Hi, Mr. Major. We are just waiting on a quorum. So, we have two members right now and we need to have four for a quorum. >> Sounds good. >> All right. Thank you. So, so far we have three members that joined. We're waiting for one more
member for a quorum. Okay, I'm going to call this meeting to order. Uh, we do have a quorum. We have four members. Um, all of which are virtual. Uh, so we have Mr. Major, uh, Mr. Parks, Miss Sizzle, and Sherry Brown
all online. Um, since all the members are virtual, I was going to u put on hold the uh the agenda items and the voting items and we can do that at our next meeting. Um, if that's acceptable to the committee members and then I can
go through the presentation. The presentation is not that long. um it because of and I can explain that once we get into the into the presentation but the legislative session was supposed to end on March 13th uh which is Friday.
Um but what's going to happen is um only policy items will be discussed. There is not going to be a final decision on the budget. Uh the legislature is going to take a break uh and then they're going to come back and vote on the budget and that won't be until April, May or June.
U so even what I'm presenting today is u it's the both the house and the senate are very far apart in terms of the budget. Um so I was just going to go over where the proposals are uh for right now. >> We just wanted to make sure that that
was okay with the committee members. >> Yes. >> Sounds good. >> It sounds good. Okay. We'll start with the the brief legislative outlook. I was hopeful that this year that we would not go into a special session, but we are going to be going into a special sess session. So,
there are only um a few uh policy bills that we're we're still following at this point. Um, Senate Bill 7046 uh is a is a bill that has an a recommendation or proposal that we would
have to share our operating millillage which is our one mill operating millillage with state uh state college sponsored charter schools. So example how that would impact Palm Beach County is we have a uh the FAU sponsors
Henderson charter school. Henderson Charter School is not eligible to receive the proportional share of the one mill referendum that only goes to district sponsored charter schools. So what this bill would do is it would open it up that uh districts uh on a go
forward basis uh for any new uh levies that were approved by the voters would have to be operating levies would have to be shared with those uh uh college state college and uh university sponsored uh charter schools. It has
much more of an impact in in uh Miami down in the south and those areas that have more heavily sponsored charter schools. Uh but that would have the impact in the future of diluting uh the uh funding that was available uh to uh district sponsored charter schools as
well as the district. We do have positive news around the Florida retirement system rate. The proposal is a reduction of the current rate of 0.4%. 4% and that would result into an equivalent decrease of about $4
million in our F FRS rate if that is if that is ultimately what's decided. As for the budget timeline, uh that like I said um is going to be put off like it was last year where we didn't get our final budget until June.
Um and so we're looking at sometime in the same time frame uh April through June when the state budget will be will be approved and FEFP will be a part of that. So we do have um I have both the house and senate proposals that we'll walk through. So we have the worst case
scenario and the best case scenario and in that situation we always balance the budget on the worst case scenario and then any additional funds that come in over and above that we would put towards um salary compensation in looking at uh other proposals and
bills uh that we don't think at this point are going to um to pass is uh sovereign immunity. Sovereign immunity and changes to sovereign immunity have been on the table for the past few years to increase the current level which is at 200 and 300,000 uh dollars as the
cap. The House and Senate are both pretty far apart. And so we don't uh think that there's going to be a decision where they can both get in line with one consistent proposal. Um so we are um hopeful that that may be that can maybe kick down the
road one more year but we know at some point uh there will be increases to those sovereign sovereign immunity uh caps which could also have a significant impact um to our budget. And looking at the federal funding outlook uh we are uh
fortunate that we're looking at uh relatively flat funding uh for all the federal grants. We did have the concern that many of our federal programs were going to be reduced um or cut or eliminated um completely.
And so if you um so with those uh federal grant programs remaining flat, our funding is not going to stay flat because we did have a decline in enrollment. And so with that decline in enrollment, sorry, excuse me, but with that decline
in enrollment, our funding for especially programs like Title One um are going to decline um as and and align with that decline in enrollment because we did have a um almost like a hold harmless for this past year that we
had our decline in enrollment. It's a one-year lag, which we discussed in our last meeting. And looking at our uh final uh certified uh uh enrollment that came in for FY26 for the October survey period, our
actual enrollment came in uh down 7,000 students um from the prior year. Uh charter schools are down about 300 students. And when you look at the vouchers, vouchers are up about 4,000 students. Uh when you look at that very
last column, um that is the projection for FY27. So we went through the modeling um projections with the Florida Department of Ed. We are projecting a decline of about 2900 students going into FY27. We do anticipate that charter schools
will have a decline of approximately 300 students and there's a projected increase of almost uh 4,000 students again in the voucher program. Uh when we originally went through our projections for FY27 enrollment, we started at a uh
decrease of about 4,000 students. We compared that with the initial modeling from Florida Department of Ed who had us down a projection of of approximately there's they have several different models they use. Uh but they had us down with their most conservative model at 1,900.
We went back uh reviewed um our modeling with our planning and demographics department. Uh they tried to back out those one-time um losses and students that we saw uh within um the immigration population. or those English um language
learner students made adjustments and and brought down that projected loss from 4,000 students to 2900. Uh we worked with Florida Department of Ed and they did accept um that adjustment within um our uh projected loss. Um so
it's not exactly at 2900. We agreed to about 2750 as our uh proposed reduction in enrollment for FY27. And looking at that loss from FY25 to 26, an enrollment of of over 7,000
students, that equated to a loss of revenue of $66 million. This chart shows how we get down to that $66 million. So if you start in row one, which is the first gold bar, you can see
the reduction of enrollment of 7500. That reduction includes both district operated as well as charter schools. Um and then you can see that decrease in uh row six is the um the base student allocation. You know that equated to a
reduction of 43 million almost 44 million uh in that base student allocation uh due to that reduction in in the number of students. Uh we also had in when you look at row nine that's the academic accelerations option which
was the new categorical created by the legislature uh this past year when initially they were going to eliminate the funding additional funding for AP IB ACE all of those um accelerated programs
uh we receive additional funding for those programs. Initially we were funded uh one for one. We were uh funded uh the base student allocation times the the FTE the number of students that pass those uh those tests. Uh uh the
legislature felt that districts were uh receiving too much additional advanced funding because that was over and above the per student allocation we were receiving. So it was almost it was double funding that student for the number of courses that they took and passed in that advanced weighted
funding. Uh so what the legislature ended up doing is they put the funding back in but they put it in as a categorical and by putting it in as a categorical they were able to then keep the funding flat. Um so when they initially uh projected what that
academic accelerations option was going to be, they based it on, you know, 19 um you know thousand students that that were going to be um passing um the the tests significantly more ended up passing, but they didn't actually adjust
the funding. So it ended up being just a it ends up waiting down the per student funding amount. And when we jump forward and look at the FY27 uh FFP calculation, you're going to see that the academic acceleration funding
stays exactly the same. So, it's going to end up not getting increased. Whereas in previous years, as the base student allocation increased, the amount of funding that each of the schools received increased because it was one for one based on the number of students um that passed. Um so that ends up being
a budget- saving initiative uh for um at the legislative level. When you move down to um the enrollment, you can see on row 30 there, it's like a a teal blue color uh that our district operated schools were down 7,100.
Charter schools uh for this year uh were down um based on the final calculation 112 students. Um and this is just compared to um comparing that to the FF FFP calc and the McKay gardener. We're
very close to what the projected was at um about 300 down about 300 but very close to the projection. When you look at what the final impact is uh to the net district funding, it ends up being a loss of 65.9 million
once you back out the impact to charter schools as well as to vouchers. So, in looking at how we're able to balance that $66 million in in the current year, uh we made some initial adjustments
uh based on the count uh based on actual enrollment during count day. And with the enrollment during count day of those based on our current staffing formulas, we were able to save about $20 million. Um, in looking at other recurring
adjustments, but that's nowhere near that's about a third of what we're looking at in our loss of revenue and why we had to make changes within our um allocation formulas of for our school budgets in order to adjust that going into FY27.
But other adjustments that we're able to make within the budget is that going into FY26 there was a more ended up being a more significant reduction within the FRS rate than we initially realized. So we have some additional savings within FRS. Uh we also had um
with the reduction within the academic acceleration that's passed through directly to the high schools and as a result of that that's not being absorbed by the general fund budget. were just reducing the budgets uh within the um each of the high school um school
budgets. And then when we looked at um interest income, we have always budgeted interest income at a lower amount um than what it actually comes in at. Um the past four years, interest income has been abnormally high. When you look at
the past 15 years, the last 11 of 15 years, interest income has been below $10 million. Um so we never wanted to increase the interest income u to the amount that we've actually been recognizing these past few years because we knew that wasn't going to continue.
Um so starting in FY um you know 26 we've started to see the interest income come down and that's going to continue to come down before it's going to go back to what the nor more normal interest income has been in the past. Uh but we are going to increase the budget
uh more than what we have in the past um up to uh $12.5 million. So that's I do consider that um a recurring adjustment. Uh so once we take all of those into consideration uh we have an additional um
non-recurring adjustments to apply and that non-recurring adjustments is primarily due to lap salary uh because our our vacancies are higher uh than what is included within our uh what we budget for our average salaries. Um our
average salary calculation includes an assumed vacancy rate of 2%. Um so anything above that 2% is considered lap salary. Um during the pandemic we did have um a vacancies rate that were
significantly higher than that 2% um going up um to 6% plus. uh we knew um and each year uh that vacancy rate continued to tick down and then as a result of this uh this past year in FY26
uh readjusting the staffing after a loss of enrollment of 7,000 our vacancy rate went from over 5% um to 3.2%. So we lost 2% of the vacancy rate just during the um this countday adjustment and alignment. So that's that difference
between the 2% and the 3.2% is what makes up that 11.1 million in lap salary uh that we can use for this year. But I can't project that that's going to continue going forward. Uh because with that adjustment, that loss
of the vacancy rate that we had uh within this uh past year due to the adjustment during count day, the future decline in enrollment that we're ch uh projecting for the upcoming year. I anticipate we're going to we're going to get even tighter on our vacancy rate and
it may even fall below the 2% that we're that we're budgeting within the average salary. So that's why I have that that lap salary of 11.1 million is non-recurring. So that leaves a gap uh within our budget of 14.8 million. So that's what
I'm expecting the shortfall to be um and draw down of reserves. But that 14 million um does not take into consideration uh what we have proposed in terms of um compensation proposals to our employee groups. So
once you add in that additional 26.9 million that represents uh the both the recurring and one-time financial impact of the um the salary compensation proposals.
uh we're at a uh a shortfall in FY26 of $41.8 million. So that's what we expect the spendown of our reserves in FY26. We were able to build up our reserves um during uh the pandemic um as a result of
receiving those ESSER funds. Uh and so we have approximately of our $450 million of fund balance, approximately $160 million of that is truly not set aside for specific purposes. So we will
be um spending down that fund balance by that $41.8 million which is approximately 30%. But we do feel that that is important um in order to compensate our employees and we have a plan in order to um balance
that shortfall going into FY27 and why we were very strategic in uh offering a salary proposal that was one and a half% recurring and a one and a half% one-time. Um, so we didn't have that recurring component going into
future years um necessitate necessitating even further reductions um than we already need to make in order to balance going into um FY27. And so just a a reminder of the components of of our fund balance. We
have $71 million is in non-spendable and state categoricals. We have 131 million set aside for specific purposes. uh 91 million is the board contingency, $160 million is what's left and is not really
set aside for specific purposes. And that is the portion we were able to build up during the time of um the ESSER funds that we received. So we are expecting to spend down that 16 160 million by $41 million
approximately 30%. When you look at our financial condition ratio, um this goes back to FY27 and is also a comparison of all the urban seven districts. Uh so Palm Beach is the orange bar. Um Hillsboro County schools
is the purple bar. Um but I added in I've shown this before. Um and this chart is as of F FY24 because we haven't I haven't received uh DOE has not released the financial condition ratio for FY25. Uh, but I added in at the at the top
there two gray boxes. One is um it's ERA. It says ERA funds. Those are federal um stimulus funds we received during the Great Recession. We received those from July 2009 to September 2011. So over a two-year period, we received
$243 million including the charter school share. And you can see that most all the districts had an uptick in their fund balance um during the time that they received those federal stimulus funds. Then if you fast forward to the
ESSER funds, you can see we received ESSER funds from uh June of 2020 through September of 24. So we and we received 629 million including the charter share. If you exclude charter, it was about
$570 million that the district received over a four-year period. So, we received over double the amount of funding over twice the amount of time. And so, that's why you see an uptick in the the uh fund
balance percentage of of most districts uh our district in particular um because we were strategic to utilize those funds. we had the ability and were legally allowed to supplant um and which meant that we were able to push eligible
expenses into the grant and uh in order to help bolster our fund balance so that it would provide um uh in a sense to hold harmless and a way for us to more strategically spend down that fund balance in the future um just like we
did during the great recession. So you can see that we built it up and then after that funding ended we slowly spent that funding down. Um then that was the intention with the ESSER funds as well to build up the fund balance and then we will start to slowly um spend that down.
So so fiscal year FY24 was the first year um uh or the last year of the esser funds that we've received. uh our uh financial condition ratio which when you think of our fund balance is comprised of um the uh unassigned fund balance. So
the board contingency as well as the assigned piece. Um the assigned piece of the fund balance is everything that's um set aside that's not a state categorical and those are things like um the afterchool program funds carried forward
with the afterchool program. Um there are also items that used to be categoricals that are no longer categoricals which were state restricted set aides. For example, um instructional materials instructional materials used to be a set set a specific state
restricted categorical. Uh the state uh three years ago um rolled that into the base student allocation. So we still have to buy instructional materials. We're still required by state statute to go through mandated adoptions. Um, every
year we have mandated state textbook adoptions, but they no longer have it listed as a specific state c uh state categorical. So that's why we cannot list it in the restricted category, but it is still set aside because we're still required um to go through uh the
state adoption uh process. Um so those are all included within what's called the um uh the financial condition ratio. So it's the the unassigned and the assigned as well as the 160 million that is not set aside for any uh particular
purpose. Um and so that totals about 13%. If you look at this the average financial condition ratio across the state uh we're about at the average uh which is the statewide average is 12.8%. 8%. And I wanted to highlight the if you're
wondering who because it is might be hard for you to see, but the the light blue bar at the top is Orange County Schools. Um Orange County Schools now has the the highest financial condition ratio. Uh they do have an operating levy and they initially were not using that
operating levy for recurring um costs like salary initiatives. I do know that there has been a change where they are now using that for recurring initiatives. So I would expect to see that to start to spend down. Um you know hopefully it's going to be in a in a in
a strategic way. Um and then in looking at that orange bar that orange bar is Hillsboro um county school. The orange line is the Hillsboro County School District. And you can see at one point they had the highest um fund balance uh percentage financial condition uh
percentage and you see how quickly it dropped. The reason why it did and that was from FY from FY11 um down to FY uh 15 and then continued a few years after that. They were using their fund balance
um for recurring salary initiatives. Um and it took the board um some time in order to make um changes to to structurally align their budget. Um and and really you can see that it looks like the federal esser dollars had a
significant impact to help them pull pull um Hillsboro out of that declining um fund balance situation that they were in. All right. So that's the update of where we're at with FY26. We do expect to spend down fund balance. That is a
projection. Uh but we do have a plan going into uh FY27. Uh and in order to ensure that we will um uh be able to uh balance the the shortfall that we had in FY26 going into FY27 based on the the
budgetary changes that were we're making uh in preparation for that. I already went over the enrollment uh modeling um and how we we started at 4,000 um but we ended up at 2700 um in collaboration with the Florida
Department of Ed. We have and I and I presented at the last meeting the changes um to the school budgets. Those school budgets were released on February 20th and the schools are working through those changes now
within my budget department. The budget analysts have met with every school um and in collaboration with uh the HR department as well as uh title one is working through meetings with the schools as well as our ESSE department
and multicultural. And so we're working through um those uh position changes at the school sites. We're in process with all the comprehensive department reviews. Um each of the department heads uh presents
to uh the superintendent. Um and so we are working through the uh the targeted reductions uh within the departments and those will be finalized by Monday, March 23rd. Um so with this uh school level uh budget adjustments um as well as
department budgets reductions we will be on target to balance the shortfall that we had in FY26 um that was uh being carried forward into FY27. In looking at our projected uh increase
in taxable value um because this will have an impact but only on uh the operating millage you can see that our um the taxable value is projected to increase in f FY27 for the the school taxable values but we're looking at only
a 4% increase in taxable values. I'm going back to FY but 24 and 25 we had doubledigit increases of 22% and nearly 16% but we're getting back to that preandemic more stabilized increases you
know averaging averaging around um 5%. Um so we're just getting some more stability uh within the um the taxable value area. And now looking at the budget outlook for FY27, we have um both the House and
the Senate proposals. Um and so they are very different. So starting with the Senate proposal, uh the Senate proposal and that's the third uh column over uh the Senate is proposing to remove vouchers. You can see this on the first
gold line uh that I have um highlighted. The Senate is proposing to remove vouchers from FTE. So that's why you see that the the um the total unweighted FTE is 176,000 in the Senate version versus
the H ver House version of 209,000. The Senate is taking the vouchers, the 30,000 vouchers out of um the unweighted FTE and they're putting it below the line. Uh so you'll be able to see um the
adjustment on on the next page. But u by doing that it makes it more um and once this would go into play more understanding as to what's truly the per student funding increase uh by excluding
the impact of the vouchers. Um it's been a request at the district level um but it's been something that the house has not been in agreement with. So that is one of the most significant differences between the the um the Senate and the House versions. And then it will also be
the impact of funding as well. Um so in order to to show a more um comparable um uh comparison of the two uh there's also an adjusted because we have to uh compare that to our what we call our
third calculation which is based on our uh October enrollment u the survey period u from FY26. So we since that the vouchers are included within that third calculation. I I have two columns for the third calc um the third calc from
January 23rd and then also the third calc adjusted which is next to it which is just taking out uh the voucher enrollment so that I can compare the Senate to the third calc adjusted and the house version to the regular third
calc. Um in looking at um the impact of the uh of the uh base student allocation, you can see that the base student allocation is increasing for uh the
house. Their proposal is that the uh BSA would increase by $108.93 93. That's a nearly 2% increase in funding compared to the uh Senate proposal which is a $27 increase in per
student funding and that's 0.5% so 0.5%. Uh the house is you know four times the amount of what the um senate is proposing and when you look at the base student allocation you can also see on row four the comparable wage factor. So
the comparable wage factor is what the Florida Department of Ed or the legislature uses to um adjust for uh cost of living in Palm Beach County. So the cost of living in in Palm Beach County based on this comparable wage factor was decreased uh from 3.55%
to 3.1%. And you can see that from the 1.0355 to the new comparable wage factor of 1.031%. And you would think that, you know, it's how could that be a significant impact
um with that reduction? That reduction equates to a $5 million loss in revenue by having that uh reduction in the comparable wage factor. The comparable wage factor is um based on a a three-year average. Um and it it's uh it
used they used to use uh the Florida price level index and it was u this is a new factor that uh the legislature switched to um several years ago. Um so that also had a negative impact. So when you look at the base student al uh base student allocation, you can see
that if we didn't have any adjustment um for that cost of living and our cost of living stayed the same, we wouldn't be looking at a $27 increase in the BSA under the Senate proposal. we'd be looking at a $50 increase, but because we're our comparable wage factor
decrease, that turn that $50 turns into 27 um $27 and the house proposal um is reduced from 129 to $108. Um in looking at uh the academic acceleration,
uh that's row nine. You can see that the both the House and the Senate agree that they're not going to increase that categorical and that's the one that I was telling you that's for the funding for ACE AP IB um all of those um
advanced accelerated um options. Um so they're the the legislature is just using that categorical as a way to cap the funding for us. So they're keeping it flat um from where where it was in the current year. Um you can see on the u the Senate proposal I added in you
know backing out the adjustment for um fees. Um and that's because it's not included in the Senate version. So needed to make sure to back that out of those other categorical amounts. uh when you look at um the enrollments um and what's projected for the
enrollment the both the house and the senate used um one of the models before um the districts agreed the reduction in enrollment before the districts had agreed to what and provided input as to what they felt that their uh FY27
projected enrollment would be. So, in future runs, I expect that the the the uh the decrease that you're seeing in enrollment on on row 29 there will be adjusted to what what was agreed to. Uh right now, it's at 1,800. Um because
that was before we had u the dialogue and collaboration with um with DOE looking at what our initial projected decline in enrollment was and um agreeing on that 2700 as the decline. Um, so that's why we're going to have an
adjustment to the loss in funding because we'll have to adjust for that additional loss um that we're expecting to have in enrollment. Uh we are expecting charter schools to have a loss um similar to what they had this year between two and
300 students um and do expect that there will be an increase in the vouchers of nearly 4,000 students. So the ending result of that um between the house so the senate proposal
um we're looking at a loss of $5 million um and under the house proposal we would be looking at an increase of 22 million and that's really the difference in the the base student allocation you know the difference between having a 0.5% increase in the base student allocation
uh versus having a 2% increase in the base student allocation. Um, so that's that's really the the difference between the two. Since we don't expect to have um a budget until potentially June, we still have to go through and build our
budget. Uh so uh what our process is is we're going to build the budget based on the the uh most conservative, which would be the worst case scenario. That would be the Senate proposal. So we're building the budget based on a loss of $5 million. Um and then any additional
funding that comes in, you know, if they end up, you know, somewhere in between the House and the Senate version, um in terms of the final budget, any once we balance the budget and anything we receive over that amount would go into
um salary, employee salary compensation. in looking at, you know, just what we're going to continue to monitor going forward is monitor our enrollment. Uh making sure that it's going to stay on track with what we projected to see um in terms of either um you know what we
projected in terms of a decline or whether we start to see an increase in our enrollment. uh what the end up you know making sure that the F FRS rate ends up being you what end whatever ends up getting approved ends up being aligned with what
was originally projected which is a um reduction of about point4% which would equate to a reduction um in of about $4 million within our budget um our teacher salary increases um our salary increases
for all employees is really subject to legislative funding. And one thing that I didn't mention is both the House and Senate proposals in terms of the um uh the the uh teacher pay they were both at 0.6% which is the same amount as this
year. Um that's the amount that's set aside within the base student allocation. The governor had proposed double that. He had proposed increasing the teacher pay uh by to 200 million which is double what it was in the current year. our share would have been
one point two would have represented a 1.2% increase um in teacher pay uh but both the house and senate um agreed on a 0.6% uh which is the same increase that we had in this current year. Um so I know
that when Mr. Burke and the board members went up to the and during Palm Beach County um legislative days. Uh one of their big initiatives was pushing for additional pay um for um employees and teachers in particular. Um and it it
doesn't seem that that was something um that the House and Senate have incorporated within their budgets. Um since this budget isn't final, um there's still the opportunity for them to make adjustments. Um but just thought that was a you know important to highlight because we we did think that
based on the governor's proposal we would see a higher amount for uh that teacher um compensation um and it and they ended up not agreeing with the governor's proposal. U we are fortunate that it does appear
that from a federal perspective that the funding is going to stay flat. Um, and then looking at the other considerations that we have for the budget, uh, we did have a three-year negotiated employer increase in our health premiums. So, looking at FY27, there's
an that impact of that increase in employee employer premiums is 8.6 million. Like I mentioned with instructional materials, even though it's not a categorical, we're still statemandated um to implement um textbook adoptions um
on specific cycles. Um, so we do have an a funding set aside in FY27, but in looking at FY28, uh, we the district will be short $15 million and 29, an additional 15 million
and FY30 10.5 million. Um that's because the the textbook adoptions are coming in double what the legislature appropriated or used to approp appropriate for instructional materials which averaged around $15 million per
year. Our adoptions are coming in at 30 plus million. Um and we are also looking at a increase in our FPL rates. Um, if that proposal is approved, uh, we're looking at an
increase in FY27 of $2.1 million. So, we were hopeful that we'd have the end of the session on March 13th. U, but we're going to have to wait like we did last last year till June, but we will work through um still work through to
balance the budget. Um and then anything that we get over and above um that worst case scenario uh will go into our salary um and employee compensation. Uh the property values are certified no
later than July 1st. the Florida Department of Ed who and uh who sets our our required local effort through the whole legislative process that mill rate will be certified to us by FTOE no later than July 19th. We'll have the uh
tenative adoption of the budget on on the 29th and that will include the approval of the capital plan and then our final budget adoption on September 9th. uh our next meeting is scheduled for March 31st. So at that next meeting or
there's not going to be much in the way of an legislative update uh because the I I find it doubtful that the legislature uh will come back into session and be done by March 31st. But we will be able to pro provide a
complete budget update of where we stand uh with the department budget reductions. That combined with the adjustments that we made within the school budgets, we'll be able to show that based on um even though we are um spending down our uh fund balance in
FY26 by that $40 million that we will be fully balanced going into FY27. Um but that does not include at this time any additional um salary um or um employee compensation for FY27. It's
purely just balancing the shortfall that we have in FY26 going into FY27. Uh because we're also facing declining enrollment going into FY27. Uh we're also uh present at that our next meeting um the capital budget and
the update to the capital budgets. Um and then our next meetings following would be on May 7th and we will likely need the meeting on May 28th. Um depending on u you know how long it takes uh for the um the legislative
session for them to come back and then also finalize uh finalize the budget. So already have gone through the timeline. So we're we're all we're through March. We are working through all of the budget adjustments for next
year. U I do feel confident um where we stand right now that we will hit our financial objectives on the department side and that combined with um the changes and adjustments we made within the schools that we will be able to
balance that shortfall um that we're facing in FY26. Um so that we you'll see that we'll have a decline in fund balance but we will be able to um to stabilize and so with that I did want to open it up for any questions.
>> I had a question. Do you have a target minimum fund balance that you try to maintain? the the absolute minimum that we're required to maintain is 3%. Um so that is where uh that is the state mandated
requirement that once you go below 3% uh you are potentially in financial emergency. Uh so we try to stay uh I would say I'm trying to get back to that. I don't know if this is not
working for here. Let me try this. wanted to go back to the financial condition ratio. Uh so we try to stay around I would say the the target would be between the around the 8 to 10%
range. Um and we would so we would want to go back and we know that our fund balance was built up um during the that esser time period. We want to just be very strategic as we spend down those funds and make sure we don't get in the same situation as Hillsboro County
Schools where we're spending recurring costs uh on using one-time funds. Um so we're, you know, in in this situation, uh we had a decline of enrollment of of 7,000 students. the adjustments that we
could make um during that first um count day adjustment on the 11th day of school like we do every year was only able to generate you know a third of the um actual loss in revenue that we were facing. And so that's really what the
purpose of those um of of those set aides are um is is really truly for that that purpose. And so that $160 million, uh, the fact that that's truly the only amount that's not set aside for a specific purpose, uh, we're going to eat
into that by by 30%. Um, so we really don't have any of this the other funding available in those other categories because it is it's truly set aside for specific purposes. Um, you know, even though like I said with the
instructional materials, uh, that DOE does not have it as or at the legislative level, they took it out from being a restricted categorical, but we're still mandated as a district to go through um, uh, textbook adoptions and and and adoption cycles every single
year. Um, so it is even though it's not technically within the state mandates, it is it is still a state mandate. um it's just not listed that way within state statute. So we still have to set the side set aside the funds in order to cover the cost of those adoptions.
>> Okay. Thank you. >> Yeah. So really the only part of the fund balance that that's available to spend down is that 160 million. Are there any other questions? All right. So then our next meeting and you know I'm sorry that we didn't have I was hopeful that I originally scheduled
this meeting so that it would be towards the end of the legislative session be able to share out at least where we were at. Um it was somewhat of a surprise uh that the legislature was uh was going to push off the budget again this year like
they did in the previous year. Um all right. So I wanted to go through the next which we did go through them but then the next meeting dates and make sure there were no issues with time. So our next meeting is March 31st at 2 PM. So, that's another Tuesday at 2
PM and then um then we'll be May 7th at 9:00 am. I wanted to make sure with the group that there's no conflicts with those meeting dates. They should all be on your calendar at this point. But if you could reach out to me, let me know um if those dates if you're going
to have any issues with any of those dates because then I can try to to reschedu um to make sure I can try to get something that's more convenient. It just gets difficult with um scheduling the boardroom. We have to have these meetings in the boardroom so that we
have access to the to the cameras. All right. And I also wanted to recognize that Mr. Ferguson has joined as well. So I'm I'm sorry that I didn't um see that earlier, but I wanted to recognize that Mr. Ferguson, a board
member, has joined um the meeting. Okay. All right. With that um I'll end the meeting and then at our next meeting we can go over um the action items u that we pushed off um from this current meeting. If you have any questions, you know, please reach out to me and thank
you all uh for attending.