Mr. Park's joining. We do have a quorum, so we can go ahead and get started. Um, you know, Sherry, Miss Brown is the the chair of the meeting. Um, but I don't know if it would be easier um since this is a virtual meeting, if you wanted me
to just go through the agenda. Heather, if you Yeah, if you could handle it, it'll be easier, I think, with virtual. Okay. All right. And then I just wanted to thank everybody. Um, and we also had Mr. Rossi join. Um I want to thank everybody for being
flexible in your time um and having a virtual meeting. Um I didn't lose my voice until today. So um hopefully you can you can deal with with it. I'm I'm hoping I'll be able to to be able to make it through
this meeting. Um I thought it was important um to continue with this meeting just because of the legislative session and where we're at. Um, but before that, I wanted to just we can do introductions uh of everybody who's on the call. So,
we have Miss uh Miss Sizzle is on the call, Miss Brown is on the call, Mr. Rossi is on the call, and Mr. Fe is on the call, um Mr. Drain is uh budget manager in the budget department, and
he's on as well. So, I was going to get started with the the budget update and it's this has been a very interesting uh legislative uh session and very unexpected
um as prior to you know last week you know I I expected by the end of May um we would be certain to have or actually by this meeting I thought we would be certain to have a final budget um it appeared that both the House and the
Senate had an agreement and uh then the the Senate ended up there was some positioning by the governor that said that he was going to veto and so at that point uh the the the Senate was siding
more. It appeared the Senate was siding more with the governor and they had to go back and and relook at the budget again. And from what I presented at the last our last uh committee meeting, the House is looking there's just
fundamental differences in what they want to do with the budget. The House wants to have a reduction in sales tax, which quite honestly doesn't make sense. You know, we're entering into a lot of uncertainty at the federal level. And
then we have the state wanting to do a self-imposed reduction of revenue of recurring ongoing revenue. And that's what the House proposal is is a reduction in the sales tax. And the governor pretty much said that that's a no-go.
um that Senate on the other side was was looking more at having some one-time relief um in uh property taxes, not something that was recurring, um but some one-time relief, and that that aligned with more of what the governor's
uh proposal was. We did get a letter that was sent out by the Senate President yesterday um that said that they have still been in talks between this the House and the Senate and he said that they are not re recommending that the the legislators come back um
next week. Uh but they do anticipate that they will be back and have will call them back after Memorial Day. Um so there it is possible that we will have a budget prior to the end of June. Uh but
it is possible that it could extend all the way through the end of June. Uh we have very prescriptive timelines um from our truth and millillage reporting requirements and that's how we have to notify the public of the of what the
millage rate is going to be in the next year. And this is the the first time that I can remember in a long time. Um but even going back I was trying to to think whether during ESSER we had um some uh uh we had a lot of concerns as
to what the budget was going to look like as well. U but I don't recall it going uh this late uh into uh into the year and potentially impacting those trim reporting requirements. Uh but it is good news
that both the House and Senate have continued to talk. Uh and um there is a chance uh that that we might have u a a compromise um sooner than the end of June. There have been some bills u that
have been sent to the governor and we are waiting for the governor to actually sign off on those bills. And it it was a very interesting session and just you know you know I I said in our last meeting either everything's going to pass or nothing's going to pass and it
was kind of a little bit of a hybrid where there were just some some things that were just added into bills that really truly didn't make sense. Uh but the bills that have been sent to the governor that we're waiting to see if he um signs off on is we have House Bill
11:05 um that has the standard monitoring and these are just the ones that have a financial impact because there are other bills but these are the only ones that have a financial impact. Uh but the education bill has the the monitoring contract for charter schools which is
which is not going to impact our district because we already had we already have a standard um uh monitoring tools for our charter schools. Um and it this bill does also eliminate the requirement where if if your school is
going to convert to a charter school, uh you used to need uh parent support as well as teacher support, 50% of teacher support. And this bill eliminates the requirement to have 50% teacher support to uh to become a charter school, a
conversion charter school. And it also included, this bill also included uh the ability for a municipality to apply for what's called a job engine charter. Um the Senate bill 296 is the
um adjustment to the middle school and high school start times, which is allowing school districts to submit a plan as to what the impact of changing the middle school and high school start times would be. um thereby allowing districts to comply with the requirement
by submitting a plan and submitting like what the impact would be but not have to actually go forward and make those changes. Um and so that that is actually a big win for not only districts, parents, nobody wanted to see a change
in the middle school and high school uh start times. And the last is the Senate bill 1470, school safety. And there was a lot of the when this bill was passed originally, the school safety bill was passed
originally, um it had some unintended consequences of the amount of um time that we would need to have. school districts would have to have uh uh actual police officers or guardians
uh on site. And it was it was not intended by the original um bills, but uh when you actually read the language of the bills, there was in like I said, unintended consequences and it was
causing u um school districts to potentially have to not allow access to certain activities after school. And uh so this bill allows it clarifies what was truly intended initially is that the
the um the security was while was during the school day and only 30 minutes before and after the school day, not the whole entire uh time that the campus is open. And that was causing like I said, you
know, logistical problems um at each of the schools um and and also even staffing problems um in order to ensure that they had the appropriate staff um in order to monitor all locations at the school sites. Uh so these are three
bills that we are we're hoping that the governor does sign or I mean at least Senate Bill 296 of 1470 will have a a beneficial impact to the district. Um and uh 11:05 um we were
disappointed that they took out the 50% teacher support uh and for the conversion charter school with the FFP. Um there's no change um to the House and Senate uh budget proposals. So I'm not going to
spend much time on those. But what I want to since I had to go through and we had to balance the budget because we have such a prescriptive timeline under truth and millillage. The way that I balanced the
budget was on what is considered the worst case scenario which is the house proposal. And that way if we can balance the budget based on the house proposal and anything we get over and above the house proposal we could then set aside for
salary increases. So that was our plan uh in order to be able to make sure that we can comply uh with uh the reporting requirements so that we can have a balanced budget u and not have to sit there and wait until the legislature
came to a compromise as to what the budget was going to look like. So we balanced budget uh based on the worst case uh uh proposal. So, with the House U proposal,
we were starting with a a deficit of $11 million. And um if you remember from you know our our last discussion uh we were looking at a a you know $40 million shortfall once you took into consideration the increase in the
teacher compensation because we have to set that side amount set that amount aside specifically for uh uh teacher raises. Um and we had the increase in the health premiums. uh but we also had
um set aside a reserve in the prior year that I helped offset what that impact was. So the total impact of the health premium increase for fiscal year 26 is 11 9 million or $12 million. We have an increase to the
contingency reserve of 3% which is $2 million um with the house proposal. The house proposal is cons is in continuing to include vouchers um within the FEFP and by including the vouchers within the F
FFP even though we as for district operated schools are seeing a decrease in revenue there's an increase in total revenue because of the increase in vouchers and as a result of that we do have to increase the contingency reserve
if at the end of the day um it uh they there's a compromise in vouchers and family empowerment scholarship is pulled out of fees or is pulled out of the FEFP, then we would not need to have this additional amount added to the
contingency reserve. So that would be $2 million we would be able to to pull out and to offset and to add to um a general salary reserve. Um, I was concerned about the increase
in the FPL rates, um, which there will be an increase, but it won't really be an increase, uh, for our district. We won't see the impact until FY27, 28, and 29. So, we are not going to have to
worry about that increase for FY26. Um, we did, uh, align our staffing with projected enrollment. The impact of that additional staffing that we added at the school sites was $3
million. Um, but what I what is I need to um make sure to highlight is that from the state perspective, they are proposing that the district is going to see a decline in enrollment. And we were
budgeting that um that we were going to see enrollment was going to be flat. And in addition, we saw an increase in special needs students as well as an increase in ELLL students. And that's what's necessitating an an increase in
and staffing. So if we see if projected enrollment actually comes in at what we the district um have projected, then we would actually see increased revenue as
well. If enrollment doesn't come in like the district projected, then when we make our adjustments on the 11th day of school, we would then see a reduction in our um in staffing because we do align our staffing with enrollment. So we
would then see a reduction in um in expenditures. And so that is something that's unique for this year that we haven't seen in previous years is we do have a disagreement as to um where we as a district budgeted versus where the
state has projected our district enrollment. We have the impact in the changes in departments uh that we talked about in our last meeting which is really limited just to contractual increases and that's
$400,000. We have the impact in the changes in schools and that was the band and the athletics pilot that's the $1.4 4 million and the salary settlement the annualized impact is for those bargaining groups that are on a calendar
year basis. Um so that's SEIU um and um and also ASOP which is part of uh the non-bargaining unit. They have a a January 1
um contractual date. Uh so we would need to and we're still in negotiations with SEIU, but this sets aside the same 4% increase uh that we already allocated to the ASOP bargaining group that allocates
a 4% increase to um SEIU and that's to recognize the annual impact for a whole fiscal year. Um since the 4% would only be retroactive to January 1st. So, taking into consideration all of
those different impacts, we're at a shortfall of of $40 million, the the majority of that $40 million is going to be allocated back to high schools, and that's that change in the add-on FTE.
um the advanced uh coursework um AP um ACE industry certification and IB. It does look like both um the House and the Senate, you know, that that is something that has not changed since I've last reported to
you. Um they're both in agreement uh that the add-on FTE will be reduced by 50%. The majority of that add-on FTE is allocated directly back to high schools and then high schools use that for
supplemental funding and supplemental resources to help benefit their students. There's going to be a significant impact, negative impact to those high schools to absorb this reduction in funding. U but that is funding that's allocated directly to
them. So there are other districts that keep that money centrally. So they'll be handling that reduction um more centralized. Uh but in in Palm Beach County, we have u really read the the
intent of of the um the the statute language which does require 80% of that funding to be allocated directly back to high schools. And that's what that's how we've handled it in the past. And so it is as unfortunately that's going to be a
direct impact to each of those um each of those high schools. And so we've already informed the high schools and we've already made adjustments to their school budgets in order to reduce that add-on um that add-on FTE so that they
could see what the actual impact would be. And then in order to then there's an additional approximately a little less than $20 million about $17 million left to balance. And so I went and looked at
everything within the budget to say what what other amounts are we able to uh are we able to adjust. So, we set aside an annual reserve for hurricanes of $5
million. And so, I've reduced that that set aside to 2.5 million. Um, we still have funds set aside within the capital projects fund as well as self- insurance fund. Um and so we I was able to reduce
the hurricane set aside and that 2.5 million is really just to get started. Um you know if there is a storm um that is is um is is going to be coming, you
know, when when it's prevalent and it's known that there's a storm that's going to be coming. we start entering purchase orders for debris pickup and and anything that will help um during that initial time period of the storm. I also
looked at other um reserves that we have and uh with the for example the the count day reserve I was able to reduce that count day reserve because like I said this was a unique year and where we did not uh the where the school district
projected that our enrollment was going to be higher than the state. You know that has not happened before. Uh, so I didn't have to have um the same amount set aside within our count adjustment reserve uh because we're already assuming that
we're having more than that we're protecting we're going to have more students. So if we end up having more students then we're going to get additional revenue. If we don't, we'll be adjusting uh our staffing in order to align. And with the
prrated holdback, uh the purpose of the the prorated holdback is if at the state level they don't project sufficient enrollment. uh then they go back and they adjust each district. They're going to hold back
funding from each district in order to make up the enrollment that's above the amount that they projected. And I went back and looked um our last year um the pr-rated holdback
um for our district was $10 million. We are still waiting to see whether with the fourth calculation that's going to be adjusted down further. Uh but that's been adjusted to um $10 million. And there also is the the $250
million set aside that the legislature has agreed to include and we're waiting to see if they're going to include it this year as well. um that if that increase is a result of an increase in vouchers um then they use that $250 million set
aside in order to help to offset um that pr-rated holdback and so I was able to slightly reduce that pr-rated hold back. So the combined adjustment was um between those two was $10
million. And finally, I looked at something we look at each year is our fringe benefit rate. And uh in FY25, it was a very unique year in that there ended up being no increase, very nominal
increase in our F FRS rate. Um and that during the legislative session, it could have been as much as a 5% increase. And we ended up that the previous year was 1 point uh a 1.8%
increase or an $18 million increase. And when I was going through of the average salaries and and planning the budget, there was a lot of uncertainty as to what that FRS rate would look like. And so we proceeded with the what
the prior year increase in the F FRS rate was because it could be as much as 5%. So, we ended up having additional um a higher F FRS rate built into the budget um than what we actually needed
uh in FY25. So, the net impact ended up being um we were able to do a $5 million reduction uh within the the fringe benefit uh rate. At the end of all of that, we end up at
a at a pretty much a balanced budget. I won't say a surplus at $90,000, but we end up at a at a balanced budget. But that means we have no additional money set aside for salaries other than the $6 million,
which is part of the teacher compensation categorical. And that's why I that's why anything that comes in in addition to um what we do presume the house proposal
which is the worst case scenario. Um anything any additional revenue that comes in would be added to a the not just a teacher but a general salary reserve.
So what have we done uh within the general fund? Um we know that this is really FY26 is really the first of what we expect at least the next two years to be very challenging budget years um not
just at the uh education level but at the state level. Uh so we've uh implemented a hire hiring freeze for non-instructional staff. We have also uh performed a review of our central office
overhead. Um we've updated our analysis. We last worked with education resource strategies back in FY16 and that we updated our overhead um overhead as a percentage of of total
expenses and over the past 10 years we've declined from seven 7% to 4%. And although that doesn't mean we're not going to cut more, this is just an initial analysis uh as part of what we
know is going to be um uh challenging budget times over at least the next uh three upcoming years. And now you can see that for the average the the median of the districts that
participated the average what BRS calls leadership and management which is really district overhead was 5.5%. Palm Beach was 4.1%. So we were below the median range.
When doing this comparison, you need to have make sure that you're doing an applesto apples comparison. Um, Palm Beach can um participates in a um with ERS and ERS asked districts to
voluntarily participate in this exercise and provide all the information so that when ERS was doing the comparisons that they could make sure like I said that was apples to apples comparisons because there are certain things that we in Palm
Beach might uh treat centrally versus other districts. might treat as an overhead cost that is uh allocated directly to school sites. We might call them different names. Uh so they worked uh very closely with each
of the districts to make sure that the information aligned and could also be uh relied upon. Um and Palm Beach, which I'll show in the next slide, is the largest district that uh participated. Uh and
ERS is hoping to expand the number of districts that participate um next year. Uh so, but the median of the districts that participated was 5.5%. In Palm Beach, it was 4.1%. The last time that we
participated with ERS, like I said, it was our district overhead was a total of 7%. Uh, like I mentioned, Palm Beach is the largest district that participated, which does give us the
ability to uh to uh have economies of scale uh because we are a larger district. Um we we have 165,000 because it's only looking at district operated schools um versus the smallest district
has about 30,000 uh students. Giving a little bit of an overview of what's included in leadership and management. So it's governance, it's operations, it's business services. Um it's also looking at um overhead when
you're looking at instruction um you know curriculum department the support that's provided on the centrally to the academic side. When you break out the different components um you can see compared to the the
median the blue part of the bar is business services. Uh the green part is instructional support and professional growth. Uh the purpleish color is leadership and the green is pupil services and enrichment. Uh so the
largest bulk of it was um is business services. um in comparing the the the staffing across uh 10,000 students, which that was their way to equate it because our districts are um varied
widely by by size. And so next we're going to break down the business services because when I was looking at that at that number I was surprised even though we are lower than the the median I was I was still surprised that ours
appeared to be uh um so high because we are larger. So I expected to see more economies of scale. Um and it the largest component of business services is data processing and information uh
services. Uh so that did make sense to me uh because we are a district that is uh we are onetoone with our devices and uh we've had other reviews done recently um that have you know who
actually had concerns that we didn't have uh adequate centralized support uh for the the technology at the school sites. Um so in looking at the the business services component of it the
largest piece of it is the data processing and the information services which is the IT piece. Um and then uh we know that with uh human resources, you know, that was um on par at exactly 10
and we have invested in increasing our human uh resources because we were we had a significant delay uh in the amount of time that it took to hire instructional staff. Uh so we did invest
in in adding additional staff within HR. uh and we have significantly reduced that timeline that it takes to on board uh the uh to on board personnel. So um and looking at the next budget
that is it's our special revenue budget is going to be balanced as well as our capital projects budget but special revenue is also going to face a lot of uncertainty not looking at FY26 but looking at FY27 and beyond because it is very
dependent on what happens at the federal level. And so we're going to continue to monitor that and um and be able to to make changes um um for future years. Um but for right now, it looks like our
FY26 budgets appear to be set. Um and it's just like I said, it's you know what's going to happen um with FY 27 and beyond and we should have more information once we get into the fall. Uh but it would be right now uh the the
grants that we're we're moni mon monitoring are title two, title three um and title four. Uh so those are the the three grants um as well as head start um and the food and nutrition cluster whether there will be any changes or
impacts um to any of those programs. Um, so we're actively monitoring all of those as well as well as any new ones um that may be highlighted. And then in terms of the capital budget, we're very fortunate uh
that the sales tax was approved uh by the voters in November 2024. So we do have a balanced uh capital plan going forward which we presented in the last meeting. Uh but we're going to continue to monitor the
financial impact that the tariffs may have um as a result, you know, resulting in increased uh pricing. So, we'll continue to monitor enrollment. You know, what happens on um the the count day, the 11th day of
school, and whether we see an increase or whether we're able to maintain our enrollment, which is how we um how the the schools were budgeted or whether we're going to see a decline um like was projected by the state. um you know
really monitoring what the impact in enrollment is going to be, continuing to monitor uh the legislative changes that come forward. Um our funding and the amount of money that we have available
for raises for employees is is tied uh directly to the funding increases u provided by the state. Um looking at the increases in the F FRS rates the last two years um last this past year we had
a very nominal increase in the F FRS rate. This year it was um a half of a percent of increase in FRS. Previous years were significantly higher. And so what are those increases in the F FRS
rate going to be and what other changes are going to continue to be made in order to you know add and and uh divert funding um from traditional uh public schools. You know how can they expand
you know additional funding um being routed to uh to private schools. Uh we have our healthc care premiums. we have a three-year um contractual commitment um to increasing
health care premiums. So in FY27 that's an increase of 8.6 million and 2.6 million in 28. And looking at instructional materials, uh we were able to use instructional material reserve
set aside um to to fully fund the adoptions in 2026. Um the uh 2027 is a much smaller adoption. Uh but in looking in 28 and in
29, we are short um of $15 million. Potentially there's an additional $15 million that we're going to need in funding in 28, an additional $15 million in 29, and $10 million in FY30. So the
increase in instructional material costs and adoptions is going to have a significant impact in future years as well. And then we're still waiting for um you know finalizing the the impact of the FPL um rate increases in 27 28 and
29. Uh and then we're all monitoring what those impact of the tariffs going to be um as well because it's you know it's there's an we have tariffs and then they remove the tariffs. So we we're
continuing to monitor the impact of of the tariffs and and how the impacts they'll have on the operating fund. Uh but most likely more significantly the impacts that they're they'll have on the capital projects fund. Like I also
mentioned the impact of uh the um changes at the federal level and um and what's going to happen from a federal grant perspective in terms of of how what what
grants potentially are going to be cut or how is the funding going to be impacted? uh so that we can um and because they're looking at what is coming down from uh funding from um
the state for education purposes, we're going to have limited funding available um to help absorb any shortfalls that we see uh on the federal side. So, right now I'm I can tell you I'm
really uncertain as to when uh the House and Senate are going to be able to uh come to a compromise on what the budget is going to look like. uh we do I am confident uh that the house really is uh
the the worst case scenario and so anything uh anything that anything that comes in that's over and above what the house has originally proposed will be able to set aside in additional salary
increases. can't even say additional salary increases but being set aside for salary increased um so with the legislative session we have a chance of it um ending like the Senate's proposal which was by June 6
which is what the Senate uh is is still aiming for but the House has put in uh but the House has also had put in for the the ability that it could extend all the way until the end
of June. tenative budget adoption cannot go beyond July 30th um per trim requirements and that's uh because we have our um our board meetings on on
Wednesday and so that we cannot go past August 4th in terms of having our tenative budget adopted by the board and so our last board meeting that we could have is July 30th and so that's when
we're, you know, there there is definitely a timeline from a legislative perspective as to when the budget can be finalized because the Department of Education needs that information to be able to tell us what our required local
effort is going to be, which is what we then need to advertise and inform um constituents so that they know what their millage rate is. And so the legislature is truly on a timeline um in order for us to be able to receive that
information um to be able to provide uh timely to the the constituents. There has not in in speaking with um our representatives from the Department of Education um that is something that has never been missed in the past and it's not some it's not a deadline that can be
missed. Um so so they really are working against the the clock and you know I'm hopeful that the House and Senate uh will be able to come to a conclusion well before um that the uh the June 30th timeline uh that the House uh laid out
and that it will more align with the Senate proposal being done uh the first week of June and then we have final budget adoption uh will be on um of September 10th. So with that, I would like to open it up
to the committee to see if you have any questions. All right. So it doesn't appear that there are any questions. I wanted to move to the next item on the agenda, which is the minutes from our April 18th meeting.
And if there's uh so we have two action items. So one would be the minutes and the next would be to go over the the draft report of the board to the uh the draft report of the budget from the committee to the board. Uh so for the
first agenda item for the minutes is there we would need to be able to take a somebody willing to take a motion for the minutes. Move to approve Sherry. Is
somebody willing to second? Can somebody second? Second. Okay. Miss Okay, no problem. This is all seconded. All right. All in favor? I I
Okay. All right. And then for um the next item on the agenda would be the draft report the board. And so I provided a draft report of for everyone to review.
And so I'm looking for um feedback on that report. Um or another option is that we could I can work with the chair of the committee. And this pres this uh report to the board is normally reported
out at the tenative budget adoption which would be on July 30th. Um and so first I would need to ask if Sherry Brown if Miss Brown is available on that day to um report to the board.
I am not in town on the 30th. Um, and I did read through the report though and I don't really have any comments or changes to it. Okay. Um, so if as the uh the vice chair, Miss Sizzle, I don't know if you
would be available uh on that date to Can you say the date again? Sorry. It's July 30th. Yeah, I should be here. Okay. Um, and so also if from the rest of the
committee members, if you wanted to provide feedback now or if you want to take time to look through the report and you can provide feedback back to me and then I can work with uh the chair uh to
finalize the the final draft that goes back to the board. So, so I would like to take the um um so for the agenda, I'm sorry, Sherry, because I hopefully don't do
this, but uh so for the uh for the agenda for the report to the board, I need somebody to accept the report and then somebody to I'll make a motion to
accept the report and submit it um to the board. Okay. Is that good? Yes. Yeah, that's good. And then let me and Mrs. Second and then Mr. Parks, I think you had a
comment. Mr. Parks, I saw that you had you made a comment. Oh, you cannot unmute. It looks fine to me. Okay. All right. No, I see that. Thank you. All right. So, Mr. Parks accepts it
as well. All right. And so, all in favor? So, then that would be all in favor? I I All right. All right. Well, thank you. All right. Um, and I think that's the last that is
the last item on the agenda. So if something comes back and I if it ends up where we're not receiving a if after the House and Senate come to a conclusion, if it ends up that the House was not the
worst case scenario, I will then and it ends up coming back worse than what the House proposal is, then I will call the committee back together again. Uh but I won't presume I mean with what we were looking at from the house proposal I
think that is um I'm hoping that that will be the worst case scenario because at that point we will need to make additional cuts. Um and so I will bring the committee back. Um if not then if if we end up receiving additional funding
um that funding like I said will be added to um a salary reserve um and we'll proceed with the the draft report that the committee approved. All right. Well, I want to thank everybody for joining today and
and being flexible and and dealing with me with my with my lost voice. Um, but I hope you get to go back to bed after this now. Well, thank you. I know. I I think I do
need a nap now. All right. Thank you everybody. Thank you. Bye. Okay. Bye.