[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.

12.01.2025 Marshall Public Schools Board Meeting

Transcript