Regular meeting of the board of Monday, February. completed. for a motion to a motion and a second to approve the agenda. >> Second byman.
Any discussion? In favor, please say I. >> I carries. Uh, next item, item six is the approval of the consent agenda. Look, uh, looking for a motion and a second to approve the
consent agenda. Moved by Director Domen. Second >> by Director Peterson. Any discussion? >> Say I. >> Item seven, we'll go to presentations
and recognition. And we'll start with the NAPAC, NAPAC and presentation of the annual compliance vote. >> Good evening. Um, can you hear me? Okay, perfect. Good evening. Um, I'm here on behalf of the Native American Parent
Advisory Committee or NAPAC to present the annual vote of compliance. My name is Ally Middle. I'm a district-wide social worker and outreach coordinator, and I'm the district representative for the NAPAC. Um, this is my sixth year in the district, and this is also the district's uh sixth
year having a NAPAC. So, a NAPAC is Native American Parent Advisory Committee. Um, at the state level, this will often be referred to as an APAC or American Indian Parent Advisory Committee. So, Minnesota statute states that a school district in which there are 10 or more Native
American students enrolled must establish an American Indian education parent advisory committee. These committees serve an advisory role and help ensure that American Indian students are receiving culturally relevant, equitable education opportunities. And just note that our
parents um did a couple years ago decide to rename our team to the Native American parent advisory committee. So, you'll hear me refer to it as the NAPAC. We currently have 63 children from 46 families who identify as Native American in grades K12 who attend schools in our
district. For the resolution of concurrence prior to March 1st each year, the NAPAC must discuss and vote on the resolution of concurrence. So, as a district representative, we met on February 2nd at a regular NEPAC meeting and I
presented some data about how about our progress on on our goals from um that we established last year. And when they reviewed the data on those goals, um then the NAPAC has an opportunity to vote in concurrence or non-concurrence. In concurrence, they find that the
district andor school board have been meeting the needs of Native American students. Um and so a representative of NAPAC must then share that vote with the school board. And this year after reviewing the data on our goals, our NAPAC voted in concurrence.
So a brief update, the NAPAC meets five times per year. Um last year and this year we are having four regular school uh meetings and then the fifth meeting is an endofear celebration event. Last year was um our first event that was a lot of fun and I'll talk more about that
in a little bit. But each year in consultation with the NAPAC um the district applies for and receives American Indian education aid and the goals I was referring to earlier and the data I presented on the progress of those goals relate to these goals here with that um state grant. So, it's
supporting post-secondary preparation for our Native American students, supporting the academic achievement of our Native American students, making curriculum relevant to the needs, interests, and cultural heritage of our Native American students, provide positive reinforcement of the self-image of Native American students, and develop
intercultural awareness among students, parents, and staff. So, um, continuing our brief update. So, some programs we have in our district that support those goals I just mentioned. Um, we are continuing always to do outreach and improve our outreach
to our Native American students and their families. Um, we hosted a community building session for our Native American high school students this year on Indigenous People's Day in October. We um are continuing to collaborate with district 622 American Indian Education Department on family
culture nights and inviting them to attend the Mamemidai hosted end of year celebration in May. And this May will be our second one. So, we're excited about that. And then also offering ACT prep course and college application fee waivers. And then coming up, we continue
to explore tutoring andor literacy enrichment opportunities. Um, one of those is building a Native American resource library that will support and promote literacy and cultural enrichment. Um, and then you can see there on the slide a picture of these
beautiful beaded medallions. We've contracted one of our NAPAC parents to make those to for our graduating native seniors. This year we have six native seniors graduating which is exciting. Um and so she's working real hard on all those bea medallions because they take
quite a while. And then um offering professional development opportunities for staff when possible center around Native American history and culture including the upcoming um MIA conference, the Minnesota Indian Education Association conference. And then um I forgot to mention as well that
other picture on the slide there of those students that was from our end of year celebration event last year and they're at the activity center making um dream catchers. So that was a lot of fun. And that concludes my um update and presentation on the annual vote of
concurrence. Are there any questions I may answer? Yes. Yeah. Oh, sorry. your determination. >> It's offered to any of our um identified Native American students. And so I just push that information out that that's an
opportunity available to all the families of of those Native American students. Thank you. >> Thank you. Next, we'll move on to item eight, uh, report from student representative Matt. didn't
feel anything. Beautiful. Excuse me. questions do you have for Matt? reason what you needed at this moment. Go back to the medallion because that sounded super fun and uh I hope Mr.
keeps leveling that one up because a lot of kids, one of mine included, was very, >> what did the winner get again? Remind me. Thank you, Matt. Let's move on to item nine.
around the district. part of my district. First of all, So, one of the things you about what you're specific classes you've been hearing about here. And that you get a chance
every year. I'll go first. Um I had was fortunate enough to have the opportunity to join the Wildwood Boardwalk. Um and there's two things I'd like to call out. one. Um really interesting and um exciting to
see things like letters and wisdom in progress and seeing how how um how the teachers have embraced it and how far along they are in the implementation of it um was really
surprising to me in a great way. Um so cool to see as a district that we're implementing these innovative strategies years ahead of other metro schools and requirements from the state
um really is in my opinion a feather in the cat for our district the way we're uh very seriously attacking our literacy strategy. So really cool to see that in action. Um, and then I'm sure I speak
for, you know, the board here. Um, anytime you get an opportunity to see the teachers in action, it's great. But specifically the Wildwood teachers are so tight and have such a strong bond. You can see the way that the work they
do from kindergarten to first grade to second grade builds on what was done the year before. Um, and they're just such a cohesive group of instructors. It's really inspiring and honestly just proud to be associated with they they really
are fantast and uh two things jumped out at me. one was uh the opportunity to see the AVID uh classroom um and seeing these students that were able to work together and I spent some time talking with the students and one of the things I said is we really appreciate this time. We get to connect with things. We get support
and so really for the for our district to find opportunities to identify students that can really benefit from that kind of structured uh activity during the day on a consistent basis is really one of the reasons that I'm so excited to see our what high graduation rates we And I think last year we at
100%. I think was or the year before. >> It's hard for me to know because >> Yep. >> pretty close. Okay. >> Okay. >> Either way, it's clear that we've identified the opportunity to help students um achieve what they're looking for both in the classroom and high
school and then what their next steps may be. Um, so I really enjoyed that and you could tell the students just really craved that time and the support they had from each other during that time. Um, uh, the other thing I enjoyed talking about was we were in one of the business classrooms talking about the students were learning about business
and someone who teaches business at a college level. I was so excited to see the interest in students talking about uh, either personal brands and company brands. they were trying to identify different uh brand and logos and what it meant and sort of making that connection which I think is another way for them to continue to think uh what their what
their interests might be right where their passions are um and have them work in some whites space material and um we can see the rise of the DECA program how that has just absolutely increased over time um it's really been um just impressive when we provide the kind of opportunities that students are interested in they just flock to it uh
and a lot of them are are flourishing and doing really well so it was exciting to see those sorts of things firsthand um in the classroom. Um, one of the boardwalks I attended was OA and the takeaway, the big takeaway for me.
talking in one of the special doing small group meeting and it was it was great to see how you know it was great to see the interventions in action
easy and I think there's there's always room for growth throughout the district and helping to identify those kids need that extra help. It's good to see how
helping those directly classroom all classrooms and they all have it. But the tricks they use and the positive the um redirection instead of redirection they all use when they hear a little swirly body moving or a kid starts to
chatter. They either have a or a snap or a word they use and the kids know that all right enough noise time to focus now and the teacher can just keep rolling. There wasn't a lot of stop behavior or noise or fidgeting or anything. They
just have those down to they hear a word and associated with we're moving on shape up. I thought classroom management in every room we went in was fantastic. So I I don't know. new standards. I know that's been a lot
of work. And just to follow up on, we also saw science specialist Um, so today we had a facility meeting and What we've been working on more to come with that.
>> You we talked about this another time. again dialogue around and in particular if you recall we started in the workplace that's our topic We also talked about the idea that we
would start here and then more to come. We would start community don't have it coming soon almost I think 49 students are advancing
seven great students And so in fact the facility community and that was because at any rate um it's exciting to We also had students neurosience participating um um
again another club went through all this already for you, but I do have the names here of >> I don't know if you watched I went back and watched Georgia um upcoming.
There's a very nice story about him. Great story. Upcoming events. Friday, Saturday and Sunday. >> All right, great. Let's move on. Um item 10, a discussion information item. Let's start calendar of events. You have a
calendar in front of you. Any questions or follows you like calendar that um April 27th is the next coffee and conversation that we're having here and we had one this evening and it was well attended and it was great
conversation with community members. So if anybody's watching at home, come on in and have your opportunity to talk with the board member. I really appreciated this conversation. Well, we've done it with in the past. >> We've done it. Next item 10B is enrollment.
That is me. That's right. All right. Okay. Um, >> I just want to I just thought I'd give you an update, but context out there and
Um, we follow parameters to determine how many we use it to. We have based on that. Um, and these are these are I just pulled out
that sometimes uh I have um numbers as of now. Um next fall, but not have kindergarten numbers for you.
Um because our for all the students um who are lived here at some point and we expect their child back. They may have
and then there are some I highlighted two capacity. And we leave some space for what also happens at now our secondary starting. And so they take those registrations and
then they try and because of that we get a big And there are some class that can get even though student moves in later that's level three. we may not have room for that
student class. So I mentioned that we have 1150 there are times that even if we're not quite there we can't take because we have the overall number is
1150 space we have and that happens because secondary staffing. Um so at any rate this is just for me to update your
last year. Uh so the highlighted numbers does that mean that you will announce to anyone else calling in or applying that it is closed or will you just tell them it's now waiting?
>> Our process at this point And then this number We got it wrong. had a lot of first graders. Next year class
uh question and a comment or request maybe. First question is if you take like the first grade number of 197 what happens if there's some something changes and all of a sudden we handle something
we monitor I think >> well that had already I think we had more moveins than it was it wasn't that development was already in place and we just had a lot of moveins that year that were unexpected and
open enrollies had already been accepted and then all the and we also had some students who hadn't registered maybe already lived here but hadn't registered with which is kind of weren't
>> Yeah. And so um we weren't expecting as many um and then back weren't expecting at that point. So, >> and I guess my uh request would be we've talked about it I think I don't know
years here. It's been quite some time we've analyzed and I know that there's some hurdles to how we would do that type of assessment. I don't know.
I think it would be really helpful to do community demographics. >> Are you >> Yeah, it' be a financial assessment. I think that's But um there was a right size study to determine the idea of offering
options. But they're my knowledge. >> So I don't know what that would look like in our classes. Yeah, fair enough. And I'd want for input on it.
We could certainly have my brain at that simple kindergarten financial money in money out of an open enroll. financial benefits. So,
>> yeah, I think that's I think that's what I was wondering based on your two questions like what's the objective of this? I mean, I I again, we've talked about it when Stacy and I have been on the board. We've had this conversation. I just
would want to make sure that Barb has what we're looking for the right things because it's a pretty big topic. >> I would just add that when we have a study session on it, it would be helpful to have the history of what that study
was and why they chose the right size and how we ended up getting the model we have. We have a unique model that we have fewer numbers of students up until what sixth grade or is it up until fifth grade and
then and then we increase our population by grade which is unique. That's not typical in in a district. And I think it would be worth the the board who hasn't been here as long to to hear how that is
unique, compare it to other districts, um and then why we landed where we did um in terms of picking the number that we wanted to be graduating each year, which was not done by anybody at this table. It was a long
time ago and we've stuck with it. has been successful as far as we know. But I think the point would be to learn are we still on the right track. >> Yeah. I think from what I remember in the previous year's conversations, one of those things that might be a yes and
that would be the opportunities that it affords our students because of the numbers of student where we're at with enrollment and open enrollment. We didn't have open enrollment. >> Thank you. Moving on. Item 11 A is our
action item. Um, we'll start with the for approval and a second to the donations and grants for January 26 totaling $6,8994. All donations and grants are greatly appreciated. The use of these funds will be to further the mission of the school
district and are used towards the wishes of the donor. Favor say I >> carry. >> B is the approval of the independent auditor. >> Good evening. So Jim Iketon uh the
partner with LB Carlson is here tonight and he is going to present he is going to present a uh a slideshow for you and talk you through the the bigger points of the audit and then I'll open it up for questions. So with that
I'm going to have Jim come on up. Members of the board, superintendent, uh Jim, thank you for the introduction. My name is Jim Iikton with LB Carl and CPAs. Uh I'm going to first uh start out with my conversation. I do want to apologize for my lack of attendance last
month. Um I had planned to uh do um two presentations in one evening and both of them were fairly closely located but I misanticipated the level of needs that were at my previous presentation. So I apologize for my miscalculation
uh of timing on that and I'm here this evening to uh present the information. So again I apologize for that. Um uh so this evening I'm presenting the uh uh audit results for the year ended uh June 30th, 2025. Um the the district is
required to uh have an annual financial statement prepared uh as part of your annual financial re results. Uh that particular financial statement is uh um prepared by the district with the support of the auditors. uh the district
does actually uh expand that particular financial statement to prepare what's called an annual comprehensive financial report. That particular uh document is submitted for achievement in for recognition of financial reporting by the association of school business
officials. It's about 150 pages long. It it has a significant amount of information in it. If you get an opportunity to read it, I see some paper copies in front of a few of you. So uh um it's a it's a great read if you're interested in in the numbers. Um so the
role of the auditor then is also uh to uh audit your internal controls specifically over financial reporting. Um we're also you know auditing your compliance with laws and regulations uh as part of uh both a federal audit as
well as state audit regulations. So, I'll go through um was where am I pointing? There we go. Um so, the audit results of this year would uh
include a single audit of federal awards. Uh the district is required to have an audit of your federal dollars if you're if they exceed $750,000 of revenue, which is the case. Um the federal government was delayed in issuing the compliance supplement as
indicated. The compliance supplement is really the regulations that we follow to complete that particular audit. They were delayed and as a result the Minnesota Department of Education has given us an additional three months to complete that process. Um uh that particular process is ongoing. Um and we
will be issuing those reports prior to that deadline. Uh so most likely you'll get uh you will get the audit reports issued. The question of me being back here to present them is is up in the air depending on the results. So we'll follow up on that when we get
uh so in my in my documentation and in my information we also issue what's called a management report. In that management report it's really a document that you could read and understand the results of the audit. You know really without having a presentation um but my goal this evening is to present the
highlights of that particular document and get uh and have the board accept the audit results as presented. So, first and foremost, the district's financial report that I mentioned, uh, we were able to issue a clean opinion that is defined as an unmodified opinion. It was
the opinion you were looking for kind of going into this process, the cleaner clean opinion, not financial statement. My audit opinion did highlight a matter related to the implementation of accounting standard Gazsby statement 101 on compensated absences. Uh, the opinion
is still a clean opinion. It's still a good opinion. It really just highlights that that particular compensation or that calculation is significantly different. Um Gazsby uh changed the definitions and how we account for really compensated absences. In this in
this case it's uh sick leave and and vacation are the main drivers of that calculation. um really doesn't change overall your your decision- making on the fund based statements that you have in your general fund and the various funds. It's mostly
a financial reporting item. Uh but it is important nonetheless for the reader of that financial to understand the significant change there. Uh as it relates to internal controls, the district is uh does and has been under
a model of having inadequate segregation of duties or limited segregation of duties in your business office. um as a result of that particular um reportable item I'll call it uh we uh do alternative procedures we do other procedures to look for and identify
compensating controls if you will and verify that other controls are overcoming that limitation um so when I look at that particular uh um item I call it a reportable item I really don't like to call it a finding because it's really something that it it is is does
it need to be corrected the district really isn't working on correcting it nor nor should you be. Um it's really not necessary as it relates to this resation. So the other uh area there noted is there were no other findings specifically in the internal controls or
financial report. And then lastly I mentioned your compliance with Minnesota laws and regulations. Again we reported no findings in that area. So overall when you look at the compliance uh results of the audit there were no findings this year. exceptional results. Uh, exactly the results you were looking
for. I'm not sure I have a slide on this, but it's also important to reflect on last year's findings. There was one finding last year related to withholding affidavit. Uh, and uh, we do as part of our testing, we follow up on all of those findings to verify that the
corrective actions were taken and implemented correctly. Um uh and as a result as of that particular uh testing we did not issue another finding as it relates to that which is very very important as part of an audit process that you're clearing up last year's
issue. There it is. See I did have I did have a uh so following uh so so overall again your compliance u requirements are are are exceptional no findings to report. So the second part of the audit really
relates to financial results. Uh I mentioned the compliance area. Second part is financial results. In my report, we do provide some information on fund balances. Uh this is statewide information um that is on this particular presentation. Uh it's using a
widely used percentage um of your or of all districts fund balances as a percentage of expenditure. It's really uh a tool and a calculation that's used by your district and by most district but also the Minnesota Department of
Education. So this is the MDE's calculation. The yellow graph is really showing fund balances statewide um have really or had been relatively stable at 20% and had been for even years prior to
2016. As we entered the pandemic, actually fund balances went up um as operations changed became less costly to operate a district in in the pandemic era. It's a bit unusual or counterintuitive, but that's exactly what happened. There were fund balances
went up because of that. And as we came out of the pandemic in 2022, fund balances went down as federal dollars became less available um to uh the districts and some of those uh extra fundings went away. some of the fund
ball to start getting used in our state in 2024. What we saw there was an additional funding that took place at the statewide level. Uh many districts took that as a one-time item and decided to defer some of those dollars into future years. So, it it is probably a
one-time uh increase in fund balance, which will ultimately see being spent down over multiple years. The green uh presentation you're seeing there is the district's fund balance. Again, these are MDE's calculations, not not yours. Um, and as you can see, your your fund
balance as it that went down in in 2017 2018 has rebounded uh to increases over over multiple years uh to to equate to very similar results that you're seeing at the statewide level. For 2025, um
there was a slight downturn which was really anticipated in the district. We'll get into individual results um of individual funds uh now. So this is a general fund financial position showing uh the district's financial position
over the last 10 years. We use cash and fund balance as as indication indicators of of financial well-being or equity and expenditures really to show the volume of your your organization. So the district's about a $50 billion operation. It's increased from a $40
million operation only four or five years ago. So there is a significant growth uh um in overall operations at the district. Um for the year ended uh June 30th, 2025, uh the district's fund balance
overall uh uh decreased by about 300,000. The budget anticipated an increase or decrease of about a million 1.1. So you were better than than what was anticipated in the budget. revenues were uh over budget by almost a million and expenditures were less than budget
by about 600,000. Really an ideal result. Uh as an auditor, I love those words. Revenues above budget, expenditures below budget. Exactly what we're looking for in an audit. So we do have information specifically to on this particular graph showing very detailed
uh information on fund balances. As you can see there, uh your total fund balance went down of about 300,000. the unassigned amount went down about 1.5 million. You had some assignments that went up and then the restricted balances. So,
I'm going to cover a couple of items in specifically in this particular presentation right here. Um, first and foremost, the restricted balance you're seeing there uh does show a deficit. Most of that deficit is an approved deficit of your operating capital u
restriction. uh that particular restriction uh is typically uh you know near or at zero then Minnesota Department of Education approved a three-year funding plan to allow for a deficit and then that that funding plan
will be go back to to normal levels over a three-year period which is why you're seeing a deficit in that particular category. uh in the assigned balances you're seeing there. Uh there's multiple uh numbers in that particular area. Um but probably most noteworthy is the uh
amount uh an amount was set aside for the deficit that was approved for next year's budget. So next year's budget deficit is actually sitting as an assigned amount of roughly 1.1 million. Uh other items that are in there include
building carryover uh dollars, some donations, and some built vehicle replacements. Lastly, the unassigned fund balance. It's important to understand that that particular fund balance is guided by a policy. The district does have a fund
balance policy. That fund balance policy states that you'll strive to maintain a minimum unassigned general fund balance of 8% of total expenditures. The bottom line on that particular presentation is that fund balance policy
unassigned fund balances percentage of expenditures and you can see it did go down this year um mostly related to the changes in that assigned balance u and but did end the year above that 8% minimum that you have as well.
So, so really uh overall uh the expectations, you know, were met in terms of the budget as well as the expectations were met in terms of that budget. So, moving forward, I I wanted to highlight some of the things that are happening in your general fund. This is
a graph graphical presentation of general fund revenues. Like I mentioned, revenues were above above budget by um about 800,000. Most of that was in general education in special education, state aid. uh those formulas uh uh as they relate to special education in
particular are very complex um and and really uh mostly related to increased costs in your expenditure in the special ed area. you received additional revenues. Um uh other areas of of note and you look at that graph, you you also see some experience in the federal
dollars declining from one year to the next. You have about a million dollars less federal um rel really related to the pandemic era. Those pandemic related dollars are declining if not eliminated fully as as we sit here today.
on the expenditure side that the expenditures were uh um real close to budget. Uh and they were uh lower than budget by um about 600,000 I believe. Um most of that is in a couple of areas. Um
salaries and benefits is one area where that were less than expectations in the budget. um those were offset by um increases in in purchase services specifically for special education students purchase services higher than
normal. Um in my report I also reflect on some of the increases in expenditures. Most if not all of the expenditures increases that you're experiencing are being experienced by all districts in the in the state. special education, health insurance are two two areas that you're
experiencing increases and I probably send that at every district I've stood in front of. Those two areas are areas that are hard to control right now and areas of increasing costs. So the district does have a number of other funds. These funds you can see
here including the food service fund, the community service fund. The financial results are are doing quite well above expectations in the food service area. Uh you can see there that uh um um budgeted amounts were this particular fund exceeded budgeted
amounts mostly related to state aid. Some of the additional state aid for food services impacting that area in the community service fund that that met expectations if not exceeded your budget expectations but mostly an extended day program um increases in tuition fees in that
particular program that were better than anticipated. very good results in that particular space as well. And then last, I just wanted to mention that that you have a capital fund as well. The capital fund is sitting at about $2 million. Most of
that is set aside for long-term facility maintenance projects, LTFM projects, which is also very stable uh in that space as well. So, I mentioned other funds, building construction fund, there's a debt fund, the district does
have a self-insured dental fund as well as something noteworthy to talk about there. Um, one area I want to mention, my report does bring into account other other accounting and auditing issues and updates. It's been probably three to
four years of very significant changes in governmental accounting standard including the one I mentioned on compensated absences. There's another one coming on financial reporting model improvements. Fortunately for the district, most of that's going to fall on me and not less on the district.
Whereas most of the last three years has been district impacted. So that's the end of my presentation. I did issue a clean opinion on the financial statements. We did have the one finding to report which really is mostly a reportable item. As mentioned,
I will follow up with you on the single audit federal awards and you might get to see me again. Hopefully not. That means there won't be a finding. Uh changes in fund balances are very positive. you met your fund balance expectations in the policy space and uh you know did everything you needed to in
the accounting space. And lastly, I wanted to state the last item on the board. Um the district is very committed to an audit process. The district's team really focuses on the needs. I followed up uh um just just on this particular
audit with the superintendent prior to issuance. I've actually been here once already kind of following up on some other areas of improvement that that district requested me as a result of some of the recommendations that were made as part of this project. So the commitment level is very high and and
that's important but it doesn't always look like that. He should be commended for that. So with that I'll open it up for questions. Um, thanks Jim. Y good to hear that we've got a obviously a clean clean opinion. Um,
we've heard some other stories from other districts, so it's good to see that uh we have a clean opinion. Um, so can you I know you've explained this before, but I think it's worth maybe just taking a minute to do it again. Can you re please
reconcile the difference the way the state calculates fund balance versus how our district and all the other probably districts in the state calculate fund balance because people hear 20% and now we we talk about 8%. Can you just
reconcile that for us? >> Yeah. So the the Minnesota Department of Education follows statute in most everything that they do. Um so this there's a statutory of reference to statutory operating debt which is um
ultimately used by the department of education to identify districts that are struggling. So their statutory operating debt calculation which is written in statute uh takes in certain fund balance categories and excludes others just purely based on statute. Um, some of the
categories that they're including in their fund balances are are assignments would be one. Uh, they include certain restricted fund balances in their calculation as well where you're excluding them. But the biggest piece is probably that assigned balance.
They include that in their calculation where you're you're as part of your fund balance policy excluding it. Um part of your question I took out of that which is u uh you stated most other districts are using a different calculation which
is true most if not all um are using very similar fund balance policy that you do some have slight variances but your fund balance policy is very consistent with what you're seeing in most districts. Just a followup and what can you give an
example of an assigned do you know an assigned um an assignment within that fund balance that we would make that would that the state is not making? What's an example? Uh so this you have four assigned fund balances. Um, those
include vehicle replacements, assignments for next year's operating deficit, which was approved by the board, assignments for building carryovers, meaning, you know, a bu a certain building at a budget that they're carrying over into next year. And lastly, assignment for donations.
So, somebody might have donated something to the district for a certain cause or certain item and you haven't spent those dollars yet. So, you assign future spending. Those are the four assignments. Um, and the the Department of Education doesn't they just don't
take the same size one of the key indicators. It seems as though year over year that's something that's not as far on the
can we do about that because that bothers me that like we um you're not alone in in your observation um of that particular concern is to well what we can what can we do about it how can we eliminate
The pure answer to that question is more people. You would need more people within the business office. So the best way I can describe it is a flow of transaction in accounting has to has to be properly
segregated by people to have appropriate segregation duties. So for instance, a cash receipt transaction probably would need to touch four or five people. right now only probably touching two. A cash dispersement transaction needs to touch
to have appropriate control structure. You have multiple people checking on each other. And um the district, if you will, just based on pure observation is determined that that cost is not does not cost does not always the benefits don't
always. Um so they're choosing not to. Um, we've had districts in them and that are at your size that have gotten to a conclusion that says, well, you know what, we're going to hire those people. We think that's important and they do that and they eliminate that finding and
that's kind of, you know, back on the district to I can't decide that for you. All I can I do is evaluate where you're at. Just following up on that, I know you probably don't want to comment on
changing course, but would you say it it's fair to say that it also is a positive for us that we run a tight ship with our administrative cost? >> Absolutely. Yeah, it it is an important
item that you're running an efficient operation. There's some data points around that actually in my report. go to it support what you're saying. >> It's one that I've come to expect that you're going to say
>> every year I'm like that on there. there a benefit to removing that finding and if so what would it be? Yeah, the only benefit I mean so these reports let me just take a step back. These reports are being submitted to the state of
Minnesota state auditor Minnesota Department of Education as well as OM which is office management budget federal government. Those are the three agencies that are getting these. Those are the required agencies. Other agencies are actually um requesting them. Uh S&P probably and other other
bond agents would also request them. we're not required to send you're not required to send them but typically you can do right so probably the only factor those first three government agencies they they read it and say yep got it thank you so there's not a lot of change
or impact on that particular state but could it could impact your bond rating um from that standpoint as a finding I in my 35 years of doing this have never that's a strong statement ever had somebody come to me and say oh yeah we got rid of that finding and improved
It really doesn't impact at all. >> Thank you. >> Thank you. Thanks. >> Um with that, um seeking a motion and second for 11B approval of the independent. Any further discuss
In favor say I. >> I. >> Item 11 C. A lot of numbers tonight. Here's a few more. So every year we come to you about this time of year and we go through and make
some budget modifications and updates to our budget. And so I just I want to run through a few of those reasons why we do this. And one of the one of the really important ones is when we start to get into the multi-year projections, we want to have a good base to start from.
That's one of the one of the big ones. So we'll be bringing multi-year projections to you soon. um so that you'll be able to look at that. But this is this is kind of the start of that process. So every year of course you approve the preliminary budget and those
and that's a great word because those numbers are very preliminary. We we have numbers from the state that are in that are not finalized. They change. We keep seeing reports that keep getting updated on on MD's website and there are hundreds of reports out there that we
can look at. Um but that's that's another reason um we're going through when we look at enrollment changes as Barb walked through that with you. Um we you know that's for next year but uh enrollment changes constantly in the
district. So um we wind up trying to get rights make sure that we're getting the most up-to-date numbers. What you're seeing in that preliminary uh budget are a lot of that is numbers based on last year plus where we think those enrollment numbers are going. So, uh, we
have more solid numbers when we get really to the middle of the year. So, uh, that's that's one of the other reasons we do it. Staffing updates, of course, um, not all when we present that budget to you in a preliminary FA fashion, not all the staffing is known
at that point. Some of it is, but not all of it. Uh, we have finalized labor contracts. So, back in December, you approved the education association contract. That's a big one. So that one is finalized and we're able to again sharpen our number now that we've got
that contract and the impact of that. The next thing as I as I mentioned changes to previous estimates and assumptions. Uh those are all those different things and then once in a while we'll have legislative changes. If it's a b if it's a new bianium year we have a lot of that going on which we're
coming up on. So um those are the reasons that we come back uh this time of year to do changes. So if we look at the overall um changes for this year, uh so revenue is increasing 763,000.
So it's a 1.48% increase in revenue. So that's in the right direction. That's where we want to where we want to see that go. U we also had an increase of 444,000 or 08% on expenditures uh from that preliminary
budget. So go to the next slide here. >> All right. Can I'm not What's the denominator for both of those numbers? Because 763 is of 1.48 and 440,000. 08 doesn't seem proportional. Am I looking at the wrong >> Well, let me here. I'll get I'll let me
get to that. I'll get that. >> Oops. So, should have similar. This should >> So, what Okay. So, so if we look at I'm just going to run through this next slide so you can take
a look at it. Um, so when we look at um the revenue side of things, so the general ed aid and property tax, uh, we had a we had a bump up a significant bump up in pension reform and that was something that hadn't been finalized
when we when we went and approved that that first preliminary budget. So that increased our revenues by about $500,000 alone on 580,000 as a budget impact. And the other part of that was enrollment looking at those enrollment changes etc.
So we had a $580,000 impact to revenue. So that was by far the biggest increase for our revenue. That's not something we would normally see. But the pension reform act, what that did in the end is um they they did
uh our our TRA rates went up, but then uh the state somewhat made us whole in that when those rates went up. So that was uh that was the change, a positive change, and that's a big bump up. The next one was a grant. Uh we had a grant
for $80,000. It was a cyber grant, statewide cyber grant, uh, that we applied for and were able to receive that. And then federal aid, $103,000. And that's a lot of that's due to timing. Federal aid is a little bit um
it's got a lot of flexibility because they're we're able to claim into the next fiscal year. So, uh, as special ed was looking at their expenditures, they had some additional claims that were really related to the previous year. So, that bumped up our federal uh federal
claims and I'll go to the next page. Thank you. All right. Next page is expenditures. So, preliminary to revise. So, salaries and wages um changed by $133,000.
So, that was on $28 million. uh of expense just to put it into perspective. So 048 change and then that was uh largely related to staffing changes and then settle contract. Those are big more
bigger areas of change there. And benefits benefits um on 12,750,000 of expense uh went up by 242,000 or 1.9%. And again, we looked at the settled
contract. Um, we looked a lot of that is health insurance. And when we looked at that, a lot of it when we drill down a little further, a lot of that's due to we have open enrollment for benefits. We have people changing between single and family
plans. Uh, we also have we have replacing staff. uh it's uh one of those numbers where we don't always know if an incoming staff is going to have health insurance right away or not in that preliminary budget. So it's just again going back and looking at those numbers
uh now that they're solid. So that is excuse me I'm I'm coming down with a little bit of a cold here. Um and then purchase services and supplies. So roughly when I look at that um increase
there $69,000 that is uh about half of that is in facilities and grounds related. We've got our facilities and grounds costs are going up and uh there we have we have suppliers that we've got pretty good pricing on but again um we
have we have to uh absorb things like snow plowing costs continue to go up even if we have a a short winter. sometimes we we're committed to a certain amount. You know, the contractors want us to lock in an amount. Uh so those are the things that are really um making that making the
bigger changes on the expense side. Okay. Then I'm going to go to the next page. So um for 2526 the revised general fund balance projection when I go to when I read along that top line just reading across
we've uh we had our had our ending balance at 3,282 that was uh and then we add in add in the revenues and expenditures and these are the new updated ones and so we
project a fund balance at 63026 of 4,545 five. So that's about 8.59%. Um and then when we go I'm going to get to this middle part which is um which is there's a lot there. As Jim mentioned
before, I mentioned some of those assigned fund balances that we have. So vehicle replacements. I got the subsequent year's budget deficit that's required to be put into assigned fund balance and that's 1.1 million. And in the subsequent the year
two we were able to also assign a partial uh in our projections we have that second year where we had also had a deficit budget and that was 944,000. So that's a partial a partial year uh that we were able to assign. And then we've
got the assignment for operating capital deficit. Um that was the plan that was the state approved plan for us to operate a deficit for three years and then after that three years we have to have that deficit down to zero. So there
we had u we've got we set aside 700,000 and we need a million50 to uh make that deficit go away. So that would leave us with 350,000 left for the for the third year of the deficit. So, we'll be able
to eliminate that deficit. We're on track to eliminate that deficit. And then we have Signment for donations um that are you they're earmarked for other things. So, excuse me. So, we've got um if we look at that, I'm going to say
I've got the two asterisks in the middle there with the subsequent year's budget deficits. So, we'll revisit those again, but I'm sliding those up into the 4 a.5 million because right now we don't know exactly what that will be or even if
we'll need them because we have the $2 million operate uh the $2 million operating referendum which will be fund we'll receive those funds in 2027. So we'll look through our projections, add that piece in, and that deficit will
probably it be eliminated or very very small at this point. So we'll slide those two in. Uh so any questions? I think that was my last page. Yep, that was my last page. So any questions? Um, no, but it doesn't. Um, the last
year at the end of 2025, we had a we ended up being pretty positive because we had a late payment from something that took a couple years to sort out >> related to help me. >> Was it you're talking about the operating capital? >> Yeah. Yep. There was from the state that
came in pretty positive from what we had forecasted because it was hard to include it. >> Uh, oh, that was special education. >> Special. Do you think are there other onetime items? Is there is there a three-year lag on that? Could that be layered into this? Do you think we're going to see those same kind of onetime items you can't forecast?
>> You know, I I think with so special education that just annually it's a tough one to predict and I would say we're, you know, pretty conservative on that number because we it's not guaranteed. Yep. >> They can't put it out and tell us uh
this current year what it's going to be. Uh, so there's that lay. So the leg you're referring to is a two-year lag because it's based on actual information from the previous two years. So we're always pretty um and there's a number of different thing there's a number of
different pieces to that. I'm talking cross subsidy um aid that was in there that that's the one that one popped up significantly. We have a bit of a trend though. So, um, I think we can follow that trend now, now that there aren't any big big changes to that, but we're
still pretty conservative on that. What would you say was the middle of the road projection? This is conservative, but what's the middle? What the 50/50 shot if you had to pick a number? >> If I had to pick a number, >> high or equally low >> for for the special education.
>> No, for like where we're heading here, this 8.67, six, seven, like how much if you had to pick a number, not conservative, not aggressive, but just down the middle of the fairway. Where where do you think we >> down the middle? Okay. >> Yeah. How Yeah. How much squish is in?
How much? >> Well, I'll tell you what. How about we wait until I come out with a multi-year projection? Then then we can talk. Would that be would that be okay? Sure. >> Uh next month. Sorry, I don't want to interrupt. This
is kind of a follow. Um, as it relates to your kind of multi-year projections, I assume you're budgeting in some type of model for >> Yes. >> Obviously, that's a super like it's unknown because we never got through it
before, but it's also made it's up to two pass or utilization rate of it. >> So So that one that one's actually easier for us. And the reason it's easier is it's a it's a it's a fixed rate. It's 0.44. Um the district
districts are required to put in half that rate, which is 0.88 right now, and we budget 044, which is half, and then the employee gets withheld h44 out of the payroll. >> So So that one's a little easier. Um the part that is is unpredictable right now
is what happens in the future to that rate. Is the state going to say well we've got to raise that rate above the 0.88 to 1% or 2%. Um that part for us it would be it will be a little more difficult.
>> Okay. So I mean that's I guess one I don't have a follow to that. So, can you remind us what that new safe and leave weave looks like? I know that the rate is fixed, but isn't it unpredictable? who will take it
and how much time they can take. >> I don't I don't think the cost the cost sets at the state level not at our level. What we pay is fixed. We pay that 088 and then depends how much what the utilization is across the state might change future allocations of that 088 are higher but it doesn't change our
>> but if we have if we have to replace them with substitutes and that is another cost for us >> the utilization rates within the district >> right well somebody else >> yeah um if you're all okay with me talking on this bit I think it's so it's
kind of a swap so when we're paying this 088% that goes in as a any other tax with like things like that. We're paying point we're paying half that the unions are seemingly siding with half of that as part of the negotiations going forward. Um the there is a sub cost but
the thing is when they're being paid by the state we're not paying that portion. So a lot of that subost is actually being wiped out by the state paying that portion of their normal salary. Because if you're not aware the paid leave works in three tiers. The first tier is
approximately 90% of their pay based on how much they earn um in the previous four quarters and then the second tier is 66% with the third tier being I believe it's 55 but it could be 50. So typically when they get to those higher tiers that sub cost is actually less
than what we would have been paying them for that day. So it kind of balances out in that way to the point it's not really a concerned cost and really that big cost Tim mentioned that is where the concern lies because if any of you are familiar with unemployment and you know it carries a risk rating based on how
often the business tends to have to use it. So that's the state's working off that deed system. So they've said in year two they don't anticipate it going over 1.12%. Currently it's at 08 but I don't know what year three looks like. I don't know what year four and so on and so forth is
going to look like considering that they had many more people utilize paid leave this year than they anticipated having hit their annual estimate on just the second or third day of this program. So that is where that kind of that concern lies. But when it comes to those
sub costs it's actually kind of a wash right now which is hope actually working the way it's supposed to as this program goes forward. So those things can change, those criteria for the program can change, but right now we are tracking every single case and like I said to
you, I believe all last month, the month before. I'll definitely bring you numbers later in the year. I'm happy to discuss those with you as we go forward, but we're doing pretty good job tracking it. And it's pretty consistent with what it's been year-over-year. So there any other questions? >> What do you mean year over year? Isn't this the first year?
>> Well, because not year I shouldn't say pay leave. This is the first year of pay leave, but previously staff would use like FMLA and things like that for child birth. And so it's kind of consistent with what we've had for FMLA in the past, which in that case we're paying full salary if they use leave and covering the substitute or if they're
not even getting or if they're out of leave and they're still using FMLA, then we're just paying the substitute on top of it. So this is actually a little bit more of a plus if that makes sense. Thank you. My question >> I have one question and that is I think
this would pertain to this topic. I know that we heard from some of our students this year and some of their letters that they wrote and one of those pertaining to budget was
students who are involved in activities and after school because we had to make some tough decisions about busing and things like that. that some students especially you know let's say for example you might not
maybe even like seventh grade that that has posed some challenges I'm questioning is that something that as we are talking about our revised budget we can consider taking another look at
um based on the feedback that I guess I'm just speaking personally the feedback that I read in the letters and and couple you had mentioned very there were quite a few younger students older students.
And so that was you brought up the impact. high school kids and activities and athletics. Many of those kids. We also have many students that are not age driving
place to leave their kiddos to get also commitment of parents. Thought I would ask it since we're talking about >> Yeah. No, we we do have that in. We're going to bring that bus back for the remainder of the year and we'll be
budgeting for that for next year as well. say if you would like. I mean, so we looked into it. It would be about 3,000. >> Oh, $3,500 for the rest of the year. Yeah. >> Or for
>> the spring, >> right? The remainder of the of this year, we'll bring it back. And if you're okay with us doing that next year, we'll include we'll include that. It'll be more for a full year of course, but we'll put that on the budget for next year as well.
>> And these just they weren't all if we do have some bus. >> What was the total budget savings for that busting decision? I thought it was like 25. >> Uh somewhere between 15 and 20. >> Yeah. Right. >> February, March, April, May, and part of
June is like 3500. Is that that that's our estimate from our athletics director and he knows he knows what what he needs for >> busting winter would be had >> I will bring up one other thing because
I know as George was talking about the uh paid family of medical leave uh the other the other piece and that's being discussed at the legislature. Um I I just had a brief update on it this afternoon from the department of education. So that is the summer
unemployment. Uh that was that was the new program two years ago and uh yes that one um is is going to be um you know I think I think by the end of or by the beginning of the next fiscal year we're probably not going to we may not
see any funding for that um which is running into the six figures right now it's about $150,000 of cost. So, um, I think that was with all of the new programs, it kind of it kind of gets a little bit muddy. So, I think maybe
somebody had been talking referring to that program as well. So, >> um, can you remind us, Tim, when do you when do you start the next budget process? >> So, in earnest. So, we'll bring a 20.
Yeah. Um, >> yeah, budget season's always a full year, but we'll bring So, um, I'd anticipate bringing you a fiscal year 27 preliminary look at a budget in April. Um, after we get into the multi-
multi-year projections, which will come in March, then we'll have that, you'll get that first look at a preliminary 27 budget, and then we'll go and update again in May and June if necessary. Could I make a like to make a request um
and this is just me but um can we consider and maybe we've done this before but can we consider prior to bringing it to the board it's either brought at a workshop or andor finance committee before that.
>> Sure. Absolutely. presentation. >> Right. Thank you. >> Seeking approval for the revised move. Next item move on to item 11D. This is
our final reading of policy. I haven't heard and motion and a second for the reading of Hi, >> school board committee report >> and I was not able to attend so I'm hunting
the legislative and then we also heard from their priorities. for the session and we were recommended that we
temper expectations I guess I'll say of movement division. So at any rate that's my there is um information on AMSD with the update priorities and >> I will mention I think AMSD day at
capital is in April >> April uh um yes and um it's an opportunity for us to bring forward be able to
talked about before has to do with LTFM and I'll have some proposals for you. That's I will. I in the morning. And I think last time we did We share
if you remember there are legislators forget we move on to with me. Um we we met a couple weeks ago. The primary there's a few people that are rolling off the board. So they had some
they're looking for more people to join. Um they primar the primary discussion was around the upcoming gall. They have talked about some of their strategies around what they're going to be raising
money for. I forget what was the topic the angel fund. Angeling Angel Fun. Um, they encourage all of us to test out their ticketing system, which I already already bought my tickets. Um, and they have wine poles as well. They're trying that this year where uh individuals are
donating bottles of wine up to $20 and then you can I think they have like a little cubby system and you punch a hole and you pull out kind of what you get. And um, so this sounds like they have a lot of uh sort of fun activities like that. It'll be at the Jack's Center again in April, April.
13th or 14th? >> 11. So close. Yep. Um the >> That's knew there was >> the other update was the uh executive director resigned. Um Norah is no longer
there. They temporarily have um who has done this before. So, um, yeah, >> you mentioned that they're looking for more people. If there are people interested, who do they contact? >> I would contact
and he's the vice chair right now. next year and I believe he's in charge. >> Yes. >> Um I know Charlie Anderson was said he was done. He might say on the finance or might be on the investment committee.
There was a whole list of names. And then there are people who could roll up >> Friday. >> Thank you. Um, okay. Next, let's go to MSBA which
is me for a month and like crazy $35 million that won't be there $50 million that won't be there. Um and
thing that's being presented is health insurance maybe a move a movement to have and it would affect I think I don't want to comment on how it would affect
a difficult cell I guess >> be mandated >> a conversation. Look forward to updates as oh and then one more thing of course next Tuesday morning not tomorrow um keeping us moving getting late in the
late in the evening >> I just uh sent that and thank you. Um other reports we met this evening 23rd of February um presentation from
Adam Mendon talked about long-term facilities maintenance work that some of that work would be upcoming would be some of the stadium turf maintenance that we do annually.
Gym floor refinishing and we're going to resurface tennis courts coming up. um some new carpet tiles and things that while some Hback repair
had a conversation about papers years and the months in options. >> Well, okay. I mean, they're not brand new, but
>> that are problematic. >> Most specifically, I believe it was Anyway, um and that also that based on our we approved last month, right? Athletics, innovation of safety and
security and We'll be getting feedback from which includ Director Peter say I >> I