and what's the trend on that is it going to get better or is that people continue to get older and well I mean the trend in the contract would be better as some are are they more lucrative contracts or older ones yeah the the sunset that's what you see the ones that Sunset usually are those more y beneficial to the end person that was part of negotiations over I mean predating me and uh eliminating some of those potir health benefits and we can Levy for those expenses as if the if the contract has sunsetted that benefit we have a trust right now that we issued bonds for many years ago that trust will run out in the next couple years so those costs we will have to Levy for okay um are our our liability um is is probably like round numbers again $130 million is so the district's share of health insurance cost would be 8% do we have an estimate of what that would be for the employer employee s um so it would also um so if you're single in most groups your single is provided at full cost it's covered the premium there's no extra premium that employees pay unless you're an ESP or Service Group it's different in each groups and they cover 10% family is 10% they family will cover 10% okay and do we know what their increase will be um our premiums are if our my estimates are and again round numbers um you know we a family premium is about 25 to 26 million $26,000 a year 25 to 26,000 a year next year it'll go up by eight% an employee will cover 10% so their cost will also go up by 8% so their cost goes up 8% okay so this is both sides yeah okay for family family yeah is the self-insurance model the right model for our district I so it's funny you asked that because I've asked that question a number of times to our consultant and um he's you know he's done analysis and said right now it's still uh you know a solid model for the district but it's something that I think we have to keep looking at there there are you know the Education Minnesota is working on um the idea the concept of a Statewide a man a mandatory Statewide plan for school districts which would be you know pretty significant step because that would have that' have 300,000 people yeah again so you know huge scale huge bargaining power that kind of thing um the conversations I've had uh you know there would be winners and losers in a shift to that uh if you're a really healthy really healthy District you're probably going to be a loser in a shift like that so how do you offset that probably some money where would that money come from the state state doesn't have any money so this might not be the right time to do it um but there's been I know they're working on that to see what those details might look like and there's a model for it I think it's it's called SEF counties cities cies going emplo it's a large state state plan y so there is a model to look at and I think that's model after should speaking out of school here a little bit Angie did I say anything that didn't sound right right I think right now the groups are the Ed which represents teachers and professionals is that and if they did that then we'd have to segregate our like that have to do it they'd have to so so those two groups would fall out and then we'd be looking at no everybody has to go I'd have to go it's just Ed Minnesota is the one that's okay so okay okay they're the ones pushing for it exactly but they're pushing for it over the whole umbrella of all of that's right that's right it would be a state law yeah they're trying right state mandated insurance so big lift um say there's winners and losers and LIF yeah and they did did they did try before when I was asking some questions they have tried to they've taken a run at this before um and at that point when they tried previously some of the big city schools were like yeah we're not interested and you know you pull that scale out of there and push back out of there and things kind of fell apart well now now everybody's looking at the insurance market and insurance landscape on what what options do we have to make this work are there districts in Minnesota that collaborate together yeah so um in a couple different ways this the there are eight service cooperatives in the in the state they're established by the state those and ours for instance is the Northeast kind of contains from here um and they have a couple pools one for school districts one for cities counties and other governmental agencies and so that pool the last time I was involved in it when I was in my previous job they had like 3,000 lives I think that they were uring um and they had you know limited plan design because that's another way you drive down costs and high deductible vas or hsas kinds of things and that group would they kind of they districts could get individual they were rated individually districts were but then were but then the group was also rated so a district might get a may may get an individual uh rated increase but the pool itself shaved off the high peaks and the low valleys so they might never give a 15% decrease they might only ever give a five but you know you're never going to get a 25% increase uh you might have a cap of 18 so that's kind of what and each each service Co-op has a pool like that and then there's also a public employees insurance pool um that has like 30,000 contracts or it used to the last time I checked um and that plan has had some rocky rockiness to it they were very aggressive in getting districts a few years ago and actually that was part of what got the law changed and uh this health insurance transparency act put into place um and so districts had to go out for bids and PE got a number of more districts but it's kind of been it's a big cost though help's a big cost for a school ship more than more than more than average so who do nine month employees all Factor Health they okay so the only group that doesn't get health insurance is the bus drivers okay I knew they didn't and that's kind of curious yep they have a higher wage they've negotiated that okay and to buy into our insurance our insurance is very expensive so to like swap salary for benefits it's very bottom line in negotiation with group that they that they were advocating for what is the number what is the number for insurance that we pay year um just that up car on um uh this eight is about other increases uh inflationary two gets to Tom comment earlier about buses included in our proposal is to purchase two buses again that's less than what we normally would do we normally would want to be purchasing four or five but any any Year we're not purchasing buses we are getting further further further on that so keeping other Capital Improvements just to requirements here sorry for that grammar problem but that's what we're recommending um and I think that's you know one of the things that's made our transportation system work is that we have good mechanics they take good care of our buses we haven't been running junk on the roads um you don't have to go very far to hear horror stories about equipment out getting taken care of uh and anytime that's happening we put kids at risk so uh we have a good Fleet but we're going to have to pay the piper here as far as budget reductions this is kind of how we've handled it in the past or thought about it um thinking about the have to do and the like to do and you're definitely in the have Todo category that's that's where we have to think that's where we have to act focusing on things that are mission aligned and then uh eliminating things that are not Mission aligned and then also what are those things that are crucial to long-term educational success and prioritizing those things um as opposed to things that might be good that we might like but in terms of long long term success not necessarily crucial to those things I do have a handout for you and in in the uh interest to time you know you can probably look this over at a different time but it's a sheet that we put together previously again just to think about as we're not that we're going through on some kind of a checklist but at least things to be mindful of as we're proposing and think about Productions um how does it impact students family staff how does does it impact our long-term Vision does it make it so we can't really execute on that what are the legal contractual obligations um and what are those things you know are reductions that we could make that would negatively impact enrollment I think there are you know things maybe we've done recently that uh I don't know that we realize the full impact of reduction because ofas en yeah I didn't even think of that that last right open enrollment nowadays I mean our school start times we saved some money by changing school start times no doubt did we lose some students because of that absolutely we did I'm not sure that we end up saving that M so and some things we can't really predict um next steps uh we meet next Tuesday like I said before we'll kind of uh take a little bit more formal walk through these and get handle on where the board's at at that meeting there'll be a resolution that we do every year especially years where we're making reductions but it's a pretty typical resolution that says as a board we're directing the administration to bring back cuts to us um Paras in the fiscal 26 budget now uh that'll get refined once we have a a sense of where you'd like to go uh communication budget meetings and uh options that will come back to you and there'll be it'll be an iterative process there'll be time for you know group discussions but also time for we sit down with you individually or in small groups to go over those production options what are the implications um one of the things we're thinking about is a feedback things like that longterm um K and I had a discussion about you know let's talk about this as our goal to be done cutting you know that that needs to be our goal what do we need to do to be done cutting and these are the five things we think we need to do to be done cutting I think part of it too just goes for the well-being of the people working too putting on them every year every year every year saying this time of year is tough for people yeah think am I G have a job next you know talked about the the personal factor of it well that's a big part of the personal factor is telling them every year Well we don't know yeah it's a tough way to live um these are the five things that we feel we need to do to be able to you know look our employees in the eye and say you don't have to worry about your job next year uh unless you're not doing it um balance that budget finish this year that way keep that fund balanced where we work so hard to get it make good decisions for next year do tough work on negotiations uh you know and then we need to increase increased local revenue and is it $1,100 a kid no it's not um how much I I think we need another thing in there too is bottom line is we just that information out there right that out to the public out to our legislators so that they can understand the implications of these short-term Solutions they're doing right and kind of getting in front of that before it happens hopefully instead of after right yeah right yeah some of these things I'm just like why don't you talk to like somebody that might be affected by this maybe just well and that's where we may need to be proactive on it rather than them waiting for them to come to us right I think our employees you know like you said they they need this they deserve this um I think this needs to be our goal our mindset like what do we need to be doing to not cut anymore and and I it's not an unre unrealizable goal like we'd be really close to that this year uh with some key key things happening but we' be pretty close to it this year uh so we work really hard to get where we're at we just need a little hard to get us to that next spot well we yeah and we just need to know we're even sustainable where we are too maintenance standpoint DIN and emplo Mark that's the end of the slide deck um ready for the top questions yeah warmed up Insurance costs are about 9.5 million the dist so think about that in the context of you know a $6 million budget six it's way more than average school district what do you think have idea um we do I don't we wouldn't have that here but we uh one of the things we did a couple years ago is take a look at districts like we we one other the things that our finance committee did I'll step back they identified a list of um maybe eight districts that are comparable to US size demographic you know Community outstate Regional Center kind of um and so we were able to get some comparison dat any other questions really budget related but you kind brought it up about um that you know don't and then you don't work your kind ofation do we have um any sort of um um like just monitoring um evaluations yeah we have yeah we have evaluation systems in place for all employes y it's actually one of my like um essential accountabilities for me is to ensure those systems are in place some of them I do some of them principles do some of them directors [Music] do and but when it comes time for cuts that's not what drives the conversation I guess that's where I was headed with that um yeah so uh oh I see so no um in when we are making reductions uh because of Law and contracts uh if we are reducing in a union position a union area the least senior person uh if they are probation is the one that goes and du we licens then or it's whatever yeah comes into it you know because obviously if you're cutting a geography how do you or whatever right yeah yeah yeah yeah that's an important distinction so if we are making a reduction in German I'll use that since we German anymore uh if we were going to make a reduction in our German program the least senior German teacher would be the one that would be reduced regardless of um performance performance yeah for evaluation right actually somebody's going to be eliminated because of performance that needs to be a separate function okay yep and that can can really that's doing with per with those performance evaluations is it's kind of uh really can't be used for much anything other than right that's correct potential missile that point that was a part of that out YK Y and at the end of the year we evaluate mat on how well he evaluates the district I'm the uh I'm the the uh ultimate responsib and I'm I'm the exception to that you know my performance does determine whether I have a job or not well as those ours because the voters yeah everybody's accountable to yeah Works any any other business I think what's interesting or what's important is that this conversation is now in the public sphere and obviously I think people'll be doing arm grabbing things like that I think um uh as we get into next week and we get more official with what our direction is and what not I think we just have to be very trans arent very I don't know I think we from an orientation standpoint it would be helpful to continue to hear tips and tricks of going into the cycle for new of what you know going into negotiations going into these Cuts going into planning into the future just so that if you can help us avoid stepping into a Mind Trap I guess the one thing I would say is we're all individual board members but it's the board that makes the decision and be really really careful about making a statement that represents the board you know um you know it's it's always easy to go into the listing mode but as soon as you provide the feedback you know then then you get into some challenging areas you know I mean it's the same in every business you know and you have to be real careful on negotiations too you know um you know we negotiate as a bargaining group and and they have a bargaining group you know and you don't want to get outside of that that sphere the other thing I'd say and I mentioned this in the training um there will never be a more opportune time to try to split the board than right now um because uh we're just getting started we headed into challenging times um three of you just got elected and you know it's like oh asley owes me a favor so um like it's never going to be easier than it will be right now and so these uh commitments to each other and to sticking together uh are really really important right now because people are going to test they're going to test it a good friend of mine has told me you need to lead with facts and not feel so that's a big part of like the splitting the board or having people come up to you individually you know and like Mark and that adds on to what Mark is talking about too you know don't have it's hard not to have conversation I'm it's fully transparent I'm friends with a lot of Staff members so it's really difficult to make sure that those conversations are like please don't talk to me about that I can't I can't do that with you that's not oh I'm sorry you're right I apologize you know but I did have to ask that question to Julie like listen can I hear that can they can they talk to me about that can I listen to what they're saying or like where does where does that line then become now I've crossed it what how does that work out so and of course Julie always answers given to me so she's smart she's totally smart um so yeah so it's definitely been it's definitely been a learning curve of I'd appreciate it if we don't have any conversation ations about much of anything right now give me a couple of months and you know even then that's it gets kind of goofy but yeah okay any tips and tricks please and thank you this is very helpful okay good that was a goal right like deeper and clearer understanding where we're at you know try to get us in a position so you can kind of wrestle with this and come the next Tuesday uh head on some things if you have questions uh you know feel free to reach out you know never hurts to defer those questions to Matt or Cara about Finance you know and it's it's complex enough that you can just kind of walk into a a bad situation without I think what you said when we were stying around on Friday is important to you imagine that is the work that we do here is really hard work and it's really complicated and you know it's not a Rosy picture but the what who we do it for and being able to spend time in the schills like we did encouraging and uplifting and um so you know wherever we have the opportunity I would say do continue to send those opportunities out to us whenever because that's the part that um you know balances the work that do here true anything else work jop Jour okay thank you everybody [Music]