Good afternoon. I'd like to call to order this special meeting with the Rough County School Board. Actually, I'm calling the meeting to order for the board of commissioners. At this time, I look for agenda approval. Mentionally approved agenda. Thank you. Thank you. I think we've got motion to second. Any discussion? The motion. You're going to call a question. My favorite was your right hand. You can put it flat wise. The agenda has been approved. I'd like to recognize our special guest, the chairman of the Ruthert Pay School Board. Chairman. This time I'll call the meeting of the Ruthert County Board of Education meeting joint, jointly with commissioners and after adoption of the DIN. So moving. Second. Any new discussion? Follow the table. Mr. Bass. Commissioners, the item under the DIN just 3753. This is the budget meeting of the Federal County Board of Commissioners, the Federal County Board of Education. We all have received in our packet, information pack already, previously from the school board. And there is a presentation or discussion that's gonna happen now, but I believe some will chair more. I believe that Dr. Sutton's gonna present his letter. Well, thank you, thank you, Chairman King, and commissioners, Mr. Garrison. Thank you for having us today. We do hope that you find the updated format of the budget request helpful. I say nodding up ahead, so we'll take very much so thank you. Thank you for my round. And we promise to keep this short and sweet, and at this time I'll recognize Dr. Chup. Thank you, Chairman Morrow. Good afternoon, board members. Good afternoon, commissioners, Mr. Garrison. I'm recognize Dr. Schum. Thank you Chairman Mora, good afternoon board members, good afternoon commissioners Mr. Harrison. I'm just really pleased to be with you all. I appreciated Commissioner Hunt's observation about the breadth of this year's proposed budget. And in keeping with that spirit, we've prepared only 10 to 15 minutes of remarks to share with you all. The police know that we're happy to stay for as long as you would like to answer any questions you have we are going to be respectful about your time and try to be focused and limit our prepared comments to 10 to 15 minutes. For my own part I want to take just a few minutes to offer some observations from the budget message that I included in your packet that appears on a page I think it's numbered one within the packet. The school board's proposed local current expense fund budget for fiscal year 24 or 25 totals $19,479,193. And that total includes a requested appropriation from the Board of Commissioners in the amount of 19,154,193 and an estimated $325,000 and other local revenue fines and forfeitures to be more specific. The proposed budget does also anticipate a reduction in spending on the board's part. And those reductions accrue from two different adjustments. One is a reduction of about $600,000 in non-personnel line items and an approximate reduction of $300,000 through the selective elimination of some vacancies that already exist for the next school year through process of natural attrition. The combined savings there for those two spending reductions total about one about one million dollars even. The proposed capital outlay fund budget reflects revenues and expenditures that total one million five hundred eighty five thousand dollars with all those revenues accruing from a local appropriation by the board of commissioners. I tried to limit the length of my message this year. I observed to somebody that in the first year I wrote when it was two pages long my last year to grow into 16 pages. So we've trimmed it way back to only two pages. But I did think it was important just to make some honest observations about the school system's fiscal position in the context of the budget message here. Some of you may already know this, I know Mr. Garrison does through conversations that he and I have had, but the school system spent approximately $4.1 million of its appropriated fund balance from the local current expense fund to reconcile revenue shortfalls accruing toward the end of the previous fiscal year. That left the board with an audited fund balance of $161,797, which represents less than 1% of its adopted local current spits fund budget. Within that $161,797, only $105,322 were unassigned under regulatory guidance under state law. So coming into this fiscal year with that revenue shortfall still in place and without any available fund balance to reconcile it, the school system repurposed what was left of its federal pandemic relief funding through the ESR-3 revenue stream. And so remember that early on we used that money to temporarily increase staffing to lower class sizes, increase student supports, provide additional teacher assistance and so on. The purpose that the use of that money changed dramatically with the current year and with the elimination of those temporary positions, we use the remaining balance to sustain current operations that include the salaries and benefits of non-temperary or permanent employees of the school system. That, those receipts through S or three have a deadline of September 30th, 2024. And beyond that time, there will be no money left and unavailable to sustain that current non-temporary staffing and the school operations that are currently funded out of SR3 revenues and the absence of an available fund balance. I also wanted to observe for you, but because we talked about it every year, the General Assembly has directed the Department of Public Instruction to change the method that it uses to calculate a lauded average daily membership for ADM, which is the basis for people funding through the State Public School Fund. In previous years, school systems have benefited from the best of three different metrics. Best first month, best second month, or a statistical projection. The new requirement is that statistical forecasts fall away entirely. And a lot of ADM for the subsequent years only based on actual ADM in the current year. Under that architecture, Month 2 membership in the current year will determine the funded ADM for next year. And based on our Month to Membership this year, we're looking at a decrease of 116 students for a reduction of approximately $972,000 in state public school fund revenues. I also wanted to acknowledge in the message that the Board of Education has actively explored additional opportunities to raise revenue and reduce operating costs through organizational efficiencies. You all probably know well about these things, but I want to just observe them for the record. During the current fiscal year, the Board has commissioned commercial appraisals of some surplus properties that it still holds, and we're currently entertaining options for their disposal that would generate some one-time revenue that would help us to temporarily sustain current operations. You all well know also that the Board has commissioned an organization called ORED, the Operations Research and Education Laboratory at NC State University, to conduct an external study that includes 10 years of membership forecasting by school and by community and will also present an array of scenarios for reorganizing the school system to increase physical efficiency through the closure or consolidation of one or more of its current schools. I expect that ORED, I noted in the message that we expect the results of ORED's analysis within weeks and I do want to observe that the week's expector had to present their assignment scenarios at the Board of Education's next regular business meeting on Tuesday, May the 7th and we would be delighted for any or all of you who are available to attend in person and hear directly from ORED what assignment scenarios they've been able to generate for the Board's consideration. I just acknowledged without belaboring the point that many of the same key factors that drive these budget conversations every year continue to drive them now. Labor expenses continue to increase with mandatory wage increases and fringe benefit increases for school employees. We expect retirement and health insurance increases. And then on top of that, you have the general inflationary influence on rising costs. I think what makes this discussion unique right now is that while those key factors are sort of perennial, we talk about a member of a year. We do so now in the absence of an available fund balance in the absence of federal pandemic relief funding that can help to sustain current school operations. What I've asked Ms. Kelly to do over the next few minutes is walk you through the couple of documents that appear in the packet, offer some observations, offer some explanation. We'll certainly be glad to answer questions now or at the end as you have them. Mr. Teague is going to close out the formal remarks today by giving you a quick overview of top priority capital projects for fiscal year 2425. Thank you again for the chance to be here and thanks to Ms. Kelly, Mr. Teague for your help with presentation. I'll turn it over to you. Thank you. Good afternoon, Chairman King, commissioners, Mr. Garrison and county staff. I want to thank you all for the kind words about the new budget format. It was no small undertaking, but I thought it was something that really needed to be done. Some of my comments are very similar to Dr. Sutton's just to acknowledge that the district's budget request is $19,479,193 and that represents the 15% increase over the prior fiscal year. We have had numerous meetings, we have spent many staff hours reviewing every aspect of the district spending. We reviewed line item by line item looking for ways to cut the non-personal expenditures to ensure that we had a budget to present that reflected our commitment to our students, our employees, and that respects the county's difficult job in allocating tax and revenue dollars. Approximately 94% of the cost of Rutherford County Schools of salaries and benefits. Of course during the pandemic we had temporary staffing to help with remote learning needs and additional teaching support for students to recover from learning loss. Those temporary positions, as Dr. Sutton said, have now ended. And in order to maximize the use of our federal dollars from S or three, we moved permitting employees into those dollars to help to to spend that program down. The budget before you does include an increase in personnel cost. It does not include any new positions. This increase is to pay for a state mandated raise of three to four percent for positions that are funded by local dollars and for those with a local match. that are funded by local dollars and proposed with a local match. The state has an 8.7 percent increase and employers cost a health insurance that we have no way of defraing, we must pay it. And the funding to maintain 20.4 current permanent full-time equivalent positions that now need to return from the SRA 3 pot of money back into the local current expense budget. This budget also reflects increases to cover the execution of the ORAD report recommendations and legal and consulting costs. It also reflects other costs increases that the district cannot afford. General liability insurance, photo coverage, and student accident policy coverage are all estimated to increase by 10% this next year. Duke Energy has increased its rates by over 7% this year alone and with another rate hike is anticipated in January of 25. These cost increases cannot be absorbed without significant repercussions on our employees, our student programs, and corresponding effects on our county student populations. Our review of the non-personnel line items yielded a reduction of approximately $600,000, which is a 4.1% decrease from our requested funds from 24 here. This reduction includes a myriad of things, and I'm just going to list them so that you can see we've touched a lot of areas. It includes professional development, workshops and training, supplies and materials, communications, telephones, membership dues, repairs, materials and related labor, public relations, meals, advertising, travel and professional and technical services. These spending cuts are not for luxury expenditures, but for items that we feel need to be sacrificed for the organization's good in a year of extreme inflation and financial difficulties. The operational areas that are affected by these budget cuts are administration, finance, human resources, public relations, student instruction, student support services, operational support services, and transportation. And from that list, you can certainly hear that we have touched on every area of operations at the county funds. As we submit our request, we want to assure you that we've done our very best to have skin in the game with everything that we've looked at. This year, you've recognized that we have updated the budget presentation. And we want to provide a clear and concise picture of our budget, and that request begins on page three. We have enumerated our budget request at the most transparent level, providing detail that we hope will be meaningful. We have also included a historical budget analysis of two prior fiscal years, as well as the current year spending trend through March 31. And that begins on page seven. In the current year expenditures, we have budgeted them at the lowest possible level, providing greater transparency and therefore providing a more meaningful variance analysis for your review. As this document rolls forward each year with the comparability and analysis potential, it will give a increase and we'll get more more profitable we'll be able to see how the spending trends budget versus actual actually are moving throughout the years. You know we believe that the Commission will find this helpful. Now I'd like to ask Mr. Teague to talk about capital. Sure thank you gentlemen as always for this opportunity, staying in the spirit of making things as brief as possible. You'll notice that you have a desire to do this, that we provide it for you and your class for every school and every site at the campus. It's not an opportunity to pack it. However, I work closely with Andrew Cersei, and then you have access to that. I'm really bringing Dr. Muchibu to you to see that. I want to see that I'm sure it's still in the stairs and can make that available to you. So, I still exist. It's just not even been in the bracket this year. What you have is a list of the top priorities that we've identified for the next school here. I hope you'll find itself a flannel toward the basically the top portion of the list is by priority. You'll see that we have the civil rights review listed at the top. Those are things that we must have been based on the visit. That we had this past year at our three traditional high schools. And so that's at the top of the list the things that we have to take care of and plan to take care of. And then it works all the way down for a total of $1, little over $1.5 million. You can see those by school and you can see those specific projects listed by each school. At the bottom you'll see a list of that is based on the type of project where we have pay the roofing, HVAC, those types of things. So hopefully, again, it's self-explanatory, but as always, I've seen how they of the project. But we have pay the roofing HVAC, those types of things. So, hopefully, again, it's self-explanatory, but as always, I've seen happy to answer any specific questions that you have about any of the specific priorities that we have listed this year. Again, working from top to bottom, you will see that after the civil rights review that we've identified some roof issues that we have that we need to take care of rather quickly all the way down to replacing bleachers at some of our schools. And we do have a bleacher inspection each year in which we try to respond to you when we find that those are not adequate visitors to our school with come see our athletic events. And so that is in response. Those things listed as far as bleachers are in response to that inspection report that we have each year for our schools. But again, I have to answer any questions that you may have specifically about Capitol. I was going to commission any questions. It seems strange to believe that Christ's centrals are like a sea system. Yeah, yeah, that tells me I'm getting older. Dr. Sudden, you mentioned this year actual ADM and 2425 exceeds what month to of 2324 was, how long before that correction is taken place by the state? So the department looks at actual ADM compared to funded ADM as the new school year gets underway, and in December of each year they sure that one way or the other. If they've given you too much money, you'd have to revert a share to the state. If they have underfunded you, they will give you a supplemental allotment. However, there's a significant threshold or margin of error that they apply to that calculation. And you would have to be substantially higher or substantially lower than the allotment in order to generate a reversion or a supplemental allotment. Miner variations by 100 kids, 150 kids, not going to really result in the sure of either for the better or the worse. You've got to pass a pretty substantial threshold, but that corrective process happens in the month of December. You know, seven, eight, nine hundred thousand dollars still a lot. Yes, you know, of course, they can work against you as well. I appreciate the work you've done. As always always school system has my support and it will continue this year. Thank you. Any questions or comments on the board? I have two, one comment and one question here. Again, thank you for the streamlined budget. It makes it much easier to read, I've read it three times, as in all the years that I've been doing this. It shows here that, and I just asked this for clarity, and not for any other purpose other than to ask this 105, 322 unassigned Local current expense fun belt budget It goes way as I understand it after September 30th, 2024 I guess my question is what can we do to help keep things solving? So thank you for the question. Thank you for the comment. That's right. The fund balance that's reported on page one of my budget message is the audited fund balance for the fiscal year in June 30th. Yes sir. Yeah, June 30th of 2023. I can't, I'm not expert enough in the particulars to explain all the different things, but there are some stipulations in state law that require boards of education to reserve a certain share of their fund balance for specific purposes. So once you take off that required reserve, that means that $105,322 or available for discretionary spending on the boards part. So only the S or money reverts back in September. Yes, sir. Not fun vibes. Correct. Yes, sir. September 30, 2024 is significant because that is the end of S or three revenues, but that's unrelated to the board's fund to fund balance. I want to make sure we don't commingle those things and get them caught up in each other. But to your question, the local government commission does not recommend or require as a matter of record a minimum fund balance for boards of education. But I think we can all agree that having a fund balance of less than 1% of a $16,17 million budget is a financially precarious position to be in. And I would say to answer your question as honestly as I can maximize the funding that the commissioners are able to appropriate to the board. That's really the only way to sustain operations and begin to build that fund balance up to a tolerable level that we would all find acceptable as a community. And so this 4.1 million of appropriated fund balance to reconcile the school systems operating budget, that's a one time thing. Yes, that represents the boards accrued savings over years and years and years and years. And so about 4.1 million dollars were spent to pay expenses in last year's budget. That was one-time money accrued over the course of many, many, many years. And once it is spent, it is gone. And what is left in that fund where $4.1 million were spent is $161,797. Shocker. I hope that helps to answer your question. Yes it does. That was for clarity. And some serious business. Thank you. Thank you so much. So I don't want to stay in fun balance. I did have a question on that. I mean, it just hit it. Vice Chairman, I've had many meetings over the years with your boards chair and vice chair. And I did recall a meeting last year, the year before last. I don't really remember what meeting it was. But we were talking about fun balance. And part of that was, and I stuck in $1 or $2 million or something was what we were talking about fund balance and part of that was and I just stuck one or two million dollars or something was what we were expected with board thought they had and fund balance and thinking when does the state do the drop your first drop of 80 and what you said immediately or you wait two months into the year when does that when you mean when does when does money from the state public still fund start to flow in the first drop? Fairly early, but it's contingent on actions of the general assembly, how timely they are, how quickly the legislature can pass along final budget numbers to the Department of Public Construction, and how quickly they can turn those kind of top level numbers into system level allotments. Because even though the state law says the state government should have a budget pass on a certain day, those that make the rules don't follow the rules. It has seldom the case that we have a budget enacted by July 1, which is the statutory deadline that the State imposes on its SPS. The line I'm driving at is that you would expect a school board to have a available balance to cover expenses during the early part of the school year in anticipation, our lack of anticipation of receiving funding as expected. Yes, sir. In the budget we have, here we're talking, I think we call it the Ward Studies, or it's a print. Ward, yes. Yes, print. Is there consideration of what that study may be bringing to us or in this budget holding back some expenses or holding back all of it. So this budget assumes that any action following release of the OR would be effective no earlier than the 25-26 school year. And there are some reasons for that. I'm glad to elaborate, but you know, that process doesn't move very quickly. And I think we're going to want to see some additional analyses after the initial ORED assignment scenarios are released, the impact of those different scenarios on transportation time and transportation efficiency for students. And certainly I think we're going to want some third party analysis about the actual cost savings that were accrued from each of those different scenarios. We're already laying the groundwork with two organizations, ITRI, which is the Institute for Transportation Research at NC State University,, IITRI, which is the Institute for Transportation Research at NC State University and Hill Consultants, which is a private group specializing in school business operations, and school finance to work on the cost analysis side of things. But I think those two additional analyses are going to be instructive to decisions that the ORED report will initiate when it comes available on May 7th. Any questions from the Board? One more. Are those two to follow up analysis? Are they budgeted at this point? Yes sir. Okay. And Ms. Kelly could speak specifically to where they're located within that. No, that's fine. But yes, there are there increased line items for the additional studies and an increase to a line item for legal work that would also be required school board attorneys in the event that schools were closed. Both are accounted for within this budget. Members of the school board, the Vice Chair and Chairman and Principal, I met with him. I think Angel Pino's with me, one of the meetings. The last few months have mentioned how well the school system has done, and the students have done, and the teachers and the staff have done, and the great in grades, I don't really know the term, but in a few years as my child was there, but we did really well with rough and effective schools. Does the Orange State take that in consideration and how their recommendations would impact the exam? They are looking purely at transportation and financial efficiency, and without regard to the impact of school clothes and the consolidations on other community dynamics or academic achievement to those kinds of things. But to your point, yes, and if I can take just a second to sing some praises, we just recently announced that we've reduced the dropout rate to 0.75% its lowest in Rutherford County's history ever. And release of school grades. This fall we've actually been able to sustain that aggressive academic recovery and are back on par with our high level water our high water mark before COVID hit in 2019 so we're real proud of that and certainly we need to be responsive to financial efficiencies and those kinds of things but you're you're wise to say, in the other lane, we need to be thinking about the impact of these considerations on what we're able to offer students by way of opportunities and benefits as a county, too. We certainly don't want to do anything that jeopardizes the thing that we're most proud of, and that's our students. Thank you, sir. Any questions from the Board of Commission? Comments. No? I do appreciate the format. I believe going forward, especially in the two years, this board and your board. Because I believe now we're going to board work instead of committee work. So we're actually getting a number of so thank you for that. I believe it means a lot. Monthly. So, I'm asking there any questions for the board. Does the school board have any questions for board commissioners? Here's any comments from the board of edge Education? I would just like to say I'm going to have the board. I hope that the commissioners see that the Ruther County School Board listened intently last year and a lot of items that you brought to the table, we followed up on them and we delivered. We made it a specific effort to take those items that you all listed and to peel the layers back one in time to see what we could do. And as Dr. Sutton and Miss Kelly and Miss Tegel laidlade out. We've got scared in the game this time as well. We really do. We've cut a lot of stuff and we're just thankful that we have the partnership that we do with each and every one of y'all and look forward to that future with. Thank you. Incomments and boards. Well, this time I entertain a motion to a term. So move. I'm sorry. I got a motion to second. Any discussion? Thank you, everybody. Any other questions? I'm here, not a follow-up question. I want to favor read your right hand. Any opposed? I was. We're adjourned. Look for a motion to adjourn. It's in two terms. Second. Just like once. We're true. Look for a motion to adjourn. Just two, John. Sorry, good. Any discussion? Okay. Any adjourn? Thank you. Thank you.