 Hello and welcome to Town Meeting TV's coverage of Town Meeting Day 2024. This program is part of a series of forums that we are bringing you in advance of Town Meeting Day on Tuesday, March 5th. So Town Meeting TV hosts forums with all candidates and covers questions you will see on your ballot, introducing you to community decision makers and connecting you with issues that shape your local community. You can find all our forums at cctv.org slash 2024 or on our Town Meeting TV YouTube channel where auto-generated captions are available. On tonight's program, we will hear about South Burlington School District's proposed fiscal year 25 budget presented by Superintendent Violet Nichols and Senior Director of Finance and Operations, Tim Jarvis. Thank you both for joining us. If you are tuning in live, we really do welcome your questions and you can call us at 802-862-3966. If you call in, we'll try our best to prioritize your question, though we will ask you to share your name and the town that you live in. So that being said, I'm going to turn it over to Violet and Tim and let them do their presentation. Thank you so much for having us. We're excited to speak with you all today and share some of the highlights of the proposed fiscal year 25 budget and to provide some information on how this budget supports our students and community in a fiscally responsible way. So we'll start off with sharing some of the basic budget information here. The residential homestead tax rate increase this year is 18.26. This is a significant tax increase for homeowners in South Burlington. This was a 5% number before the common level of appraisal figure came in. We abbreviate the common level of appraisal with the CLA letters. So we'll refer to it as we have this conversation. So this was a really dramatically different looking budget until we got the CLA figure on January 2nd. And I want to share some information with the community about what this means and how we got here. So two big pieces of information that we'd like folks to understand is that this tax rate of about 18% will be the exact same tax rate for any budget the district would have brought forward to the voters between 63.2 million and 71.5 million. And that's due to the mechanics of Act 127 and the education funding formula. We went from about a 5% homestead tax rate increase before the CLA to overnight looking at this number of about 18%. And I think you're going to see these numbers countywide as you start to have these conversations. So this is a dramatically different looking budget season than any we've ever experienced. I've never talked to the community before about a budget where the tax rate would remain the exact same amount with such a wide discrepancy of funding. You know 60% of our homeowners in South Burlington do pay an income sensitized tax which would relieve some of the burden produced by this common level of appraisal figure in the Ed funding formula. But the difference between what it would mean to our schools to pass this at 18% or should we ultimately have to revert to our current fiscal year budget, the community would still have a tax rate of 16.5%. But with that would come dramatically different programming in our schools with significantly reduced quality of programming looking at some devastating cuts. So tonight we're going to focus in on what this budget would prioritize which is student facing positions, elementary literacy programming and specialists to support that model of structured literacy, supporting multilingual learners and special education students and facilities upgrades associated with a recent safety audit we have, the school safety being a critically important factor in our school budget. I'll talk you through some of the mechanics of our budget here on the expenditures side. We're facing modest inflation this year. Certainly last year when we sat here Tim and I shared very different numbers with you initially in the 8% range. This year looking at modest inflation of 2.5% to 3%. We do have the impacts of our negotiated collective bargaining agreements which pay our teachers and our support staff and our administrators. Two of three of those have already been settled. And these numbers are like health insurance which you see increasing in cost not negotiable. So these are in that they're finalized for fiscal year 25. Health care is of particular concern. This is a fixed cost that's bargained for at the statewide level. But it's significantly impacting both employees and employers on the education side. If you took these two factors here alone of the collective bargaining agreements as well as the commitments associated with health care you're looking at about a 10% increase year on year from fiscal year 24. So this gives you an idea of some of the commitments that the district has financially and what would we be looking at if we rolled over the same budget given the increases that are not something that we can modify at this point in time. On the revenue side we're seeing impact fees which are offsetting the interest on our new additions. And this is coming in at about a 91% rate. So we're really looking at this expenditure for the ZEMs which are the additions on the expenditure side and the revenue side really evening out. State factors this is where our budget dramatically changed. The yield has reduced about 40% negatively impacting the school budget. Common level of appraisal the CLA factor that we've talked about is the main area of concern. South Burlington is experiencing incredible growth which we support. However, we have seen two back-to-back sharp decreases in the common level of appraisal which is this difference between what homes and real estate is selling at and what it's appraised at. So the further we get from our 2021 appraisal the more this is dipped historically and statewide that's certainly the trend. Many communities are on a wait list for reappraisals some of them being more than a decade since they're reappraised. One of the differences I think Tim and I would really like the community to understand is that South Burlington is unique and that we are one of the only districts in the entire state experiencing growth. And we support this growth and think it's a good thing for our community and that it only makes our community more desirable. However, there's a connection between this common level of appraisal dip which has been so significant two years in a row dipping 11% this year which drives up the ed tax rates. So we've been very fortunate to work closely with legislators and have opportunities to provide testimony to the House Ways and Means Committee who is helping to improve ed funding. And we did share this factor of CLA as something that we would love to see having a net or some kind of modification so that we could have more predictable budgeting but really more than that so that we could have education tax rates that our community can support and that will benefit our students. I believe statewide that that is a factor that really has high possibility for improving school budgets throughout. But as you all tune into conversations, particularly listening to districts in Chittenden County, I think the CLA will come up quite a bit and we are the economic heart of Vermont and this is a factor that has impacted Chittenden County schools particularly hard this year. So I'm going to turn it over to Tim who's going to share some historic tax rate information with you all. Thank you Violet. So this chart that you're looking at tracks both of our residential tax rates as well as our CLA over the last 10 years or so. So you can see that we experienced a period of pretty consistent steady tax rates between 2015 and 2021. In fact, the average about what we're asking for in this year's budget. So although we're asking for or actually being impacted by a higher tax rate percentage increase, the 1.6 that we're looking for really isn't inconsistent with what South Bernalton has experienced for a number of years. You see the blip in 2022, that's the year that our homes were reappraised which has a natural sort of re-equalization effect. And then as Violet indicated the last three years, since that reappraisal we have been hit very hard by the CLA impact which has a equal and opposite effect on the tax rates. This next graph shows where the increase is coming from. So the 8.6 million that you see is the extra spending that we're asking for in the fiscal year 25 budget versus our current budget. As you can imagine, much of that is tied up in salaries and wages and staff insurance and benefits simply because that's 80% of our budget to begin with. And so you would expect that with the negotiated collective bargaining agreements, staff turnover and rehiring at current wages and things like that but you would expect that to contribute largely to any increase in our budget. The second largest factor you'll see in the top left, a transfer to the Capital Reserve Fund, we and many other school districts are experiencing a severe deficit in our facilities. And in order to start putting what we call into a savings account or a rainy day fund for future needs, the school board decided to allocate 1.9 million to that Reserve Fund this year. We didn't originally propose that but with the way that Act 127 works we were able to put the 1.9 million into the budget with zero impact on the tax rate. So we felt that it was prudent. It's a one-time expense that would go into this Reserve Fund for future use. We're also in the middle of PCB testing as an example that is going on across the state. We haven't received results from that yet but we need to have some money set aside for the eventuality, whether it's PCBs, whether it's broken boilers or whatever in our aging infrastructure, we thought that it was prudent to allocate this money to that purpose. The other categories, debt service, that's what Violet was talking about in terms of last year's bond that we were able to secure from the voters. We have some principal and interest payments that are coming due but these are almost entirely offset by the collection of impact fees from New Development in South Burlington. So that's actually a bit of a wash. We do want to, we have put some specific funds into our school safety category. Act 29 is another new law that is going into effect that requires us to follow certain protocols relating to school safety and we felt that some of this money can come from the bond that was approved last year but some of it will come from our operating budget as well. And then the rest of it is really general inflation for supplies and transportation and other expenses that make up the rest of it. So that's how that extra money is being allocated. We also had a surplus from our fiscal year 22 audit of $2.27 million and Vermont statute dictates exactly how we can apply that. One way is you carry it into the next year's budget which is this year's budget as revenue and without going into all the accounting calculations associated with this when we did all of our budgeting we realized that if we chose that option we would effectively be giving this money back to the state and that the South Burlington tax voters would get no benefit from it whatsoever. So we have asked to put on to the warning for the March 5th vote that this money would also go into the capital reserve fund which we think is a prudent and tax efficient way of using those funds. So voters can expect to see that second question on the ballot on March 5th. Looking beyond fiscal year 25 this also talks about Act 127 and you can see that it was designed with the best of intentions. The intention of Act 127 was to recalculate the way that the education funding formula works and how it gets distributed to the many school districts across the state and there is a five year period that permits a certain level of grace for school districts as long as they don't exceed certain spending thresholds and in our case we did not so we're safely within that threshold number and therefore that's where the 5% tax increase came from. So as long as we were prudent and kept our spending within a certain range we would enjoy a cap of only a 5% tax increase. That's at a state level and that's again before the application of the common level of appraisal which took that 5% and transformed it into 18.26%. This only has a five year shelf life as it's currently written so what you have to avoid is artificially stuffing your budget with additional expenses that are recurring in nature which is why we really have to use as our primary lever for budgeting both on an annual basis but especially now with Act 127 that in this five year period we need to ensure that we're not adding expenses that we will be living with on a recurring basis by putting the funds into the capital reserve fund is actually a very smart way to budget our money. I think I'm going to hand it back to Violet for the staff and considerations. Thank you. So given that we're at South Burlington experiencing increases in enrollment associated with development we are proposing a pretty modest increase in staff which is a .6 full time equivalent and in other words that's about half of one full time employee district wide and we're able to support this with some model changes looking at special education with respect to the parameters of Act 173 and looking at multi-tiered systems of supports. We're trying to prioritize our elementary literacy program which is a structured literacy program research based program as well as math and literacy specialists at the elementary level. We came to these conclusions when we looked as a team and through our board reports as student assessment results so you know when we started our budget conversations we wanted to center students and to use the data that was available for qualitative and qualitative data. So you see that here also reflected in this budget is supporting multi-lingual students, social-emotional learning supports and of course school safety which is critically important and actually our number one mission is safety first and then physical safety and then education second. So to walk through some of the details of what that looks like here a school by school list of proposed modifications and these are changes from the current 2023-2024 school year by school. We are also finally sunsetting our ESSER positions so that elementary and secondary school relief funds that were provided from the government are expiring September of 24 so it was important that we make some decisions and we were able to roll over some positions here into our local budget. We're proposing to put our health and wellness educators as well as a student engagement coordinator into the local budget. Also looking at here some of the specialists so reading and math to try to bolster those early elementary literacy programs and math proficiency rates. So more information can be found on this at our website as well as funding sources. A number of these positions are grant-funded and I want to switch gears here to go back to this tax rate. We have been looking at a few different graphics to try to depict this huge change in the education funding formula which is that we are now in a position and many in Vermont because of the mechanics of Act 127 are looking at this 5% cap. So what does that look like in all actuality? The functional change is that we have this unique scenario where we could have introduced a budget of $71.5 million and why is that all the way down to a budget of $63 million and it would have yielded the same 18% tax rate and that's totally unique we've not seen this before. To achieve any lower tax rate we're looking at cuts of at least $8 million in our district so if we're going to move this number from $18.26 to $18.25 it's about an $8 million change in our school. To quantify that we're looking at significant impacts on education. Everything is being considered, nothing's been finalized but we're having to evaluate everything from the arts to world languages, athletics, programs, increasing class sizes and really quite concerned that we could even maintain education quality standards. So the difference in value that our community could get here is something that we've been discussing quite a bit. We did perform this exercise where we thought about this 9.99% tax rate which is double almost what historical rates have been and to get to that number we'd have to cut $11.4 million and that tax rate again would still be twice what historic rates are. So if we're having conversations, if the voters do not approve the budget worst case scenario we roll over our current budget taxpayers would still be seeing the 16.5% rate which is not much relief from the proposed 18.25. Again, these factors are really out of the district's control and Tim and I stand before you thinking this is a really Tim and I have both described this as a fiscally responsible budget. We both believe in prudent spending and have tried to be modest in the year-on-year increases we've included which as you can see truly includes quite a few reductions in model changes trying to introduce a fiscally responsible budget. So what does this look like for the average homeowner in South Burlington or the average condo owner? We've got some information here. We've got last year's numbers here when the CLA was about 93%. We had the 5% tax rate and up until January 2nd this is what Tim and I thought we would be sharing with folks today. When the CLA dropped 11% we then overnight saw this 18.25% tax rate. What does this mean for the average homeowner in South Burlington? That being a home valued at about $440,000. The difference between $295 and an increase of $1,000. For the average condo owner which is about a $300,000 assessed value we're looking at the difference between about a $200 and a $731 increase. So affordability is a real concern of ours. But again to drop this requires a pretty significant amount of cutting and we could still cut this by nearly $8 million and the taxpayer wouldn't see any movement on that tax rate so no reduction being really a unique factor this year. We do have about 60% of our community members who pay income sensitized tax rates. So this means that about 2 thirds of our residents will see some tax relief given the income sensitivity provisions. If the CLA had remained the same as it was for this fiscal year, 2024, the tax impact would reflect only the 5% cap. So the further increase of this 18% is entirely attributed to the CLA and it's out of the district's control. The calculated tax rate above that you see is exactly the same for any expenditure between $63 million and $71.5 million and that's due to the 5% pre-CLA cap. So it's a unique situation that even with a 0% increase in expenditures from 2000 fiscal year 24, our post-CLA tax increase would still be 16.5%. And that's due to the methodology of Act 127 and the CLA impact. So I want to share the difference with community members. I think as Tim and I have been sharing this information and we've just come from a staff meeting in one of our schools and we shared this slide here and we said, you know, they said, Violet, what happens, Tim, what happens if the budget doesn't pass and it doesn't pass and it doesn't pass and I said, okay, we could revert back to our current fiscal year budget and we all thought, oh, that's not so bad, we're living in this budget, right? But given the commitments we have between the negotiated agreements to pay staff more and health insurance, we're looking at pretty significant cuts. So to quantify, if we reverted back to this year's budget, we'd be looking at a difference of $8.51 a month for the average homeowner. And so with that, I know we've got about five minutes left and so we'd love to open it up to you all. We're happy to answer any questions from folks in the community. I do want to just point out on our slide deck here that anyone looking for more information can go to sbschools.net slash budget FY25. Reach out. We're happy to answer any questions anytime and thanks again for having us and we'll take any questions you might have. Well, thank you so much, Tim and Violet, for that important information for South Burlington residents and voters and you mentioned it towards the end there but can you just reiterate, you know, what happens if this budget doesn't pass on Town Meeting Day? So if the budget doesn't pass, we would go back to the community with a lowered budget, right? And so historically what that would mean is that the budget would lower and the tax rate would lower accordingly. This year, if we were to introduce any lowered tax rate to the community, we would have to get below $63.25 million. That would be about $8 million of cuts for our school system and that could mean dramatic differences in programming from everything from special ed services to arts, languages, athletics. We're discussing cuts as an administrative team at all levels and, you know, really have concerns as we're one of the biggest employers in South Burlington. We have 518 employees and we're concerned about the impacts that that could have on childcare and our local economy in South Burlington. We're also really mindful of the connection of the correlation between real estate values and quality of education, something that we've always felt really proud to stand before the community and say we represent South Burlington and we're having really hard conversations. I never thought I would be a superintendent discussing cutting the arts and it goes much deeper than that. Well, thank you for letting us know and then finally before we end the presentation here, can each of you just share what the most significant piece of information that you want to let voters know? I think it's really where we're talking about the impact of not passing the budget and people needing to understand what is at stake. It's hard to understand. You know, we have given this presentation many times. We have discussed Act 27 in exhaustive detail with our colleagues around the state. It's not an easy topic to understand. I mean, it doesn't make intuitive sense to people that you could have an $8 million cut and still have the same tax rate and so we need to get the word out about what is at stake and we need to have people understand the relative handcuffs that we have in terms of expenditure cutting that's not going to represent or be represented in their tax bills. I think I could boil it down to the difference between rolling over our current budget which would ultimately produce a 16.5% tax rate for the community. So still a really steep increase but for this difference of less than 2%, the quality of our educational programs could be maintained and the dollar difference between the two for the average homeowner is about $8.50 per month so I think that's the biggest piece that I want folks to understand that even if this budget is voted down and voted down and voted down it won't get lower than 16.5 which again is a historic high but I think that's really important for the community to understand. Thank you so much Violet and Tim and we really appreciate you all tuning in to Town Meeting TV's ongoing coverage of local candidates local budgets and ballot items. You can find this and many more forums at cctv.org slash 2024 or on our Town Meeting TV YouTube channel. Make sure to mark your calendars and tune in to our live election results show after you cast your ballot on March 5th at 7pm and you can contact your local clerk to find out how to obtain a ballot and to register to vote and just a reminder that in Vermont you can register to vote on Election Day. Thank you again for watching Town Meeting TV. Have a great night.