 And I'm going to be floating a little bit back and forth. Like I said, I'm using two computers. Kind of the big thing in taking a look at the budget for next year, the 2021-22 budget, is I'm going to start with the bottom line, what people can expect to pay, what the increases they can expect to see in terms of their taxes, because that's what most people are usually interested in. And then I'll kind of go through and I'll explain a little bit for those that have a little bit more interest in Vermont tax law, how we actually get to that bottom line. So bottom line, and this has actually changed since some of the earlier presentations, because things looked a lot rosier after we initially had to kind of talk about the budget with the school board in terms of the education fund. There was a significant amount of money that flowed into the education fund this year, despite COVID, that people did not expect. And so it's made for a little bit rosier outlook. And so the bottom line for all three towns is that the school budget, as it currently stands and based upon what's working its way through the legislature in terms of property yields right now, is going to add about $1.5 cents per $100 of assessed value of people's property. So to kind of break that down a little bit, if you've got a home of average value in Vermont of $275,000, the average school tax increase that you're gonna see is gonna be 41 bucks, which is about 341 a month. And the other piece to be aware of for the taxpayers that are out there is that Vermont has a sensitivity income threshold. If you are below that threshold, and I believe it's $95,000 for the household for this year, you can fill out an additional form when you're doing your Vermont taxes so that you qualify for this, and it will reduce your school property taxes. So it's important to kind of look out for this. Now, a couple of things to be aware of. And I'm gonna do this as kind of a preview, kind of a pre-teaching so that when we get to it again a little bit later in the presentation, it may make a little bit more sense to people. In terms of tax rates, you've got your tax rates and you've got your actual tax bill, which is the money that you pay for your taxes. There are really two things that go into determining what your tax rate and your tax bill are. The first is what happens with the school budget. Obviously, if the school budget increases, then people end up paying a little bit more, your tax rates go up, and you do pay a little bit more when that happens in terms of the check that you write out to pay your school property taxes with. There are fluctuations that happen also in tax rates when it comes to school property taxes that are based on something a little bit different that don't have as much of an impact on what you actually pay. They have a huge impact on tax rates, but a very, very small impact on what you actually pay when you pay your tax bill. One of the things that I'm gonna keep coming back to is that what you pay for your town taxes, there's a different process for that than what you'd pay for your school property taxes. School property taxes are based upon the fair market value of homes in a town, right? And so that's established with what they call this equalization study that occurs every year. And so what happens is they take a look at what the homes are selling in the town and they say, okay, based upon this, then in that town, the home value is X. And that value can be above or below what the town has assessed you to be at. And they determine your property taxes based upon that fair market value. And now you'll see these wild fluctuations sometimes in school property tax rates based upon what happens from year to year in fair market values. In the case of all three of our towns, the fair market values have dropped from last year to this year. And what happens is when those market values go down, the state will increase the tax rates. But the two balance each other out. One goes down, one goes up, so that in the end, these changes mean that you're paying about the same as you paid in the previous year. Another way to kind of think about this is it's like this. Yep, your tax rates went up because of these fluctuations in fair market value, they went up. So you're paying more on the value of your home, but the value of your home has gone down. And when you put those two together, things come out to be equal. So the important thing to take away from that long-winded discussion here is this idea that the actual increase that you are going to see in your taxes, if you have a home of average value, is about $41 for the school year. So hopefully that makes a little bit of sense. And I've got some slides that go into an incredible amount of detail on this a little bit later in the presentation. In terms of the Orange Southwest School District school budget goal for 2021-2022, and actually for all the years that come after that, as far as we can see right now, the goal is to move into what's called the level service budget. The town was great in the past couple of years. They provided some big increases to the school budget, which allowed us to build some significant structures that we needed to really go after improving academic achievement and mathematics and science and English, as well as to revamp the special education department so that we're providing better services to students so that students are coming off IEPs. And so the community has given us everything that we need in terms of that work, which is awesome. And so it's appropriate at this time to move over to this idea of a level service budget. Level service budget is one in which there are no new funds being asked for. Level service budget does not mean that the school budget isn't going up. It means that the budget only increases enough to cover inflation and other mandated obligations so that we're able to provide the same programs and services that we did in the previous year. And if you think about it, right, the cost of materials goes up a little bit every year because of inflation, the cost of the benefits that we provide to staff that were contractually obligated to provide to the staff increase every year, like health insurance, you know, went up 10%. And then the staff contracts themselves with the teachers and with the support staff with the bus drivers, the contracts themselves through negotiations actually spell out the increases that we give them in terms of their pay from year to year. And so those are the things that will cause a level service budget to increase. They're mandated, they're mandatory, they're not within our control. We are not adding anything new to the budget above and beyond those mandatory items. We can talk about those a little bit, right? In moving from this current school year to the next school year, there is a $523,000 increase. And those are those mandatory budget items, right? We don't have a choice in them. They must be added to the district budget to maintain our current level of services. If you look at the arrows, right, there are three things that are adding up to 98% of that $523,000. That's the estimate we had to put in for where negotiations are gonna land with the teachers in terms of their salaries for next year. That includes a 10% increase to health insurance. And there are other benefits that the staff get like dental insurance and long-term disability insurance. And those go up a little bit from year to year as well. So 98% of that $523,000 is mandatory, contractual obligations, we've got to do it. And then about 2% of what's there is due to inflation, right? Inflation causes the cost of the supplies and the services that we get to go up a little bit every year. So even though we're not adding anything new, right? The cost increases from year to year. We've all experienced that in our own personal lives. That happens with schools too. Now, comparing current year, right, 2020-21, that's the budget that folks voted in last year that we're currently living under. And comparing it to 2021-22, what you'll see highlighted in yellow is what the district is asking for from taxpayers through the Education Fund. This current year, we asked for 19.7 million from the taxpayers that folks voted in. And then next year, you can actually see that it's gone down a little bit. Next year, it's 19.4 million, which is a reduction of 1.54% that we're asking from the taxpayers, 1.54 to 1.56. Now, we created this reduction by using surplus money. So at the end of most school years, we have money that is unspent at the end of the fiscal year. And so we have some designs, which I'm gonna explain a little bit about what we're gonna do with that surplus money to help reduce the burden on taxpayers. So one of the questions that we've gotta ask in terms of the surplus money that's gonna help us out for a couple of years is where did it come from? And why we're needing to use it at this time. A year ago, when COVID closed down the district, we realized really quickly the negative impact that pandemic would have on the state's ability to generate tax revenues, right? And those tax revenues, right? If they go down, it reduces the amount of money flowing into the education fund, which means there's less money in the fund to support education. So the money's gotta come from elsewhere. So one of the ways of thinking about it is if you think about a school budget as a fixed cost, and you think of the education fund as the checking account that choose to pay for that cost, if the money flowing into the checking account decreases, right? Because of COVID, and there isn't enough to pay the bill, the state's gotta scramble around and find more money elsewhere to make up that difference. And in this scenario, the local taxpayers here are that elsewhere, we're the ones that will be expected to make up that difference. So recognizing that there was probably gonna be an increased burden on local taxpayers due to the decrease in tax revenues flowing into that ed fund, what we did is we pulled out all stops to create the biggest surplus that we could at the end of the last year so that it could be used to subsidize budgets in the coming years. Reminder, surplus money is money that is left unspent at the end of the budget year. So at the end of last year, we did a couple of things to try to maximize what that surplus was gonna be. We froze spending in March, right? Remember, in mid-March, the schools moved to remote session. And so any spending that was unnecessary because of that move, we froze. That way we didn't spend the money, we had it available at the end of the year. We had also budgeted for a number of programs, primarily athletics, that due to COVID, they just couldn't run. So we had budgeted for them, they didn't run. So that money was available to go into the surplus. And then I give my business management team a tremendous amount of credit because we really went hard after all the federal money we could get our hands on in terms of reimbursements and whatnot to try to max out this year-end surplus. And what we ended up with is over $1.6 million in unspent money at the end of last year that we can now use to subsidize school budgets, which means reducing the burden that our local taxpayers have. And we have enough there to do it for three years while the state's economy recovers. So it was a lot of good work on behalf of the staff, the teachers here as well as the business office really pulling out all stops to make this happen. And the big thing that we are doing with that $1.6 million is we wanna be able to use it over three years. And so what we've done already, because the law allows us to do this, is we've already taken half of that $1.6 million, right? You see it down there in the green 826,342 bucks. We've taken half of that $1.6 million and we've already applied it towards next year's budget. And so if you look at the two boxes, what it's showing you is that without using that surplus money, we would have to ask for $20.2 million from the taxpayers. Being able to use this part of the surplus money next year reduces what we're asking for from the taxpayers from $20.2 million down to $19.4 million. So it's a significant decrease. It's actually less than we asked from the taxpayers last year. Kind of look into the future. When we were setting up this plan and building up this surplus, the discussions at the time were, it's probably gonna take a couple of years for the state's economy to recover and for tax revenues that they generate to return to normal. And so we really kind of built this plan around subsidizing the school budgets for the next three years. So during this time, the district's gonna seek to reduce those tax burdens by using this giant surplus we were able to create to make sure that we're reducing the burden on taxpayers. Because we recognize that you guys really stepped to the plate for us in the previous couple of years to allow us to build the structures that we needed to advance learning. So what this kind of looks at, looks like is this is right. In this first year here, we've already applied half of the surplus money to next year's budget. We can automatically do that. So we've done it. The goal is to take the remaining half of that surplus money and split it equally to help subsidize the 2022, 23, and 2023, 24 school budgets, right? Again, we're all set for next year, but we are unable to use the remaining surplus money in the following two years without the voter's help. I'll talk a little bit about what that looks like. What needs to happen is we really need the voters to help us by approving a place for us to put the second half of the surplus money to hold it until the budget years in which it will be used, right? So next year we can automatically apply it to the budget. State law allows us to do this. Then we'll have a little over 800,000 that are left over that we want to apply to the two following years. To do this, we need a place to actually put that money so that it can sit there until we need to use it. So as part of this year's school ballot, you will be asked to vote for the creation of an operational reserve fund for this purpose because without that, we've got no place to put that money so that we can use it when those years come up. For this to work, there is really only one article on the school ballot that deals with the budget. It's article 10. And if you vote yes on this article, it does three things for us. The first thing that it does is it allows us to expend $21.1 million on education on educating our students here in the district. And it's important to recognize that we're not asking for $21.1 million from the taxpayers. We have to state what we are going to expend on the students. And we're asking for $19.4 million from the taxpayers. The remaining amount that gets us up to that $21.1 million actually comes from federal grants in the surplus money we're planning on using, right? So we have to ask the taxpayers to expend the total amount of money that we're gonna spend. But not all that money is coming from the taxpayers. Some is coming from federal grants and some of it is coming from the surplus. The second thing voting yes on article 10 will do is it creates that operational reserve fund that we talked about so that we have the place to hold the surplus money in so that we can use it in 2022, 23, and 2023, 24. And then the last thing that it does is it puts the remaining surplus money into the reserve fund. Now, just so folks understand, once that money goes into that operational reserve fund because you have voted on its purpose there, we cannot use it for anything else. I do not have direct access to it. The district does not have direct access to it. The school board, at the time that we wanna use it to surplus the budget for those two years, I have to go to the school board in writing, tell them what we're gonna use the money for and how much we want. And then the school board has to review it and vote it in. So there are lots of controls in place over what this money can be used for. So I'm gonna stop here for a moment. I don't think we probably have any, but if there are any questions out there that folks wanna ask, please turn off your mic and ask them. I can't physically see you while I'm presenting, but I can hear you. All right, so the next part of this presentation relates to the impact that changes in the common level of appraisal from one year to the next has on your tax rates. We talked a little bit about this at the very beginning. I said I was doing some pre-teaching here about the fact that school taxes come from fair market value. CLA changes, common level of appraisal changes can cause dramatic swings in your tax rates from year to year, but don't really change what you physically pay in taxes by very much. So it's real important to understand this as folks can see a dramatic change in your tax rates, but that doesn't mean that the tax bill that you have to pay is gonna change a lot. Typically, if your tax bill is changing on the school side of things, it's because we've changed something in the school budget that's having an impact, or we still have a lot of students in terms of enrollment, which hasn't been the case in recent years. So I'm gonna give you the overall piece here, and then I'm gonna go into detail for those that may be a little bit more interested in the mechanics behind those CLA changes, but in terms of your tax rates for next year, right, again, it's important to realize that school taxes are based on fair market value of properties and not the town's assessment used in the grand list. If fair market values fall from this year to next year, tax rates will increase, and this is the situation across the three towns. So if you look at Braintree at the very end, right, last year, your fair market assessed value was 109.44%, which means that the houses in general were selling for 9.44% over what the town assessed those houses to sell for. And you can see that that fair market value has dropped, right? Last year, you were 9% above, this year, you're down at 1.13% above. And whenever you get a decrease like that, what that means is that your tax rates are gonna go up, but the value of your home has gone down. So what's really happening is that you're paying more in taxes on the value of your home, but your home has less value. So the end result is that, you know, regardless of these fluctuations, in terms of the CLA changes, what you pay is about the same. Your tax rates will change. You will pay more this year because of changes to the school budget. How much more will you pay? Well, I showed you at the very beginning, you're gonna pay 1.5 cents more for $100 of assessed value of your homes, fair market value, which adds up to about $41 on the annual tax bill for the average priced home of $275,000. So in Braintree, your tax rate, 90, 11.5 cents of it is due to CLA changes. You're gonna be paying 13 cents more for $100 of assessed value of your property. And this is because your fair market values have gone down considerably. So again, you're paying more on your property, on the value of your property, but because the value of the property has gone down, it balances out. In Brookfield, you'll be paying three cents more because they didn't have as big a shift in their fair market values between last year and this year. So 1.5 cents of that, you're gonna be paying more in your tax bills, right, about 41 bucks for the average priced home. The other part is due to these market fluctuations, fair market fluctuations. In terms of Randolph, in terms of your tax rate, you'll be paying 0.4. So four cents more per $100 of assessed value. But that's because the fair market values of your homes have gone down moderately when the state did its equalization survey. So again, what people can expect on the average cost, average cost home of $275,000 is about a $41 increase in the actual tax bill that you pay. So in terms of school tax rates, we can go into a little bit more detail here besides the noji way that I just described things. When you pay your property taxes, you're actually paying a small amount in taxes to the town, right, there's town taxes. And in terms of the town, they calculate things differently than the school taxes. The much larger amount in taxes that you pay are taxes to support the schools through the education fund. And this discussion is not about town taxes. This discussion is about the school portion of those taxes. So if we're spending more on the schools, it should make sense that what you pay in your school taxes increases as well, the actual check that you write out at the end of the year. Changes to your tax rates that are due to an increase in the school budget will definitely increase how much you physically pay in school property taxes. What's interesting is that the part of your tax rate that changes due to the fluctuations in the common level of appraisal typically do not change what you physically pay. And then we're gonna look at a specific example here. And the example that we're gonna look at is a grain tree. And these use actual common levels of appraisal and tax rates for grain trees. So there are actual numbers in here. So these formulas, it's important to recognize that I'm simplifying them. The formulas actually use the town's grand list amounts. But for simplification, it's easier to pretend that the grand list amount is the cost of the average home in Vermont of $275,000. So the town has assessed your home's value to be $275,000. And that's used for your town to determine your town's taxes. The state on the other hand does a study each year called this equalization study to determine the fair market value of your home based on what homes in your area have been selling for. This current year, 2020 slash 21, which is in the Navy blue there, the state has said that the fair market value of your home is actually 9.44% greater than the town's assessment. And so the state for school property taxes purposes is gonna tax you on that value. So right, if your town's assessed you at 275,000 and you increase that by 9.44%, the fair market value of your home is $300,960. So the town last year, when it was doing this that set the tax rate for $100 of the value of your home at $1.47. That means that for every $100 of value of your home, you're paying $1.47 in taxes. And your tax bill would have been around $4,430. This year, something happened. You can see that the common level of appraisal has gone down, right? It was 109 last year, it's gone down to 101. What does that mean? It means that the fair market values of your homes have dropped by about 8%. And so what the state did in response to that is they actually increased the tax rate on your home, or will increase the tax rate on your home because this is for next year. So based upon this assessment, right, fair market value for your home is actually 278,108 dollars at a tax rate of $1.61 for $100 of value. Your tax bill will be $4,471 or in that ballpark this coming year, right? So basically you're gonna pay $41 more this year and that number should sound familiar, right? So again, you see this whopping change in the tax rate and brain tree by 13.5 cents for $100 of value, but in reality, the only thing that's really impacting your actual tax bill, what you pay is the impact that the school district budget had on things. And that impact is about 1.5 cents for $100 of assessed value. So we go back to where we started here is this idea that while the change is in the common level of appraisal can cause your tax rates to fluctuate wildly, they really don't change the amount you have to write out for your check when you pay your school property taxes. Only increases in your tax rates that are directly due to changes in the school budget are gonna change how much you physically have to pay. Based on the current property yield being voted on by the legislature, your effective tax rate that it's effective tax rate is that which changes what you pay will increase by about 1.5 cents for $100 of assessed property value. And on the average home, you're gonna see an increase of about 41 bucks. Just to show a little bit more in terms of where we stand, right? Total budget, total expenditures that we're looking to expend on student learning next year is 21.1 million. Remember, we're only asking for 19.4 million from the local taxpayers. The rest of that money is grant money and money from the surplus. This is assuming a property yield for those that are really into the tax game of 10,998 dollars. And that is what is currently working its way through the legislature right now. When we did these presentations a little bit earlier in the year, the state was worried and reasonably so that given COVID, they weren't gonna have as much in the education fund. And so the initial property yield that they had us used was like 10,763. And so this is a real good improvement in terms of benefiting all the districts across the state that the property yield is that. We are gonna use 826,342 dollars in surplus to offset the budget. That means that what we're asking from the taxpayers is actually a decrease of 1.56% from last year. One of the things to be aware of is that we always wanna keep below what they call the spending threshold. The state this year does not wanna see districts spending more than 18,789 dollars per student. If a district spends more than that, there are severe penalties that a district will incur in terms of taxes for exceeding that threshold. And so what we're looking at right now is based upon the numbers that we have, we're paying 17,085 per student for next year. That's what our budget is calling for, which is actually a reduction from last year. Last year we actually paid $109 more per student than we will next year. So we've got a pretty good buffer there that's in place. These pieces are kind of not as important, but I'll throw them out there because we talked about them in earlier meetings in case people are interested. Raven, that budget has already been approved. Raven is a in-house program that we run that serves our students that are in need as well as students from other districts. And there is a tuition to attend that program, which will be $26,693 next year, which is significantly less than if these students were sent out to other programs, probably at least 30 to $60,000 less. The tuition rates at RTCC have gone down for next year by about $100. If a person from outside the district who does not have an elementary school in their district chooses one of our elementaries for school choice, the district will pay $14,866 to send that student here for the high school for next year. If, again, if we have students coming in through school choice, the cost of the tuition to the district that is sending the student here will be $18,630. And that is about it, unless there are questions out there. And since it's just Orca Media and two of my board members who've heard this presentation before, I don't believe there's probably questions. It is a little stale trying to do a presentation when you don't have people standing in front of you. It's more fun to have some interactions and some questions, but hopefully, if this plays on Orca Media, people are gonna see it. And if it generates any questions, shoot me an email. Tomorrow I will be sending out the line item detail of the budget so that everybody can have it, as well as I'll send out again our annual report for people to look over. And so I think that that'll be useful information. And again, the vote is on March 2nd. We really are hoping that folks can come out and vote for this budget because we've done our homework in trying to reduce taxes for folks. But being able to use that surplus money to lower taxes for three years in a row does require that vote so that we can create that operational reserve fund to put the money in and hold it for the success of two years after next year. So that's gonna be really important. And again, the other thing I want folks to remember is that we have to state in the ballot how much we will be expending on students next year, but what we are expending on students comes from multiple places. 19.4 million is coming from the taxpayers. The remaining amount is coming primarily from the federal grants that we received. So that doesn't affect local taxpayers. And the surplus, which already affected local taxpayers, but last year, to help subsidize things. So with that, I'm gonna sign off and I appreciate it. And again, folks that are watching on Orca Media, if there's questions, shoot me an email. I'll answer what I can. And if it's something that's deeper into the budget that I can't answer, I'll make sure that Robin Pembroke, our business manager, gets ahold of you and can talk you through it. So thank you very much. Take care. Thank you, Lynn.