e e e e e e e e e you guys ready thank you Dan welcome to the December
16th 2024 Morehead Area Public Schools Schoolboard meeting at is 6 PM I am calling this meeting to order and I'll start with a roll call on my left please ven present Berard present markart present stefas present Bergen present yorin present vote present thank you now
if we all please stand for the Pledge of Allegiance I pled aliance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible with liy and justice for
all preview of agenda Dr lunik thank you uh tonight there are no additions or corrections to the agenda recommend approval thank you Melissa I move to approve the agenda as presented Cassidy I'll second I have a motion by Melissa Melissa I'll second by Cassidy they move
to approve the agenda as presented any further discussion from the board seeing none all those in favor signify by saying I I those oppos same sign motion carries item e public hearing related to the proos proposed
2024 payable and 2025 property tax levy uh the public hearing will start at 6 PM or as soon thereafter the proposed the purpose of the public hearing is to allow for public comment M on the proposed certification of the final 2024
payable 2025 property tax levy is there anybody here to speak on the proposed property tax levy is there anybody here for the public hearing dib thank or public form I guess I'm sorry thank
you item F we are proud at this time at this time during the meeting we recognize outstanding achievements of students staff and community members after an Honor's name has been read they will accept their certificate and a fold will be taken Laura Lee member of the
school board will read off the we are Prouds please we are proud of the Horizon knowledge Bowl participants knowledge bowl is an academic competition questions tests question tests students
recall uh problem solving and critical thinking skills in all academic areas and current events the 2024 Horizon team of students grades 6 and seven completed all three meets with up to 18 teams from around the region The Horizon team
placed first and second at all their meets and all Horizon teams placed in the top four at all three competitions students on the team are ad SOA Sola uh
Ado uh Noah Anderson Isabella atachi alvares kandel Cronin uh Nolan Durk Ganon hemlick sea Hughes
Carson calot Maguire Kinsley Rockne Krauss pton Payton Lee Alexia merkord Jonah Michels Riley Moon Hudson Murray
Avery shalik Olsen Bentley Schmidt ater stia Jacobs Vivien Tanner tayor Weber sand and Gavin Welsh the team is coached by
Brady or brandy Hogan and Karen Taylor [Applause] nice per stop [Applause] these are just amazing my Lord so nice not having to make weight
anymore I dare you to try to try to eat one of these of the me thank you everyone for coming tonight congratulations nice work I will say when I walked in I hadn't grabbed it I thought oh no what's going on
they're mad again moving on to item G the public form I guess I already asked Deb about that there's that's correct item two consent agenda all items on the consent agenda are considered to be routine and and been made available to the school board at
least two days prior to the meeting the items will be enacted by one resolution there will be no separate discussion of these items unless a school board member so requests in which event that item will be removed from this agenda and considered under separate resolution to the extent possible Schoolboard member
inquiries on consent agenda items will be made directly to the District administration prior to the meeting item a we have superintendent number one approval of the November 25th 2024 school board meeting minutes Item B administrative and or I'm sorry business
and administrative Services we have number one December claims number two family medical leave number three weave of absence number four change of contract number five resignations number six retirements and number seven new
employees do I have a motion for the consent agenda map sorry move to approve the consent agenda as presented thank you Cassidy I'll second have a motion by Matt seconded by Cassidy move to approve the consent agenda as presented any further discussion
on seeing none all those in favor signify by saying I I I those oppose same sign and the motion carries it item three new business under a we have certification of final 2024 payable 2025
property tax levy Dr okay thank you tonight we'll take you through the uh TNT presentation and and this uh presentation includes not just the tonight's proposed Levy but the budget
as well so there'll be two parts uh to this presentation I would encourage you that if you have a question uh let's ask it right away that way we can uh tackle that right uh right here and now and then you don't have to remember what you wanted to ask as we go through it so
starting on page 23 uh you'll notice the uh cover page uh there and uh do this thing work perfect on uh the public hearing which uh chair stus started the meeting on uh
now with some special legislation that's been in it's been in play for a while now this can be embedded into the regular meeting but it has to begin after 6 pm and uh if there was anybody here we'd have to give them opportunity uh for them to speak uh before uh we
would ask that you as a board adopt the final Levy at this same meeting uh when we are done with this presentation tonight we will then ask you to uh certify the property tax levy uh for um payable
uh 25 I believe so hearing agenda we do provide you on page 25 a background of the information on school funding our current uh state of our District's budget the district's
proposed property tax levy for taxes payable in 2025 and the public comments moving on page 20 six here just to kind of give you an idea of the why behind the meeting uh
right now the legislature uh must set the funding for Minnesota Public Schools just goes in and talks about that uh by State Statute they have to per Pro provide a system of uniform they have to provide a uniform
system of public schools and uh they will make such Provisions by taxation and otherwise as will secure through uh efficient system of public schools throughout the state that is listed in the Constitution that is what they are
tasked to do when it comes to education funding so as a result the state sets the formulas which determine our revenue and most of our revenue is based on uh the amount of pupils we have uh there
are Provisions in law such as tax policy which affect local public schools and the maximum authorized property tax levy which for us the process begin in September when we asked you as a board
to certify the max now from that time in September to where we get to tonight the levy tends to move up and down as the state goes through their formulas and determines whether there needs to be modifications or adjustments as it goes
this year was relatively stable uh I think it did most of its swinging between what we originally presented to you in September and it kind of got locked in I'd say in about mid October and it didn't really move much that's not the way it goes some of the time uh
it can really swing wildly throughout especially when you're coming off of a legislative session and there were changes to uh formulas uh takes them sometimes to work through the Kink so this year was uh a little bit of an anomaly it uh started at a certain
number I think it was 2% overall and then it dipped to the one point uh uh 1.87 that was under uh zero so the negative so $300,000 less uh that's kind of where it hovered uh since like I said
mid October so the state authorizes the school board to submit the referendums and operating and capital needs to the voters for approval um we have experience in that uh we will probably be more than like talking about that as we run through uh this session to
determine what uh we would like to do uh with another run at a capital projects Levy or so on and so forth so we have that Authority as a school board with voter permission so this slide uh you've seen this one before it's not too um it's
kind of familiar to you and this talks about where the state form funding formula has been since 2003 to it would be uh today in 2025 just some quick points to bullet points to make sure you're aware of for fiscal year 23 24
because of the legislative session that previous uh 23 in the spring of 23 they did uh provide an increase of 4% on the formula or a little over $275 per pupil and then in fiscal year 24 it was back down to 2% or
$143 uh more than it was the previous year per pupil now the point that we want to make with this slide that if uh inflation had kept up uh with the per pupil formula uh we would be roughly at
$864 per pupil and if we were to get that closer to inflation it would take another $1,300 or 18.7% uh to bring our formula uh up to the uh cost of living or the cost of well we'll call it the cost of living
but some people refer to as inflation cost of living so just bear with me on that but right now if it were to kept up with inflation we would be at 8645 or uh it would need an 18.7% uh bump up to 13 uh totaling 1364
to that 8645 any questions on these slides as I've presented them to you I'll kind of do a check in too as we go in case there is some questions all right hearing none we'll move on so this slide here uh is
specific to the underfunding of special education because we did talk about in the previous Slide the per pupil formula this is above and beyond what the per per per pupil formula has not kept up
with and so I think what what folks would be surprised to hear is that even with the recent funding increases to special ed towards that cross subsidy were still underfunded in special ed by quite an amount of money so as our
special ed population continues to go upward I think we're at 21% uh special ed when I think just a few short years ago we were trending around the 17 to 18% Mark uh that formula or that
underfunding becomes even more exasperated as a result so just so you know that um the state is underfunding special ed by approximately 726 million and uh with the corrections or the additions to uh
the cross subsidy it did bring it down to 455 million for state for fiscal year 2027 but well below uh what is needed to keep up with inflation for a special end any questions on this slide how much are we were we
underfunded and then how much are we underfunded now with the new cross subsidies yeah so we were underfunded to the tune of I'd say roughly in Dwayne correct me if I'm wrong but I want to say about 7 million then with the uh the
addition to the Cross subsidy brought that down to roughly about four million but then those costs continue to climb back so the they're they're looking this year now I say this with all intensive purposes that they can maintain that but
we all know what the budget looks like in the Tails right so I recall the governor stating that everything is on the table uh prior to this legislative session they were supposed to move the cross subsidy to 50% which would bring our deficit down to maybe around I'm
thinking 3.6 correct me if I'm wrong we're still 3.6 in the we're still 3.6 in the hole and so um we're hopeful that they'll stick to the 50% but with the governor stating everything's on the table it will be
interesting this session to see if that comes to fruition uh or not so I'm hopeful I just want to put it out there though that you just don't know so any other questions on
that perfect so some budget information we'll take you through uh our budget uh based on uh these factors uh we'll talk about how our budget is divided into separate funds we have a general fund a food service community service building
construction Debt Service internal service opep trust and then opep Debt Service now not only you get a double dose of this tonight but you'll get the audit uh following up and and Courtney will take you through that going through almost the uh same kind of uh scenario
I'll take you through here but it'll be a little bit different now these on page 31 of your packet this is basically our budget for the 2324 school year and then you'll see
kind of a preview or an estimation of what our 2425 budget looks like this does uh continue to show uh the fact that um our district is no different than any other District I think
uh an additional a little bit of Revenue would help us start balancing this out so this is uh essentially shows a pretty good picture as to why we need to uh get after our budget challenges a little bit whether that's through some you know
through some legislative support which I do thank you guys extremely for your support in those resolutions that we submitted to msba um they did not uh some of those uh proposals didn't make the Masa uh platform but that doesn't mean
that we can't try to do some of those things at least from a transfer perspective because in my opinion they don't hurt the state and they don't cost the state anything it just gives us flexibility so we can start building back that on assigned fund balance so
you'll see here um that there are it's a pretty it's a pretty good narrative to show as to why uh we need uh an influx of Revenue combined with some um balancing of our expenditures if you look at that top number which we say
General and restricted if you look under that June 30th of 2025 projected uh and you'll see the fund balance you'll see that's down to 4.6 million and that includes our committed assigned and unassigned in that 4.6 Million
number um looking down you'll see some um large uh decreases that's only because our construction fund is continuing to go down as we finish the high school project so a lot of that's tied to a decrease in our construction fund but
also I just want to draw your attention to that General restricted line that's at the top there any questions on this slide okay so we look at all our revenue and uh that's $1 140 million
that includes the fund balance in our construction fund as well um bringing that um looking at that you'll see how it's broken out in terms of uh Debt Service the percent that makes up the budget the general fund so on and so
forth there any questions on this slide we'll get into a little bit more detail moving forward all right so your general fund Revenue here uh divided out by state that 82% our federal is at
4.1% our local here this does not include our bonded debt is at 13 a half% but that local amount here not only does it include what you're going to hopefully support in terms of a levy tonight but in that 13 and a half% is
local things such as gate receipts for tickets at any type of event we run uh fees tuition uh medical assistance entrance earnings they make up the other four and a half% of that and I do want to point out that from a local perspective
without bonded debt we're at 9% and I believe around the state that local amount is upwards of 14% or so so we don't Levy as much as
the rest of the state does and just so we're aware that if you added it shows more is coming from the state but that's only because when you balance out this graph it's got to equal 100% so if we were to add in a sense
let's say a capital projects Levy for 4 million that might move the local contribution here to 16% and drop the state portion to about 79% so it just it all has to balance within that 100% of that or that circle
graph so just so you know outside of what we've bonded for debt in terms of our building bonds we Levy the local taxpayer a little less than what the state averages around the state and I think Courtney will take you through that when she does her audit
presentation on what that is you'll see a you'll see a graph on there that will compare uh where we are from a state perspective to where we are locally any questions on this slide here we go we have our general fund
expenses by object and um you can see how we're broken out salary and wages are 60% benefits are at 18% so we're right we're right there in the average with uh most districts across the state between salary and
benefits purchase Services makes up about 13.3% of the budget supplies and materials are at uh just a little under 4% Capital expenditures around that 7.1% and then the other at 6 and that
other represents our property casualty and work comp insurance here it's broken out a little bit uh in more detail um just so you know District Support Services includes uh our business services Human Resources
um those kinds of things and then on the other it's the same deal liability and and property Casualty Insurance uh pupil service pupil Support Services includes our counselors uh our nurses and transportation and instructional Support
Services include our media technology and and the staff development type expenditures now I will say that I will tell you that this year and next year there could be a change to this because they change how and where we can code things what almost feels annually but uh
that's where these expenditures lie so tonight we'll talk about a change in the tax levy but it does not determine a change in the budget so for example you might see tonight the decrease in our local property tax levy and you will to the tune of about
$300,000 but that didn't mean that our budget was affected by $300,000 that meant that we could have the same amount of money we're just levying less because the formulas that are equalized from the state might be picking up more of those dollars
okay so um any questions on this slide page 36 okay moving on to page 37 difference in Levy Cycles just to compare the city and the county their budget year begins January 1st and their 2025 taxes provide
revenue for the 25 calendar year for us as a school district our budget begins July July 1st our 25 taxes provide revenue for the 2526 school year and then our budget is adopted in the June
of 2025 so we are levying tonight for next year's budget so we are levying six months in advance and so we are building a budget based on the numbers we think we know as of today whereas the county
and the city get the budget for the exact calendar year in which they Levy so little different cycle that we're in being a school district so here's an example of a uh tax statement how many of you got yours in the mail the other
day you raise your hands with so much excitement so these come to your uh these come to your uh mailbox here in the last couple weeks and uh they come between the 10th and the 25th of November and every owner uh gets their
tax statement and it talks about uh their taxing jurisdictions and it shows the impact that each of those taxing jurisdictions has uh on your tax statement now if you looked at it from our perspective how many of you on your tax statement under your voter approved
saw your amount go up a little bit and your other line went down okay so that's similar to what I had on M and I think that's similar to what went on in regards to everybody's
tax statement regarding our portion as a school district of the levy any questions on this slide thank you so School District property taxes each school district has the limited authority to Levy taxes
remember we're capped because of our formulas and whatnot and then MD calculates Levy amounts uh for various categories that are set by state law and voter approval so if we would have passed our capital projects Levy in
November uh those tax statements would have had to have been altered or adjusted because they would have been printed out prior to that approval so we would have we would have been able to Levy that on this year's taxes so that
would have made your tax statements not accurate under our portion but since that didn't go those uh those amounts were considered uh accurate any questions on that all right so going through uh we go through a six-step process when setting
your property tax levy step one we've uh we've been through that happens uh generally uh early in the summer and then the legislature sets those uh targets or those formulas then the county auditor takes those same
calculations and determines the uh tax impact and then the Department of Education takes them the amount or what we do in our summer Levy system puts it into the system and then it kicks out uh the calculations and then in September
we set we Levy the max you get to see the first uh the first run so to speak uh on what your tax impact is going to be based on the numbers that Cam and Denise put into the system over the summer and then it kicks out that number and then we kind of monitor that number
from September to where we are tonight and we ask you to set the levy uh based on the numbers that were on your property tax statement any questions okay so when we're approving
the the district's tax levy in 2024 uh you'll see the dates here that are highlighted September 8th September 23rd uh mid November December 16th which is tonight and then following the hearing uh we will certify those final
limits you offered up the opportunity for the hearing tonight now we're going through the presentation Port portion of it to ultimately set that final Levy overview of the district's property tax levy take you through now the the
reason why and which uh our tax levy decreased 307,000 almost 308,000 or 1.3% we'll take you through it in a greater in a greater detail so bear with me as
we go through this is the uh General summary you can see under the general Levy that that general fund went down approximately 11.8% you can see uh under that General how each area was impacted
to come up with that uh uh negative 11.8 and then you can see under community service that actually went up 3 and a half% and Debt Service went up 10.2% and when you add all those in we actually re we actually went down in
terms of our Levy by$ 37,7 186 or 1.3% and that's the amount that uh we will be approving uh tonight based on these changes BR I have a question so there's
a change like in the so let's say the let's see which one should I pick local operational revenue is down 316,000 so when it comes in from the fed from the state potentially then is it that goes in the same area or is it just go into a general fund or do it go with to
compensate for what is shortfall does that make sense yep so for instance when the local optional Revenue goes down the um we'll see it down in general and the
the general part of the budget is down 11.8% mhm so that is what we see when it comes in so it's going to be down by approximately $1.4 million what we don't see on this is
that the state in some regard picks it up in state aid or an equalized formula so we won't see that in this presentation right because it comes in under state aid and then this is only specific to our Levy right so I'm hoping that I'm answering your question but the
federal or the state money that comes in go back into the enal fund or would it Go potentially into State money comes the state money generally comes in in this case it'll come in as unassigned or not restricted so it could be used more
flexible way than potentially this way okay that was my question thank you yep now you'll see for instance though the long-term facility maintenance those dollars came in at 776 th000 less those
dollars we could only use a certain way okay so if the long-term facility maintenance money came in $700,000 more we would actually see that on the ltfm line we would be restricted in terms of how we would be able to use those
dollars is that makes sense so then when they come in for more dollars for $10,000 more or 3.3 on community service we could only use it than those $10,000 in community service
service and scrolling down Debt Service same way good question we'll take you through a little more in detail that explains these changes so we'll take you through the explanation of these changes so the question here is uh the general fund
long-term facility maintenance you see the change of $776,000 this was due to a health and safety and deferred maintenance project that was approved and you can see down here that uh it's payable in a 2024 Levy included
in the one-time Levy for funding in asbest abatement project approved by the Minnesota Department of it and I think Steve was leading us through that project over this past summer if I'm not mistaken and that explains the decrease
there so the general fund under the prior year adjustments you'll see that it went down $696,000 because our levies are initially based on estim these are just cleanup numbers so actually on a budget our size to only
have a cleanup of about $696,000 I'm going to have to give our uh our our business folks a lot of credit because there are prior year adjustments that are a lot bigger than $696,000 even on a budget R size so for
us to only have to adjust uh less than a million dollars on a budget our size I think Cam and Denise are owed quite a bit of um big thank you because these adjustments could ultimately hurt us if they were bigger because we'd have to
catch up either we Levy too much or we didn't Levy enough so initially to be in this spot it's a nice job so our Debt Service uh actually increased a little over a million dollars and you can see that uh by law
and by Statute we have to Levy at 10 5% of our debt payment or and uh because of that that gives us a little bit of a um a little bit of a cushion in case some folks over the course of the year don't end up paying their taxes this
helps us continue to build up a little fund balance if there are folks out there that are having a difficult time then this just helps us continue to meet our obligations so by law we don't have a choice we have to Levy the 105% and uh if you go back to the page
uh one or page 31 I believe we're all just keep moving on to the next one but uh you'll see that that's changed and the debt service has actually increased a little over a million dollars so what that tells me is people have um people have paid their taxes and we're in uh
we're in a good position that way because it grew okay factors uh that influence are that that impact our taxes obviously we all are well aware of the change in property
valuation we have a change in the total value of all property within the district and that can increase or decrease the levy amounts based on what those changes are and uh whether there's a change in state funding formulas or there's differences in local needs these
are all factors that influence our Levy moving forward so the impact of property valuations in this example uh we'll give you two examples to talk about and uh what we'll do is we'll take you through how those
change based on values so the impact of property valuations on a the orange house up at the top is $110,000 and the blue house values increased by 25% and went to
125,000 the total Levy for the district is $500 and you can see that the school district will generate the same amount of Levy even though the value is increased and the orange house will pay less than the blue house does make
sense so then some of the changes that may affect your home's taxable impact or your value in 2023 the legislature passed laws that affect property taxes for taxes that are
payable in fiscal year 2025 and just some uh Recaps of those changes and uh they they did change the homeowners uh by increasing the homestead exclusion uh for valuations
between that $76,000 and that $517,000 Mark and increased the first tier limit for egg homestead land to 3.5 million from 2.15 million so those changes in
effect have netted some positive changes to your property taxes so a four years uh the fouryear school levy comparison uh we'll go take you through this and we'll show you a little bit of the uh the impact of that
uh these examples uh take into the school district taxes only they don't include the city or the county and we also show you the amounts based on no change and the 16.8% increase to property values over the past four years
so taking you through that uh you can see here that uh if you take just the residential Homestead piece and we focused on that $150,000 estimated Market market value you can see that in 2022 those taxes paid were
$78 and in 2023 they went to 668 payable in 2024 they went to 645 and then the estimated payable taxes in 2025 which were here tonight uh moved
to $578 which from 22 to 25 the value or the tax amount went down $130 and the change from 24 to 25 is projected to be $67 so you can see the amounts if you
just take your own home kind of estimate its value you can kind of see across where you um where you see or where you fit and uh kind of estimate from there uh this these slides share the same uh story except they're in a graph
form and you can see how those have uh moved downward or trended downward uh over the years and these are based on no changes to your property value the next slides talk about that
16.8 change so these would be a little more accurate when compared to your home so the first one again is at $150,000 residential Homestead the next one's the $350,000 and you can see that even in uh
fiscal year 24 it went up from 1563 on that 350,000 to 1593 and I think we can attribute that to um the HVAC project that we had to put on that was uh board approved and
we got special legislation to do that and you'll see that even with that amount it didn't go up drastically and then because we uh didn't pass the capital projects Levy uh and the Val valuations did change with some of those
changes we mentioned earlier you'll see that that taxable valuation then again dropped from 1593 to 1540 the next year again please remember and keep in mind that this is only our impact as a school district it doesn't include uh
the county or the city so we're only looking and focusing on our impact at the moment so here are some state property and tax uh refunds and deferrals you can see them there they have the homestead uh credit refund the special
property tax refund the senior citizen property tax deferral and you can read what those are all about uh right there I won't take you through those in great detail but tonight I appreciate your time for listening uh to me uh bore you
with your eyes open and uh tonight though uh we were to accept public comment nobody uh showed show up to make those public comments and now tonight uh with the board's support I ask that you certify uh the 2025 property tax levy as
presented and then these are the parcels from that property abatement program that the city of Morehead runs and this is the 11th year of it and I remember when I first got here it had just started and there was maybe enough to fill up a half of a page and now that
we're 11 years in into this we are filling up almost two pages and I would anticipate uh in short order we might be filling up two and a half to three pages so this is the property tax rebate and by rule we have to have them in here for
the presentation so uh with your support tonight I would ask that we certify the property tax levy as presented Dave I'll move to approve the certification of the final 2024 payable 2025 property tax levy in the amount of 23,7
6,847 46 and authorized the board clerk to sign the business and administrative Services memo asba 24077 r final 2024 payable 2025 tax levy for Independent School District number 152 before submission to the Clay County
auditor and Minnesota Department of Education Keith I will second I have a motion by Dave second and by Keith move to approve the certification for the final 2020 payable 2025 property tax levy in the amount of 23,7
6,847 46 and authorize the board clerk to sign the business and administrative Services asba 24077 R final 2024 payable 2025 tax levy for Independent School District number
152 before submission to the Clay County auditor and the Minnesota Department of Education any further discussion on this seeing none all those in favor signify by saying I I I those oppos same sign and that motion carries Item B
fiscal year 2024 audit report Dr runik okay tonight we have uh Courtney with ID Bailey here and uh she will present to you our 20124 audit uh this evening so Courtney thank
you for coming all yours can you hear me okay yes we can wonderful so as mentioned my name is Courtney Richmond I'm an audit senior manager with I Bailey based out of AR Fargo office and this evening we're going to take a step back you just got done hearing about forward-looking
budget uh we're going to take a step back and look at your june30 2024 annual audit results it's a PDF so you had a roll it oh there we go is it working now no okay he's T he'll take care of it
okay sounds good okay so first we're going to jump into the audit results and any findings so our first slide here talks about the audit opinion so in our first bullet point you can see that the district received a clean audit opinion the technical term for this is an
unmodified opinion which means that the financial statements are prepared in accordance with standards and do not contain any material misstatements now the second portion of this slide um just want to caveat that this is merely our professional opinion we're not testing
100% of the transactions of the school district um but instead we use a risk-based approach to kind of Drive the testing that we perform our next slide will talk about the audit of the federal funds so anytime a school district or any entity spends more than
$750,000 of federal money uh that trigger is a separate compliance audit uh so that's what we're talking about here so on the right hand side of the of the slide you can see that the district spent just over $9.1 million of federal Awards during fiscal year
2024 and at the bottom of the slide here you can see that the district received an unmodified or clean audit opinion over Federal Awards next we will talk about the audit findings so even though the school district received clean audit opinions overall uh that doesn't mean that there
aren't other internal control deficiencies that we identify throughout the audit process so that's really what we're bringing to your attention here so there's three main areas that we focus on the first being the financial statements so the first finding within the financial statements is the
preparation of the financial statements including the schedule of expenditures of federal Awards uh so that just has to do with the fact that i' Bailey prepared the full year-end financial statements with all of the required footnote disclosures um so that's something you've had in the past and it's a very
common finding for not only school districts but many of the organizations that we audit the second finding uh relates to material journal entries so as we come in and do our audit testing uh we do propose some adjustments to balances um
as we're testing things um and that's what this finding relates to again something that you've had in the past and and common for school districts and the last financial statement finding relates to segregation of Duties this really has to do with just the smaller office size um as far as your Finance
Personnel so you're not able to completely segregate every single Financial Duty um so that's where this finding comes from something that you've had in the past and another common one uh the second area we focus in on is the compliance over the federal Awards so
there was one finding identified during fiscal year 2024 um this specifically relates to procurement suspension and deartment so there's two levels of findings so you can have a material weakness which is the more severe or a significant
deficiency which is kind of the Lesser stringent finding um so for 2024 there was a significant deficiency identified in in internal control so what this has to do with um just relates to the federal procurement policy so it doesn't
mean that your funds were spent in correctly it just means that the federal government has a more restrictive dollar amount on their policy as far as obtaining quotes um than the state does so you're in compliance with the state it's just the federal government has a lower threshold so that's where that
finding came from uh the last area we look at is Minnesota specific compliance um there was one finding specific to Student Activities um and of all of our testing there was just one expense that we tested that didn't have all the required
signatures so the student has to sign the adviser and then the principal so just one of them was missing one of those signatures next we'll talk about the cash and Investments of the school district so this slide really shows you the cash and investments in thousands
over the last 10 years one thing to note is this does not include the cash that's in your building construction fund since that's set aside specific for the construction costs um so you can kind of see how the district has been trending over time overall when looking at fiscal
year 2024 very comparable with the last three years next we'll jump into more of the general fund information and our next slide here shows the adms served uh your adms are your student counts we like to include
this slide because the number of students you have really is what drives the aid that you get from the state so for fiscal year 2024 you can see a slight increase there in the student counts our next slide here is the main numbers page that we'll go through um
and this relates to the budget to actual results so the first two columns there represent the board approved budget for the year the third column is your actual results and then on the far right you can see any variance between the final budget and the actual results um so
overall you can see on the revenue side you actually brought in 5.1 more million in Revenue than you budgeted for um which was within 4.7% of the budget on the expenditure side you did spend uh just over six million more than you
budgeted for So within about 6.2% of the budget if I'm reading that right um one thing just to note there on that other financing source sources section um there's no real budget for some of those items and those kind of offset some of your expenditures um so you kind of have
to look at them in in total there as those other financing sources kind of offset um the increase in the expenditures so the key takeaway from this slide is that net change in fund balance line you can see that you brought in more Revenue than you spent
uh which increased your general fund fund balance by 923,50 for fiscal year 2024 our next couple slides here are going to show you just some comparative information um from the last three years of the district and on this slide
specifically from the revenue perspective compared to the Statewide average so there is a year leg in the Statewide so that's why 2023 is the most recent information shown there but you can kind of see how you compare to the state as far as your Revenue sources so
there in the blue you can see is the state sources uh red is local the green is the federal and then that purple would be any other um so overall you can kind of see that you uh at Morehead do receive more in state funding but less
from the local levies and local Revenue uh this next slide is the general fund expenditures this is just District information for the last three years kind of showing how you Trend um with your type of expense so in blue there is the salaries and benefits uh red is
purchase Services the green is supplies and materials purple is capital expenditures and then that light blue is anything additional so overall you can kind of see your expenditures are fairly comparable from your year to year when
you look at it in total so what does a positive fund balance really mean for the district overall it contributes to a favorable Bond rating if you do need to issue additional bonds uh gives you the opportunity to uh produce additional investment income and then lastly really
just offers the district kind of that added cushion in case you have any expenditures come about that you weren't planning for or any Revenue shortfalls this next slide shows the five different categories of fund balance I won't go in detail of this um but our next few slides will show kind
of in graph format where the district is s sitting with their fund balance um in these different areas so this slide is showing you your change in E fars fund balances within the general fund um so you can see the bottom right hand corner there shows you
that 12.9 million that you ended with for fiscal year 2024 Broken Out by category so at the top there you have that nonspendable um that is spefic specific for any prepaid expenses or inventory anything that is listed as
restricted is restricted by the state of Minnesota um so that's funding that you have to use on those designated purposes anything that's committed is set aside by the board for a specific purpose uh the assigned piece is again set aside um
for a specific purpose or project and that leaves you with that unassigned fund balance so you can see the unassigned fund balance grew by just over a million dollar for fiscal year 2024 this next slide breaks down that same information for 2024 and Compares
for the last 10 years so you can kind of see how you've been trending by category um the yellow portion there is nonspendable that red there is the restricted so that's the piece that's restricted by the state so when looking over time you can kind of see um the
last five years or so that that portion is bigger as those f funds have to be spent on state specific um purposes and then as a result that cuts into kind of the unassigned fund balance that you can use on anything our next slide shows some
recommendations regarding your fund balance so at the top you can see the district's approved policy uh so your policy is to maintain a minimum unassigned fund balance as a percent of your operating expenditures uh within that 17 to 25% range so that Target
amount for fiscal year 2024 is 18.1 to 26.6 million we do also just include a third-party recommendation from the government Finance Officers Association and they recommend having no less than two months worth of expenditures which
equates to 16.67% um so that would equate to roughly 18.9 million for the year so our next slide shows you where you're at um with that unassigned fund balance and unrestricted red fund balance um kind of in relation to the
district's policy so those red lines on the page show the minimum and the maximum um and then the Blue Line there would be your unrestricted um and the green would be your unassigned so you can see that there was an increase uh in 2024 but
below kind of that District approved policy for the fiscal year quick question Courtney yep um back on this slide here I see it's 2019 to 2020 do you see that pretty common across the board for any school districts you serve
in Minnesota seeing that drop in the NS sign it just seems pretty obvious to me it's we that covid time we see that big drop yeah and it it kind of correlates back to the previous slide where you can see this is you know the unassigned portion is dropping as that restricted
piece of the state is is going up um so you're more restricted on what you can spend those funds on but yes um there definitely was a dip during the co time frame thank you uh next we'll talk about some of the other funds of the district um the first one being the community service fund so
this is just showing you the yearend fund balance for the last 10 years um overall very comparable when looking over over time a slight decrease there in fiscal year 2024 but overall still a positive fund balance at the end of the
year and then our last slide is the same information for your food service fund uh the red line in the middle of this page is actually showing you the maximum fund balance per state statute uh so for 2022 and 23 you can see that you were
above there that was primarily due to the federal government kicking in with the free and reduced meals at a higher reimbursement rate so that was a common trend for school districts during that time frame um but 2024 you're back below that maximum now
any questions on anything that I covered this evening any questions from the board doesn't look like there's any questions thank you so much for coming tonight Courtney yes thank you for having me and I would just like to say thank you to cam for his help during the
audit so cam does a wonderful job yes thank you so this is a resolution so do we have a motion sorry lur Le I moved to approve the fiscal year 2024 audit report draft with
no changes as presented by ID Bailey LLP thank you Melissa I second I have a motion by Laura Lee second and by Melissa move to approve the fiscal year 2024 draft with no changes and as presented by I Bailey LLP any further
discussion on this seeing none all those in favor signify by saying I I I those oppose same sign and that motion carries item C Morhead High School construction update Steve Moore good evening just another quick update there's tons of slides but I'll go through them very
rapidly don't don't panic I've even added more since your hard copy but it's all pictures it's all exciting so um this just kind of where we are where does em the construction project fall within our strategic framework it supports our facility our facilities uh
framework for indoor and outdoor spaces that's I won't read that to you but that's our this framework what we're dedicated to do in terms of facilities and it all comes providing that foundation and supporting uh both athletic and educational programs within our district students and
staff um so our goal there's there's several goals you've seen in that framework this one is focused on on the high school construction and my job is to manage this phase two to complete on schedule objectives are complete phase
1B uh by July of 2025 we're on track and I'll I'll remind you what those phases are phase two part one uh by December 2025 that's on track phase two part two by April 2026 so phase 1B
administrative spaces chemistry room bioscience phase two part one is music space and some other couple other classrooms phase two part two is the Performing Arts Center and blackbox areas another part of the another
objective was to assess this construction progress to determine if these timelines are the correct ones and that was assessed and agreed upon that this is an achievable these are achievable objectives uh thankfully for the nice weather we had in the fall was
a big part of it but uh we got a lot of contractors working hard uh in in some many different conditions outside Athletic Field project is another part phase one that was the um long jump
and P vating that was completed in October on schedule and um the next part coming up is phase two that's the softball fields um on the south part and that is out for bid and those bids are due uh on Thursday at 2
pm that was right there you go so we're on track for that phase too and we do have funding set aside in the current budget to complete this phase uh and get this done this summer that's the the
goal all right so overview week by- week camera timeline and then construction status so here we are back in September oh look at the leaves in the sun okay then we just keep moving on and this is just cool to see all the
progress through October lots of concrete lots of walls and U the construction progress caused Dan to have to move the camera not once but twice so that's a good thing but I appreciate Dan and and his team for moving that camera
because it it gives a lot of good good Pro well I you weren't up there physically okay um there we are that's where we changed the camera angle um where the camera location was that's in November
and then we started getting some inclement weather but there's still a lot of stuff going on you can see that um when that crane is that's area H where the music classrooms are so the roof's going on walls are going up that's last week
and then this week bam so that's a cool picture uh that semi has the pre-cast wall panels and so that was this morning and I'm going to show you a picture afterwards of I mean that's essentially that whole wall is done um so they let
put eight or nine panels up today was pretty fun to watch on the camera um so parking lot's done nothing has changed there in Phase 1B that's these are kind of dated photos but it's the last time we sent the the I was going to say the UAV but it's not the
military drone um up up so these are the the latest uh drone photos that you haven't seen yet but that's back uh on 18 November so phase 1B as a reminder that's the door one main entrance reception n nursing offices counseling
offices chemist rooms and bioscience area so there's some pictures coming up so that's a closeup of the area that middle section is the vestibule and those are all the doors that will be door one so that is the inside picture this is so the last week they did some uh
fireproofing so this has all been sprayed since but so these pictures are a little bit old so it doesn't really look like that it's all the half of it's been fireproofed so those that's the location of this picture and that those boards there where windows will be uh
exterior windows oops and then this is uh where that's the temporary entrance for the construction Crews uh where the vestibule doors will be so those are kind of framed in but um all the window
framing has been ordered and then this one is just that little corner where that's the main office where everybody will be no that's receptions on the other side that's reception so that's going to
be the window that that so we can have somebody looking to see who's coming in our building uh this is a picture of that exterior wall that is where the principal's office and some other
offices are going to be calming rooms um and then that's the interior so photo to the left is exterior photo to the right's interior of that area so they're working on roughing and Plumbing mechanical and electrical um and so once that's all done once the
fireproofing is done then we can start doing the interior surfaces in framing uh that's just a lengthy shot of that other oh this is second floor so these are the two chemistry rooms and then on the other side of you can see
the metal studs that are vertical that's going into the bioscience room so again mechanical rough in electrical rough in fireproofing uh underway phase two this is the band Orchestra choir area that'll be
completed in December and so you if you've driven by you've seen the exterior work being done the walls are being up uh put up they hope to have the the roof on and complete um by Christmas I believe and then that's just the metal
frame going up on the roof yes so will there be a a load in over Christmas break again for that um the choir and Orchestra and for those buildings oh yes and so the following December uh December 2025 we will be moving these
sections from the temporary space in over the holidays again can't wait fun times but we'll get her done be a lot less people than we moved the last time so and it'll be the final move for our our music staff they've been great
um and then so this is the the crane showing up uh in positioning itself to put up the pre-cast walls and then this is some of the pre-cast walls that went up last week along the existing structure and you can
see the uh how they're supported as they're being set and then this is a picture from this morning yeah so I was so busy I just sat here and took still photos as they moved a panel I was I was so
intrigued so here we go there it is moving Dan probably knows how to like record this and make it look really cool but this is all you get from me and so they swing it around and then they set it in place so there it is and then so
that was the first panel this morning and then as of there's the new camera angle from from our folks in Tech and now you can see almost that whole East wall has been placed and then they got another one on the on the semi bed waiting to go up tomorrow so if weather
continues to cooperate that is the wind I mean it was pretty windy today and they're still able to put eight or nine panels up so the goal is to have all the pre-cast walls in place by Christmas and they're still doing CMU block wall underneath that plastic so they're doing everything they can to
keep this project rolling and that's all I got wow any other questions for Steve comments thanks Steve it's like 45 slides in five
minutes it's a record thank you thank you okay moving on item D land Detachment and annexation okay thank you so on page 119 uh just to let you know uh got an email from a land owner that uh owns Parcels
of land in uh the adaab borup West School District and is contiguous with the Morhead Area Public Schools and um their request was to move four Parcels of of uh land that currently resides in
the Morhead Area Public School District to the adab borup West School District and although the this uh request will wouldn't you know
um because the size of the parcels that you can see here aren't extremely large but uh and wouldn't leave a real large burden on the on the uh Parcels that would be left behind or the land owners that would be left behind um in
Consulting with a few folks that um was talking with me that one of the concerns was precedent and um if precedent precedent and if we were to accept this no matter how small it was there would be concern
that there are other land owners that are contiguous to the district and if we allowed this then we really wouldn't have a mechanism to say uh no to the next one that may or may not ask to move
or relocate their Parcels into a neighboring districts that contiguous to us so with that in mind and if you have any questions i''d be Happ to answer them but I would recommend based on precedent that we do not support the
request to move these Parcels to the a of borup West School District um just due to the precedent that it would set and I'll entertain any questions that you have any questions Orly is this sort of in the
middle of a bunch of like this is in the middle of our school district or is this like on the edge yeah so as you look at the parcel that's there Y and then you see that black line that's kind of on the south and you see that adab borup that's got an arrow there adab borup West we have land that's
so funky and they're like we own we have a parcel that comes to us a parcel goes to adab borup West and then these on really north of that black line uh are in our land right now surrounded by adup borup West
parcels and how it was divided in the future or in the past excuse me was it was where their kids went to school so if your kids went to school in Morehead your land was designated to Morehead if you went to adab borup West it went to
iTab borup West and I'm sure at the time when these land when this land was divided this might have even been Norman County Westland at one time and has since now become adab borup Westland because of the the merger of Norman
County West and adabor so as it sits right now again I'll emphasize that I can understand where the land owner is coming from because they have the authority to ask you as a board have the ability to endorse or not endorse uh this
request um because of the precedent again like I said that it would set with other land owners that would be around I would recommend that we do not endorse uh this request for the land to be moved uh these Parcels to be moved in
the adaab borup West School District okay ma'am prep to make the resolution thank you ma'am how about if we do the motion and the more the morid Area Public Schools Board of Education moves to not endorse
the land owners's petition for the Detachment and annexation of partials located within the Morhead Area Public Schools School schol District to adab borup West School District and directs Administration to send an official notification to the landowner Melissa a
second I have a motion by Matt second by Melissa move the Morhead Area Public Schools Board of Education moves to not endorse the land ordinance petition for the Detachment and annexation of parcels located within the Morhead Area Public
School District to adab borup West School District and directs Administration to send an official notification to the land owner and we have discussion here from Cassidy okay anybody else any further discussion seeing none all those in
favor signify by saying I I those opposed same sign and the motion carries item e resolution establishing combined polling place multiple precincts and designating hours during which the polling places will remain open for
voting for school district elections not held on the day of a Statewide election Dr lck thank you every year uh we do this uh resolution designating uh certain polling places uh in the community if we were to ever uh
run an election uh on our own and uh this resolution is very similar to that in years pass and uh this also uh would be important for us if we were to ever do something uh in the fall with uh either operating or cap capital projects
Levy this resolution helps set uh the precedent for what precincts would be open uh during that time or during that uh during that election so I would recommend that uh we adopt the resolution here in the packet uh
supporting these polling places thank you Cassidy um I'll move to approve the resolution establishing combined polling places for multiple precincts and Des designating hours during which the polling places will remain open for
voting for school district elections not held on the day of Statewide elections as presented Dave I'll second I have a motion by Cassidy seconded by Dave move to approve the resolution establishing combined polling places for multiple precincts and designating hours during
which the polling places will remain open for voting for school district elections not held on the day of a Statewide election as presented any further discussion seeing none all those in favor signify by saying i i i those oppose same sign and that motion carries
item F second reading of policies Dr thank you uh with there being no changes to the first reading uh I would recommend that uh you approve the second reading of these policies as presented Laura Lee I move to approve the second reading of policies as presented Cassidy
I'll second I have a motion by Laura Lee seconded by Cassidy move to approve the second reading of policies as presented any further discussion seeing none all those in favor favor signify by saying I I those oppos same sign and that motion carries item four superintendent updates
Dr W I have no updates at this time I do have one comment to make um anybody that is wishing to go to the msba conference it's coming up here next month about this time next month so like the 16th 17th or 17 18th correct Deb y uh
reservations have already been made but tell me if you're not going to go so I can I was just going to remind every board member to make sure you let Deb know if you're going item five close the meeting move to uh close the meeting at
7:15 p.m. pursuant to Minnesota statute 13d point5 subdivision 3 a for the purpose of discussion discussing the year end superintendent evaluation I got a second L Le second second thank you
any further discussion on that seeing none all those in favor signify by saying I I I those opposed this meeting will be closed I'll give uh three minutes so we can get started again thank you
right e e e e e e e e e
e e e e e move to open the public meeting at 7:23 p.m. a second thank you Dan are you ready for
question can I can we do it now Dan yep move to open the public meeting at 7:23 PM I got a second by Laura Lee thank you and uh any further discussion seeing none all those in favor signify by saying I I I those oppose same sign that
motion carries item seven move to close the public meeting la lee I mve to I move moov to approve the adjournment of the December 6 no it's we're closing the public Mee I am moved to CL close the public meeting
at 724m pursuing to Minnesota statute 13d point5 subdivision 3C for the purpose of discussing the sale or purchasing of property correct Keith it's not a
question yes I second we didn't talk about that thank you we have a motion by L Lee second by Keith move to close the public meeting at 7:24 p.m. pursuant to Minnesota statute 13d 5 subdivision for
the purpose of disc P sale or purchase of property and I don't believe anybody else is in here so Dr lck so thank you uh with we won't e e e
e e e e e e e e e e e
I moved to open the public meeting at 7:32 p.m. Dave second I have a motion by Laura Lee second and by Dave move to open the public meeting at 7:32 p.m any further discussion seeing none all those
in favor signify by saying I I I those not in favor same sign motion carries item nine adjournment Cassidy I move to approve the adjournment of the December 16th 2024
school board meeting at 7:32 pm thank you Keith I'll second have a motion by Cassidy second by Keith move to approve the adjournment of the December 16 2024 school board meeting at 7:32 p.m any further discussion seeing none all those
in favor signifi by saying I I those oppos same sign this meeting is adjourned thank you