001Welcome to the State Green Valley Schools Board of Education Study Session of May 27, 2026. Chrissy, would you please call the roll? Sure. Mrs. Babs? Present. Mr. Berthold? Present. Mrs. Gilligan? Present. Mrs. Horanek? Here. Mr. Lechuga? Here. Mrs. Salomon? Absent. Mrs. Weiss? Here. Great. And we have fiscal year 26 April district financial statements. Tony? Great. Thank you. Good evening. So it's my pleasure to go through the district's monthly financial statements for April 2026. We're going to spend most of the time as usual on the general fund, but I did want to talk a little bit about the nutrition services fund as well as the building fund a little later on because I got some relevant information on those too. We did get a chance to present this at the Finance and Audit Committee meeting, which
002was yesterday. Normally it's on Mondays, but we moved to Memorial Day, so we were able to meet with the Finance and Audit Committee yesterday and went through these same financial statements. One other thing I wanted to do was acknowledge our accounting and reporting team who prepares this for us every month, one of which the head is here right now, Jane Frederick, is visiting tonight. So she's here. She's also going to be here for the board meeting later on for recognition around the annual comprehensive financial report awards that she and her team earn every year. So thanks for your attendance, Jane. All right. So let's start out with the balance sheet for the general fund. Again, this information you're seeing on your screen is from the financials that are in the board packet tonight, as well
003as there is a dashboard summary with a green, yellow, red sort of stoplight scheme that we help to track whether or not any of our funds need particular attention. As we've mentioned previously, for most of the second half of the year, we've been keeping a close eye on the Nutrition Services Fund since they have moved to use most of their reserve. And I'll touch on that later, but the long story short is they're doing okay now. But I still did want to give an update until we land the plane on that for the fiscal year. So as for the general fund, we're comparing here the balances as of April 30th of 2025 versus 2026. And we'd like to point out any major differences between the two columns that might indicate something that we probably need
004to explain. It might indicate a problem or if most of them, it's not a problem, but most of it's just something that we want to explain why there is a discrepancy year over year in any large amounts. So the first line, as you can see, is our cash and investments balance. That's 147.8 last year on April 30th versus 125.7 this year. This is lower for a couple of reasons. Number one, last year we had a few one-time items that artificially inflated the cash and investment balance that didn't occur this year, namely the iPad sales that we've talked about a lot, the land reimbursement from the building fund last year. Those inflated the amount last year. The second thing that results in a lower cash and investments balance is the fact that we have an actual
005higher spend down of reserves this year than we did compared to last year. So when we're using more of a fund balance, we're going to use more of that cash and investments balance. And so year over year, that's going to result in a lower amount. Finally, the last thing was there's a little bit more cash borrowed from the general fund this year compared to last year, and that's related to that Nutrition Services Fund. Recall that the Nutrition Services Fund operates in arrears, which means they have to expend the money before they get reimbursed from the state or the federal government. And normally they use their reserves to do that, except as we talked about, they don't have any reserves this year. They used all their reserves. That means in order to operate in arrears, they
006have to borrow money from the general fund. And that's what this represents. This is something that will reconcile remedy itself once they get their reimbursements for their requests or funds from the federal or state government. But for now, that's going to result in a lower cash investment balance in the general fund. So those three things combined are what explain that reduction year over year. None of them are unexpected, but they do result in that change. The second thing I wanted to note, and that's again directly related, is this $4.8 million due from other funds. The other funds that that is due from is that Nutrition Services Fund. That represents the Nutrition Services amount that is owed to the general fund for their outstanding grants, grant amounts from the federal and state governments. This next item,
007this $459,548, and a corresponding amount down here in this due to other funds, represent the best grant outstanding award to Flagstaff Academy for some capital improvements that they're doing. Once that was awarded, we recognize it as a receivable from the state and a payable to Flagstaff. Only once they do the work, though, is when the cash happens. And so really, it's an in and out on the general fund. They offset each other. So as soon as we get the money from the state for the best grant, we will remit it to Flagstaff and both of these numbers will drop proportionately. The reason that this number does not exactly match this $459, which it has in previous months, is because also in here is a little bit. It's about $150,000 related to the closure of Carbon
008Valley Academy. What we're doing is trying to ensure that we land the plane appropriately with Carbon Valley Academy. And when they close up, any additional leftover assets and reserves will revert back to the district from the Academy. And so it doesn't make sense for us to send them too much money, more money than they need for them to close out their final fiscal year. So what we've been doing is withholding a little bit so that they don't have extra money sitting in their bank accounts and reducing the risk or even the challenge of getting that money back to the district. And so we've strategically figured out about how much that's going to be, but it's going to be $150,000 for this year, next year, excuse me, this month, next month and then the last month
009of June. And it will remove about $450,000 of risk from them having sort of extra money just laying around for no reason that I intend to use that we have to worry about calling back. So so that we are sticking in this due to other funds account until the school closes and that we know exactly all the ups downs and what ends up being reverted back to the district. So it's just a holding account for now. The other large numbers that you'll see here is this taxes receivable and a corresponding unearned revenues. This represents the outstanding amounts that we are anticipating to get from the remaining two tax payments from our four counties. This is high number is a little higher compared to last year because we have an increase in assessed valuation. There's about
010if you recall about a 9% increase in assessed valuation year over year. And so that's going to result in an increase in that amount that we are planning to receive this year compared to last year. One thing to note is that the amount that we have outstanding is approximately proportionate to the amount budgeted compared to last year, indicating that our collection rate is about the same, which is what we would expect. Our collection rate usually is pretty high. It's about 99%. So but there's no anomalies with regard to collection rates, which is another metric that we keep our eyes on just in case there's maybe an anomaly going on with any of our counties. Sometimes they have unexpected very large abatements from like an oil and gas company or something like that. And we'll see
011weird fluctuations in our collections rate. And we'll have to inquire and see what's going on. And so far, we haven't seen anything like that going on this year. OK, there's not really any other major items or year over year items that I want to talk about on the balance sheet. Any questions before I move on to our actual to actual? Great. I'm going to touch on one metric on each of these three schedules, and that is our current fund balance as of April 30th. Right now, it's at one hundred and two million. That number is what our our anticipated ending fund balance will end up being at the end of June 30th. So right now we've got that's the numbers of April 30th and we'll have May and then we'll have the end of June
012and we anticipate that to get up to about 162. Then that means that from here on out, our tax collection payments are going to far exceed our expenditures for those remaining two months to the tune of about 60 million dollars. So that's that's what the oftentimes we talk about our cash flow is really uneven because we get those very large tax payments only as late as the spring. And also what that means is that our published ending fund balance each year, our reserves, is at a high watermark. That June 30th is pretty much the highest point during the year that it ever is. And so it's it's interesting that it's coincident with the ending of our reporting year because it's in it's in the end of February or March is the low watermark. But often
013people will say they'll point, hey, why do you have so much in your reserve? Why do you have so much in reserves? Well, they're looking at the high watermark of our reserves. We actually spend that down significantly throughout the year and it only fills up just before the end of the year. All right. Onto actual to actual. So here we go. So this is all the revenues, expenditures and changes in fund balance that occurred for the period of July 1st through April 30th of FY 25 and respectively FY 26. And so, again, we'd like to similarly look at the variances year over year and explain why we might see those. So the first one you can see is property taxes as well as millivy override. Now, it's a little confusing here because millivy override is
014property taxes. It's just a subcategory. This property taxes relates to our total program and this property tax relates to voter approved millivy override. But they are both property taxes. And so you'll see the same proportionate amounts on each side as they go up and go down. And that's why this number you can see is about half of this number. And accordingly, this number is about half of that number because they're both being collected as the counties pay our taxes. So I'm just doing a time check real fast here. Let's see here. The other thing I wanted to note was our investment income has decreased year over year by about a million dollars. We think that's going to drop by another million dollars next year. There's nothing wrong with that. What that represents is a lower
015rate of return on a lower reserve. When we spend on a reserve, that means less invested funds. And so we're going to get less investment returns back from that. In addition, whenever the feds reduce their rate, our LGIP or local government investment pool where these funds are invested, also their rate of return that they provide for us goes down proportionately. So when we see a lower rate of return and a lower reserves, we're going to expect to see lower income or excuse me, investment income. And that's what's represented here. And you'll hear Justin later on when he talks about the introduction of next year's budget. You'll see a million dollar mark down for interest income next year as well. All right. The next one here I wanted to talk about was equalization. So equalization here
016is down just slightly. And remember, equalization works out such that the state pays a little more when we make less in property taxes and the state pays a little less when we make more in property taxes. Well, when we see a nine percent increase in property taxes, the state's going to kick in just a little bit less equalization. So that's why we see a little bit lower from the state on that line. The next one I wanted to point out was career and technical education. You can see that's nine eleven last year and six sixty three this year. This one would be right around nine hundred thousand dollars. Also, that would represent the amount that we are getting for our CTE reimbursement. That's a categorical funding stream that's for our vocational education programming. But if
017you recall this year, I spoke to this earlier in the year, we had an audit of some prior year CTE expense reporting and they came back and said, actually, you owe us about two hundred and sixty thousand dollars back. So we get as a result of that audit adjustment that came out of this number right here. So this number is artificially reduced by that audit adjustment. And so we're going to end the year with this variance right here, even though the amount that we got year over year was about equivalent. The the audit reimbursement is causing that variance. All right. Some other changes you'll see is in federal you'll see pandemic relief went away. That's as expected. Finally, all those covid relief dollars found sunsetted. There was a lot of really great funding streams to
018help bridge the covid gap. That's finally gone away. This other federal sources number that you don't see here is related to the Pawnee grasslands forest service reimbursement. I've spoken to this earlier. I want to just make sure you understand what it is. When the Forest Service has land that resides in our district boundaries, they essentially give us a little bit of money to offset the lost property taxes that we don't get from that land. And so that comes directly from the federal government to the Forest Service. Well, federal government funding has been volatile lately with some of the different initiatives from the administration. So that's been a little unpredictable for us. We're not sure when we're going to get those dollars, but I'll keep an eye on it and I'll let you guys know when
019we see a movement on that. On the expenditure side, we see some changes in a year over year on salaries and benefits. Those track with expectations when we increase our compensation for our teachers and staff, as well as if we have any changes in FTE, which I think we had a little bit of an increase this year compared to last year for FTE. Both of those combined will result in higher expenditures for salaries and benefits. And so this is in line with expectations. All right. So for the year so far, you can see this line right here represents a change in fund balance. So this is our expenditures in excess of our revenues to date. So we spent 72 million dollars more than we brought in this year. But remember, we're at a low watermark.
020We expect to make up more than 60 million of that in the opposite direction over the next two years. So right now we're sitting at 102. We expect that to end up right around 162 in the next few months. All right. On to our current year budget to actual. So this instead of comparing year over year, we're comparing how we're dealing with what Justin and his team budgeted versus how we're doing from an actual perspective. You can see our property taxes and mill levy override property taxes were about 40 percent collected. So that other 60 percent is that 60 million dollars that I was speaking to earlier. You can see that this line right here, I also asked about we're about 40 percent collected on local sources. This is also related to property taxes. This
021money comes in from our agreements with our different municipalities that have U.R.A.s. So we have the I.G.A.s where they collect money for their U.R.A.s that redirect some of our property taxes. And then they remit the majority that back to us through our intergovernmental agreements. And that money comes in the end of the year because they have to finish their collecting before they can calculate the amount that they send back to us. So those those are some of the revenues that we're waiting on. Most of the revenues are at 100 percent. You can see we're not going to get any more for equalization. We're done collecting on that because they changed that cycle from 12 months to nine months wrapping around our tax payments. And so because we only have two months left and we're going
022to get tax payments for those, they've already paid all of our equalization monies from the state so far. So that's at 100 percent. The expenditure lines that we like to take a look at, we are 10 out of 12 months through the year is the end of April. That's 83 percent of the way through the year. So any expenditure items that are level loaded, like salaries and benefits, those amounts that we pay month to month that are pretty level month to month, we want to make sure that those don't exceed that 83 percent benchmark. Because if they do, that would indicate we're going to go over by the end of the end of the year. And so we look at our salaries and benefits and we're only at 78 and 73 respectively. We are below
023that 83 percent. We are indeed going to outperform what we have budgeted in salaries and benefits. That is actually makes up the majority of our outperformance. We expect the outperformance will be about 15 to 16 million dollars. And if you if you do the math down here, we're budgeted to end at 145.8. And if we end up with another 16 million dollars, we're going to be up at that 161, 162 that I've been talking about. So, again, right now, we're at 102. We end up at 162 ish. And that remains to be seen with some final accounting adjustments and differences with regard to the final accruals that we have to do when final revenues come in. Things like if we get the National Forest Service payment on time, it's going to affect that. So that's
024why I can't tell you for sure if it's going to be 162. But that's where we are expecting to be real close to. All right. That's all I have on the general fund. There's not too many interesting things happening there. But I do want to answer any questions before I move on to the nutrition services fund and the building fund. Great. All right. On to the nutrition services fund. Let's go down to page 34. Excuse me. So if we look at our nutrition services fund budget to actual, you can see down here that they were budgeted to spend down one point five million dollars from a one point eight million dollar reserve to four hundred thousand dollars. Basically using most all of their reserves. And that was one of the things that was a red
025flag for us. We were keeping an eye on it. And at one point during the year, it looked like they were even going to burn through this four hundred thousand dollars and go all the way into the red and essentially have negative reserve. There's just no money at all. So we this is why they had that yellow triangle. And that's why we've been talking about them every single meeting that I've had with you. Katie Cosette, our nutrition services director, has been working really hard and working in concert with our budget team to make sure that we could land the plane and make the adjustments that were necessary to ensure that they did not do that. And I'm pleased to to to let you know that they have been successful at that. So they are indeed
026based on projections from both teams. They are not going to spend past zero. And in fact, they should end the year with a few dozens of thousands of dollars, again, uncomfortably close to zero, but still not past zero, which was the metric that we're trying to make sure they did not go past. So so we're happy with that. Right now they've got six sixty. But again, I think that's they're going to they're going to keep spending a little bit more. And I think they're going to end up probably at fifty thousand dollars or so. I think we're going to end up. So, again, that is due to great work of Katie. She's been working with her team. She's had to cut some hours for some nutrition services personnel. No one lost their jobs. She was
027very important to make sure she wasn't asking anyone to leave. But she is in order to resolve this number for next year, because remember, we don't have a reserve for her to spend down for next year. So next year's budget has to be in balance because she's only working with fifty to one hundred thousand dollars of reserve, depending on where she ends this year. Next year, she has to be in balance. And so her revenues have to equal her expenditures. And in order to do that, she's got to cut, figure out how to cut one point four million dollars in expenditure expenditures or identify more revenues. She's going to mix of both. And so next year, she's going to be cutting some expenditures due to some meal planning, due to some changes in how she
028acquires her her food. So instead of a warehouse model where she just goes to one food service company, she's going to reach out to individual suppliers. And it's going to be a little more work on their on the administration side, but they'll get those direct suppliers and not have to pay the markup of going through a warehouse. And they're going to save hundreds of thousands of dollars in doing that. The second thing that they're doing is there's another funding stream through the Healthy School Meals for All that has to do with providing supplementing salaries and benefits for food services personnel. That's going to result in a few hundred thousand dollars more in revenue next year. In addition, they're cutting, I think, to administrative positions and streamlining some other positions for next year for staffing. All
029of that is not without asking anyone to lose their jobs. Instead, they'll be moving some people around. Some positions will be eliminated, but only when due for natural frictional employment, which means people naturally leaving their resign, their retire. Other people will be shifted into those vacant positions. So she is she is she is reducing the workforce, but only through attrition, not through active reductions in force. I think that's really important to know. So any questions on that? Yes. I do have a question, particularly on the supplies and materials. Just looking at the number there is pretty high. What what is the driving factor for such a high number on supplies and materials? Supplies and materials is her food costs. That's the that's the cost of goods for hamburgers and and salad, chicken and that stuff.
030That's the primary driver. Now, there are some non food supplies and materials that they need, like I think they things like the meal plates and the styrofoam plates that they use for the kids and a few other kitchen utensils and things like that they need. There are some non food supplies that go into that. But the vast majority of that is food supplies. Just a question because I'm thinking back probably way back where they used to have and I don't know if we used to have them at one point here in the district. But when I say reusable trays, they were the hard the melamine trays. I know exactly what you're talking about. I use them to understanding that cost in every in every area has gone up. Have they considered that to reduce not
031only be sustainable, but also possibly reduce cost? Have they looked at that? I'm sure that they have, but I don't know the answer to that. So I will get an answer from from Katie and get that back to you as to what her analysis of getting the reusable trays versus the disposable ones were and why that decision was made. I can I can absolutely help answer that. Thank you. Sure. All right. So with my last five minutes, I wanted to talk about the building fund. So our building fund is on page 19 1818. I wanted to show you the current year budget actual. Now you can see here a huge net change in fund balance, right? That's not a bad thing. That's on purpose. That's how the building fund works. What the building fund is
032for is every time we sell bonds, we fund the building fund up. We fill it up with resources. And then our construction team uses those resources to build schools and to do all the major renovations and capital improvements district wide. So it's on purpose that you see a large decrease in fund balance for the building fund. But as you can see, our ending reserves at the end of this fiscal year is about sixty six point seven million dollars. And so what that means is it's time to go out for the second issuance and sell a new round of bonds from the 2024 voter approved bonds. So the voters approved about seven hundred and forty million dollars. We only issued about three hundred and forty of that in the first issuance back in twenty twenty four.
033The construction teams have been working hard. They built Big Sky. They built a lot of the Innovation Center. They built the new Montessori building and a lot of other construction product progress. So this represents a good thing. They are they are doing the work that the voters ask them to do. And so now as this as this balance gets bent down, we're going to go back out and sell another round of two hundred and sixty five million dollars of bonds this September is the plan. I want to make sure that the board was aware of this because you're going to be presented with a recommendation for an action item on June 10th. That is a resolution to approve the sale of these bonds and an associated agreements that we do for escrow agreements through our
034bond council to issue all sorts of just stack of paper like this. I think you remember some of you were signing a lot of pages last time in twenty twenty four. It's the same thing. So I wanted to make sure that you're aware of what was going on there. And in addition, Justin tonight will be showing you a budget for the building fund that shows new revenues of two hundred and sixty five plus million. So it's going to be two sixty five plus investment income. And so I think it's more like two seventy or something like that. And so you'll see some new revenues going into the budgeted F.Y. twenty seven budget for the building fund for for for next year. And again, that's going to be in a proposed budget that he presents tonight.
035But I want to make sure you're aware because it's a pretty big transaction and make sure you understood what it was, what the timing was and if I can answer any questions for you. Just reminding me, and I know you probably just said it in a bunch of numbers, but we sold. So we had the bond. We sold half of those bond dollars. Right. Roughly a little less than half. Yeah. What was that number? It was a three hundred and forty million and change. Right out of the seven forty something. And then we're doing we're selling two sixty five here in September. That's right. So there will be room for another tranche is what they call them in a few years. We're going to spend this two sixty five over the next probably two or
036three years, depending on the pace and the work that the construction team can get done. And then we will come. I will come forward to the board in another two to three years and say, OK, we've gone through that second tranche of two hundred sixty five million. We were ready for the final amount. I'll bring that forward to the board at that time. And can you remind me just in general, when was that three forty? So it was December of the year twenty. Yes, it was in twenty twenty four. We were able to we were primed to get that out as soon as possible to get on the market as quickly as possible. Because a lot of other school districts we knew were also looking at approving bonds. And we wanted to make sure that
037we were as early as on to take advantage of the investors that were out there looking to buy bonds and also make sure that our construction team was ready to go immediately rather than having to wait for funding and then start start their work. And that what would happen there is they would have to wait potentially months because other contractors would get tied up doing other projects from other school districts. And so we really did a lot of work to make sure that we were ready to go right out the gate as soon as that was approved by voters. Thank you. I know you only have a few minutes, but I just want to ask in relation to where we are from a fiscal, I mean, a financial perspective as it relates to interest rates.
038So it sounds like right now, is this a good time for us to push? And I know you have all this like down pack, but a good time for us to sell those at the where interest rates are right now. Yeah, so so I believe a little higher back in. Yes, and it was so. So there's two perspectives here. One is the investment earning rate. That's the LGIP one that we get off the investment dollars. And that is three point seven seven percent compared to last year's four point three nine percent. That is you can see on the dashboard. That's the very last line. You can see it shows there. That is not the same, but it is related to what bonds are priced at. So when we issue bonds, bonds are issued at a
039coupon rate of five percent. That's standard across the board. Pretty much always issue new bonds at five percent. So an investor is going to buy that bond and say, hey, I'm going to give you a thousand dollars. You're going to give me that bond and you're going to give me five percent interest on that bond. Well, depending on what the market rate and what that investor can get elsewhere in the market. Let's say that they can get lots of more higher interest rates from other investments. It's going to make that bond that we that we offer them a little less attractive versus if rates are lower than that. Five percent is going to look even more attractive and they're going to give us more for that bond. And what you're talking about there is the
040effect of what's called premium. And so when we issue that 265 million dollars in bonds, that's all that's what we get indebted for 265 million. But we're actually going to get more than that. We'll get more than 265 because investors like municipal bonds, they're very secure, they're low risk. And that five percent interest rate is attractive to them compared to what they could get out on the open market. And so so yes, in terms of market timing, it varies even week to week. And that's what our underwriters are for. We have some municipal advisors and underwriters. They help us with pricing and they help us to time the market appropriately so that when we sell those bonds, it's at a time where we can get as best pricing as possible while taking into consideration that
041we do need to issue those bonds because we need those funds for our construction. Thank you so much. You bet. All right. I think that's my time that I have for you tonight. Is there any questions that I can answer before we wrap up? Do board members have any questions? All right. I will present an abbreviated version of this at the regular board meeting tonight later on. Thanks, Tony. Thank you. I will ask for a motion to adjourn. Sarah and Leosha. All in favor? Aye.