001Welcome to St. Frank Valley Schools Board of Education Study Session for February 25th, 2026. Christy, would you please call the roll? Sure. Mrs. Babs? Present. Mr. Berthold? Present. Mrs. Gilligan excused. Mrs. Horanek? Here. Mr. Lechuga excused. Mrs. Solomon? Here. Mrs. Weiss? Here. Thank you. All right. Mr. Wien, start. Federal calls for the normal February financial statements. So let's turn this over to Tony Whiteley. Thank you. Thank you. Good evening, member of the board. It's my pleasure to go through the February financial statements tonight, to spend a little bit of time on the general fund, and then talk about nutrition services primarily. And then I'd like to transition to another topic right after that, as we wrap up in this brief half hour that we have before the break of the board meeting. As you know,
002we're looking at February financial statements, these are monthly financials, through the eighth month of the 2026 fiscal year, ending February 28th, 2026. First of all, I just want to confirm you're able to see what I'm looking at on my screen, so that I can point and what not. Great. Thank you. So I'm going to start off confirming that I'm going to be primarily driving the conversation from our dashboard. We are Greens in the general fund, but we do have the yellow triangles that continue in the nutrition services fund. And I'll touch on that, on the actions that we're taking to remedy those yellow triangles after I talk about the general fund. First of all, I'd like to touch on the balance sheet. So these are balances as of February 28th, 2025, and 26, respectively. We
003talk about any major differences between the two columns, and answer any questions you have on there. The primary difference that we usually talk about is cash and investments. At this point, last year, we were at about $120 million. We're down to $97 million at this stage. This is primarily our low point in the year in terms of our reserves, our fund balance, because now we're going to start receiving tax payments from here on out. But the comparative difference year over year is accountable to a few different things. Number one is our actual plan spend down. We were planning to spend down our reserves just a little bit more in this year compared to last year. So this represents that difference. In addition, there were a few other contributing factors. Last year, we had some infusions
004of one-time cash, namely the Godding Hollow reimbursement, as well as some iPad sales. And that elevated our cash balances last year compared to this year, because those things were one-time items last year. Finally, the Nutrition Services Fund has had to borrow a little bit more from the General Fund. Since they don't have any reserves, any expenses that they subsequently request a reimbursement for from the federal or state governments, they have to borrow cash from us in order to maintain that until they get those reimbursements in. Because they don't have any reserves, they're borrowing more this year than they were last year, because they had a little bit of reserves last year. So that's why we are a little bit lower in our cash investment balance year over year. That's as expected for all of those.
005The second item I'll just talk about is this grants a receivable and the corresponding due to other funds item right here. Those, if you recall last month, they were a little higher, and then we were working those down. That is an accounting entry that we record that represents a remittance of the best grant for Firestone Charter Academy for some capital construction work that they're doing. What we do is we recognize that as a receivable and a payable at the same time, and as they do the work, we request the reimbursement, we get the money from BEST, and then we remit it back out to Firestone. That all just happens, so it's really a net zero accounting adjustment, but it will eventually go down to zero on both sides of that once the best grant has
006been fully expended and reimbursed. The other large number that you can see here and the big difference year over year is this taxes receivable net and the corresponding unearned revenues. Again, this is the last month before we start receiving and recognizing tax receipts, so this is going to be the largest that we're going to see this taxes receivable number. The reason that it's different year over year is it's higher. That represents an increase in assessed valuation in our community. We had a 9% increase. That represents additional resources through our milleville override, as well as the total program and our other milletties. That represents really the health of our real estate area and new construction and good property values, so that's why everyone's home values are a little higher. These will start to creep down as
007we get those taxes. Tax payments, once they come in, will no longer have taxes receivable. In those larger amounts, they'll go down as we receive our subsequent tax payments, as well as the corresponding unearned revenue line. This other item right here, this due to other funds, you can see it was 1.1 million last year and now it's 459 this year. The 459 we already talked about that represents our payable for the best grant to charter school. The reason it dropped from 1.1, this 1.1 last year represented an amount that we had held in holding for the city and county of Broomfield from a URA reconciliation that they had done. They sent us a large payment based on their interpretation of our intergovernmental agreement on how much revenue share they shared with us with the URA.
008We had some concerns around the amount that they had sent. We thought they had sent us too much, so we didn't want to recognize it all as revenue. We put in a holding account until we could figure out exactly how much they did indeed owe us and then sent the rest back to them once we reconciled that. We were able to keep the majority of it, but at this point last year that was in a payable account, sort of a holding place until we could reconcile that. That's since gone because that's been recognized and we're all reconciled with the city and county of Broomfield. On to our actual to actual. This is our year-to-date actual to actual. It represents all the activity, revenues, expenditures, and changes in fund balance through February 28, 2025 and February
00928, 2026. You can see a year-over-year difference. Again, we'd like to look at those variances and try to explain if there's anything unexpected. First of all, we see a decline of investment income. That's this number right here of about $754,000. That is as expected. That's as budgeted. We expected that because we have a little bit lower reserve balance and a lower rate of return. Remember, our rate of return is in proportion to the Fed funds rate. As the Feds reduce their Fed funds rate, so too does our investment income returns come from our local government investment pool where we keep our money. That is as expected. In fact, we anticipate further declines next year as the Feds lower that rate as they meet quarterly. That's the investment income. Other local source, this $2.9 million. Again,
010we've talked about this one a lot, but this was that iPad sale last year. That didn't happen this year, so we're going to see a difference there of the local sources year over year. I want to skip down to CTE. This is line 13, Career and Tech Education. You can see this time last year, we received about $911,000. We were at $352,000 this year. This represents two things. One, there was a CTE audit that happened last year in FY25 where we had to actually pay some money back because they found some expenses that we had included in our CTE expenditures that were not qualified. We actually had an audit adjustment where we had to pay them back about $260,000. That showed up as a negative revenue this year in this line right here. That's artificially
011decreasing it. In addition, we've only received one of two payments. That also is contributing to the difference last year versus this year or year over year. That's why we're seeing about $558,000 year over year. A quick question regarding that. This probably isn't your purview from a financial perspective, but do you know what we've done to ensure that we don't fall into that problem again where we have some expenses that aren't going to be accepted? Yes, we definitely did a root cause analysis of exactly what happened there. I'm happy to delve into the specifics if you would like, but we did address the problem and we added some additional checks and an additional layer of confirmation that those reports were correct so that there wouldn't be such large audit adjustments in the future. That's all I
012need to know. Thank you. Sure. All right. On to the pandemic relief. That's all done. No more pandemic relief tracking that we are doing anymore. Last year, there was just some tiny remaining amounts, the amount of $319,000 that it's sort of just the last little bits housekeeping as that wrapped up. There's no more of this year. This other federal sources right here, the $673,000. This has to do with the Pawnee Grassland National Forest Service land area that's in Weld County. What the federal government does is they try to compensate local taxing jurisdictions that had to forego property taxes because that area isn't being developed, obviously. It doesn't have commercial, it doesn't have residential, so there's no property tax payers on the Pawnee Grasslands areas designated as National Forest Service land. What the federal government does
013is they try to, maybe not a one-for-one, but they try to give some taxing jurisdictions like us who are impacted by the existence of the National Forest Service land with some additional money to sort of offset the loss of property tax revenue. Because that's coming from the federal government, we're seeing some volatility in when they pay and what they decide to pay and whatnot. We're not always having that come to us consistently, so we see some volatility. Sometimes we'll see two payments within the same fiscal year or sometimes there'll be a payment just before the beginning of the fiscal year and a payment just after the end of fiscal year because the payment is usually around summertime. So we'll often see variances year to year over the Pawnee Grassland payments that result in variances like
014you're seeing right now. But we haven't seen any payments yet this year. Hopefully we'll see one before June and if we don't, then we'll actually have two payments next year, we would expect. On to our expenditures. Primarily we take a look at the two largest expenditures, which are salaries and benefits, as you know, represent roughly 80 to 85 percent of our general fund operating expenditures. We see those have incremented a little bit, 2.5 percent year over year and 6.3 percent year over year. That represents increases in compensation alongside increases in health insurance costs that the district contributes, as well as additional staff where there is growth. Some other year-over-year changes that we've talked about, sort of ad nauseum, and I don't want to jump into it too much because I want to reserve some time
015for some other items, but if you have any questions, if you recall, we talked about some geography changes as a result of some accounting rule requirements related to how we record leases and information technology subscriptions. So you'll see decreases in our supplies materials and corresponding increases in capital outlay, debt service, and then lease purchase financing arrangements here. That's all. Most of that variance is really related to this accounting change. Finally, the $4.3 million, that's regarding hollow reimbursement from the bond project funds that were reimbursed to the general fund because the general fund in previous years had fronted the cost by that land. That, of course, it was a one-time item last year and didn't happen this year, so it's a variance. Finally, we'll just talk about quickly current year budget to actual. We are on
016track. There's no concerns. There's nothing that we need, I think, further explanation, but unless you have any questions, we can touch on that. We generally like to just keep track and make sure that we are not above our anticipated run rate. We are eight out of 12 months through the year as of February, and so we would expect to see two-thirds. We're two-thirds of the way through the year or 67%. If we see our level loaded expenditures exceed 67%, that would probably be a red flag for us. We're well under that for both our salaries and benefits. Again, just to reiterate, we're at $75 million in reserves right now as of February 28th. That's our low point, so as we start to get tax payments, we'll see that creep back up until we get to
017our anticipated ending fund balance of $145 million before outperformance. If we outperform, which we expect we do, we'll see that climb maybe another $10 to $15 million. That would end us at June 30th of about $155 million to $160 million in terms of our ending fund balance this year. Now, I did want to skip down to the Nutrition Services Fund and just talk about some of the things that we're working on there. This is page 34, so I'm just going to click down real quick here. Nutrition Services Fund, as you know, we've talked about some concerns regarding their balanced budget. They have been spending down reserves year over year and to the point where at this point there's no more reserves left. They don't have anything left to go, so they're going to spend down
018to zero. We have anticipated their projected actuals to put them right at zero or even in the red. We can't let them do that, so we've been working with Katie and our budget team to ensure that they're making the appropriate adjustments right now to make sure that they don't end up below zero at the end of June. We've been working on a few different things. They've been working on adjusting some expenditures for things like their non-food supplies and materials. They have inventory for disposable products and stuff that they're going to use those inventories down instead of replenishing up to normal levels and then use reusables wherever they can. They are working on adjusting, making sure they're not filling vacant positions. They're not actively asking anyone to leave, just want to make that clear at this
019point, but they are not filling empty positions and try to rearrange existing staff to help arrest any salaries and benefit expenditures. They are still working on ensuring they're moving away from a distributor model for food purchases into doing direct purchases from individual suppliers, and that would decrease their overhead for those expenditures. Yes? For those vacant positions, is that causing any strain around the district and other areas by not filling them? It certainly would. Now, I don't have the specifics of where the vacant positions are occurring and where she is shifting around, but she's trying to make sure that if there's a vacant position here and they need the extra help, she's going to try and rebalance the work to get or hours or whatever in order to get people to the right place. But regardless,
020if they're used to a level of service previously and they are decreasing that level of service or to contain expenditures, there's going to probably be some either strain on the remaining employees or a decreased level of service for the students in terms of speed. And then I recall during COVID, we had like, and I don't know that this can happen, but I'm just asking if this is kind of what they're doing now, where they had positions kind of shift. So as an example, and I don't know if this is what they did, but like a bus driver could come and help with custodial type of stuff or vice versa or something cool, probably not vice versa, but something like that. Is she considering things like that? I believe she is. They don't have quite as
021a variety of personnel to be able to shift. So there's not too many sort of non-boots on the ground personnel that she's got. Most of them are either preparing food or serving food or distributing. So it's really having to shift people from different locations or different hours rather than taking people who aren't being utilized in that fashion and repurposing them. There's very few people in the industrial services program that aren't doing actually that food preparation or food service. And Tony, if you remember, one thing that we spoke about related to this was that potentially bus drivers who have that gap in their day could potentially support nutrition services. The bottom line, however, is if we are looking to save dollars and 85 percent of our budget is personnel, there has to be a reduction of
022personnel in order to save dollars. But we are looking for the efficient use of staff. And if we do have bus drivers who do a morning run and an afternoon run and would like some hours during the middle of the day to support nutrition services and we can do that efficiently, that may be one strategy. So it was a great question. Thank you. So suffice it to say we are dealing with near-term concerns, which is to ensure that they don't spend past zero. They're out of their reserves. They can't go into negative reserves. And so we're ensuring that that doesn't happen. But in addition, we're wanting to make sure that their FY27 budget is balanced appropriately so that they're not running into the same situation next year. We're working with them on a monthly basis
023now. We have another meeting on April 7th, I believe, to follow up on that progress. All right. If there's no other questions on the financials, I'd like to pivot to one other subject here to discuss with the board tonight. And we want to make sure that if you haven't already heard, there are concerns around one of our charter schools, this Carbon Valley Academy. Last year and even the year before that, we saw that they were having some financial struggles, a lot of turnover, governance issues, student count issues. And we had come forward to the board with a probationary charter authorization. This was last February, so a little over a year ago. They were given, granted, a three-year operating charter authorization for Carbon Valley Academy. But it was contingent on them appropriately addressing some financial, mostly
024financial related concerns that we had outlined to them and given to their administration. Fast forward a year, things haven't really improved, unfortunately, at Carbon Valley Academy. And they've continued to have turnover in various areas of their staff, some of which have prevented them from being able to meet their legal requirements around special education, some governance requirements around having a robust board to ensure that they're operating responsibly. Their leadership has turned over, their finance people have turned over, their registrars have turned over. So they're having some operating challenges. And so we've been working with them extensively to ensure that they're going to be able to appropriately provide for a great educational experience for those kids, those kids who are in our district. We as the authorizer, I want to make sure that our charter school is
025doing that. And we also want to make sure that they don't get in a situation where a two becomes a ten, so to speak, whereas maybe, you know, middle of next year, they just have to sort of close their doors, causing chaos to the parents and stuff. So we've been checking in with Tony Carey, who's their executive director, as well as their general counsel, who set some requests for some metrics and some challenges that we need them to make sure that they are equipped and have a plan to address. And then we'll see where they come in on that. There's a date we've given them. It's April 6, I believe. And they have indicated that they're going to work with an outside educational services provider. The company is called Excel, and they are in negotiations
026with them to develop an agreement to execute these outside educational services. And to have that company come in, that company would have to invest a significant amount of money because they have to bring a bunch of things up to standard in order to make sure they're serving the students appropriately, make sure that they're able to get their enrollment up to be able to have enough kids for them to operate solvently. And so I wanted to make sure that you were apprised of this situation, because if it does bubble up into a board meeting or recommendation from our superintendent, that you know what's going on and you've been able to ask any questions. And especially given the study session back and forth a little bit, we could be a little more open and have this conversation
027right now. So I'd like to offer, if I can answer any questions, there's also some concerns that I think Laura Hess would be more appropriately be able to answer from the special education situation. Tim O'Neill has been working a lot with their general counsel. And then, of course, Matt Buckler, who's our charter liaison, has been involved in this as well. Also, they have a deadline of April 8th to give us a very detailed and concise plan of how to remedy our concerns. And at that time, they know that a decision will be made. And then we will prep the board on our recommendation. And then we would likely make a decision in May. I also have requested to go out and have a community meeting with the school community in conjunction with the Carbon Valley
028administration, so that we can be transparent and give families some lead time on their decision-making related to it. How many students have served by the school? Their certified October count was about 220 kids. They had projected higher than that and consistently have gone down each year. Since the 220 certified October count, they've lost another 37 kids. As of January, they were 197. So seeing that large, that precipitous of a decline in student count mid-year is, it's pretty foreboding, I guess I'll say. And then again, we would need to check in and see if they've lost any more since then or maybe if they've gained any back. But the decline since October count mid-year indicates sort of a flight families to other opportunities for their kids. Are there reporting requirements on why the families leave? Like
029do they have any allegations to report on? We could ask. We do know already that many of them have written the district. I know superintendent has received some complaints. I know that our special education department has received some complaints. We've received some concerns from vendors who aren't getting paid timely. And again, they are an autonomous separate legal entity. They are an authorizer, but we are unfortunately not able to sort of step in and do anything more than what we stipulated in their operating contract, as well as our role as their authorizer. Other than that, we can't force them to pay their bills and we can't force them to do certain things. But in terms of special education, that was one of the big ones. They were unable to meet their obligations of some of their
030IEPs for some of their students and now they have to go back and do some compensatory services. They're not yet set up to even provide that. They've had some turnover in their special education teachers. I know one of them got moved and became the principal and then that person has since gone and leave. Their volunteer executive director Tony Carey I think is now stepping in and he's serving as a volunteer principal I think right now. So there's been some turmoil and you know we don't want to pass too much judgment, but there's definitely some concerns that we would like to see addressed to ensure those kids are getting served according to their needs. You mentioned that they hired an outside organization to help them with this process and it's going to cost a lot of
031money and if they're having some issues financially, are there any obligations from our district to help with that? And I know just based on what you were just saying, they're an outside entity and I understand all of that, but I just want to make sure that them going to get the help and I'm not saying we don't want to help if we can, but them going to get the help. I just want to make sure we are not on the hook financially for something like that. Right, yeah no we are not on the hook financially. Now we do have what's called an insurance model with our special education services, so all of our charter schools, we ask them to bear a student proportionate burden of district-wide special education expenditures and so what essentially is happening
032is if they're not able to provide those services, our special education team can step in and say look we have to provide, legally those kids have to be served and essentially it still comes out in the wash because we are going to, from a financial perspective, it'll always be reconciled in terms of the burden for costs for special education. They will indeed bear that proportion amount. Now what happens is if they were to wrap up affairs, then they would need to make sure they discharged all their debts from any existing assets that they have and then anything remainder would actually roll back over to the district and so, but the converse I don't believe is true. If they have more debt than assets, which we know they don't, then we wouldn't be on the hook
033to pay those again if they wrapped up the affairs. And then the last question, this is probably a bit premature, but do we own the building they are in? No. No we don't. We have no plans to that. Yeah, their facility is aging. They've got some challenges with their facility as well and I think that's also contributing to maybe their poor enrollment because the facility is less than ideal for a learning environment. Thank you. So I just wanted to make sure you were prized of that whole thing and make sure you have any questions. Again, we will come back with additional information to the board based on their response, based on their plan with their educational service provider and give you updates and be able to answer questions from that point. I think we're about
034out of time. Is there any other questions I can answer before we wrap up regarding financials, nutrition services, or charter schools? Great, thank you for your time. Thanks Tony. So with that, I request the motion to adjourn. Moved by Sarah, Sinclair, Marty, and Trosser.