[1:04] I'll call the meeting to order. Our
first item is the pledge of allegiance.
[1:08] I aliance to the flag of the United
States of America and to the republic
[1:14] for which it stands. One nation under
God, indivisible. Liberty and justice.
[1:24] » Sarah, can you read our mission
statement?
[1:26] » The mission of the Marshall Public
School District is to educate, support,
[1:29] and prepare all learners for success.
>> Thank you.
[1:34] First item is approval of the agenda.
>> Motion to approve.
[1:37] » Second.
>> Thank you. A motion by Jeff and a second
[1:41] by Sarah Ranchie to approve the agenda.
Any additions or corrections?
[1:47] Hearing none, [clears throat] I'll call
for the vote.
[1:57] The agenda is approved.
Next item is the public form. Is there
[2:02] anybody from the public want to approach
the board?
[2:07] Seeing none,
move on to item number six, our
[2:12] presentation, our audit review.
Welcome Tamara.
[2:16] » Hello. and Lyanna.
[laughter]
[2:18] » I'm just here
>> support.
[2:22] » Yes,
my support person
[2:26] side of the clipper.
>> One of these
[2:32] is on.
[2:39] » There's an on and off switch on the
side.
[2:41] » Ah, maybe that's it's off. probably
doesn't help.
[2:46] Oh, buzz.
>> Okay.
[2:49] » The top. Okay, sounds good.
>> When I don't do it right the first three
[2:53] times. [laughter]
All right. So, my name is Tamara Dice.
[2:58] I'm with Hoffman and Broes and I'm here
to present the audit report for Marshall
[3:01] Public Schools for the year ended June
30th, 2025. The district received an
[3:07] unmodified opinion or a clean opinion
for the June 30th 25 audit report. Um,
[3:14] we do have a single audit as well and
that will be wrapping up here. Um, the
[3:18] OM was part of the government shutdown
and they didn't release their single
[3:23] audit compliance guide in time. Um, and
so those are delayed and the state knows
[3:28] that. So, we'll have a separate single
audit piece of it at some point.
[3:33] Normally, they'd been released at the
same time. So, this year we just add a
[3:36] little extra fun.
[3:41] the top this one.
Sorry.
[4:05] There we go. Thank you.
All right. To start out, we'll take a
[4:09] look at some of the financial highlights
for fiscal year 2025.
[4:13] As the district completed the year, its
governmental funds, which are your
[4:17] general food service, community service,
building construction, and debt service
[4:21] funds, those reported an increase of
approximately 986,000
[4:26] in their combined fund balance, bringing
the balance at year end to about 15.1
[4:31] million. That was mostly due to an
increase in the general fund, food
[4:35] service fund, and debt service fund,
partially offset by a small transfer out
[4:39] to close out the building construction
fund. Of that $986,000
[4:44] increase, um about half of that was
contributed to by the debt service fund.
[4:50] The general fund, excluding your
transportation and operating capital
[4:54] activities, that fund balance increased
about $212,000
[4:59] to just over 8 million. That total fund
balance amounts to 19.7%
[5:05] of your annual district expenditures,
which exceeds your district's fund
[5:09] balance goal of a minimum of 8%.
During the year the district completed
[5:14] and placed into service the renovation
of the middle school theater, the total
[5:18] cost of that project was about 657,000
and was funded through the general fund
[5:24] as part of the approved long-term
facility maintenance budget.
[5:30] The district entered into two
right-of-use lease arrangements during
[5:34] the fiscal year. One agreement was for
athletic space through the board of
[5:37] trustees of Minnesota State Colleges and
Universities on behalf of Southwest
[5:42] Minnesota State University and the other
was for educational space for the
[5:47] Marshall Alternative Learning Center via
a subleasase agreement with the
[5:52] Southwest West Central Service
Cooperative. the costs associated with
[5:56] those lease agreements was just over $3
million. Under um governmental
[6:01] accounting for there's an asset and a
liability that needs to be booked with
[6:06] those leases. Um it's an in and out on
the fund statements, but um we need to
[6:13] book it at a present value. The district
entered into subscription-based
[6:18] information technology arrangements or
we refer to as sidas for IT software and
[6:24] electronic curriculum. The cost
associated with those was approximately
[6:28] $169,000.
Um a similar present value calculation
[6:33] is used for lease that's used for leases
is also used for cvidas. So that's where
[6:37] those numbers come from.
[6:44] During the year, the district also
implemented Gazsby statement number 101
[6:49] for compensated absences. What this
standard does is it establishes new
[6:53] criteria for accounting and financial
reporting for compensated absence
[6:57] liabilities. beginning governmental
activities net position was restated
[7:02] from uh just over 21 million to 16.3
million which is a decrease of about 4.8
[7:09] million. This standard requires things
like uh PTO vacation or sick time that
[7:15] can be rolled over to the next year to
be recorded as a liability on the
[7:19] governmentwide statements. um which is
the front statements, not things that
[7:23] not the statements that you would
normally use for decision-m uh but
[7:28] previously the only thing that was
recorded is any time off that um was
[7:32] paid on termination. So just a little
bit of a change there. The district um
[7:38] we want to congratulate you as well for
being recognized with a certificate of
[7:42] excellence in financial reporting for
fiscal year 2024.
[7:47] The voters failed to approve the
proposed $2 million operating levy on
[7:51] November 4th.
[snorts] And then looking ahead at the
[7:56] district's future, uh in the 2023
legislative session, the legislature
[8:01] approved a foundation formula increase
of they said between basically 2 to 3%
[8:09] um and it has been set now at 2.75% for
fiscal year 2026. that has a positive
[8:16] effect for school district operations
and maintaining a balanced budget. This
[8:21] increase means that even if you didn't
have any change in student numbers, you
[8:26] would receive an increase in your
general education aid. The legislature
[8:30] also approved free breakfast and lunch
to all K through 12 students during that
[8:35] uh 23 legislative session and this is um
considered permanent right now. So the
[8:42] district is in the process of renovating
the high school HVAC control system.
[8:46] Management has budgeted the to budgeted
the total cost of the project at
[8:50] approximately 737,850.
As of the end of the year, the district
[8:55] had incurred about 299,000
of direct costs relating to that
[9:00] project. The project is being paid for
by the general fund as part of the
[9:04] approved long-term facility maintenance
budget and will be completed during
[9:08] fiscal year 26.
[9:13] And then this graph is showing a
projection of enrollment. So it's
[9:16] showing actual um enrollment for fiscal
year 24 and 25 and then projecting out
[9:22] for 26 27 and 28 where those final
numbers will land. It's um as we can see
[9:29] from the line it's future projections
are reflecting a decline in enrollment.
[9:33] The decrease from 25 to 26 um is based
on current fiscal year 26 enrollment
[9:40] specifically in early childhood through
first grade. Um and then I also wanted
[9:45] to point out 24 to 25 the decrease is
about 12 students. So the line looks
[9:50] pretty sharp but that's just based on
the measures I use for my axis. Um these
[9:56] numbers impact the district's funding
because um enrollment is what determines
[10:01] most of the school district's funding
components. Maintaining enrollment
[10:06] stability and growing it continues to be
one of the district's goals.
[10:10] And from 24 to 28 that is about 98
students of a drop. So,
[10:18] okay, the following graphs that we're
going to take a look at are referencing
[10:22] the general fund excluding
transportation and operating capital.
[10:26] So, if you're familiar with the smart
system, that's funds 1,0 and 21. Um,
[10:32] fund balance increased from 24 to 25 by
about 212,000 which was a function of
[10:38] revenues and other financing sources
being greater than expenditures and
[10:42] other financing uses. the adjusted cash
balance increased along with fund
[10:46] balances. You're going to see um the
orange I didn't have these labeled. The
[10:52] orange is your ending fund balance and
then the teal color is the adjusted cash
[10:56] balance. And in each year there's going
to be a difference and that's just
[10:59] timing differences between accounts
payable and accounts receivable. So
[11:04] accounts receivable we're going to see a
revenue or an increase in our fund
[11:08] balance but we haven't got the cash for
that yet at the end of the year. So,
[11:12] some of those differences are why we see
those spreads. They aren't equal all the
[11:17] time.
[11:23] These two graphs show the general fund
revenues by sorus. Fiscal year 25 is on
[11:27] the top and 24 is on the bottom. You can
see the largest source of revenue is
[11:32] from the state, which is the gray piece
of the pie. That's consistent with every
[11:37] other district. Um, state revenue is the
biggest contributor into school
[11:43] districts. Federal sources of revenue
are one of the smallest pieces, but they
[11:48] are the cause of the most compliance
requirements. The level of federal
[11:52] funding is what subjects the district to
a single audit requirement. If federal
[11:56] expenditures are over $750,000,
a single audit is required. For fiscal
[12:01] year 26, that does go up to a million,
but that's not going to knock you guys
[12:05] out of needing a single audit. So for
some of our districts it um may but here
[12:12] it won't. Uh Marshall Public Schools had
about $3 million in federal funding in
[12:17] fiscal year 25. So that would have to
drop [snorts] a lot which we don't want
[12:21] to. So uh federal revenue decreased
about 4% which is about a $1.3 million
[12:27] decrease from fiscal year 24. Most of
that is decreased COVID 19 funding. So
[12:33] that was all done and used up in fiscal
year 24 and didn't continue. And so that
[12:39] decrease in the federal just shifted to
um kind of the state revenue when we
[12:44] look at percentage wise.
[12:49] This graph shows a 5-year history of
revenues by Sorus. Again you can see the
[12:53] state funding which is in the teal is
the largest source of revenue. The
[12:57] higher state funding amounts over the
years have been primarily due to an
[13:01] increase in the basic education formula
along with an overall increase in
[13:06] students throughout the years. In 2024,
you could see a larger jump in that
[13:11] state aid. There was a 4% increase in 24
and historically and kind of now it was
[13:19] about 2%. So that's that big jump there.
And then we also had more special
[13:25] education aid. um in 25 along with that
increase in 21 through 24 you can see
[13:31] the higher federal revenue in the brown
so the [clears throat] furthest bar on
[13:36] the right and that is higher 22 through
24 coing ended in 24 [snorts] so now we
[13:42] see that drop in 25
[13:47] now moving on to expenditures these two
graphs show the last two years 25 on the
[13:51] top and 24 on the bottom again the
largest expenditure to any school should
[13:56] be salaries and benefits, the red and
the yellow. Um your job is to educate
[14:01] students. You need the manpower to do
it. And so that's where we see um the
[14:06] most expenditures happening.
As you can see, the expenditure
[14:12] categories in the general fund have
remained similar relative to total
[14:16] expenditures in the last two years. Your
slight increase in the equipment
[14:21] category, it's up about 6%. So that's
equipment and capital outlay and that's
[14:27] going to be those right of use leases
that we had for the spaces at SMSU.
[14:33] That's just how um function of how we
need to book it. So that's the increase
[14:37] there.
[14:40] [clears throat]
And then the next slide, this graph
[14:44] shows the 5-year history of expenditures
by object code. The expenditures have
[14:48] remained consistent again
year-over-year. And as you can see, um,
[14:52] the two biggest expenditures are your
wages in the orange and benefits in the
[14:56] yellow. And those increase with added
either added positions, increases in
[15:01] pay, things like that. In 2023, the
spike in your site buildings and
[15:07] equipment. The green color is mostly due
to special education vehicles and a CTI,
[15:13] the CTI construction costs. In 2022,
other expenditures which is um the brown
[15:20] on the very right increased with the
implementation of Gazby 87 which was
[15:25] that um the lease standard where now we
need to show rent payments just kind of
[15:30] like a lease or a loan payment.
And then the increase in purchase
[15:36] services in 2024.
The blue line, that increase is due to
[15:41] CTI expenditures which it was using up
insurance proceeds. And our increase in
[15:46] site buildings and equipment in 2025 is
from those right of use leases entered
[15:50] into during the year.
[15:55] If we look at expenditures at the areas
or the programs in which most of those
[16:00] are attributable, the graph here would
depict that each program or category is
[16:05] at the bottom and the colors represent
the last 5 years. Instructional costs,
[16:10] which include regular education and
exceptional instruction, are and have
[16:14] been the majority of the district's
expenditures, um, which we'd expect.
[16:18] It's the cost to instruct those
students. in fiscal year 23. Again, here
[16:24] we're going to see those site buildings
and equipment um jump up and that's for
[16:29] the CTI construction costs. Fiscal year
24, the costs are elevated to for the
[16:35] repair of the CTI building that was
covered by insurance proceeds. And now
[16:38] in 25 is those rate of use leases.
[16:46] Looking at the general fund budget to
actual,
[16:50] uh these tables are showing that general
fund excluding transportation and
[16:53] operating capital like our other graphs
have been. The overall change in fund
[16:58] balance for this fund ended up being
about $1.6 million better than what was
[17:02] budgeted. And that's mostly due to levy
revenue budgets and then general
[17:07] education aid. Some of those are harder
to predict than others. So, um that was
[17:13] most of the reason there. those numbers
uh do these numbers do in exclude any
[17:19] right of use lease and subscriptionbased
information. So those $3 million that I
[17:24] was talking about before that's not
reflected up here because it's an in and
[17:27] out. So I didn't want to skew those
numbers and they aren't budgeted for.
[17:32] [snorts] The bottom data shows ending
fund balance as a percentage of
[17:36] expenditures.
The prior year 2025 budget and actual
[17:40] are all greater than your 8% minimum
fund balance goal. and the percentage is
[17:45] similar to the prior year. So,
[17:50] and moving on from our general fund,
we'll take a look at our other funds.
[17:58] I don't know how many fancy transitions
I have in here, but [laughter]
[18:03] uh the food service fund revenue for
2024 25 totaled about 2.4 million and
[18:09] expenditures were about 2.25 million.
That resulted in a fund balance increase
[18:15] of roughly 146,000.
The district contracts with an outside
[18:19] vendor, Taher, for the operation of its
food service program and receives
[18:24] financial guarantees for the annual
operation operating results of that
[18:28] program. The fund balance increased due
to receiving more than anticipated
[18:32] earnings from investments, lunch sales,
and federal revenue, partly offset by
[18:37] increased food and supply purchases and
costs. We all know that groceries are
[18:41] going up and so that translates here as
well. The June 30th uh 2025 food service
[18:46] fund fund balance is at 1,152,000.
[18:51] The community service fund total
revenues and other financing sources
[18:56] were about uh $3 million and total
expenditures were 2.9 million. Total
[19:03] revenues and other financing sources
exceeded expenditures by 48,000
[19:07] resulting in an increase of the same
amount in the fund balance. The main
[19:11] reason for that increase was positive
operations in general community
[19:15] education and early childhood family
education programs partly offset by a
[19:20] deficit of deficit operations in the
school readiness program. The community
[19:24] service fund balance at the end of the
year is $951,123.
[19:32] In the building construction fund, total
expenditures and other financing uses
[19:36] exceeded revenues by about $8,000.
We had a transfer uh to the general fund
[19:43] to close out this uh this building
construction fund since [snorts] the
[19:47] projects were all done. So at the end of
the year, the balance in that fund is
[19:51] zero.
[19:55] The debt service fund revenues exceeded
expenditures by about $486,000.
[20:01] That increase is primarily due to
statutory levy requirements and the
[20:05] mandated funding of the escrow accounts.
The fund balance in this fund at the end
[20:09] of the year is 3,432,000.
[20:14] The health insurance internal service
fund received about 3.86 86 million and
[20:20] charged for services pertaining to your
health insurance premiums from the
[20:24] participants and other governmental
funds of the district and incurred about
[20:29] 4.97
million related to insurance claims paid
[20:33] and administrative fees for those
services which is an approximate $1.1
[20:38] million decrease. The net position in
this fund at the end of the year is at a
[20:42] negative roughly $2 million.
The OPED revocable internal service fund
[20:48] incurred about a $66,000 gain on
investments and investment expenses when
[20:54] netted together and paid the general
fund about 57,000 for employee benefits.
[20:59] So this increased the net position and
at the end of the year the net position
[21:03] for this fund is at about $749,000.
[21:08] Are there any questions?
Any of that? All right. If not, I do
[21:14] want to thank Sarah, Trisha, Lyanna, and
all the others in the district that we
[21:20] get to bug. They make the process pretty
easy. So,
[21:25] » thank you everybody.
>> Thank you.
[21:27] » Thank you.
[21:32] » Move on to our consent agenda. I'll
entertain a motion.
[21:36] [snorts]
>> I'll make a motion.
[21:39] » Thank you. Second
>> motion by Sarah Brink and a second by
[21:44] Tim to approve the consent agenda. I
will call for the vote.
[21:57] That is approved.
[22:01] Next category, board reports or update.
Does anybody have any updates
[22:06] reports?
>> Mr. Chair, the executive committee met
[22:08] on November 24th
and [clears throat] discussed in detail
[22:12] and in depth the shortfall in the 2627
budget.
[22:18] It is unfortunate, but because of the
failed referendum and to remain and to
[22:24] maintain a responsible and solvent
budget, we recommend proceeding with the
[22:29] 1.8 million in program cuts and
personnel cuts.
[22:35] » Thanks, Jeff. We also had a finance
committee meeting last week as well
[22:39] reviewing the audit uh more a little
more in depth than what was done
[22:43] tonight. Uh and then also discussed as
well uh the upcoming issues relating to
[22:48] the uh failed referendum and uh looking
um at what what and will be that process
[22:54] and how it will come before the board uh
likely this winter.
[23:00] » Thanks Sarah. Anybody else?
[23:07] Moving on to our discussion items. Uh
summary of Superintendent Jeremy
[23:12] Williams's review. A performance review
for Superintendent Jeremy Williams is
[23:16] now complete for the 2526 school year.
As part of the performance review
[23:21] process, an online evaluation was
completed by the school district staff
[23:25] and school administration and school
board. I didn't say that correctly. The
[23:29] evaluation consisted of five sections
with various ratings areas. In each
[23:33] section, a ranking scale of 1 to four
was used with one being development is
[23:38] needed and four being performance is
exemplary exemplary.
[23:43] I will just uh I won't go through each
one of these, but I'll just say uh
[23:47] Jeremy had a low of 3.07 rating on
instructional coaching support and a
[23:52] high of 3.67 67 on referendum leadership
with a total score of 3.32 out of four.
[24:00] The ratings in process indicate that
overall Superintendent Williams met and
[24:04] exceeded expectations in each of the
categories during the 2526 school year.
[24:09] The school board was pleased with his
performance and the work that was done
[24:13] focusing on student achievement. So,
thank you Jeremy. Appreciate it.
[24:21] » Any questions on that?
[24:26] Next discussion item is a second review
of policies. All of those listed. I will
[24:32] not list all of them. Any questions or
concerns with these policies?
[24:40] Hearing none.
[24:45] Next action is a board action approval
of the 2425 financial audit which we
[24:50] just heard.
>> So moved. Second.
[24:53] » Thank [snorts] you. A motion by Sarah
Ranchie and a second by Jeff to approve
[24:57] the financial audit for the 2425 school
year. Any further discussion?
[25:05] » Thanks for the work on that and for
Tamara for sharing.
[25:12] » I will call for the vote
[25:19] and that is approved.
[25:23] And with nothing else on the agenda, I
will adjourn the meeting. Thanks
[25:27] everybody.