[A. CALL TO ORDER]
[00:00:08]
GOOD EVENING AND WELCOME TO THE SPECIAL CALLED MEETING OF THE HENRY COUNTY BOARD OF EDUCATION.
[B. Budget Hearing]
FOR THE PURPOSE OF THIS SECOND OF TWO REQUIRED BUDGET HEARINGS, AND I WILL TURN IT OVER TO DOCTOR PACE. THANK YOU, MADAM CHAIR. THIS IS OUR SECOND BUDGET HEARING, AND I WOULD LIKE TO INVITE OUR CHIEF FINANCIAL OFFICER, MRS. CLAY, TO PRESENT THE SUPERINTENDENTS FY 26 BUDGET RECOMMENDATIONS. MRS. CLAY. GOOD EVENING, MADAM CHAIR. MEMBERS OF THE BOARD AND DOCTOR PACE. IN SUPPORT OF TODAY'S HEARING, I'LL PROVIDE AN OVERVIEW OF THE SUPERINTENDENT'S BUDGET RECOMMENDATION FOR FISCAL YEAR 2026. I'LL START WITH A REVIEW OF THE DISTINCT FUNDS THAT ARE INCLUDED IN THE SUPERINTENDENT'S RECOMMENDATION. PER POLICY, THE BOARD TAKES ACTION ON THESE AGGREGATE FUNDS ANNUALLY DURING THE BUDGET ADOPTION PROCESS. THE FIRST OF THE FOUR FUNDS IS THE GENERAL FUND, WHICH IS THE ACCOUNT USED FOR OUR DAILY OPERATIONS LIKE SALARIES, INSTRUCTIONAL SUPPLIES AND MAINTENANCE COSTS. NEXT IS THE SPECIAL REVENUE FUND, WHICH ACCOUNTS FOR GRANTS GIVEN TO HENRY COUNTY SCHOOLS FOR DESIGNATED AND SUPPLEMENTAL PURPOSES. THE SPECIAL REVENUE FUND ALSO INCLUDES THE FINANCIALS ASSOCIATED WITH SCHOOL NUTRITION AND THE BEFORE AND AFTER SCHOOL ENRICHMENT PROGRAM, WHICH IS AN ENTERPRISING ACTIVITY. NEXT IS THE CAPITAL PROJECTS FUND, WHICH INCLUDES THE REVENUES AND EXPENDITURES RELATED TO CAPITAL IMPROVEMENTS AUTHORIZED BY THE BOARD. AND FINALLY, THERE'S THE DEBT SERVICE FUND, WHICH CAPTURES REVENUE AND EXPENSES ASSOCIATED WITH LONG TERM DEBT INCURRED TO FINANCE CAPITAL PROJECTS. THESE DISCRETE FUNDS, WHICH ARE REQUIRED BY GOVERNMENTAL ACCOUNTING STANDARDS, ALLOW SEPARATE TRACKING OF REVENUE AND EXPENSES TO ENSURE PUBLIC RESOURCES ARE ALIGNED TOWARDS INTENDED PURPOSES. BOARD. YOU KNOW THAT THERE ARE A MYRIAD OF EXTERNAL AND INTERNAL INPUTS THAT HAVE BEEN CONSIDERED IN DEVELOPING THE BUDGET FOR EACH OF THESE FUNDS. THE FY 26 BUDGET CYCLE FORMALLY LAUNCHED IN DECEMBER, WITH THE PUBLISHING OF THE BUDGET CALENDAR IN JANUARY. THE 2025 STATE LEGISLATIVE SESSION KICKED OFF. OUR DISTRICT ENROLLMENT FORECASTING PROCESSES WERE COMPLETED, AND THE BOARD SHARED PRIORITIES AROUND INVESTING IN COMPETITIVE COMPENSATION AND INVESTING IN THE COMMUNITY. INSPIRED STRATEGIC ACTION PLAN WERE PUBLICLY DISCUSSED WITH CLARITY OF PRIORITIES. OUR TEAMS MONITORED THE STATE LEGISLATIVE SESSION AND MET WITH LOCAL OFFICIALS TO SUPPORT DEVELOPMENT OF A PRELIMINARY BUDGET OUTLOOK, WHICH WAS PRESENTED IN MARCH, A STUDY SESSION A TENTATIVE BUDGET WAS PRESENTED AND TABLED DURING THE APRIL MEETING OF THE BOARD, AND THE FIRST OF TWO REQUIRED BUDGET HEARINGS WERE HELD. SINCE THAT TIME, THE STATE HAS FINALIZED ITS FUNDING EXPECTATIONS AND NEW INFORMATION HAS BECOME AVAILABLE FROM OUR LOCAL TAX ASSESSOR'S OFFICE. THIS INFORMATION INFORMS THE FORECAST OF REVENUES AND EXPENDITURES THAT ARE PRESENTED TODAY. LOOKING ACROSS ALL FUNDS, THE SUPERINTENDENTS FY 26 BUDGET RECOMMENDATION CONSIDERS THE PRIORITIES OF THE BOARD AS WELL AS INSIGHTS FROM STUDENTS, TEACHERS, LEADERS AND FAMILIES THAT HAVE BEEN GATHERED FROM VARIOUS ADVANCED ADVISORIES.BEFORE WE DIVE INTO EACH OF THE FOUR FUNDS, I WANTED TO BRIEFLY HIGHLIGHT INVESTMENTS THAT ARE INCLUDED WITHIN THE BUDGET PROPOSAL TO START INVESTING IN COMPETITIVE COMPENSATION, WHICH IS A SHARED PRIORITY OF THIS BOARD AND THE SUPERINTENDENTS RECOMMENDATIONS AROUND EMPLOYEE COMPENSATION ARE CONSISTENT WITH THE PROPOSAL SHARED AT THE TENTATIVE BUDGET. ADOPTION. THE PROPOSED BUDGET EMBEDS AND SUSTAINS THE MIDYEAR SUPPLEMENTS APPROVED BY THE BOARD OF EDUCATION IN DECEMBER OF 2024, AND TARGETS ADDITIONAL IMPROVEMENTS BEYOND TO RESULT IN INCREASING THE CERTIFIED HENRY COUNTY SCHOOLS TEACHER SCALE BY $3,000 COMPARED TO THE ADOPTED FY 25 SCALES, INCREASING CLASSIFIED AND PROFESSIONAL SCALES BY 3% COMPARED TO THE ADOPTED FY 25 SCALES, AND INCREASING ADMINISTRATIVE SCALES BY $1,300 COMPARED TO THE ADOPTED FY 25 SCALES. AND FINALLY, THE PROPOSAL HONORS THE SERVICE OF OUR EMPLOYEES BY ADVANCING EMPLOYEE STEPS WITHIN THE AUGMENTED SCALES. OUTSIDE OF THE OUTLINED COMPENSATION INVESTMENTS, WHICH TOTAL $8.5 MILLION AND TOUCH ALL JOB FAMILIES, ADDITIONAL INVESTMENTS OF $13.6 MILLION ARE INCORPORATED INTO THIS BUDGET TO IMPLEMENT STATE MANDATES AROUND EMPLOYER PAID RETIREMENT AND BENEFITS COSTS IN TERMS OF INVESTMENTS IN HIGH QUALITY INSTRUCTION AND SUPPORT SERVICES. THE BUDGET CALLS FOR THE ADDITION OF 63 SCHOOL BASED OR DIRECT SERVICE POSITIONS AS FOLLOWS. TO RESPOND TO DISTRICT GROWTH AND SERVICES REQUIRED FOR OUR STUDENTS, THE INTENT IS TO ONBOARD 32 ADDITIONAL TEACHERS, SIX EMTS, INTERVENTIONISTS, FIVE PARAPROFESSIONALS, AND FOUR ELEMENTARY SCHOOL ASSISTANT PRINCIPALS. ADDITIONALLY, NINE TEACHING ALLOTMENTS HAVE BEEN BUDGETED TO ACHIEVE STRATEGIC PLAN OUTCOMES IN INCREASING ACCESS TO WORLD LANGUAGES AND ORCHESTRA. TO EXPAND CAPACITY IN SUPPORTING OUR EXCEPTIONAL STUDENT LEARNERS. THE BUDGET CALLS FOR THE ADDITION OF TWO PSYCHOLOGISTS, TWO INSTRUCTIONAL COACHES, AND THREE BEHAVIOR INTERVENTION COACHES. FINALLY, THE GENERAL BUDGET CALLS FOR THE
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ADDITION OF TEN CENTRAL OFFICE STAFF TO IMPROVE OUR OPERATING CAPACITY AND PROCESS EXCELLENCE IN OPERATIONS OF THE PERFORMING ARTS CENTER, TRANSPORTATION, STUDENT SERVICES, HUMAN RESOURCE SERVICES, LEGAL AND ADMINISTRATIVE SUPPORT. THE BUDGET ALSO INCLUDES INVESTMENTS TO ADVANCE OUTCOMES RELATED TO LEARNING, ACCELERATION AND LITERACY IMPROVEMENT.ADDITIONALLY, TO RESPOND TO HEIGHTENED NEEDS, INCREASE TEACHER DEVELOPMENT FUNDING AND SCHOOL IMPROVEMENT FUNDING WILL BE ALIGNED TO IDENTIFIED SCHOOLS. NOW THAT WE'VE REVIEWED THE HIGHLIGHTS, LET'S DIG INTO EACH FUND, STARTING WITH THE GENERAL FUND, TO UNDERSTAND THE BIG PICTURE OF CHANGES WITHIN THE REVENUE AND EXPENSE PROFILES COMPARED TO THE PRIOR YEAR. I PREPARED A VISUAL WHICH IS ON THE LEFT HAND SIDE OF THIS PAGE, AND ON THE RIGHT HAND SIDE, I HAVE OUTLINED THE DRIVERS OF WHY THE REVENUE OR EXPENSE IS CHANGING FROM THE PRIOR YEAR, AND I'VE CATEGORIZED THESE CHANGES BASED ON WHETHER THESE ARE DUE TO DECISIONS BY THE STATE LEGISLATIVE SESSION, OR IF IT'S RELATED TO LOCAL ACTIVITY. ADDITIONALLY, YOU'LL SEE THAT THERE ARE SOME COLOR CUES OF BLUE, YELLOW, OR GRAY IN THE VISUAL THAT'S ON THE LEFT. AND THOSE SAME COLOR CODING IS AVAILABLE ON THE RIGHT HAND SIDE TO SHOW HOW THESE FIGURES COME TOGETHER TO IMPACT REVENUE OR EXPENSES. STARTING AT THE TOP LEFT AND FOCUSING ON REVENUE CHANGES, WE ARE ANTICIPATING YEAR OVER YEAR REVENUE GROWTH OF $15.5 MILLION, WHICH IS SHOWN IN THAT FIRST BLUE HIGHLIGHT. AND THIS IS SOLELY SUPPORTED BY THE ANTICIPATED GROWTH IN THE LOCAL TAX DIGEST THAT IS NOW ESTIMATED AT 7.5% VERSUS 9% IN THE PRIOR SHARED IN THE PRIOR MONTH. THE ANTICIPATED DECREASE IN STATE FUNDING YEAR OVER YEAR WAS REALIZED BECAUSE OF THE STATE'S OVERALL REDUCTION IN EQUALIZATION FUNDING, COUPLED WITH REDUCED STATE FUNDING DUE TO THE LOCAL FIVE MIL SHARE REQUIREMENT, WHICH IS SHOWN IN THE THIRD AND FOURTH BLUE HIGHLIGHTS ON THE RIGHT HAND SIDE OF THE PAGE. SHIFTING TO EXPENSES AND AGAIN LOOKING INSIDE OF THE BOX ON THE LEFT, YOU CAN SEE THAT WE ANTICIPATE THE EXPENSE PROFILE TO INCREASE BY $23.2 MILLION AFTER REDISTRIBUTION OF A FAVORABLE BUDGETARY VARIANCE, WHICH IS $1.1 MILLION LESS THAN THE FORECAST THAT WAS SHARED LAST MONTH. AT TENTATIVE 62% OF THIS INCREASE, WHICH IS THE $14.4 MILLION VALUE HIGHLIGHTED IN YELLOW, IS DRIVEN BY THE RATE INCREASES ESTABLISHED BY THE STATE, WHICH ARE NOT FULLY FUNDED. LET'S TURN OUR ATTENTION BRIEFLY TO THE RIGHT HAND OF THE PAGE, REVIEWING THE YELLOW HIGHLIGHTS UNDER STATE ACTIVITY AS SHARED IN PRIOR MONTHS. REPORTING ON BUDGET DEVELOPMENT, THE TRS EMPLOYER CONTRIBUTION CONTRIBUTION RATE WAS CHANGED FROM 20.78% TO 21.91%, AND THIS WILL COST OUR SYSTEM $3.4 MILLION TO IMPLEMENT. SEE THAT FIRST YELLOW HIGHLIGHT ON THE RIGHT, WHICH IS $1.2 MILLION MORE THAN THE FUNDING WE EXPECT THE STATE WILL PROVIDE. THE MAJORITY OF THE NEW COST WE MUST ABSORB IS IN THE COMING FISCAL YEAR, RELATES TO CHANGES FROM THE STATE AROUND THE STATE HEALTH BENEFIT PLAN, WHICH WILL TOTAL $11 MILLION. WHILE WE WILL RECEIVE SOME FUNDING FROM THE STATE TO OFFSET THE $125 PER MEMBER PER MONTH INCREASE FOR CERTIFIED STAFF FROM THE QBE, OUR LOCAL DOLLAR MUST SHOULDER THE FULL BURDEN OF THE $305 PER MEMBER PER MONTH INCREASE FOR OUR PARTICIPATING CLASSIFIED STAFF, THE WORKFORCE AND INFRASTRUCTURE INVESTMENTS THAT I HIGHLIGHTED EARLIER IN THIS REPORT ARE THE PRIMARY DRIVERS OF THE NEW FY 26 COSTS THAT ARE SHOWN IN GRAY, AND IF OUR LOCAL DECISIONS WERE ALL WE HAD TO FOCUS ON, WE WOULD BE IN POSITION TO COVER THESE NEW COSTS AND BEGIN TO NARROW THE GAP BETWEEN THE ESTIMATED REVENUES AND EXPENSES. HOWEVER, DECISIONS COMING FROM THE STATE ARE DRIVING A CHANGE IN THE EXPENSE PROFILE THAT WILL EXCEED REVENUE GROWTH FOR THE FISCAL YEAR. ACCORDINGLY, WE ARE FORECASTING TO USE AN ADDITIONAL $7.7 MILLION OF RESERVE ABOVE THE 20.1 MILLION RESERVE USE EMBEDDED IN THE FY 25 AMENDED BUDGET SET ANOTHER WAY, WE WILL BE USING 27.8 MILLION OF RESERVES TO CLOSE THE GAP BETWEEN THE FORECASTED REVENUES OF FIVE 68.4 MILLION AND THE ANTICIPATED EXPENDITURE PROFILE OF 5.9 6.2 MILLION. THE SUPERINTENDENTS RECOMMENDATION FOR THE GENERAL FUND EXPENDITURES FOR FY 26 TOTAL FIVE 96.2 MILLION, WHICH RESULTS IN A PER STUDENT EXPENDITURE OF 13,867 PER STUDENT, AND THIS REPRESENTS A $930 INVESTMENT INCREASE PER STUDENT COMPARED TO OUR INITIALLY ADOPTED FY 25 BUDGET. AS I HAVE SHARED EARLIER, PEOPLE, STUDENTS, STAFF AND FAMILIES ARE AT THE CENTER OF A SCHOOL SYSTEM'S BUDGET. THE SUPERINTENDENT'S BUDGET RECOMMENDATION CONTINUES. OUR SYSTEM'S PERSISTENCE IN PUTTING RESOURCES CLOSE TO STUDENTS. WITH 97% OF THE FUNDS ALIGNED TO TEACHING, LEARNING, ENVIRONMENT, MAINTENANCE AND DIRECT STUDENT SERVICES. FINALLY, THIS BUDGET RECOMMENDATION ALIGNS TO THE BOARD'S EXPECTATIONS OF INVESTMENTS IN THE COMPETITIVE COMPENSATION AND STRATEGIC ACTION PLAN. QUICKLY TURNING TO OUR OTHER GOVERNMENTAL FUNDS REQUIRING ACTION. I'LL START WITH A REVIEW OF THE SPECIAL REVENUES. AS A REMINDER, SPECIAL REVENUE FUND IS COMPRISED OF THE FUNDING ACTIVITY RELATED TO DIRECT GRANTS, WHICH MAY OPERATE ON A REIMBURSEMENT BASIS.
ENTERPRISE ACTIVITY AND SCHOOL BASED ACCOUNTING ACTIVITY. WITH THE CLOSEOUT OF THE PANDEMIC
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RELATED FUNDING AND SOME CONCERN AS TO WHAT FEDERAL FUNDING LEVELS WILL BE SUSTAINED, WE ARE PROJECTING AN OVERALL DECLINE IN SPECIAL REVENUE YEAR OVER YEAR. IF YOU LOOK AT THE COLUMN FURTHEST TO THE RIGHT, YOU CAN SEE THAT WE ANTICIPATE AVAILABILITY OF $57.5 MILLION IN FUNDING TO ADDRESS THE SPECIFIC NEEDS AND PROGRAMING DEFINED PER EACH SOURCE OF FUNDS.EXPENDITURES ARE CLOSELY ALIGNED, TOTALING $56.2 MILLION. I'LL NOTE THAT THIS IS THE THIRD YEAR IN WHICH WE ARE ABLE TO DEDICATE FUNDING GENERATED FROM RENTALS OF OUR FACILITIES FOR ARTS PURPOSES, TO THE FURTHERANCE OF ARTS PROGRAMING WITHIN OUR DISTRICT. THE LAST TWO FUNDS WE WILL REVIEW ARE THE CAPITAL PROJECTS FUND AND DEBT SERVICE FUND. REGARDING CAPITAL PROJECTS, THE BOARD'S SALE OF PROCEEDS AND BOARD SALE OF BONDS AND A PRIOR FISCAL YEAR PROVIDES THE INCOME THAT WILL BE NEEDED TO PAY FOR THE $69.4 MILLION OF COSTS THAT ARE ANTICIPATED FOR THE UPCOMING YEAR. THE REVENUE GENERATED WITHIN FY 26 IS RELATED TO THE INTEREST EARNED ON THOSE BOND PROCEEDS THAT ARE HELD IN A CONSTRUCTION ACCOUNT. THE DEBT SERVICE FUND ACCOUNTS FOR THE TAX PROCEEDS THAT ARE EXPLICITLY DEDICATED FOR THE REPAYMENT OF DEBT HELD BY HENRY COUNTY SCHOOLS. WE FORECAST COLLECTIONS OF $94.2 MILLION, AND THE DEBT SCHEDULE REQUIRES $42.4 MILLION OF REPAYMENTS. ADDITIONALLY, IN ALIGNMENT WITH THE BOND STRUCTURE, IT IS NOTED THAT WE ANTICIPATE $43.8 MILLION OF OUR SPLOST SIX COLLECTIONS TO BE TRANSFERRED FOR PAY AS YOU GO ACTIVITIES. THE BUDGET SUMMARY THAT IS DISPLAYED ON THE SCREEN REFLECTS THE ANTICIPATED SOURCES AND USES OF OUR FUNDING FOR OUR GENERAL FUND, SPECIAL REVENUE FUND, CAPITAL PROJECTS FUND, AND DEBT SERVICE FUND. POST THIS EVENING'S HEARING, THE BOARD WILL HAVE THE OPPORTUNITY TO TAKE FINAL ACTION ON THE PROPOSED BUDGET. DOCTOR PACE, THAT CONCLUDES WHAT I PREPARED AND I YIELD THE FLOOR TO PUBLIC PARTICIPATION. THANK YOU. THANK YOU, MRS. CLAY. MADAM CHAIR, THAT CONCLUDES OUR PRESENTATION. AND AT THIS TIME, I WILL TURN IT OVER TO OUR PARLIAMENTARIAN FOR PUBLIC COMMENT, IF AVAILABLE. THANK YOU, DOCTOR PACE. WE DO NOT HAVE ANY PARTICIPANTS FOR PUBLIC COMMENT FOR THIS BUDGET HEARING. THANK YOU, MADAM PARLIAMENTARIAN. MADAM CHAIR, I TURN IT BACK OVER TO YOU. THANK YOU, DOCTOR PACE. AND THANK YOU, MRS. CLAY, FOR THAT PRESENTATION. SEEING AS THERE IS NO FURTHER BUSINESS BEFORE THE BOARD, I WILL NOW ADJOURN OUR SPECIAL CALLED MEETING AT 6:44 P.M, AND WE WILL RETURN AT SEVEN FOR OUR BUSINESS MEETING.
* This transcript was compiled from uncorrected Closed Captioning.