[0:08] Good afternoon, everyone. It's 3.30. Thank you for joining. I hope you had a productive day.

[0:15] All right, so let's jump into the mid-year budget review. The first thing I want to recognize is this idea of the vision, the mission, the values, and how it relates to the budget. You know, when we build a budget, the most important thing we need to do in every department, every campus, is ensure that the budget is a quantification of our vision, period.

[0:37] So when we measure the purchases that we make, the investments that we make like today does

[0:43] it align to our vision, our mission, our values. That's something I want everyone to really

[0:48] keep top of mind. It's the antithesis to roll over budget. We just kind of roll it over, roll it over.

[0:53] We have to think about what are we spending today that's moving and advancing the district forward.

[0:57] So just philosophically, that's the way we're going to do business. We've been doing business that way

[1:02] and we'll show some examples in just a moment. And even when you do that, that doesn't mean you don't

[1:06] have challenges, right? So I want to talk about the challenges in just a second, but I want

[1:14] to emphasize again, the budget has to align to the strategic plan. So today we had a, I hope,

[1:21] a productive day of learning and professional learning and professional development, building

[1:25] capacity, whatever we want to call it, we made an investment today. Robert Stelves here. There was

[1:30] a number of folks training today. I think we had the service center one here today and two curious,

[1:36] Yes, how did it go today?

[1:38] What did you experience today?

[1:39] Was it good, bad?

[1:40] And again, there are no titles here.

[1:41] Let's just be honest.

[1:42] How was your day of learning?

[1:44] Because it aligns to the investment

[1:46] in our strategic plan and our budget ultimately.

[1:49] How did it go?

[1:50] Anybody?

[1:54] Everybody had just a great day today.

[1:58] And what was the take?

[1:59] What is something that you saw or experienced today

[2:02] that you want to highlight?

[2:07] Did anybody want to jump on the mic and do that?

[2:10] Dr. Poole, go ahead, Mr. Poole, part.

[2:16] Over at Hattie Martin, we had a presentation on Tier 1 instruction.

[2:22] It was focused on special education.

[2:26] And our presenter put a word to something that we all do, it's called adaptations.

[2:32] She said we have adaptations and accommodations and modifications are all types of adaptations

[2:37] that we do in the classroom, and she broke it down for us.

[2:41] We looked at lead forward.

[2:44] There was just a lot of great information

[2:45] that was presented today.

[2:47] Wow.

[2:48] Thank you, Mr. Propart.

[2:50] And like Mr. Propart said, you know,

[2:51] it really ties into this stuff here,

[2:53] tier one instruction today,

[2:55] where we're making very strategic investments

[2:57] to make this a district that everyone

[3:00] is really, really invested in and proud of.

[3:03] So that's a great example.

[3:04] Thank you, Mr. Propart.

[3:05] Anyone else?

[3:07] I just saw some great learning and action in Dr. Siviala's classroom this morning. They were having a great learning moment with the person who was in there from the service center.

[3:21] I'm not sure of her name, but I can definitely see that activity being presented to the students moving and just them being interactive in their classroom just to this hand on learning.

[3:34] and that was exciting.

[3:36] Awesome. Thank you, Miss Alejandro.

[3:39] Anyone else today? How was your day?

[3:41] Hey, look, tonight my wife's gonna ask me

[3:43] not how my day was.

[3:45] My wife will ask me what was the best part of my day

[3:47] because we deal with challenges all day

[3:49] and she will not let me discuss anything negative

[3:52] till I tell her the best part of my day.

[3:53] So best part of your day.

[3:55] Miss Silva's you were gushing today

[3:57] about what you saw in IOT and Robert Stell.

[4:01] You want to share just a bit?

[4:01] Yes, sir. It was a great opportunity to see our IOT teams all together in one room.

[4:10] The room was full of expertise, leadership and power. It's amazing. Our IOT teams at

[4:18] every campus. The change that they're helping make in our district is amazing and kudos

[4:26] to all the IOT teams that I witnessed this morning.

[4:30] Thank you, Mr. Silva. I love what she said.

[4:32] The room was filled with expertise, leadership and power.

[4:39] Thank you, ma'am. I didn't say better myself.

[4:41] Okay, so let's jump into a little bit about the budget and where we're going,

[4:47] and where we are, and why we're talking about this.

[4:51] We're talking about our business office, but we're also talking about every single

[4:54] campus and every single department, every single unit,

[4:58] But every one of us is a manager of the budget, a visionary of the budget really essentially.

[5:04] And I want to give kudos to our business office specifically.

[5:08] They are doing an extraordinary job as evidenced by the superior rating we just received from

[5:14] the financial integrity rating system of Texas, great job business office, Mrs. Cisneros, Norma

[5:21] Ken Tenea, and Maria Flores, Vanessa Cano, Mary Alice, Hopi, the team does an extraordinary

[5:30] job.

[5:30] The second part of that, we just had an amazing audit, very stellar audit.

[5:34] So all of our business practices are right on point, according to external auditors.

[5:40] And that's wonderful, right?

[5:41] That doesn't mean we're not going to have challenges.

[5:43] So what I want to make sure that we address today is this concept called Bluff.

[5:51] Bluff is an acronym for bottom line up front.

[5:54] I love to give the bottom line up front.

[5:56] So here's the bottom line up front.

[5:57] In spite of all the great things we have going on, there are still challenges.

[6:00] One of the big challenges we have is this deficit budget.

[6:03] That's the current reality.

[6:04] I want to give you the bottom line up front.

[6:06] I want to make sure we understand how we got to this deficit situation though.

[6:11] Okay? We didn't plan on it. We proposed a balanced budget, but remember, and we'll talk

[6:20] about it in just a moment, a balanced budget is dependent on a lot of variables coming

[6:26] into play. A lot of variables coming into play in the right way. And we'll talk about those

[6:32] variables in just a moment. Okay? So just ripped the bandaid off $1.9 million deficit right

[6:37] now projected out. But here's the thing. The sky is not falling. We have to stay optimistic.

[6:45] We have a solution alongside you and we're going to get through this together. So it's

[6:50] sky is not falling. Might be a little cloudy, but it's definitely not falling. But we're going to be

[6:54] okay, right? So let's go through a couple of other related items here.

[7:05] I want you to understand

[7:06] where the funding comes from. And again, this is going to be a very simplified budget, school,

[7:12] finance conversation. And you can chime in in the chat at any moment. You have a question

[7:18] at any moment you chime in. If something is not clear, there are no ridiculous questions

[7:22] here. I want you to understand as much as you can about this.

[7:26] This is a breakdown of our revenue. And you can see we get about $11 million from our

[7:36] local tax base right here, about $11 million, okay? Right here. We get another

[7:44] $23 million from the state.

[7:51] A smaller portion from the Fed, it's a very small

[7:55] portion, right? So if you do the math, you can see approximately the state funding

[8:01] is, you know, three quarters of the budget, local funding is 20% and federal funds

[8:06] about 5% roughly speaking there. Mrs. Seesnetto, I think she's on the call,

[8:11] Did you want to chime in on any of that?

[8:13] Are my numbers accurate?

[8:14] I hope so because I pulled them from your presentation.

[8:19] That was a joke.

[8:20] Good, Sam, you're good.

[8:22] Okay, all right, good.

[8:25] So that's just a real brief breakdown of the revenue.

[8:30] That's where we get, now the challenge comes

[8:33] and I want you to listen carefully, good people, friends.

[8:37] Whenever we have a change in some of those variables,

[8:41] IE enrollment and attendance, this piece right here changes dramatically.

[8:47] We rely on that piece right there, okay?

[8:50] Here's what I want you to learn real quick.

[8:52] There are two parts of the budget, two parts, okay?

[8:56] The first part is

[9:02] the maintenance and operation side, okay?

[9:06] Two parts.

[9:07] That takes care of our salaries, our supplies.

[9:11] It pays the utility bills, transportation, school travel.

[9:18] When we have to do a repair.

[9:20] Now here's the part I want to emphasize.

[9:21] When we do a repair, whenever the M&O repairs exceed what the district is capable of doing, for example,

[9:29] we have some repairs we've done to our school turf.

[9:32] Back in, we replace the school turf and three fields.

[9:35] The baseball field, softball field, football field, we replace the turf.

[9:38] back in 2019, 2020, somewhere around there, that debt that loan was added to the M&O side.

[9:47] Does that make sense?

[9:48] Does it add to the M&O for repairs?

[9:50] The same thing with HVAC projects and retro lighting projects, roofing projects.

[9:56] Those things can be added to the M&O.

[9:59] But when you do that, you make a trade-off.

[10:01] You make a trade-off.

[10:02] Okay, we know we're going to pay for this from M&O.

[10:04] you know, however, you know, we know that that investment will be paid off

[10:09] for whatever it is 10, 12 years, and then we'll have that M&O, you know,

[10:12] freed up for whatever, right?

[10:14] But there's the other side of it, and I want you to listen carefully here.

[10:20] There's the interest in seeking side as we call the debt side.

[10:25] And the interest in seeking pays the debt for bond elections that happened 15

[10:31] years ago, 20 years ago.

[10:33] So there's probably $40 million or $38 million of principal at the district is still paying

[10:39] with that INS debt.

[10:42] Now here's an important point.

[10:46] This M&O side has a what they call a fund balance.

[10:51] I'm going to use a terrible term that I don't like but I'm going to use it to keep things

[10:55] simple.

[10:56] It's sometimes referred to as a rainy day fund, and we have about $4.4 million in that

[11:07] rainy day fund, okay?

[11:10] This INS over here also has a fund balance, and it has about $2.5 million in it, okay?

[11:17] So you have two separate parts of the budget.

[11:21] However, what you have to really understand, if you're going to have a strategy to get

[11:28] out of this situation we're in,

[11:35] is that this INS fund balance over here can never be

[11:40] used to pay for anything on the M&O side, does that make sense?

[11:43] They can't cross, like INS fund balance, you can't use that $2.5 million over here to

[11:49] to pay for, you know, a roof on the MNO side or a debt on the MNO side, your turf, because

[11:56] it's on the MNO side. Does that make sense? Everybody with me. I'm explaining very, very

[12:02] simple here. Let me check in with my team over here.

[12:09] Any questions in the chat? Anything,

[12:12] no questions. I feel like some people are gone. You know what I mean by gone? That's an

[12:18] acronym. Know what that means? Glazed over, not engaged, gone. Glazed over, not engaged.

[12:25] That's a joke, okay. I'm doing a great job. I'm performing tonight, somewhere here in

[12:31] Rob's side, I don't know where. Okay, here we go. All right, so we got that part down now.

[12:36] M&O and INS do not mix, right? Let's go on to a few more components here. Okay, here's the

[12:46] The other challenge we have, I mentioned the M&O debt, right?

[12:49] And there's term and H back and roofing and all that sort of stuff.

[12:53] That's about $9 million in the M&O debt.

[12:56] And remember, I said on the INS side, there's $38 million of past bond elections, right?

[13:02] But here's the point that I want to make clear.

[13:06] Your big takeaway from this slide, every slide should have a takeaway, is this.

[13:10] Yes, this is the $1 million a year that we are budgeting every year, even in a balanced

[13:19] budget year, we include the $1 million debt payment on the M&O sign and still balance

[13:25] the budget, provided all those variables, attendance, tax rate, property values, all those things

[13:35] line up.

[13:35] Hey, we're good, right?

[13:38] When something goes awry, danger will robinson. We got to do something, okay?

[13:43] All right, so what do we do? Let me pause there. Everybody tracking with me a little bit.

[13:51] Okay, let me look at some faces online here, and I'll tell you you really are not.

[13:56] Oh God, Monty Selleppinger is smiling like she's like, oh my God, what is going on here?

[14:00] I just care about 21st century. I don't care about this. Look, get that thing going.

[14:03] All right.

[14:05] We have a question.

[14:05] Who's it coming from?

[14:06] Dr. Survials.

[14:07] Dr. Survials, reveal yourself.

[14:09] I can't see you.

[14:10] How much longer to cave in the middle?

[14:13] Okay.

[14:13] Good question.

[14:15] Dr. Survials asked a question.

[14:16] How much longer to pay the M&O?

[14:18] Great question.

[14:18] So, we have three years left on one of the notes.

[14:22] It's a great question.

[14:23] And those notes pertain to the fund balance.

[14:27] I'm sorry, the turf on the field.

[14:29] and then we have another four years on the money that goes back to the, there was a retro lighting

[14:40] project back in 2012, 2013, that was approved, so not very many years left on those two, right? But

[14:48] they're still eating up that $1 million of your payments, that makes sense. But the good thing is we can

[14:54] save on some of that interest here in just a minute. Great question, Dr. Savas, I'm going to hand over

[14:57] the health hosting duties to you just as

[15:00] Okay, thank you. All right. So, let's continue. All right, because this was only supposed to go to four o'clock. Do you have any board members on the call? I hope so. Anybody here, reveal yourself. I can't see you. Yes, I'm here. Dr. Puig, you bit. Hi, Mr. Villalbus. Okay, good. Miss Villalbus has heard some of this. And so I've all the trustees who've been talking about these for a few months. Okay. So just really, really quick.

[15:28] What are some of those variables, those factors that go into the budget?

[15:32] Again, I think we'll just talk about three of them today.

[15:37] We don't have a whole lot of time, okay?

[15:39] And having a budget conversation on a Friday afternoon, on a three day weekend, I don't

[15:43] know if it's the most riveting thing to do.

[15:45] Mrs. Martha Flotus, but you look really engaged, so I'm glad you're with me, okay?

[15:48] Here we go.

[15:50] Let's talk about, you

[15:54] know, let's just talk about, we're going to talk about property taxes.

[15:59] We'll talk about enrollment, attendance, and we'll talk about property values, okay?

[16:04] Let's just do that.

[16:06] And we'll do it in short order here, but I want you to track.

[16:09] Ask questions, just like Dr. Savayos did, just jump right in, okay?

[16:14] Okay, so the tax rate.

[16:18] What do you notice?

[16:19] It's going up, down, staying the same.

[16:22] Do you want to chime in?

[16:24] It's a group discussion.

[16:25] Mitchell and Gaudier, what do you notice?

[16:32] It looks like it's going down.

[16:34] Yeah, it is.

[16:35] And not only does it look like it, it actually is, right?

[16:37] And it's gone down significantly.

[16:40] So you see the trend line is down.

[16:43] That's a good thing, right?

[16:45] But let's, let's, again, bottom line up front.

[16:48] Here's the bottom line though.

[16:49] Even though they're going down and I'm not complaining, right?

[16:52] That's a good thing that the tax rate is going down.

[16:55] Very proud of that.

[16:57] The board has done a great job with that.

[16:59] the state obviously has said look MNO taxes we want to be reduced that's a good thing but

[17:06] let's let's see the other side of that too okay and the other side of that is when you look at

[17:11] property values and so if we look at property values uh what is happening there oh my goodness

[17:23] Christian, Dileon, what's happening there, ma'am?

[17:29] Yeah.

[17:30] They're going up, sir.

[17:32] Yeah, they are, yes, ma'am.

[17:34] And they're going up.

[17:35] You know, you were describing it like, look at that.

[17:38] I mean, these things are just jumping.

[17:40] Look at that.

[17:41] Jumping.

[17:42] Now, here's what I want you to understand.

[17:44] Here's the takeaway.

[17:46] Even though the property tax goes down,

[17:49] if the values go up,

[17:51] you don't necessarily pay less, right?

[17:53] That's just the way it goes.

[17:55] I mean, I love to see the values go down and the text, okay, all right?

[17:59] But that's just, we don't control that. That's a factor we don't control.

[18:02] Although I do at home and I will protest my taxes and I hope you do the same, okay?

[18:07] So yes, it's a side note, but it is a variable that we can't control

[18:11] that impacts the way we collect local revenue. That $11 million that we get,

[18:16] you know, that's impacted by the, by the, how much we can collect when the values go

[18:19] up, we collect more. But guess what happens on the state side?

[18:23] when the values go up the state gives us less. Oh, y'all got it. Oh, y'all got it.

[18:27] Values go up, state goes, okay. Oh, you got Tesla in your backyard. Okay, you get less. We're

[18:31] going to pay you less. That's the reality. Okay. So that's just the way school finance works.

[18:38] All right. So let's jump now to the next slide. If I can,

[18:46] takes a steady finger and

[18:52] you raise these check marks here. Here's the good thing.

[18:55] Pat yourselves on the back, teachers and staff, you're doing an exceptional job with the

[19:00] attendance.

[19:00] It's going up.

[19:01] Have y'all noticed that in your campuses?

[19:04] You'll notice that?

[19:05] Now, is it where we want to be yet?

[19:07] No.

[19:07] But is it going up?

[19:08] Absolutely, it is.

[19:10] It is going up.

[19:11] In fact, so you know, 1% increase, a 1% increase in our attendance for the year is nearly

[19:20] $300,000.

[19:22] So do the math. This is a difference of, you know, 1.2 here. Just multiply 1.2 times $250,000. That'll take a much more trending up. Now it'd be nice that we had 2% increase, 3% increase.

[19:34] Now you're talking three quarters of a million dollars, right? Okay. Any questions about that?

[19:39] Me pause here and check with us.

[19:53] All right. My team tells me to continue. All right. So here we go.

[19:57] here is the bottom line up front and you take nothing away today take this

[20:03] he take this away okay the enrollment this is that snapshot every October every

[20:11] October here it is here it is look how good we increase increase increase we did

[20:17] not predict this and nor did anyone here on this call predict this

[20:24] there is the

[20:26] $1.9 million right there,

[20:30] does that make sense?

[20:33] So the attendance and the enrollment is critical.

[20:36] All of us are marketers.

[20:37] We have to sell the fact that we have an amazing choir program, a Mr. Part, and Michelle

[20:45] Desmond, right?

[20:46] We have to create an experience and sell the fact that we have a STEM elementary.

[20:52] We have a fine arts elementary.

[20:54] We have a leadership academy.

[20:56] We have all these great things and not to mention all the CTE programming, right?

[21:01] So these are opportunities right now for us to really sell what's happening here, because

[21:05] we've got to stand the tide of this, okay, pause, thoughts, wondering about that.

[21:11] Was anyone aware of this?

[21:12] Not aware of this?

[21:14] Curious?

[21:18] Anybody?

[21:19] Everyone knew that we had dropped 126 kids?

[21:21] I know that you had mentioned it, sir, to us about the enrollment, you know, that some have gone to a private sector, some have gone to the homeschooling, you know, so I know that that was, you know, mentioned to us as the board, you know, so and we were kind of aware of that.

[21:41] But now my question is how do we go about on getting these kids back, especially the ones

[21:47] that are the homeschooling ones, maybe, you know, to kind of find out, is there a way

[21:52] that we can find out why they went to homeschooling or was there anything kind of thrown out there,

[21:59] you know, I mean, when they withdrew because I know it could be some, you know, bullying

[22:03] or they didn't feel safe or I mean, I don't know, you know, is there something that we could

[22:09] correct and reassure them that we can you know provide the safety you know for

[22:17] their student and that public school you know our public sector is the best you

[22:23] know choice that it's beneficial for the kids I'm just kind of like

[22:28] uncomfortable with just leaving it like oh they just withdrew and they're doing

[22:33] homeschooling now yeah yeah and I don't think anyone's leaving

[22:38] even at just like, oh, they're gone.

[22:40] Oh, too bad.

[22:41] So it's had for us.

[22:41] I don't think that at all.

[22:44] We do have to do, we do have to do a little digging

[22:47] and do a little additional marketing around

[22:50] selling the experience here.

[22:52] There are too many good classrooms.

[22:54] I've been in that the experience is exceptional.

[22:56] But we have to sell that now.

[22:57] Schools are a business now.

[22:59] Parents have choices.

[22:59] Just like, I don't tell a restaurant why I don't go anymore.

[23:02] I just quit going.

[23:03] I don't tell a vendor why I quit using them.

[23:05] I just quit using them because there's something

[23:07] I'm not getting.

[23:08] So part of it is the experience, we have to make sure that they're getting, right?

[23:11] Okay, we've got about 300 seconds, I'm going to zip this last bit here, okay?

[23:15] All right, so I'm not going to cover all of that right now or that, let's jump to this part.

[23:20] Part of the solution that the school board and myself and some others have talked about is this,

[23:27] part of the solution is this idea of using, really using the INS fund balance,

[23:36] that $2.5 million to pay off some of this M&O. But remember, you can't do that, right?

[23:42] Do you remember that? But what you can do, what you can do, is transfer that debt over

[23:52] with voter approval. You can move it over, but the key thing I want to emphasize here is,

[23:58] when you move it over, you're not increasing the taxes, right? No, you're just saying,

[24:04] And, okay, let's move that repair debt in this bucket over here.

[24:10] And what is that going to free up another million dollars, right?

[24:13] So that's part of the solution.

[24:16] It doesn't raise any taxes, it just moves from one bucket to the other, so you can actually

[24:21] use the fund balance in this bucket over here.

[24:23] So that's something that we are exploring.

[24:26] Now, the other things that we have to explore, and it goes alongside with Ms. V.

[24:31] level said a moment ago. And let me clear this off here.

[24:37] I need to get better at using this eraser,

[24:39] Miss Alejandra, what do you think? I agree. Am I doing okay? Yeah, all right. Okay, we're doing okay.

[24:47] All right, so the the next piece is this kind of solution thinking. And here's what I want you

[24:55] out to leave with today is we have solutions. Yeah, there isn't a problem. We can't solve when we do

[25:01] it together. When we come together to solve it, there's nothing we can't solve as an organization.

[25:06] All of us are smarter than one of us, and I hope you believe that because we have a lot of smart

[25:13] people in this district, right? So, if we look at some of the ideas, one is going to start with,

[25:18] you know, everyone's mindset just being like, it's not about spending more money. It's about using it

[25:23] in a way that's impactful, that impact the vision. A lot of times with budgets, we get this mindset of,

[25:28] Hey, wait a minute. If I don't spend it, I'm going to lose it. Use it or lose it.

[25:33] I mean, if we're not spending money in February, March, April for Title 1 stuff and buying it, hoping it's going to impact this year, probably not the most strategic spending.

[25:45] But if you're going, oh, wait a minute. I don't spend. I'm going to lose it. We've got to change that mentality. It's about strategy, right?

[25:52] The next thing is this, every investment we make goes back to that strategic plan.

[25:58] That four-part strategic plan, right?

[26:02] We are doing and we'll be launching a staff survey, so we're going to send you a Google

[26:07] form, three questions to get your input on how we can find some savings in the district.

[26:13] And I'm sure the first one will be, never mind, okay, I'll stop there.

[26:19] The next one is navigating deficit budget series.

[26:21] I am training alongside embassy snows

[26:24] doing a lot of capacity building and staff development

[26:27] in ourselves in managing deficit budgets.

[26:30] We have a staffing study that we just finished

[26:32] that we have a draft of.

[26:33] And the purpose of that staffing study,

[26:35] just to help us look at how do we write size,

[26:38] the district, write size enrollment changes,

[26:41] then you take advantage of attrition.

[26:43] You don't just, okay, keep hiring when enrollment,

[26:45] you can't afford it.

[26:46] That's not a value judgment.

[26:47] and you don't have the revenue to support it.

[26:48] So you have to look at attrition

[26:50] when you look at some of these staffing data.

[26:52] We're looking at the master schedules

[26:54] making sure those are efficient.

[26:57] We had some major pains capacity staff development

[27:01] last week and this week.

[27:04] And then lastly is really, again,

[27:06] thinking about this idea of shifting the MNO over to the INS,

[27:10] just to ensure that we're maximizing the strategies

[27:14] we came to fill, to free up some of that M&O money, to pay salaries, to give raises, to

[27:21] ensure that we can fix things without having to go into any more debt. Okay? That was a good 29-minute

[27:27] discussion. Any thoughts, wondering questions, closing comments?

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