[1. Meeting Opening] [00:00:10] >> PLEASE STAND FOR THE PLEDGE. >> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA. AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION, UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL. [3. Consent Agenda] >> NOTING THAT THERE IS NO PUBLIC COMMENTS. MOVING ON TO THE CONSENT AGENDA. THERE ARE TWO ITEMS PRESENTED ON TONIGHT'S CONSENT AGENDA. 3.01, MINUTES. 33.02 UP BOARD. >> MOTION TO APPROVE THE ENTIRE CONSENT AGENDA AS PRESENTED. >> THANK YOU. ALL THOSE IN FAVOR, SAY AYE. OPPOSED SAY NAY. [4. Action Items] PASSES 7-0P. MOVING ON TO 4.01, LAND AUCTION BY TIM BROWN. >> GOOD EVENING, EVERYONE. I BROUGHT MY WATER SO THAT'S AN INDICATION I MIGHT BE UP HERE JUST A MINUTE. I KNOW. I DON'T HAVE A LOT OF FRIENDS OUT HERE TODAY. I'VE HAD SOME GRAPES AND WATER OFFERED SO THAT'S A GOOD START. REALLY WANT TO DIVE IN TALKING ABOUT THE LAND AUCTION. THIS HAS BEEN SOMETHING WE'VE BEEN WORKING THROUGH FOR QUITE A LITTLE WHILE AS A DISTRICT. PUTTING JUST A VERY BRIEF POWERPOINT TOGETHER TO TALK A LITTLE BIT ABOUT THE PROCESS WE'VE GONE THROUGH TO THIS POINT IN WHAT SOME OF OUR NEXT STEPS AND WE'VE GOT ONE MEMBER OF THE AUDIENCE HERE THAT IS INTERESTED IN PUTTING A POTENTIAL OFFER AND SO THAT IS ALWAYS GREAT NEWS. SO THE PROPERTY WE ARE TALKING ABOUT HERE IS A LITTLE MORE THAN 16 ACRES AT 136 STREET. BAPTIST WROTE IT. PROBABLY FAMILIAR WITH THIS, THE FIRE STATION IS WITH ED, LAND WE WORKED WITH THE CITY TO PROVIDE THE FIRE STATION OPPORTUNITY WHICH IS OBVIOUSLY A GREAT RESOURCE. HERE'S ZOOMED IN LOOK ABOUT PROPERTY. CURRENTLY RELEASES PROPERTY PROPERTY TO A LOCAL FARMER AND THEY TILT AND RAISE THE CROP AND HARVEST THE CROP AT THE END OF THE YEAR. THEY'VE ALREADY BEEN NOTIFIED THAT THIS WILL BE THERE LAST YEAR TO BE ABLE TO DO THAT PENDING THE AUCTION AT THIS PROPERTY. SO TO THIS POINT, THESE ARE THE STEPS THAT HAVE TAKEN PLACE. WE HAVE GONE THROUGH A FORMAL APPRAISAL WITH A REVIEW THAT WAS DONE. THOSE WERE DONE IN AUGUST AND SEPTEMBER. WE HAVE HIRED PROPERTY SERVICES AS AN AUCTIONEER TO AUCTION THIS PROPERTY OFF. PRIOR TO THIS MEETING WE ADVERTISE FOR A NOTICE OF A PUBLIC HEARING TONIGHT SO THAT IS ONE REQUIREMENT IN THIS PROCESS. TONIGHT BEFORE YOU WILL BE THE OPPORTUNITY TO VOTE FOR A RESOLUTION. THE DISPOSITION OF THE LAND. IF APPROVED, THE LIVE AUCTION WILL BEGIN TOMORROW AND THIS IS COMPLETELY AN ONLINE AUCTION. IT'S WHEN WE PARTNERED IT IN THE PAST AND THEY'RE THE ONES WHO AUCTION OFF OUR SCHOOL BUSES, FREQUENTLY AUCTIONING OFF VARIOUS LANDS, ESTATES, AND THE LIKE. THEY'VE GOT A BUILT-UP WEBSITE READY TO GO PENDING YOUR APPROVAL TONIGHT. THAT WILL STAY LIVE UNTIL OCTOBER 21ST. BUT IN THE MEANTIME, WILL ALSO ISSUE AND PUBLISHED IN A LOCAL PAPER FOLLOWING ALL THOSE LEGAL CHANNELS TO HELP YOU WE ARE IN COMPLIANCE THERE AND IN THE LIVE AUCTION IN THE EVENING OF OCTOBER 21ST, THAT IS OUR RUNWAY. THROUGH THIS PROCESS WE WILL THEN APPROVE THE AUCTION OF THAT NIGHT CONDITIONALLY WITH ULTIMATELY THE BOARD GETTING FINAL APPROVAL. AND SO THERE'S A COUPLE THINGS IN PLAY WITH THIS OPTION AND THE FIRST THING I WOULD WANT TO MENTION IS WE COMPLETELY HOLD ALL OF THE POWER, IF YOU WILL, IN THIS CASE THAT WE DO NOT HAVE TO ACCEPT ANY DATE THAT IS OFFERED. WE GET TO THE ENTITY AUCTION AND NOT A NUMBER WE ARE COMPARABLE WITH, WE SIMPLY DO NOT TAKE THE OFFER AND WE ARE BACK TO THE DRAWING BOARD OF DOING IT AGAIN. THERE WILL BE NO RESERVE, PER SE. BUT WE CAN CERTAINLY MAINTAIN AN INTERNAL RESERVE THROUGHOUT THIS PROCESS. ON THE NIGHT OF THE 21ST WHEN IT CLOSES WE WOULD EITHER ACCEPT OR NOT ACCEPT CONDITIONAL UPON TAKING IT BACK TO THE BOARD. OCTOBER 28TH, 1 WEEK LATER WE BRING THE FINAL OFFER WITH ALL THE DETAILS ASSIGNED TO THAT AND IF APPROVED BY THE BOARD, EVERYTHING GOES INTO PLAY AT THAT POINT. LOOKING ROUGHLY AT A 30 DAY CLOSING WITH A GOAL OF WRAPPING EVERYTHING UP BY THE END OF 2026. WITH CASH IN HAND FOR THE SALE OF THIS PROPERTY. IN TERMS OF THE PROCEEDS REALLY EXCITED TO BE ABLE TO SHARE THAT I THINK THIS IS AN OPPORTUNITY THAT CAN BENEFIT EVERYONE. AS WE'VE TALKED ABOUT BEFORE, BEING A SELF-INSURED BENEFIT TRUST WE HAVE HAD IT IN THE PAST AND CONTINUE AT A LITTLE DEBT TO OURSELVES SO WE BORROW FROM THE PLUG INTERNALLY AND WHAT WE DO [00:05:03] IS DEPOSIT ALL THE PROCEEDS FOR THIS SALE INTO THE OPERATIONS FUND AND BUY DOWN OUR OWN INTERNAL DEBT. THIS IS NOT DEBT LOAD FROM SOMEONE ELSE, THIS IS ALL INTERNAL FROM ONE THING -- I'M NOT SURE IT HAPPENED THERE. FROM ONE ACCOUNT TO ANOTHER. WHAT I LIKE ABOUT THAT IS THIS IS SOMETHING THAT WOULD BENEFIT EVERYONE AND HELP THE PAY DOWN SOME OF THAT DEBT. I WILL GO BACK TO THE TIMELINE JUST TO MAKE SURE WE ARE ALL ON THE SAME PAGE AGAIN. ALL THIS WORK HAS ALREADY BEEN DONE. THE AUCTIONEER HAS BEEN HIRED. READY TO GO PENDING YOUR APPROVAL TONIGHT. IF YOUR APPROVAL GOES FORTH, WE FLIPPED THE SWITCH AND READY TO GO AND THE AUCTION BECOMES LIFE. THE AUCTIONEER IN THE MID-TIME ON THEIR OWN DIME AND WILL NOT BE CHARGING FOR IT. THEY'VE GOT THE DRONE FOOTAGE, SIGNAGE, ALL THOSE THINGS READY TO GO LIVE AND TO THEIR CREDIT THEY ARE CHARGING US FOR ANY OF THAT MARKETING. SO I WILL TAKE ANY COMMENTS OR QUESTIONS. I KNOW WE DO HAVE TO HAVE A PUBLIC HEARING BUT I WANT TO MAKE SURE EVERYBODY IS ABLE TO HAVE THEIR QUESTIONS ANSWERED. >> GO AHEAD, PLEASE. >> REALLY JUST HIGHLIGHTING A COUPLE OF THINGS I KNOW A COUPLE OF BOARD MEMBERS SENT OUT. IF ANYBODY WANTS TO SPEAK. BUT I APPRECIATE YOU GETTING BACK TO US. IT'S GOOD FOR THE PUBLIC TO HEAR SOME THINGS WE'VE GONE THROUGH BEFORE. I THINK THE MOST IMPORTANT WE HOLD ALL THE CARDS, AS FAR AS THE VALUE. WHATEVER THAT PROCESS ENDS UP IN, IF, YOU KNOW, IT'S A NUMBER -- TO USE HER EXACT WORDS, NOT GUARDABLE WITH, WE DO NOT HAVE TO APPROVE IT. >> THAT IS CORRECT. >> THE OTHER THING IS THE END USE OF THE LAND. SOME OF US HAVE BEEN CONTACTED BY MEMBERS OF THE COMMUNITY. WE DON'T HAVE MUCH CONTROL OVER THAT. PROBABLY DON'T NEED TO OR WANT TO. THAT GOES THROUGH TO THE CITY AND THE ZONING, I BELIEVE. IF YOU GIVE A LITTLE BIT MORE ON THAT BECAUSE PEOPLE ARE CONCERNED WHAT COULD END UP THERE. >> OBVIOUSLY WE'LL LOOK AT THE HIGHEST BIDDER IN THIS PROCESS UPFRONT REAL ESTATE DEVELOPERS HAVE BEEN THE FOLKS THAT REACH OUT TO US. IT'S PRETTY LANDLOCKED IN THAT REGARD THEIR HOUSING UNITS ALL AROUND IT. ONE NICE THING ABOUT THE AUCTION PROCESS IS ALL THE ZONING WILL FALL ON THE INDIVIDUAL BUYER. WE WILL NOT HAVE ANY PART IN THAT WHATSOEVER. IT WILL NOT BE CONTINGENT, NOT BE PURCHASED THIS AND IF WE GET ZONING WE ARE MOVING FORWARD. THAT WILL NOT BE PART OF IT. THAT DOES FOLLOW THE INDIVIDUAL BUYER. THE OTHER EXCITING PART ABOUT USING AN AUCTIONEER IS WE ARE NOT PAYING BROKER FEES IN THIS PROCESS AND THE ONLY IS THIS A COMPETITIVE PROCESS BUT IT ALSO IS THE BEST APPROACH FINANCIALLY THAT WE COULD HAVE. THE PARTNERSHIP WITH THE AUCTIONEER I THINK IS OUTSTANDING IN TERMS OF THE OFFER THEY GAVE US FOR THEIR FEES. MANY OF THOSE ARE GOING TO BE PUT BACK ON AND WE TALKED ABOUT A LITTLE BIT COMMITTEE, BEING PUT BACK ON THE CELLAR SO WE HAVE VERY LITTLE INVOLVED IN THE SALE OF THIS LAND. SO I'M PROUD OF THE WORK WE'VE DONE TO MAKE THIS HAPPEN. >> THAT'S GREAT. THANK YOU. >> CAN YOU SHARE WHO WILL BE HOLDING ESCROW FOR THE COMPANY? DISTRICT? ATTORNEY'S OFFICE? >> METZGER PROPERTY, THEY WILL HANDLE EVERYTHING AND THE INITIAL 10%, DUE AT THE TIME OF THE AUCTION CLOSING, CLOSING IS NOT THE RIGHT TERM BUT CLOSING MEAN SOMETHING TO YOU. THE TIME OF THE ACTUAL AUCTION ENDING, THAT'S ALL HANDLED BY THEM. THEY'LL TAKE CARE OF EVERY ASPECT OF THAT AND ALL WE WILL GET IS A CHECK FROM METZGER WHEN WE ARE DONE. >> GREAT. I DO WANT TO READ A LITTLE STATEMENT. I THOUGHT IT WOULD BE EASIER IF I WROTE IT OUT SO IT SOUNDS A LITTLE MORE ELOQUENT AND ARTICULATE, IF YOU WILL. FIRST OF ALL, I WANT TO SAY RIGHT OFF THE BAT THAT I APPRECIATE OUR LEGAL TEAM AND ADMINISTRATION TEAM, WHAT THEY'VE DONE BRINGING THIS PROPERTY TO AN OPTION. I HAVE GREAT RESPECT FOR METZGER PROPERTY SERVICES, THEIR COMPETENCE AND EXPERIENCE AN APPROACH TO GENERATING COMPETITIVE BIDS. I'M OPTIMISTIC ABOUT THE INTEREST THIS PROPERTY WILL ATTRACT. AS A REALTOR WITH 30 YEARS OF RESIDENTIAL AND COMMERCIAL REAL ESTATE EXPERIENCE, I KNOW THAT THE VALUE AND PROPERTY IS BOTH ART AND SCIENCE. THE SCIENCE LIES IN THE COMPARABLE SALES, THE CALCULATIONS AND ADJUSTMENTS USED TO ARRIVE AT AN APPRAISAL. THE ART LIES IN RECOGNIZING THE VALUE THAT BUYERS MAY PLACE ON THIS PARTICULAR PROPERTY OF PLEASURES LOCATION SURROUNDING DEVELOPMENT, INFRASTRUCTURE, AND FUTURE POTENTIAL. I AM EAGER TO SEE HOW INTERESTED BUYERS VALUE THOSE QUALITIES TO THEIR BIDS. THE FINAL SALE IS A DECISION FOR ALL SEVEN BOARD MEMBERS. ONCE THE AUCTION IS COMPLETELY LOOK CLOSELY AT THE OFFERS, THEIR TERMS, AND A VALUE PROPOSED SALE WOULD BRING TO SCHOOLS. A WINNING BID WILL RECEIVE OUR [00:10:02] CAREFUL CONSIDERATION BEFORE ANY SALE IS APPROVED AND I APPRECIATE EVERYTHING THAT THE ADMINISTRATION, MR. BROWN, AND LEGAL TEAM IS PUT FORTH IN FRONT OF US AS WE'VE ASKED HER QUESTIONS. OUR SCHOOLS, OUR TAXPAYERS, OUR COMMUNITY DESERVE THAT REVIEW. THANK YOU AGAIN TO EVERYBODY WHO HAS WORKED TO BRING US TO THIS POINT AND I LOOK FORWARD TO REVIEWING THE RESULTS WITH THE ADMINISTRATION AND MY FELLOW BOARD MEMBERS AT THE CONCLUSION. THANK YOU. >> FURTHER COMMENTS? SARAH PARKS-REESE? >> CAN YOU ELABORATE A LITTLE BIT FURTHER ABOUT THE PROCEEDS? I KNOW YOU SAID THAT WE ARE GOING USE IT TO PAY DOWN THE BENEFIT LOAN TO OURSELVES. I KNOW WE ARE IN THE MIDDLE OF BARGAINING. BUT WHAT -- WHAT DOES IT DO? >> THAT'S A REALLY GOOD QUESTION. OBVIOUSLY WE'LL TALK A LITTLE BIT MORE IN DEPTH ABOUT BARGAINING STRATEGY AT OUR3 EXECUTIVE SESSION TOMORROW. BUT THE NUTS AND BOLTS STANDPOINT, FROM AN INSURANCE GOAL FOR THE UPCOMING YEAR, OUR RENEWAL IS GOING BE BASED IN FUNDING TO EXPECT IT. SO DUE TO AN EXORBITANT HIGH NUMBER OF CLAIMS AND COSTS RELATED TO THAT IN 2026, '25-'26, WE ARE NOT DEVELOPING TRIVIAL EQUIVALENTS TO HELP BUY DOWN THAT DEBT. AND SO IMMEDIATELY NO ONE IS NECESSARILY GOING TO SEE AN IMMEDIATE IMPACT. WE HAVE TO AT SOME POINT TACKLE THAT DEBT THOUGH. THIS IS OUR FIRST STEP TO BE ABLE TO DO THAT. SAID A LITTLE DIFFERENTLY, IF WE ARE TO TRY TO BUY THAT DEBT OVER TIME WE NEED TO CONTINUE TO INCREASE THE CAUSE OF COST OF INSURANCE WE CAN GET INSOLVENT AT THAT LEVEL. THERE'S NOT GOING TO BE AN ATTEMPT TO DO THAT IN '27 JUST BECAUSE OF THE HIGH INCREASE IN PREMIUMS. GOT REAL CREATIVE APPROACHES PROUD OF THAT WILL TALK ABOUT HERE VERY SOON THAT ARE GOING TO PROVIDE SOME OPTIONS FOR EMPLOYEES. BUT TO GO ALL THE WAY AROUND THE BARN AND BACK, NO IMMEDIATE IMPACT LONG-TERM DEBT THAT HAS TO BE ADDRESSED AND THIS IS A FIRST BITE AT THAT APPLE, SO TO SPEAK. >> THANK YOU. >> HOW MUCH DEBT ARE WE LOOKING AT ON THE CLAIMS ASIDE? I KNOW WHAT WE EXPERIENCE THE PAST THREE YEARS IN THE ACCUMULATION OF DEBT YEAR-OVER-YEAR. I KNOW THERE IS AN ONGOING ACCUMULATION. HOW MUCH IS IT AND HOW MUCH DO YOU ANTICIPATE THIS BUYING IT DOWN? >> CURRENTLY OVER THE COURSE OF THE LAST TWO OR THREE YEARS AND BEFORE THAT WE WERE AT A TIME WEREN'T PAYING THAT BACK. A COUPLE YEARS AGO WE STARTED TO AGGRESSIVELY DO THAT TO THE POINT WE COULDN'T DO IT ANYMORE. TO ANSWER YOUR QUESTION A LITTLE OVER $8 MILLION TODAY AND THIS ABIDE 25% OF THAT DOWN. SO IT'S A START. IT'S NOT A FINISH. IT DOES SPEAK TO THE CHALLENGING HEALTH INSURANCE YEARS WE'VE HAD OVER THE LAST COUPLE >> SUZANNE THOMAS? >> THANK YOU. I APOLOGIZE. DON'T MEAN TO PUT YOU ON THE SPOT. I JUST THOUGHT OF IT WHEN SHE ASKED THAT QUESTION. WHAT IF WE DIDN'T PUT IT THERE? ADMINISTRATION OPERATIONS. YOU GUYS DECIDE WHERE THAT GOES. BUT IF IT DIDN'T GO THERE AND THE DEBT STAYED THERE, HOW IS THAT THAT BEING PAID RIGHT NOW BACK IF WE DON'T PUT A CHUNK OF IT? HOW ARE WE PAYING THAT DEBT BACK CURRENTLY? >> WE ARE NOT. >> IT'S JUST ACCRUING? >> IT IS. >> NOT LIKE A CREDIT CARD? >> IT'S TOO OURSELVES IT WAS NOT ANY INTEREST FEES ARE THAT NATURE. IT'S TAKING OPERATIONAL DOLLARS THAT AREN'T INTENDED TO BE SPENT ON THIS AND SPENDING IT ON THIS TO SUBSIDIZE OUR HEALTH PLAN. SO IT'S NOT LIKE WE ARE OUT THERE GETTING A LOAN LIKE THAT. TO USE IT FOR OTHER SOURCES, A VERY EXCITING POTENTIAL IDEA IS, HEY, LET'S GO PUT THIS IN SALARIES. HERE'S THE REASON YOU CAN'T DO THIS. THIS IS ONE TIME MONEY. ANY EMPLOYEE GROUP. DOESN'T MATTER THE EMPLOYEE GROUP, THAT'S A LONG TERM COMMITMENT THAT COMPOUNDS OVER TIME. AND SO ONE TIME MONEY IS BEST USED TO HELP SPREAD DOWN A ONE-TIME COSTS HOPEFULLY VERSUS A LONGER TERM COMMITMENT. >> THANK YOU FOR THE EXPLANATION. IT MAKES SENSE. THANK YOU. >> THIS MIGHT BE A CONVERSATION WE HAVE LATER ON BUT LATELY WHAT COMES TO MIND IS HOW ARE WE MITIGATING THE ONGOING DEBT ACCUMULATION OF CLAIMS AND ARE CONTINUING TO ESCALATE. IF THIS IS 8 MILLION, IS US OVER THE COURSE OF ONE YEAR? >> DEAFLY NOT OVER THE COURSE OF ONE YEAR. MY THIRD YEAR IN THE DISTRICT AND THERE WAS ALREADY DEBT THERE WHEN I ARRIVED SO THIS IS A LONGER-TERM IMBALANCE THAT HAS EXISTED FOR QUITE SOME TIME. WHAT I WILL TELL YOU IS OVER THE LAST COUPLE OF YEARS IT HAS CERTAINLY GROWN A HIGHER RATE THAN IT HAS IN THE PAST. I ACTUALLY HAVE SOME CLAIMS DATED TO SHARE WITH YOU TOMORROW TO GO OVER THAT A LITTLE MORE [00:15:04] DETAIL. ALSO SOME OF THE VERY CREATIVE AND UNIQUE APPROACH IS THAT WE TAKE INTO THIS, WHETHER IT IS THROUGH VIRTUAL MENTAL HEALTH, VIRTUAL URGENT CARE -- TELEHEALTH. >> AN EXCITING CART A VASCULAR PROGRAM WE PROVIDE TO OUR EMPLOYEES. A LOT OF OPPORTUNITY BUT CERTAINLY PUT SOME COST SAVINGS IN PLACE. >> THANK YOU. >> IT'S A TOUGH AREA AS YOU ARE WELL AWARE. >> YOU HAD YOUR MIC ON BEFORE. >> SO WHAT WAS ANTICIPATED AS FAR AS BENEFIT SAVINGS WHEN WE SWITCHED TO THIS BROKER A COUPLE OF YEARS AGO AND WHEN WE AS A BOARD MEET WITH THE BROKER AND THEIR PBM? >> THERE'S PROBABLY A LOT TO UNPACK AND I THINK WE ARE BETTER OFF TO MAYBE DO THAT TOMORROW BECAUSE I'LL HAVE ALL THAT PREPARED IF THAT'S OKAY. WHAT I WOULD SAY TO THAT IS CLAIMS ARE CLAIMS AND THEY ARE THE HIGHEST DRIVER. AND SO AGNOSTIC TO ANY BROKER, CLAIMS ARE STILL GOING TO EXIST AND THAT'S WHERE WE ARE SEEING OUR BIGGEST SPEND ON AN ANNUAL BASIS. BEING SELF-FUNDED. EVERYBODY HERE UNDERSTANDS IT BUT THE AVERAGE EMPLOYEE OR CITIZEN DOESN'T. IF I GO TO THE DOCTOR, YES, I PAY MY PORTION. THE OTHER PORTION IS PAID BY ANTHEM BUT THE BILL COMES TO HSE SCHOOL SO WE LITERALLY PAY EVERY OTHER CLAIM. WE PUT OTHER MECHANISMS IN PLACE AND TO PUBLICLY ADDRESS THE PBM, THAT'S BEEN SAVINGS FOR US THE LAST YEAR. THAT'S ONE OF THE WINS. HAS NOT MITIGATED THE IMPACT OF CLAIMS. HAPPY TO ANSWER THOSE QUESTIONS. >> THANK YOU. OPENING UP TO THE PUBLIC HEARING, I'M NOT GOING TO OPEN TO THE PUBLIC HEARING. ANY MEMBER OF THE PUBLIC WHO WANTS TO ADDRESS THIS BOARD MAY COME FORWARD AND WILL BE GIVEN . ANYBODY WOULD LIKE TO SPEAK AND ADDRESS THE BOARD? SEEING THAT THERE IS NONE, CLOSING THE PUBLIC HEARING. DO I HAVE A MOTION TO APPROVE, A RESOLUTION REGARDING THE DISPOSITION OF LAND APPROVING AN AUCTIONEER AND TAKING ACTION RELATED TO THEIR AS PRESENTED? >> I MOVED TO APPROVE THE CONSENT BOOKS. I MOVED TO APPROVE THE AGENCY LAND DISPOSITION AS PRESENTED. >> SECOND. >> THANK YOU. ANY FURTHER COMMENTS ON THE BOARDS? I KNOW WE JUMPED THE GUN A LITTLE BIT? OKAY. YOUR MIC IS ON. THANK YOU. CLOSING DISCUSSION AND CALLING THE QUESTION. ALL THOSE IN FAVOR AS PRESENTED, SAY AYE. PASSES 7-0. [5. Information Items] MOVING ONTO INFORMATION ITEM 5.01. BUDGET PRESENTATION BY TIM BROWN. >> I KNOW THIS IS THE MOMENT WE'VE ALL BEEN WAITING FOR. WE LAUGH A LITTLE BIT BUT THIS IS A PRETTY IMPORTANT PROCESS FOR THE SCHOOL DISTRICT WHEN YOU ARE TALKING ABOUT A BUDGET OF OVER $300 MILLION AND I WOULD BE REMISS IF I DIDN'T CELEBRATE OR ACKNOWLEDGE A FEW IMPORTANT PEOPLE AND ONE OF THOSE IS OUR DIRECTOR OF BUSINESS CECILY. SHE IS THE BEST OF THE BEST AND WE ARE BLESSED TO HAVE HER HERE SO I JUST GET THE LUXURY TO PRESENT IT TO YOU ALL TONIGHT BUT IT DOESN'T STOP THERE. THROUGH THE BUDGETING PROCESS, OUR PAYROLL AP DEPARTMENTS. MANY OF YOU ARE AWARE MIKE REUTER SERVES AS CONSULTANT FOR THE SCHOOL DISTRICT AND BUDGETS ACROSS THE STATE OF INDIANA. ABSENT OF ME WE HAVE SOME OF THE BEST PEOPLE IN THE STATE DOING THE WORK HERE AND I WANT TO ACKNOWLEDGE THEM FOR ALL THEIR OUTSTANDING WORK. WITHOUT FURTHER ADO, I WILL DIVE IN AND TALK IN DEPTH ABOUT WHERE WE ARE HEADING. I AM EXCITED TO SHARE SOME OF THIS NEWS TONIGHT. MAYBE NOT EVERYBODY IS EXCITED TO HEAR, BUT I'M EXCITED TO SHARE. HERE'S OUR BUDGET TIMELINE. AT THE FACILITIES AND FINANCE MEETING SEPTEMBER 3RD WE GIVE A VERY HIGH LEVEL OVERVIEW OF THE BUDGET TONIGHT. TONIGHT IS OUR WORK SESSION. THE BUDGET WILL GO LIVE. WE'LL FLIP THE SWITCH AND THIS BECOMES AN ADVERTISED BUDGET AT THAT POINT. THERE ARE STILL STEPS THAT ARE VERY IMPORTANT IN THIS PROCESS. ONE OF THOSE BEING THE PUBLIC HEARING OCTOBER 14TH FOLLOWED BY OFFICIAL BUDGET ADOPTION OCTOBE. THAT'S WHAT WE ARE PUSHING TO YOU AT THIS. ALL RIGHT. IT WOULDN'T BE A BUDGET UNLESS WE WERE TALKING ABOUT NUMBERS. HERE WE GO. WHEN WE TALK ABOUT THE BACKGROUND OF THE BUDGET, ONE OF MY GOALS IS TO LEVEL SET ALL OF THIS AND I KNOW ALL OF US HAVE DIFFERENT LEVELS OF EXPERIENCE OF THIS AND SOME OF YOU HAVE THIS DOWN NOW BECAUSE WE'VE HAD IT SO LONG AND OTHERS MAY BE NEW INFORMATION. WHAT YOU ARE LOOKING AT ACROSS THIS GRAPH HERE IS THE NET ASSESSED VALUE IN OUR DISTRICT. REMEMBER, THAT'S ALL THE TAXABLE PROPERTIES. BUSINESSES. HOMES. FARM GROUND. APARTMENT COMPLEX. THE TOTAL VALUE OF ALL THOSE PROPERTIES. [00:20:03] WE GET TWO DIFFERENT ASSESSMENT VALUES BUT WE GET ED NET ASSESSED VALUE APPLIED TO OUR DEBT SERVICE AND OPERATIONS FUND AND WE GET A REFERENDUM ASSESSED VALUE APPLIED TO OUR DEBT SERVICE EXEMPT FUND AND OUR REFERENDUM FONDER. THE ONLY DIFFERENCE BETWEEN THOSE TWO ARE THOSE DISTRICTS. PAUSES ON AV GROWTH BUT THE REFERENDUM GETS TO CAPTURE THAT. CERTIFIED ASSESSED VALUE DOES NOT AND WHAT YOU SEE OVER THE LAST EIGHT YEARS IN THIS IS A PRETTY STEADY INCREASE IN THE NET ASSESSED VALUE. WE TALKED ABOUT THIS A LOT WHEN WE BEEN ON THE ROAD WITH THE REFERENDUM, O OVER THE LAST SEVERAL YEARS, THE DEDUCTIONS TO GET TO YOUR NET ASSESSED VALUE HAVE BEEN FAIRLY CONSISTENT. BUT YOU SEE A PRETTY SHARP DROP IN THE INCREASE ENDED THE INCREASE STARTING IN 2027 OF THE OVERALL NET ASSESSED VALUE. TO LEVEL SET THIS A LITTLE BIT OVER THE LAST TEN YEARS, THE AVERAGE RATE OF GROWTH IS 7.1% IN THE REFERENDUM THAT AV AND 6.53. IF YOU TAKE OUT WHAT I CALL THE BUBBLE YEAR IN 2023 COMING OUT OF COVID, THAT'S A MUCH BIGGER INCREASE? INCREASES ARE STILL OVER 5-6% RESPECTIVELY. I MARKED THOSE LAST TWO BECAUSE IT STARTS TO BE WHERE I SEE A 1 STARTS TO SHOW UP. GROSS VALUE OF OUR PROPERTIES AGAIN ARE CONTINUING TO GROW BUT THE AMOUNT OF DEDUCTIONS ARE INCREASING SUBSTANTIALLY WHICH RESULTS IN A NET AV REALLY FOR THE FIRST TIME IN A LONG TIME THAT IS A DROP IN 2027 AND THIS REALLY COMES TO PLAY IN A LOT OF ASPECTS IN OUR DISTRICT. I WILL TELL YOU THAT THE DROP WAS THE LOWEST IN THE HAMILTON COUNTY OR DEPENDING ON HOW YOU LOOK AT IT THE BIGGEST DROP IN HAMILTON COUNTY. BUT WE SAW A DROP IN OUR NET AV WHERE OTHERS DIDN'T SEE THAT. ARE REFERENDUM ACTUALLY CAME IN BETTER THAN WE PROJECTED. ALMOST FLAT. YOU SEE 13 HUNDREDTHS OF A PERCENT OF AN INCREASE. THE OTHER IMPORTANT FACTOR IN WHAT WE DO IS OUR ENROLLMENT. OUR EDUCATION FUND IS FUNDED THROUGH THOSE COUNT DAYS. THE NUMBER OF STUDENTS ENROLLED ON THOSE TWO CRITICAL DAYS. HERE IS AN 8-10-YEAR SUMMARY OF WHERE OUR ENROLLMENT FALLS AND YOU'LL SEE THE BOTTOM RIGHT WE ARE PROJECTING A SEVENTH STRAIGHT YEAR OF DECLINING ENROLLMENT AND IT'S REALLY A PRODUCT OF THAT KINDERGARTEN VERSUS SENIOR CONCEPT. YOU SEE HERE THAT THESE ARE HOT OFF THE PRESS THIS WEEK AND WHERE OUR ENROLLMENT STARED. THESE ARE NOT OFFICIAL OCTOBER 1 NUMBERS YET. WE ARE GETTING CLOSE TO THAT DATE BUT THE LARGER CLASS OF SENIORS OVER 1800 STUDENTS. LOOK AT OUR CURRENT KINDERGARTEN AT 1103 THAT'S THE ROOT OF THE CHALLENGE HERE. WE ARE GRADUATING THAT MANY AND BRINGING IN THAT MANY LESS. A COUPLE OF EXCITING POINTS I POINT OUT IS IF YOU FOLLOW THE COHORTS WHICH WOULD BE THE DIAGONAL. THERE IS A REALLY BIG JOB, RIGHT? TAKE KINDERGARTEN LAST YEAR TO FIRST GRADE THIS YEAR. WE ARE SEEING INCREASES IN ALL THOSE GRADES AND THAT'S WHAT YOU DO NOT SEE A DROP OF 700 STUDENTS IN THE GRAPH, YOU SEE A DROP OF 394 BECAUSE EVERY SINGLE GRADE FOR THE MOST PART IS SEEKING COURTESIES. INCREASES. THE ROAD SHOWED WE'VE BEEN ON THE LAST FEW MONTHS OR SO, DECLINING ENROLLMENTS SOMETIMES IS SYNONYMOUS WITH A CHALLENGE OR A PROBLEM IN THE DISTRICT. MAYBE THERE IS INDUSTRY THAT IS LEAVING. MAYBE THERE ARE PROBLEMS WITH THE SCHOOL AND MAYBE THERE IS SOME SORT OF ECONOMIC FACTOR IN THE COMMUNITY AND FRANKLY NONE OF THOSE THINGS ARE TRUE FOR HSC SCHOOLS. OUR SCHOOLS ARE PRODUCING OUTSTANDING RESULTS WITH OPPORTUNITIES THAT ARE THE BEST IN THE STATE, FRANKLY. PEOPLE ARE JUST LIVING HERE AND LOVE LIVING HERE AND LOVE LIVING HERE SO MUCH THAT WHEN THEIR KIDS GO AWAY THEY DO NOT MOVE. HOMES AREN'T COMING UP AS MUCH AS THEY USED TO AND FRANKLY PEOPLE AREN'T HAVING AS MANY KIDS AS THEY USED TO. THESE ARE ALL PART OF OUR STORY BUT IT IS NOT REFLECTIVE THAT WE'VE GOT AN UPDATING SCHOOL DISTRICT. IT'S REFLECTIVE OF THE CHARACTERISTICS OF THE GREAT THINGS, FRANKLY, ABOUT OUR COMMUNITY. WHEN IT COMES TO DOLLARS TO THE STUDENT, I THINK IT'S IMPORTANT TO UNDERSTAND HOW THIS WORKS. SO THERE ARE TWO COMPONENTS THAT ARE BASED ON EVERY SINGLE STUDENT'S ENROLLMENT IN A SCHOOL DISTRICT. THE FOUNDATION ABOUT. THAT BELT THAT'S THE SAME FOR EVERY SCHOOL, EVERY STUDENT NO MATTER WHAT SCHOOL YOU ATTEND. I'LL PUT A QUALIFIER, NONVIRTUAL. THERE IS IN DIFFERENT NUMBER FOR VIRTUAL STUDENTS, THEY GET 85% OF THE NUMBER. THIS HAS ALREADY BEEN LOCKED IN. ABOUT 1.5% INCREASE FROM 69-67 TO A LITTLE LOWER THAN $7,000 BY [00:25:05] THE LOOKS OF THE INDEXES WHAT'S PUT UP ON THAT AND UNIQUE FOR EVERY SCHOOL DISTRICT IN THE STATE OF INDIANA AND THERE ARE THREE FACTORS THAT CONTRIBUTE TO COMPLEXITY. THE NUMBER OF SNAP, TEN SO LOW, INFACT, IT PUTS US PRETE BOTTOM OF STATE FUNDING IN DOLLARS PER STUDENT. SO THE COMPLEXITY PERCENTAGE DID NOT CHANGE, THE STATE JUST IMPLEMENT IT THAT UP 35 HUNDREDTHS OF A PERCENT. AT HSC, THERE IS A DECIMAL POINT THAT SHOULDN'T BE THERE. 15404 LAST YEAR. 15458 THIS YEAR. EVERY SINGLE NONVIRTUAL STUDENT PRODUCES $7,225.58. UP 1.46%. WHERE DOES THIS RANK IN THE STATE? >> REMEMBER EVERYBODY GETS THE SAM. THE COMPLICITY IS A DIFFERENTIATOR. WE RANK 370 AT A 376 AT A PUBLIC TRADITIONAL SCHOOLS AND PUBLIC CHARTER SCHOOLS. THIS YEAR, A FEW MORE CHARTERS BROUGHT ONLINE, WE WERE 378 OUT OF 374. WE ARE ALREADY SORT OF IN A CHALLENGE THAT WE RECEIVE SOME OF THE LOWES FUNDING BASED ON OUR CHARACTERISTICS IN THE STATE. SOME WOULD ARGUE, WELL, THAT'S BECAUSE YOUR POVERTY RATE, THE FACTORS I TALKED ABOUT ARE MUCH LOWER. NOT A FALSE NARRATIVE AT ALL. THE COUNTER ARGUMENT TO THAT IS JUST BECAUSE THOSE NUMBERS ARE RELATIVELY LOW DOES NOT MEAN THAT THERE ARE NOT SIGNIFICANT MENTAL HEALTH CHALLENGES WE NEED TO SUPPORT IN OUR SCHOOLS. ENGLISH LANGUAGE LEARNERS AND EXCEPT FOR ORDERS AS WELL, ALL THINGS THAT TAKE SIGNIFICANT AMOUNT OF FUNDING AND ARE AGNOSTIC TO A POVERTY CALCULATION. THIS CREATES QUITE A CHALLENGE TO OUR SCHOOL DISTRICT OR THIS IS NOT NEW. THIS IS JUST PART OF OUR STORY. AGAIN, TRYING TO PROVIDE A FEW DEFINITIONS HERE. TAX RATE IS ULTIMATELY WHAT IS USED FOR TAX ALL THE ENTITIES WITHIN OUR SCHOOL DISTRICT. IT IS THE PERCENTAGE THAT WE USE FOR EVERY $100 OF THE ASSESSED VALUE AND I'LL TALK A LOT ABOUT THE WORK LEVY. THOSE ARE JUST DOLLARS. AFTER THE TAX RATE IS APPLIED WITH A LEVY ARE THE DOLLARS YOU RECEIVE AS A PART OF THAT. SO HERE ARE A COUPLE OF EXAMPLES THAT ARE REALLY TELLING. WHAT YOU SEE ON THE LEFT -- ON THE TOP AND FIRST ON THE LEFT PART OF THAT FORMULA IS THE TAX RATE WE USE FOR THE OPERATIONS FUND IN 2026, MULTIPLIED BY THE NET ASSESSED VALUE IN 2026. WE'VE TALKED ALREADY ABOUT HOW THE NET ASSESSED VALUE IN 2027 DROPPED. SO IF I OR IN THIS EXAMPLE IF I USE THE EXACT SAME TAX RATE AND THE ONLY THING THAT CHANGED IS IN THE ASSESSED VALUE, THE LEVY CHANGES BY ALMOST A MILLION DOLLARS. THAT SAME RATE DOES NOT PRODUCE THE SAME AMOUNT OF MONEY. IN FACT, IT PRODUCES QUITE A BIT LESS. GO DOWN TO THE BOTTOM EXAMPLE. THE LEVY YOU SEE OF A LITTLE OVER $42 MILLION IS A LEVY WE RECEIVED IN THE OPERATIONS FUND IN 2026. IF WE WANTED TO MAINTAIN THAT SAME LEVY YOU, JUST DIFFERENT WAY TO LOOK AT THIS, NOTICE THE TAX RATE IS AT 3596, THAT'S WHAT HAPPENED IN 2026 BECAUSE THE NET AV DROPPED. IT TAKES ALMOST A PENNY MORE TO ACHIEVE THE EXACT SAME LEVY. WHAT WE ARE JUST TRYING TO DEMONSTRATE HERE IS SIMPLY THIS. AS NET AV DROPS, EVEN TO GET THE SAME AMOUNT OF MONEY AND TAKES A HIGHER RATE. IF WE WANT TO ACHIEVE EVEN MORE MONEY WHICH THROUGH ALL THE INFLATIONARY CONSTRAINTS AGAINST THE WORK WE'RE DOING, IT TAKES A HIGHER RATE TO BE ABLE TO DO SO. REAL QUICK ON THE VARIOUS BUCKETS AND THE FUNDS. I THINK WE'VE GOT THIS DOWN. BUT REAL QUICK, EDUCATION PAYS EVERYTHING IN THE CLASSROOM. TEACHERS, PRINCIPAL, SUPPORT STAFF, TECHNOLOGY SUPPLIES. OPERATIONS PAYS FOR EVERYTHING NOT THAT. TRANSPORTATION, CAPITAL PROJECTS, ALL THE THINGS IT TAKES TO OPERATE UTILITIES. THERE IS A MAXIMUM LEVY THAT IS STATUTORILY SET FOR THIS FUND. NEXT YEAR THE 25 MILLION. A LITTLE OVER. WE'LL TALK MORE ABOUT THAT IN A MINUTE. THE REFERENDUM FUND PAYS FOR TEACHERS SALARIES AND BENEFITS. IT'S ON THE BALLOT IN NOVEMBER AS WE ARE ALL AWARE CONTINUING THE TREND OF ALMOST ALL THOSE DOLLARS PAYING FOR TEACHERS SALARIES AND BENEFITS. 1 OF 25% PAID FOR THIS AND IT PAYS FOR LIB INSECURITY AS WELL. APPARENTLY THE RATE IS 1995 FOR THE PROPOSAL WE TALKED ABOUT AT LENGTH IS WITH APPROVAL THAT THE RATE WOULD MOVE TO $0.22 IN 2027. A COUPLE OF OTHER FUNDS IMPORTANT. SOMETIMES WE DO NOT SPEND AS MUCH TIME ON THESE BUT THIS IS REALLY IMPORTANT FOR THE CONVERSATION TODAY. WE HAVE TWO DEBT SERVICE FUNDS. [00:30:01] THE TRADITIONAL DEBT SERVICE ARE THE ANNUAL DEBTS WE TAKE OUT ON A REGULAR SERVICE. VARIOUS PROJECTS IN AND AROUND THE SCHOOL. AND THERE'S DEBT SERVICE EXEMPT. THESE WERE PROJECTS THAT WERE APPROVED THROUGH A REFERENDUM. WE HAD NOT DONE THAT IN A NUMBER OF YEARS AND WOULD NOT ANTICIPATE DOING THAT PROCESS AGAIN IN THE FUTURE. TRADITIONAL DEBT SERVICE? ABSOLUTELY. LIKE YOUR HOME OAK RIDGE LOAN THESE ARE DEBTS WE TAKE OUT TO DO THE WORK TO KEEP THE SCHOOL UP AND RUNNING IN THE WAY IT NEEDS TO BE. RAINY DAY, IT IS -- I WILL NOT SAY USE IT OR LOSE IT. THERE IS NO MONEY TO REPLACE IT MONEY HERE, WE'VE NOT TAPPED INTO RAINY DAY FOR A WHILE. THERE'S ABOUT $13 MILLION THERE AND THE GOAL OF THE FUND IS FRANKLY TO BE THERE IN THE UTMOST OF EMERGENCIES. WHEN THERE IS NOT AN EMERGENCY WE DO USE IT FOR A LITTLE CASH FLOW. ANY PROPERTY TAX DOLLARS COME IN MAY AND JUNE, NOVEMBER AND DECEMBER AND THIS IS THE WAY TO CASH FLOW AND REPAY THE FUND BACK AT THE BEGINNING OF THE YEAR IT'S A LITTLE OVER 13 MILLION. AND AS A PART OF THE BUDGET PROCESS WE DO HAVE A SELF-INSURANCE DENTAL FUND APPEARED THAT IS NOT OUR HEALTH BENEFIT. IT'S AN INDEPENDENT DENTAL FUND. THERE IS NO REVENUE OTHER THAN WHAT WE PROVIDE AS A SCHOOL DISTRICT AND EMPLOYEES PAINTED THAT FOR THEIR DENTAL INSURANCE. PROBABLY THE LEAST IMPORTANT OF WHAT WE ARE TALKING ABOUT HERE. I SAY ALL THAT WE HAVE THIS UNIQUE IMPACT THAT HAS CHANGED SOME THINGS IN TERMS OF THE WAY WE BUDGET. THERE A ARE TWO BIG EVENTS OF TS AND WE TALK IN LENGTH AT BOARD MEETINGS FIRST THE ONE ON THE RIGHT, THERE WERE $300 HOMESTEAD CREDIT. IN 2026 FOR THE VERY FIRST TIME ALL HOMEOWNERS SAW A MINUS AT THE END OF THE TAX BILL UP TO 10% OF THEIR OVERALL TAX LIABILITY NOT GOING ABOVE AND BEYOND $300. WHAT DID THAT MEAN? IN 2026 A LITTLE OVER 4.5 MILLION. WHAT IS ESTIMATED TO BE IN 2027? EVEN MORE. NOT BY A LOT BY ABOUT 14 POINT WE BALANCED THIS A LITTLE BIT BY MOVING MONEY FROM DEBT SERVICE. THE APPLICABILITY IS GONE IN 2027 SO THIS WILL BE A DIRECT HIT TO THE OPERATIONS FUNDS. WE'VE ANTICIPATED IT NOW AND BUDGETED FOR IT WHEREAS THAT WAS HARDER TO DO DUE TO LEGISLATION. THE OTHER PIECE ARE THE PROPERTY TAX DEDUCTIONS. THIS IS A GRAPH WE TALKED ABOUT QUITE A BIT. THIS REALLY DRIVES HOME WHEN I WAS SAYING EARLIER ABOUT THE GROSS A B, THE BLUE LINE CONTINUING TO GROW IN OUR COMMUNITY. WE ARE VERY VIBRANT AND HAVE MANY SUCCESSES IN THE FISHERS AND NOBLES IN AN AREA ABOUT WHAT YOU SEE IS A GRAPHICAL REPRESENTATION OF WHAT WE TALKED ABOUT AND HOW THE GRAY AND RED LINES FOR THE VERY FIRST TIME ARE SEEING A DROP. AND SO THE NET ASSESSED VALUE THAT WE USE AS OUR TAX BASE IS DECLINING FOR THE FIRST TIME IN HISTORY. IT'S IMPORTANT TO CONCEPTUALLY UNDERSTAND THIS. OUR PROPERTY VALUES ARE NOT DECLINING. WHAT IS HAPPENING IS THE DEDUCTIONS ARE INCREASING. THIS WORKS THE SAME WAY AS YOUR PERSONAL INCOME TAX. YOU START WITH YOUR GROSS AMOUNT AND THERE'S A VARIETY OF DEDUCTIONS AND ON YOUR 1040 YOU PAY BASED ON YOUR NET INCOME. SAME EXACT THING HERE. WE ARE JUST EXPANDING IT. WHAT I POINT OUT IS THE LIGHT GRAY LINE IS WHAT WOULD HAPPEN TO THE REFERENDUM THAT AV, NOTICE IT STAYS PARALLEL TO THE BLUE LINE. SO AGAIN DRIVING THIS HOME, IF AV IS GOING DOWN AND YOU EVEN WANT THE SAME RATE -- THE SAME LEVY, IT TAKES A HIGHER RATE. LET ALONE AN INCREASE IN THE LEVY. AN ABSOLUTE IS GOING TO TAKE A HIGHER RATE. A YEAR AGO IN THE SAME PRESENTATION I TALK ABOUT ONE OF OUR JOBS HAS ALWAYS BEEN TO MANAGE TO A TAX RATE. NOW OUR PHILOSOPHY IS A LITTLE BIT DIFFERENT IN TRYING TO MANAGE TO A LEVY KNOWING THE TAX RATE ULTIMATE IS GOING TO HAVE TO INCREASE BASED ON THE FACT THAT AV IS DECLINING. LET'S DIVE INTO THE BUDGET ST STORY. I WILL START WITH THE CHAL CHALLENGES. I ALWAYS SAY DO YOU WANT BAD NEWS FIRST OR GOOD NEWS. THERE IS SOME BAD NEWS FIRST AND WE'LL CELEBRATE THE REALLY GOOD NEWS PAID EVEN WITH AN INCREASE IN TUITION SUPPORT WITH OVER 1.4%, BECAUSE OF DECLINING ENROLLMENT WE ARE ANTICIPATING A DROP, A DECLINE IN OVER $500,000 IN TUITION SUPPORT FOR THE 26-27 SCHOOL YEAR. WE ARE READY TALKED ON THE FRINGES ON OUR HEALTH INSURANCE AND THE CHALLENGES WE ARE FACING IN THAT DEPARTMENT. NO DOUBT THAT THERE'S GOING TO HAVE TO BE A SIGNIFICANT INCREASE IN OUR HEALTH INSURANCE COSTS IN 2027 DUE TO THE INCREASE IN HEALTH INSURANCE CLAIMS. WE HAVE TO BUDGET FOR THE INCREASE AND HAVE DONE SO. THE OTHER CHALLENGES, THE REFERENDUM. WHAT WE THOUGHT WAS A 1995 RATE THAT WE CONTINUE TO PRODUCE. IF I GO BACK TO THE LIGHT GRAY LINE, WE KNOW NOW THAT THAT'S NOT THE CASE. AND SO THE 22-CENT RATE IS [00:35:03] CONTINGENT UPON THE SUCCESS OF THE PROPOSED REFERENDUM ON THE BALLOT NOVEMBER 3RD. SORRY. ANOTHER CHALLENGE. WE'VE HAD A MENTAL HEALTH GRANT THAT HAS SUPPORTED 17 STAFF MEMBERS AND THE STAFF MEMBERS ARE SOCIAL WORKERS, COUNSELORS, AND SCHOOL PSYCHOLOGISTS. CRITICAL FOLKS IN THE CONTINUUM OF SERVICES THAT WE PROVIDE. THE SUNSET ON THIS GRANT WILL HAPPEN DURING THE 2027 YEAR AND SO THE DISTRICT WILL ABSORB AND HAS PLANNED FOR THIS FOR YEARS FROM THE VERY BEGINNING OF THIS GRANT ABOUT $700,000 IN COSTS FOR STAFF MEMBERS AS WE TRANSITION OUT OF THAT GRANT AND START PAYING ALL OF THOSE COSTS LOCALLY. AND ANOTHE CHALLENGE. ALL FOLKS THAT HOLD A TEACHER'S LICENSE. CLASSROOM TEACHERS, ADMINISTRATORS. EVERYBODY THAT HAS BEEN A TEACHER AND HOLD A TEACHER'S LICENSE. WE ARE NO DIFFERENT THAT WE HOLD TEACHERS LICENSE AND HAVE A PENSION PROVIDED TO THE STATE. ACTUARIALLY THEY DETERMINED IN 2027 THAT THE MAXIMUM REQUIRED CONTRIBUTION IS MOVING FROM 10.1% TO 11%. WHAT DOES THAT MEAN? ALL IN FOR OUR TEACHERS AND ADMINISTRATORS THAT IS A NEW MILLION DOLLAR COST THAT WE HAVE NO INFLUENCE OVER WHATSOEVER. NOT SUGGESTING THAT TEACHER RETIREMENT PENSIONS ARE A BAD THING. SIMPLY POINTING OUT THAT THIS IS A NEW MILLION DOLLAR COST TO THE DISTRICT. NOW SOME OPPORTUNITIES. THE WORK OF THE BUDGET TASK FORCE IS NO DOUBT SHOWING UP IN THE BUDGET IN 2027. THE NEARLY $8 MILLION IN PROJECTED CUTS THAT WE WERE ABLE TO ACHIEVE, ALTHOUGH CERTAINLY NOT IN THE SUMMER OF '26 WILL ALLOW THE BUDGET TO ACTUALLY BE REDUCED. AND I'M PROUD TO BE ABLE TO SAY THAT TODAY. THE MAXIMUM LEVY GROWTH QUOTIENT, THIS IS WHAT LIMITS THE LEVY WE ARE ABLE TO ACHIEVE IN THE OPERATIONS FUND IS ACTUALLY AT 6%. FIRST TIME IN RECENT HISTORY THAT IT HAS ALLOWED US TO ACHIEVE A 6% LEVY GROWTH IN OPERATIONS SO I TALKED A LITTLE BIT ABOUT THE TAX RATE GOING UP. THIS WILL BE THE SPACE THAT SEES THAT THE MOST IN TERMS OF THE OPERATIONS FUNDED. THIS IS STATUTORY THAT WE CAN GET THIS AMOUNT. I WILL TELL YOU THERE ARE OTHER SCHOOL DISTRICTS DUE TO SOME NEW FLEXIBILITY IN THIS THAT ARE ABLE TO GET UP TO 10% IN THIS SPACE. THE MINIMUM IS SIX. IT'S BASED ON OVERALL GROWTH AND WE DID NOT MEET THE CRITERIA. BUT EVEN OUR NEIGHBORS ARE GOING TO SEE A LEVY GROWTH IN THE OPERATIONS FUND. THIS WILL HELP TO OFFSET A LITTLE BIT OF THAT 4.5 MILLION IN THE HOMESTEAD CREDIT LOSS SO THIS WILL BE AN EBB AND FLOW WITH A PORTION OF THAT. ANOTHER OPPORTUNITY SO FAR AND I'VE BEEN TALKING ABOUT THIS FOR SEVERAL MONTHS AND USING THE TERM CAUTIOUSLY OPTIMISTIC BUT WE ARE THROUGH EIGHT MONTHS NOW SO I'M STILL CAUTIOUSLY OPTIMISTIC BUT I FEEL GOOD ABOUT WHERE WE ARE. EXPENDITURES INCLUDING IN THE EDUCATION FUND ARE BELOW REVENUES AND SO WE HAVE SEEN AN INCREASE IN AVAILABLE CASH BALANCE IN OUR EDUCATION FUND. WE HAVE NOT BEEN ABLE TO STAND THIS MEETING A FEW YEARS AND BEEN ABLE TO SAY THAT SO THAT'S REAL GOOD NEWS. EXPENDITURES IN THE REFERENDUM FUND ARE ABOUT LEVEL WITH PROJECTED REVENUES AND SO I THINK WE'LL BE ABLE TO MAINTAN THAT CASH BALANCE IN THE REFERENDUM FUND HEADING INTO 2027. IT'S REALLY IMPORTANT TO TAKE A MOMENT TO TALK ABOUT THAT. WE'VE TALKED ABOUT OUR SPENDING PLAN AND WILL CONTINUE TO TALK ABOUT THAT IN FUTURE BOARD MEETINGS RELATING TO THE BUDGET. OUR SPENDING PLAN IN .27 IS ACTUALLY GOING TO PURPOSELY SPEND DOWN REFERENDUM CASH AND THAT WAS OUR ATTEMPT TO BE VERY CAREFUL TO ASK OUR COMMUNITY TO SUPPORT THE REFERENDUM BUT NOT DO SO AT A RATE THAT WE THOUGHT WAS ABOVE AND BEYOND WHAT WAS APPROPRIATE. AND SO OUR SPENDING PLAN ACTUALLY PURPOSELY SPENDS A LITTLE BIT OF CASH DOWN THE REFERENDUM FUND. OPERATION IS NOT QUITE AS ROSY DUE TO A VARIETY OF FACTORS NOT BECAUSE WE HAVEN'T MADE CRITICAL CUTS AND MADE SOME REAL POSITIVE STRIDES BUT SOME OF THOSE OTHER FACTORS THAT HAVE PRESSED ON US, INFLATIONARY DEMANDS AND QUITE FRANKLY THE HOMESTEAD CREDIT PIECE IN THE CIRCUIT BREAKER THAT PLAY A PART OF THIS. WE ARE GOING TO OUTSPEND OUR PROJECTED REVENUES BUT ABSENTLY STAY WITHIN BUDGET. THIS IS NOT GOING OUTSIDE THE BUDGET. THIS IS JUST SPENDING MORE THAN THE REVENUE WE ARE BRINGING IN BUT STAYING EXACTLY, FRANKLY, UNDER BUDGET WORK WE THOUGHT WE WOULD BE. SO STILL GOOD NEWS. JUST SPENDING A LITTLE CASH IN THE OPERATIONS FUND. SO LET'S TALK SPECIFICALLY ABOUT EACH ONE. FROM 2026, THAT'S THE BENCHMARK I'M COMPARING HERE. WHAT ARE WE GOING TO SEE IN TERMS OF BUDGET AND 2027? FIRST IS WE ARE GOING TO SEE A [00:40:02] REDUCTION IN SALARY AND BENEFITS DECREASING BY $7.3 MILLION. THIS IS THY DIRECT CORRELATION TOEDITS WE MT TASK FORCE. ANYBODY PAYING OUT OF THE EDUCATION FUND WILL BE PRINCIPALS, TEACHERS, SUPPORT STAFF. THERE ARE A LOT OF THINGS THAT FACTOR INTO THIS. AND BEFORE I EVEN -- MAYBE I'LL GET THE QUESTION AND NOW IS AN APPROPRIATE TIME EVEN WITH THOSE CUTS WE ABSENTLY HAVE PROJECTED IN THE IMPORTANT RACES THAT WE THINK ARE NECESSARY AS PART OF THE 2027 YEAR. MUCH OF THAT WILL BE HANDLED THROUGH THE COLLECTIVE BARGAINING PROCESS BUT THEN WILL EXPAND OUT TO TEACHERS AND SUPPORT STAFF AS WELL. I DO NOT WANT THAT TO BE CAPTURED HERE THAT BY DOING THIS THOSE FUNDS ARE GOING TO BE AVAILABLE. WE ABSOLUTELY HAVE BALANCED THAT. I TALKED ABOUT WITH DECLINING ENROLLMENT CHALLENGES, JUST THE SUPPORT AND MEANS THEY CRITICALLY NEED FOR THE WORK TAKING PLACE. WE BUDGETED A MILLION MORE DOLLARS FOR EXCEPTIONAL LEARNERS IN 2027. SUMMER SCHOOLS' EXPENSES ARE GOING TO DECREASE DUE TO THE VARIETY OF STATE EXPECTATIONS AND RECOMMENDATIONS. CURRICULAR MATERIALS WILL INCREASE BY ABOUT HALF A MILLION DOLLARS AND THAT'S JUST A PART OF THE YEARLY PROCESS AND WHAT WE PLAN TO ADOPT AND WE WILL MOVE THE BEHAVIORAL HEALTH EXPENSES WITH THE SUCCESSFUL -- HOPEFULLY SUCCESSFUL PASSING OF THE REFERENDUM. THOSE EXPENSES WILL GO TO THE REFERENDUM BE IT YOU WILL NOT THAT'S 412,000? THAT WAS OUR CONTRACT IN '26. THAT NUMBER IS 27,000. THESE ARE THE BIG HIGHLIGHTS. OBVIOUSLY IT LINE BY LINE THERE IS SOME ADDITIONAL ADJUSTMENTS BUT THESE ARE THE BIG CHANGES. WE GET OVER TO THE REFERENDUM FUND, WHAT CHANGES THERE. WE ABSENTLY HAVE TO BUDGET THE PASSING OF THE REFERENDUM. REMEMBER, THE GROUP THAT OVERSEES BUDGETS HAS THE POTENTIAL TO CUT OUR BUDGET. THEY CAN NEVER RAISE IT AND SO WE HAVE TO BUDGET THAT THE REFERENDUM WILL PASS AND IF IT DOES NOT THIS BUDGET WILL HAVE TO BE CUT AND THERE WILL BE CHANGES ACROSS THE BOARD COMES IN THE CHANGES. BUT AS IT STANDS HERE BEHAVIORAL MENTAL HEALTH COMES IN AT 700,000. TRAFFIC CONTROL AT 375,000 COMES IN AND THIS IS PART OF OUR SPENDING PLAN. NOTHING HAS CHANGED HERE. IF WE TALK ABOUT AS APPROVE THE RATE WOULD GO FROM 1995 TO $0.22 IN 2027. TALK A LITTLE BIT ABOUT THE OPERATIONS FUNDS. WHAT ARE THE CHANGES? OVERALL ADMIN EXPENSES INCREASED IN THE BUDGET BY HALF A MILLION DOLLARS. WE PUSH MORE EQUIPMENT MAINTENANCE TO BALANCE THE BUDGET TO ABOUT $700,000 IN REOCCURRING MAINTENANCE TO UPDATE 22 SCHOOL BUILDINGS. THE BUDGET FOR TRAFFIC CONTROL WHICH PREVIOUSLY LIVED IN THE OPERATIONS FUND IS BEING SHIFTED TO THE REFERENDUM FUND. AS WE TALKED ABOUT, THE OPERATIONS FUND IS ELIGIBLE FOR A 6% LEVY GROWTH SO WITH THE DECLINING AV, THIS WILL RESULT IN A HIGHER TAX RATE IF WE MAXIMIZE THAT WHICH I WOULD HIGHLY RECOMMEND BECAUSE THAT IS STATUTORY THAT WE CAN ACHIEVE THAT'S OF WHAT THAT MEANS IS THIS OPERATIONS RATE WOULD MOVE FROM 3596 TO 3879 AND THAT IS A PRODUCT THAT THE FACT THAT THE AV IS DECLINING. WHEN WE TRY TO LOOK AT OTHER DISTRICTS, THEY SAY THAT THEIR PROPOSED BUDGET IS NOT INCREASING AS MUCH IN THE OPERATIONS FUND. YOU'D WANT TO TAKE A LOOK AT THEIR NET AV AND SEE WHAT THEY DID. ONE OF OUR NEIGHBORS IN PARTICULAR HAS AN MLG CUBE 10% FOR THE 2027 BUDGET. TALKING A LITTLE BUT ABOUT THAT SERVICES AND THESE ARE THE ONES I'M FRANKLY MOST EXCITED ABOUT SO EVEN WITH A DROP IN NET AV WE ARE GOING TO MAINTAIN THE EXACT SAME TAX RATE IN THE DEBT SERVICE ACCOUNT AND WE ARE ABLE TO DO THAT FOR A COUPLE OF DIFFERENT REASONS AND I'LL GET A LITTLE BIT INTO THAT IN THE MINUTE BUT THE HIGH LEVEL OF THIS IS THAT WE HAD SOME DEBT FALLING OFF THAT WE FRANKLY DIDN'T REPLACE AND WHAT DOES THIS MEAN? IF WE ISOLATE THE DEBT SERVICE FUND THIS MEANS WITH THE DECLINING NET AV AND THE RATE, DECREASES THE LEVY BY A SIGNIFICANT AMOUNT AND THE TAXPAYER IS GOING TO PAY LESS FOR THE DEBT SERVICE ACCOUNT. THAT IS ACTUALLY A SMALLER TAX LIABILITY TO THE HOMEOWNER NOW BECAUSE WE KEPT THAT FLAT. WE WERE ON A CALL TODAY WITH ONE OF OUR PARTNERS' POLICY ANALYTIC AND THEY WERE PROJECTING OUT DISTRICTS KEEPING A FLAT LEVY WHICH WOULD HAVE REQUIRED A TAX INCREASE AND I SAID, NO, WE ARE ACTUALLY GOING TO KEEP OUR TAX RATE LEVY AND THERE AREN'T MANY SCHOOLS DOING THAT OUT THERE. I THINK THIS IS A REAL POSITIVE FOR HSE SCHOOLS AND YOU'LL SEE [00:45:03] HOW COMES IN A PLAY THE MINUTE. SO THIS LIVES OUTSIDE OF OUR CIRCUIT BREAKER. THERE'S ONLY TWO THINGS THAT LIVE OUTSIDE OF THAT FOR US. THE FIRST IS THE SERVICE IS EXEMPT BECAUSE WAS CAPITAL PROJECTS APPROVED DURING A REFERENDUM AND THE SECOND THING IS THE OPERATING REFERENDUM. WE ARE ACTUALLY GOING TO DROP THIS BY HAVE A PENNY AS WELL. WE HAVE BEEN TALKING QUITE AT LENGTH ABOUT THE REFERENDUM GOING UP TO SENSE PROPOSED IN 2027. THESE TWO WORK IN PRODUCTION. CONJUNCTION. IF YOU NEARLY FOCUS ON THOSE TWO AND THERE ARE CHALLENGES WITH THAT, IT REALLY IS AND THAT PERCENT AND A HALF WHICH I THINK IS A REAL POSITIVE FOR THE SCHOOL DISTRICT AS WELL. THESE ARE AREAS DROPPING AT A TIME WHEN AV IS ACTUALLY DROPPING AS WELL. USUALLY THE OPPOSITE OF WHAT HAPPENS. SO WHAT DO WE HAVE TO DO? IN ORDER TO ADVERTISE THE BUDGET PROPERLY WE ALREADY TALKED ABOUT THE TIMELINE. WE HAVE A RESPONSIBILITY TO PROTECT OURSELVES. IT'S VERY COMMON AND APPROPRIATE TO ADVERTISE A HIGHER TAX RATE AND A HIGHER BUDGET IN SOME CASES AND VERY LOW NET ASSESSED VALUES BECAUSE WHAT THE DEAL GF WHO ULTIMATELY IMPROVES OUR BUDGET WILL DO IS WE'LL GO IN AND SAY, YEP, WE'VE GOT TO CUT THAT DOWN TO REALITY, IF YOU WILL. BUT IF THERE'S EVER A MISTAKE AND A $30 MILLION BUDGET THERE SOMETIMES MIGHT BE A LITTLE MISTAKE. THIS IS THE PROTECTION. IF WE COUNT SOMETHING LIKE THAT AND I CERTAINLY HOPE WE DON'T THEY CAN'T SAY, WE CAUGHT IT, WE ARE GOING TO RAISE IT. WE ARE SETTING CEILINGS SO THAT HAS JUST A LITTLE BIT OF OBJECTION. ALL OF THAT TO SAY WHAT DOES THIS MEAN? FIRST OF ALL ON THE LEFT-HAND SIDE YOU'LL SEE THE ADVERTISED BUDGET IN 2027. AND I WANT TO BE CAREFUL HERE. ADVERTISED, REMEMBER, WE ARE ADVERTISING HIGH WITH OUR TAX RATES. THIS WILL NOT BE THE TAX RATE. WE'VE DONE THIS FOR MANY YEARS HERE AND FRANKLY THIS IS A COMMON PRACTICE IN SCHOOL BUDGETING. ON THE RIGHT-HAND SIDE IS WHAT I PREDICT THE ACTUAL BUDGET TO BE. YOU'LL NOTICE ON THE BUDGET LINE, YOU'LL NOTICE THAT'S PERMISSION TO SPEND IT. IN MOST CASES THEY ARE ALMOST IDENTICAL. THE OTHER EXCEPTION WOULD BE DEBT SERVICE. WE ADVERTISE A LITTLE HIGHER TO PROTECT US AND WE HAVE NOT CLOSED IN THE 2026 GEO BOND SO THAT STILL OUT THERE. I DO NOT ANTICIPATE THAT AT ALL AND I DO THINK IT WILL BE $58 MILLION BUDGET BUT WHERE I WOULD CALL YOUR ATTENTION ARE THOSE TAX RATES. DEBT SERVICE, NOTICE DEBT SERVICE EXEMPT, NOTICE OPERATIONS ARE HIGHER IN THE BLUE THAN THEY ARE IN THE RED. WHAT IS IN RED IS WHAT WE REALLY BELIEVE WILL HAPPEN. WHAT IS BLUE IS GOING BE ADVERTISE OUT OF THE PUBLIC. I THINK RIGHT NOW THIS IS WHERE IT REALLY COMES INTO PLAY. THE LEFT EXAMPLE IS THE 2026 BUDGET ORDER. THESE ARE ACTUAL AMOUNTS AND ACTUAL RATES. OON THE RIGHT IN RED IS THE PREDICTED 2027 BUDGET. AND YOU'LL NOTICE RIGHT OFF THE BAT OVER $7 MILLION CUT FROM THE BUDGET IN '26 TO '27. THE RESULT OF ALL THE EFFORT TO GET IT MUCH MORE BALANCED THAN IT HAS BEEN THE LAST COUPLE OF YEARS. YOU NOTICE THE REFERENDUM? THE BUDGET NOTICE TO THE BUDGET SPENDING PLAN? THAT IS NOT SAYING THE LEVY WE BRING IN IS 31 MILLION. THE LEVY IS AROUND 299. WE ARE GOING TO SPEND CASH PURPOSEFULLY IN THE REFERENDUM. DEBT SERVICE, THERE IS A REAL BIG DROP. FROM BUDGET '26 TO BUDGET '27. WE HAD SOME DEBT FALLING OFF. THE PHILOSOPHY IS TO REPLACE THAT? WE CHOSE NOT TO DO THAT. PART OF THE PROCESS IS ALLOWING US TO DO THE CRITICAL WORK TO UPDATE OUR SCHOOLS. WE ARE JUST TRYING TO DO OUR BEST TO BE RESPECTFUL OF THAT RIGHT THERE IN IN THE WAY WE BALANCE OUR DEBT. THAT SERVICE EXEMPT NOT A BIG DROP IN THE BUDGET BUT THAT TAX RATE DROPPED, THERE IS A HALFPENNY THAT'S PART OF THAT. THE TWO THINGS THAT LIVE OUTSIDE THE PROPERTY TAX CIRCUIT BREAKER? REFERENDUM AND DEBT SERVICE. LOOK AT THOSE COMBINED AND IT'S ABOUT A PENNY AND A HALF INSTEAD OF $0.02 TOTAL. OPERATIONS. THAT'S THE UNFORTUNATE ONE. WE SAW A DECLINING AV. WE REALLY NEED TO CAPTURE THAT 6% THE STATE IS ALLOWING US. THAT IS A PLACE THE RATE DOES INCREASE. OVER ALL, WHAT YOU SEE IS ABOUT JUST SHY OF FOUR AND A HALF PENNY INCREASE ON OUR OVERALL TAX RATE. WHAT I CALL YOUR ATTENTION TO IS A BUDGET THAT DROPPED BY $15 MILLION AND THAT'S A PRODUCT OF AGAIN ALL THE WORK OF A LOT OF PEOPLE. WHERE HAS THIS BEEN OVER THE LAST SEVERAL YEARS? YES, THIS IS AN INCREASE IN THE [00:50:03] TAX RATE BUT I'D POINT US THAT WE ARE STILL BELOW THOSE NUMBERS. ONE OF THE MANTRAS WE WORKED VERY HARD IN TALKING INFORMATIONALLY ABOUT THE REFERENDUM IS THAT WE ARE TRYING TO CAPTURE A PORTION OF WHAT WE WOULD'VE ACHIEVED IN THE PREVIOUS REFERENDUM. WE AREN'T TRYING TO GET ALL. RECOGNIZE LEGISLATIVE PROCESS HAD A VERY IMPORTANT GOAL IN MIND WHERE REFLECTS THAT IN THE WORK THAT WE'VE DONE. SO SOME CURRENT ASSUMPTIONS BUILT IN THIS AND HERE'S SOME EXCITING THINGS. LAST YEAR YOU APPROVED A RESOLUTION THAT ALLOWED US TO TRANSFER $15 MILLION FROM THE EDUCATION TO THE OPERATIONS FUNDED. STANDARD PRACTICE IN SCHOOLS GOING BACK TO THE 2019 CHANGE OF THE BUDGETARY PROCESS WHERE EXPENSES WERE SHIFTED AROUND AND I TOLD YOU AT THE TIME OUR INTENT WAS TO ONLY TRANSFER TEN AND THAT'S EXACTLY WHAT WE DONE AND WE'VE HELD TO THAT. AS A PART OF THE BUDGET WE ARE ONLY GOING TO RECOMMEND A TRANSFER OF $7.5 MILLION IN 2027. AGAIN, IT'S A MULTI-PIECE PUZZLE BUT THAT'S AN IMPORTANT PIECE OF THE PROCESS AS WELL. INTERESTS AT THE TIME OF WRITING THIS AT ABOUT A WEEK AGO AT THE INTEREST RATES ARE GOING TO DROP AND THEY WENT UP 25 BASIS POINTS LAST WEEK. SO MAYBE THEY STAY THERE AND MAYBE THE FED INCREASE THE INTEREST RATE AGAIN. IF SO, OR INTEREST RATE WILL PRODUCE MORE MONEY IN 2027. BUT WE HAVE TO ANTICIPATE THE DROP THERE. IN TERMS OF REVENUE WITH THE EDUCATION FUND WE ANTICIPATED A 700,000 DROP IN INTEREST BASED ON THAT. THIS IS GETTING IN THE WEEDS BUT I THINK IT'S IMPORTANT. WE DO RECEIVE COMMERCIAL VEHICLE EXCISE TAX THAT WAS DEPOSITED IN THE OPERATIONS FUND IN 2026 AND ASK EXACTLY WHERE IT WILL BE IN 2027. WHAT'S NEW IS EXCISE TAX AND EXCISE TAX FOR US IS RIGHT AROUND $7 MILLION. THOSE ARE USUALLY PROPORTIONALLY SPLIT BETWEEN ALL PROPERTY TAX FUNDS. WE HAVE MADE THE EFFORT TO PUT ALL OF THAT IN THE OPERATIONS FUND IN 2027. I WANT TO TELL YOU THAT THAT IS NOT A SIMPLE MOVE. THAT IS A MULTI-PIECE PULL VARIOUS LEVERS TO BE ABLE TO DO ALL THE THINGS THAT WE HAVE DONE HERE. IF WE DIDN'T DO THAT THEN THE TRANSFER WOULD NEED TO BE MORE AND OTHER ASPECTS WOULD FALL INTO PLACE AS WELL. SO I THINK MINE IS THE FACT THAT WE THINK WE ARE GOING TO GET LESS INTEREST, I THINK ALL THOSE THINGS ARE GOOD THINGS IN THE 2027 BUDGET. SO LOOKING AHEAD, ANYBODY DOING BUDGETING APPROPRIATELY IS ALWAYS GOING TO BUILD IN JUST A LITTLE BIT OF LUCK'S ABILITY IN THE BUDGET AND THAT IS A FINE LINE. WE HAD CERTAINLY DONE THAT JUST A LITTLE. BUT I WILL TELL YOU THAT THERE ARE ALWAYS UNFORESEEN EVENTS THAT HAPPENED IN THE SCHOOL YEAR WITH 20,000 STUDENTS AND 2500 EMPLOYEES AND SO WE HAVE TO BE A LITTLE NIMBLE IN OUR BUDGET. WITH THAT BEING SAID THERE IS A BIT OF A STRUCTURAL DEFICIT MEANING THAT WE PROJECT A LITTLE LESS REVENUE IN EACH OF THE THREE BIG FUNDS THAT WE ARE GOING TO BRING IN. YOU'RE A MEMBER AT THIS POINT LAST YEAR THE STRUCTURAL DEFICIT WAS $18 MILLION IN THOSE THREE FUNDS COMBINED. I'M HAPPY TO REPORT IT'S CLOSER TO 5 MILLION IN THE 2027 BUDGET AND IT IS PURPOSELY DONE AT OVER A MILLION DOLLARS IN THE REFERENDUM FUND. SO I THINK THAT IS A BIG KUDOS TO EVERYBODY FOR ALL THE WORK WE'VE DONE THROUGHOUT THIS PROCESS. IN 2027 IF WE ARE FULLY SPEND UP BUDGET LIKE I SAY IT'S A LITTLE OVER $5 MILLION. I SURE HOPE WE AREN'T SPENDING EVERY SINGLE DIME OF THE BUDGET BUT THINGS HAPPEN AND A CALENDAR YEAR. AND AS WE GO INTO THE FUTURE, DECLINING AV GOING BACK TO THAT GRAPH WILL CONTINUE TO REQUIRE US TO HAVE A LITTLE BIT OF A HIGHER TAX RATE EVERY YEAR. I THINK WE PULLED EVERY LEVER YOU CAN PULL MEANING THAT WE'VE KEPT DEBT SERVICE FLAT WHICH IS HUGE. WE'VE DROPPED THE RATE DEBT SERVICE EXEMPT WHICH IS HUGE. AND WE HAD A MARGINAL INCREASE IN THE REFERENDUM. I THINK WE'VE DONE EVERYTHING WE CAN TO KEEP THIS IN CHECK AND FRANKLY I'M PROUD OF THAT WORK AND THE WORK OUR TEAM HAS DONE TO THIS POINT. WITH THAT BEING SAID, I'LL TAKE ANY QUESTIONS. >> ANY QUESTIONS OR COMMENTS FROM THE BOARD? SUZANNE THOMAS? >> I HAD A COUPLE. SOME THINGS YOU TALKED ABOUT IN THE PAST BUT IF YOU COULD JUST REEXPLAIN IT. I'M JUST GOING TO GO BACKWARDS. CAN YOU GO TO THAT SUMMER SCHOOL THING YOU TALKED ABOUT? SO SUMMER SCHOOL FOR OUR KIDDOS, THAT DID NOT CHANGE BREED THEY CAN STILL GO INDIANA ONLINE AND DO SUMMER SCHOOLS. OUR CONTRIBUTION OF WHAT WE ARE SUPPORTING HAS CHANGED. IS THAT CORRECT? >> DO YOU MIND IF I LEAN IN ON YOU A LITTLE BIT? >> ARE WE JUST ALLOWED ONE CLASS? >> THE FOCUS OF THE STATE. >> WHAT WAS THE CHANGE? >> WE ONLY CAME FOR THE REQUIRED CLASSES WHICH INCLUDE A COMPUTER FOUNDATION, INCLUDE IN PREPARING FOR COLLEGE AND CAREERS. SO THOSE CLASSES WE ARE PAYING FOR IT, THE ONLY CLASSES THAT WE [00:55:05] ARE PAYING FOR. THE REST OF IT IS INDIANA ONLINE. >> BUT THEY ARE AVAILABLE SO ANYBODY WHO WANTS TO TAKE A COUPLE YARDS SAYING THAT YOU CAN'T TAKE SUMMER SCHOOL. >> THROUGH ONLINE. >> CORRECT. WHAT I WANTED TO KNOW. >> THIS SUMMER IS THE LAST SUMMER TO OFFER LIVE PE. THAT WILL NO LONGER OCCUR EITHER. >> DID YOU SAY LIVE PE? >> CORRECT. >> WE ARE NOT DOING IT STARTING 2027 SUMMARY. >> THEY WILL TAKE THAT COURSE IN EIGHTH GRADE. >> RIGHT. I REMEMBER THAT. THANK YOU. >> WHICH THERE IS AN ELEMENT OF SOME REIMBURSEMENT BUT IT DOES COST TO SOME OF THOSE COURSES SO THIS IS NOT A SILLY ABOUT PAYING FOR KIDS COURSES, IT'S PAYING FOR OUR STAFF TO BE HERE FOR THE INSTRUCTION. >> THAT ALSO HELPS IN OUR BUDGETING AS FAR AS OPERATIONS AND THINGS DOING IN COST TOO. >> CORRECT. SORRY. DIDN'T MEAN TO TURN THAT OFF. COULD YOU PLEASE GO TO THE GRAPH PAGE THAT SHOWED THE GRADES -- A MOMENT THAT ALL OF THE GRADES AND ENROLLMENT? I WAS LOOKING AT IT AND TOOK A COUPLE PICTURES A BIT SO I COULD KEEP SEEING IT. I WANT TO POINT OUT IN A POSITIVE WAY THAT IF WE REALLY LOOK AT OUR GRAPH YOU MADE A POINT BUT I THINK YOU SAID IT A LITTLE FAST SO I'D LIKE YOU TO SAY IT AGAIN SLOWLY THAT IF YOU GO ON A DIAGONAL AND LOOK FOR EXAMPLE OUR SECOND GRADE CLASS FROM 2018-2020 ALL THE WAY DOWN TO NOW AND YOU LOOK AT WHERE THEY ARE INTENDED GRADE OR WHATEVER. I DO NOT SEE THAT IN FRONT OF ME. THOSE ANGLES ARE HIGHER-LEVEL CLASSES. ENROLLMENT IS INCREASING. THAT'S A VERY POSITIVE THING FOR OUR DISTRICT AS THE KIDDOS GROW IN OUR DISTRICT. WE DO STRUGGLE IN K THROUGH THIRD BECAUSE OF NOT JUST THAT SHE SAID IT BEFORE -- IS NOT A SITUATION OF OUR SCHOOL DISTRICT. OUR SCHOOL DISTRICT IS OUTSTANDING. NOT PUTTING PRESSURE ON THE CITY BUT IT'S THE COST OF LIVING IN OUR COMMUNITY AND IT'S HARDER FOR A YOUNGER FAMILY TO RAISE A FAMILY IN THIS AGE GROUP. WE LOSE KIDDOS, AS I CAN TELL YOU THEY'LL GO TO A DIFFERENT COMMUNITY THAT IS NOT AS HIGH. SO I WANT TO POINT OUT THAT THIS GRAPH YEAR TO SHOW THAT OUR ENROLLMENT AS THE GRADES INCREASE, OUR ROLES INCREASE. I WANTED TO POINT OUT AGAIN. >> WE LOOK AT THE SENIOR NUMBER COMPARED TO THE CAN TO GARDEN NUMBER, THE DIFFERENCE IS 700 STUDENTS. BUT THE DROP IS ONLY 294. THAT'S BECAUSE COHORTS FROM A KINDERGARTEN TO FIRST GRADE, FIRST GRADE A SECOND GRADE, FOR THE MOST PART ARE GROWING. THE NUMBER OF SENIORS NOT ONLY AS OUR LARGEST CLASS, IT'S A SLIGHT BIT MISLEADING BECAUSE THERE ARE ABOUT 30 STUDENTS THAT ARE IN OUR EXCEPTIONAL LEARNERS DEPARTMENT THAT WE STILL SERVE UP TO AGE 21 AND THOSE GET SHOWN ON THE LINE OF SENIORS. AND SO THAT FOR SOME OF THOSE STUDENTS THEY WILL CONTINUE TO STAY IN THAT SPOT UNTIL THEY REACH AGE 21. >> AND THEN GOING TO THE RAINY DAY FUND. CAN YOU... SO EXPLAIN AGAIN OR CAN YOU OFFER SOME INFORMATION THAT I ASSUME -- OBVIOUSLY WE WANT TO HAVE MONEY IN OUR RAINY DAY FUND. BUT WHAT IS IT THAT ACTUALLY FUNDS A RAINY DAY FUND? IN THE PERFECT WORLD -- >> THERE ARE NO RAINY DAYS. >> IN A PERFECT WORLD EVERYTHING IS RUNNING SMOOTHLY AND WE HAVE DEPOSITED A BUDGET. HOW DOES THE RAINY DAY FUND GET MONEY INTO IT? HOW IS IT DEPOSITED? >> GREAT QUESTION. ZERO SOURCE OF REVENUE FOR THE RAINY DAY FUND. ONLY RECEIVE MONEY AT THE END OF THE YEAR AND SUCH A SURPLUS IN YOUR BUDGET THAT YOU SAID, I THINK IT'S A GREAT TIME TO TRANSFER A MILLION DOLLARS FROM THE OPERATIONS FUND OVER TO THE RAINY DAY FUND. THAT HAS NOT HAPPENED IN MORE THAN A DECADE HERE. ALSO HAVE NOT SPENT DOWN THAT MONEY AND MORE A DECADE HERE AND IT HAS SET HERE, EARN INTEREST WHICH IS GOING TO THE EDUCATION FUND. BUT HAS ALLOWED TO SERVE AS CASH FLOW SUPPORT FOR US. MEANING AND I KNOW I SAID THIS AND I GOT HEAD NODS EARLIER COME UP PROPERTY TAX DRIVEN FUNDS ARE ONLY PROVIDED TO US IN MAY AND JUNE AND NOVEMBER-DECEMBER. BUT ALL YEAR LONG, WE HAD BILLS IN ALL THESE FUNDS AND SO WE WILL DO IN THE BIRD APPROVES THESE A TEMPORARY LOAN THE BEGINNING OF THE YEAR TO PUT MONEY IN AN OPERATIONS AND BACK AT OUT RIGHT AT THE END. THE CONCEPT RELATED TO THE BENEFIT TRUSTS AND OPERATIONS NOT EVEN CLOSE TO THE SAME. [01:00:03] THIS IS MONEY INCOME AT MONEY OUT, TRANSFERS ALL IN-HOUSE, NO COST. IF WE DIDN'T HAVE THAT THAT'S WHEN YOU GO TO AN OUTSIDE GROUP AND SAY, HEY, WE ARE IN APRIL AND WE DO NOT HAVE THE TAX UNTIL ANOTHER MONTH, WE NEED TO TAX ATTACKSBECAUSE MISSION WARRANTS. THAT'S ALL OFF THE TABLE BECAUSE WE ARE INTERNALLY DOING IT FIRST. BECAUSE POINTING THAT OUT BECAUSE WE PEOPLE TALK ABOUT US IN A DEFICIT AND THEY SAY, HEY, YOU'VE GOT $13 MILLION. WHY AREN'T YOU USING IT. I WANT TO ALSO POINT OUT THAT IS IT COMMON TO SAY THAT YOU WANT TO TRY TO KEEP THREE MONTHS TO FOUR MONTHS IN THE BANK AS YOUR QUESTION? IS THAT RIGHT ABOUT RIGHT? >> THAT'S A GENERAL RULE OF THUMB. THAT DOESN'T HANDLE ONE MONTH. JUST A POINT THAT OUT. >> THAT'S WHAT I'M ASKING YOU BECAUSE I WANT PEOPLE TO UNDERSTAND THAT WHEN YOU SAY 13 MILLION -- >> IT SOUNDS LIKE A LOT. >> DOESN'T REALLY COVER ONE FULL MONTH. >> OTHER EDUCATION EXPENSES, IT DOES NOT. IF THERE WAS EVER A PAUSE IN TUITION SUPPORT, OUR CASH BALANCE WOULD MAINTAIN THAT WERE A LITTLE WHILE. IF WE WENT 2-3 MONTHS, NOW WE ARE HITTING THE RAINY DAY FUND. >> THANK YOU FOR SHARING THAT. THERE WAS A SLIDE YOU HAD THERE THAT I DIDN'T REALLY CATCH THE UNDERSTANDING TO IT. IT WAS A SLIDE YOU WERE EXPLAINING AND I KNOW IT WAS SOMETHING THAT HAPPENED WITH IN THE LEGISLATION THAT HAS CHANGED WHERE WE ARE NOW PAYING 10.1 TO 11.1%. YOU HAVE SHARED THIS IN THE PAST. IS THIS JUST A COST THAT THE AGENCY PAYS OR IS IT A MATCH? IT'S NOT A MATCH, RIGHT? IT'S JUST AUTOMATIC THAT WE PAY IT. >> THERE'S TWO COMPONENTS TO THIS. I'M GOING TO TRY TO FIND THE SLIDE. >> GOING BACKWARDS? >> RIGHT THERE. >> AS WE SIT HERE TODAY IN 2026, THE DISTRICT FOR ALL CERTIFIED STAFF IS REQUIRED TO PAY 7.4% OF THE SALARY INTO TEACHER RETIREMENT. 3% IS DEFINED AS THE EMPLOYEE CONTRIBUTION. A MAJORITY OF DISTRICTS, HSE IS ONE OF THOSE, PAYS THAT ON BEHALF OF OUR EMPLOYEES. I WILL TELL YOU MY PREVIOUS DISTRICT DID NOT AND SHOULD 3% OF EVERY EMPLOYEE'S CHECK WENT TO TEACHER RETIREMENT. THAT'S MORE THE MINORITY THAN THE MAJORITY. WHEN YOU TALK ABOUT WHAT IS REQUIRED VERSUS WHAT IS NOT, WE ARE REQUIRED TO PAY 7.1 TODAY BUT SINCE WE DO ABOUT IT IS 10.1 AND THAT MOVES TO 11.1%. SO ANY PAYMENT MADE TO A CERTIFIED EDUCATOR AND THAT IS DIMINISHED RAIDERS, TEACHERS. 11.1% ON TOP OF THAT AMOUNT GETS PAID TO TEACHER RETIREMENT. >> GOOD. THAT'S -- I THOUGHT THAT WAS TE SEVEN. I UNDERSTAND. THANK YOU. >> ANY FURTHER QUESTIONS OR COMMENTS FROM THE BOARD. >> THANK YOU. >> NO QUESTIONS TO BE HONEST. THIS IS MY FOURTH TIME DOING THIS AND YOU ARE JUST FANTASTIC SO I REALLY WANT TO MAKE A COUPLE OF COMMENTS. THE WAY YOU EXPLAIN THIS TO NOT ONLY US BUT TO THE COMMUNITY IS SO APPRECIATED. YOU BREAK IT DOWN IN LAYMAN'S TERMS THAT WE CAN HOPE WE ALL UNDERSTAND. IT'S AN UNBELIEVABLE AMOUNT OF WORK THAT I REALLY CAN'T DESCRIBE THE PEOPLE WHEN THEY ASK THAT OF A COMMUNITY MEMBER TODAY. WHEN DID YOU START TO UNDERSTAND THE BUDGET AND I SAID PROBABLY THREE YEARS IN. MAYBE PEOPLE DO NOT WANT TO HEAR THAT. SHOULD'VE DONE BETTER EARLIER. BUT IT IS AN INCREDIBLE ENDEAVOR TO FIGURE ALL THIS OUT WITH THE FUNDING SOURCES AND I THINK THE BIGGEST TAKEAWAY IN THIS PRESENTATION IS WE WILL HAVE TO GO BACK AND DO SOME HISTORICAL RESEARCH. BUT I DO NOT KNOW -- I KNOW FOR SURE THAT IN MY TIME THE BUDGET HAS NEVER DECREASED. I DON'T KNOW THAT IT EVER HAS. BUT NOT ONLY ARE WE DECREASING, WE ARE DECREASING SIGNIFICANTLY WHILE 15-$60 MILLION WHILE AS FAR AS I CAN UNDERSTAND MAINTAINING ALL OF OUR LEVELS OF EXCELLENCE IN SERVICE AND SERVING THE STUDENTS AND IT SOUNDS LIKE WE MAY BE EVEN HAVING SOMETHING FOR OUR TEACHERS. JUST AN INCREDIBLE WORK TO MAKE ALL THIS HAPPEN. I'VE HEARD PEOPLE JOKE ABOUT HOW YOU DO MORE WITH LESS AND IN MY EXPERIENCE YOU DO LESS WITH L LESS. THE MATH DOESN'T WORK IF YOU HAVE LESS, YOU DO LESS. WITH YOUR ENTIRE TEAM, DR. KEGLEY, EVERYBODY BOTH SIDES OVER HERE, JUST INCREDIBLE WORK FIGURING THIS ALL OUT. [01:05:01] AND I JUST CANNOT THANK YOU ENOUGH SO I WANT TO MAKE THAT CLEAR. >> WANTED TO SAY THE SAME THING. I ASK A LOT OF QUESTIONS TO REITERATE AND REITERATE SOME OF THE THINGS AND PUT IT BACK OUT THERE OF THE IMPORTANCE AND GREAT WORK THAT YOU DO SO I WANT TO SAY THANK YOU AGAIN TO EVERYBODY THAT HAS DONE IT AND GETTING US PREPARED FOR THIS NEW BUDGET SEASON. THANK YOU SO MUCH. >> THANK YOU. >> THANK YOU. I THINK WE ALL ECHO BEN'S COMMENTS AND SUZANNE'S COMMENTS RATE WE ARE BLESSED TO HAVE YOU ALL AND YOUR TEAM FOR GETTING US TO THIS POINT. 50 MILLION IN SAVINGS IS A HUGE LIFT TO WHERE WE ARE RIGHT NOW. THANK YOU. NOW CLOSING DISCUSSI * This transcript was compiled from uncorrected Closed Captioning.