001Hello and welcome to the St. Green Valley School District Board of Education Studies session of January 28th, 2026. Christy, can you call the roll? Sure. Mrs. Babs absent. Mr. Berthold? Present. Mrs. Gilligan? Present. Mrs. Horanic absent. Mr. Lechuga? Here. Mrs. Solomon absent. Mrs. Weiss? Here. Thank you. And today we are doing second quarter financial statements. Tony, take it away. Great, thank you. Members of the board, appreciate your time tonight. We'll spend the next half hour going through the second quarter financial statements of our fiscal year 2026, 25-26 year. So this encompasses the months of October, November, and December. So that's activity that between those three months aggregated. So it's all year, all the way through December 31st, 2025. And so all the balanced items that you might see in here are as of that date.
002And then any total transactions encompass the dates of June through December. So as you know, we typically spend quite a lot of time talking about the general fund. And we generally have mostly greens, but this month we do have some yellow triangles on our dashboard. And we spent some time discussing this at our finance and audit committee meeting on Monday. And then again, wanted to spend some time discussing this with you tonight. So I'll spend a little bit of time on those yellow triangles as soon as I'm done with the general fund, and then we can skip to the other funds as time permits. So let me, sorry, one more thing just to make sure everyone's apprised. Tim O'Neill is visiting us tonight. Make sure he's got a little This is our executive summary dashboard.
003So this accompanies the financial statements just to help give us a quick overview. It's got the red, yellow, green sort of stoplight scheme to help identify problem areas or things that we want to pay more attention to. It's organized by fund. All the gray areas we typically, out of the interest of time, don't spend too much time on. But of course, we're always happy to refer to those if there's any questions on them. All the items in white, we'll spend a little bit of time on and then go through some of the notes that our accounting team and I have brought up in terms of observations and whatnot on some of those schedules. So first, I'm going to skip on your screens here to our general fund, actual to actual, excuse me, balance sheets we're
004going to start with. And again, most of these schedules compare last year at this time to this year at this time. So we can kind of see variances or differences, a little bit of volatility and point out why that might be. Because we just want to keep an eye on our radar of, hey, if things aren't operating sort of as expected or in accordance with whatever trends were going on last year, we'd like to highlight those and just explain what's going on. Because usually there's a good explanation of things like, you know, one time items from last year versus not happening this year, you will see variances there. So one thing that I would like to note is our cash investments. So you can see we're at about 121.3 million this year, excuse me, last
005year versus 131 or so, 130 this year. So that's about 7% higher, an increase of about 9.1 million. And again, that's as expected as we receive increased equalization payments for our higher total program or any additional tax receipts. Now, at this point, we haven't gotten hardly any tax receipts, so this is mostly all equalization. But it's all within spec, those are nominal variances. One other thing I wanted to talk about was our due from other funds. You can see there's a big number here, 12.2 last year versus 2.7 this year. That's due to some cash that borrowed from funds 21, 41, and 43. Now 41 and 43, those are kind of unusual. And that was posted last year at this time. 41 and 43 is our cap reserve fund and our bond building fund. And
006if you know, at this point last year, we had just passed the bond. And so there was a lot of pre-work that was done in anticipation of that potentially passing. And so a lot of the expenditures that were authorized came out of that fund in expectation of the bond passing. Now if it didn't, then the general fund would backfill those, and those projects would have been wound down. But because of some of that pre-work that was done, that's why there was a little bit of cash that was borrowed from the general fund to get that early work started. The really nice thing about that work that was done is it allowed us to get ahead of the game in terms of construction work, allowed us to get our general contractors in and get those projects
007started right out the gate, saved us money in interest, sorry, in inflation, and saved us in terms of further timelines because we were able to, again, immediately get those projects off the ground. So that's why there's not as much in terms of due from other funds this year compared to last year. This year really only represents the amounts that are borrowed from the Nutrition Services Fund, which again is another conversation they'll have just a little bit. Down here in Grants AR and related due to other funds, that's the $641,000, I'll change my cursor here so I can highlight. It says $641,000 right here and this associated $641,000 right here. That is just related to a best grant from one of our charter schools. So the work was completed. So from an accounting perspective, we post
008it and put it on our balance sheet as an amount that we expect to get received. But it's also because it's a charter school, it's an amount that we're going to send right back out to them. So it's both an accounts receivable and an accounts payable at the same time. And so these two kind of offset each other, but they have to be recorded because they were recognized in the prior year. Okay, here, let's see. This P card clearing account, we talked about this before. This just represents when P card transactions occur and hit our bank. They're sort of stuck in this clearing account for just a moment while our accounting team reviews the transactions and gets them posted to their regular expense accounts. What's happening is the cash comes out of our bank, we
009want to immediately get that posted and say, hey, cash has come out. And so we post that to this cash account and this holding account while the transactions are processed by our accounting team. And then they get posted on a regular basis. So that's what this account does. So any differences from prior years, just timing differences and volume differences in our P card activity. That's all I've got on the balance sheet. I'm going to skip forward now to our year to date actual to actual. So instead of balance sheet accounts, which is sort of the balance in a particular account as of December 31st, this is all the activity. So revenues and expenditures between the dates of July 1st, 2025 and December 31st, 2025. Now for the prior year, you can see there was some
010minor differences in things like property taxes. Now remember, I usually try to mention this, the variances in property taxes are really small, even though it seems like a big number, like 383,000. Remember our property taxes, they're budgeted for like, let's see, about $150 million. So we're seeing a real small amount as amounts trickling from our counties at this stage in the year. And then in February, we'll start to see property taxes coming in. And that's when we're really worried about any large variances from expectations. Right now, a 23% difference seems big, but it's really, really small. We're talking about just a really small subset. It's like, it's, I think, here's the example before. And I remember Don Haddock mentioned this a few years ago, is like, when you're talking about expulsion rates and say, like
011your expulsion rates are really, really low, and they're say, two people. And then the next year, you have four people. Well, someone say, well, your expulsion rate doubled over the year, over a year, you had a hundred percent fold increase. When you're talking about just a really, really small sample size, you see large variations, large swings in your percentage basis. And so even though two, four is really, really small, very low expulsion rate overall, it's the same situation with property taxes here. We're seeing 1.6 million versus two million. And that's because our property taxes really aren't flowing in. So any large variances that we see is just because we have such a small sample size. The next is investment income. I like to always talk about investment income. Year over year, we see a decrease
012of about $600,000. That is as expected. Our investment returns from our LGIP, which is a local government investment pool, it's called a trust, that those returns are directly proportionate to the fed funds rate. So as you hear about the fed funds rate on the news, and they, you know, they go up a quarter point or go down a quarter point, they've been inching down over time. They've been really elevated for quite a while, which has been great for our investment returns. But as those rates come down for fed, so does our returns with our LGIP. And so those those track accordingly, those are fully as expected, you'll see that we were budgeting less for that as well. But when you look at an actual to actual basis, you're going to see a variance there. All
013right, other local sources, I'm going to try to stop talking too much about this. This is the sale of the iPads. Last year was a difference. This year, we didn't sell them. So we see a difference there with sale of iPads. Okay, equalization net. So this $21 million represents both an increase in the amount the state has been sending us on a monthly basis from our total program formula. As well, net of this number is our allocation to our cap reserve and risk management fund. If you recall, we did a special board action this year to withhold our normal allocation of cap reserve to help bolster the fund balance and the general fund. And we wanted to make sure that we didn't spend that down too fast and give out as much in compensation as
014we can. And Brian Lamer and his team are they're working hot and heavy on all the bond projects, so they're not able to put as much work into the cap reserve expenditures that they normally would. So we were able to withhold a little bit of that from cap reserve this year. What that results in is an increase in this number because we're sending less out to cap reserve. And that's where this net of equalization net of our allocation to other funds. So that's why it's hires because we're not adding as much to our cap reserve fund. Does that make sense? Let me know if you have any questions on that. Is most of the 21 the result of the increase? No, most of it is from the total program. Yeah, that's what I was wondering.
015It's mostly from the accelerated payments from equalization. That's exactly right. Yeah, our amount withheld from general fund to cap reserve from last year to this year in total for the full yearly amount is going to be roughly let's say six to seven million. Now by formula it's five point five, but last year we also had some specific allocations to cap reserve. Those are one-time allocations for specific projects that were also part of last year's that aren't part of this year's. So not only are we withholding the formulaic five point five million, but also there's one-time expenditures that aren't also going to cap reserve. And so we'll see a savings or a decrease in the amount that's going to cap reserve savings in the general fund of roughly seven and a half. And will we see
016a little bit of a reversal later in the year when those equalization payments slow down? Like the acceleration of them? So at the end of the year we'll start seeing a difference in the opposite direction? Yes, potentially. So what happens with equalization payments, the new equalization payment schedule, is instead of 12 equal monthly payments for the state's anticipated payment to us for equalization, they're doing nine that are structured around our tax payments. So they'll give us the full amount divided by nine for all the months through January. Then they'll skip February and then give us I think March and April, and then they'll skip May and June. So they're not going to pay February, March, and June because that's when we're getting our tax payments. What they're doing is just trying to help sort of
017couch our cash flow, our anticipated cash flow needs. So that's when you'll see a switch between equalization and property taxes. And exactly what we're talking about Jocelyn is that this equalization will run ahead for a little bit. And then once you start in February and then especially May and June, it'll fall back in line. Yeah, check my time here, make sure we have enough time for nutrition services. So one other thing I wanted to notice, point out was this negative 267. It's really weird to see a negative revenue. And the reason why that is is last year Winder went a CTE audit where we had to owe some money back. They had overpaid us for our CTE reimbursement. And so as we went through and scrutinized those those CTE claims, it ended up we had
018to pay back about $267,000. And the audit occurred last year, but the report and the amount that was due back occurred this year. And so we paid that back to them but showed up shows up as a negative amount in this revenue account. But once we get this year's CTE reimbursement, then that will go positive again. It's just, it's just right now we've only paid them and we haven't received this year's allocation or payment back to us so far. So that's why there's a negative revenue there. That'll probably be there. I'm not sure if we got the payment yet for January, but that'll be there until we get the CTE reimbursement for our categorical in the current year. Then it'll flip positive. All right, other notable items is this preschool. This is as a result
019of some timing issues as well as a slight decrease in our enrolled preschool population. And other state sources, make sure I've got that. Other state sources is due to timing of our redact funding. So we're expecting our redact payment to come and we had already received it by this point last year. Okay, finally, the other big number here is our other federal sources. And that is a result of the payment of National Forest Service, a payment from the federal government for our share of the planting grasslands. They send that out every year and it varies depending on when it gets sent. And so we always have some timing anomalies with that. And then finally, on this particular page is this number looks pretty weird. Supplies materials line is a lot lower compared to last year.
020That's also affiliated with this capital outlay and debt service. And what that is, it's mostly a geography change is how I described that. It's amounts that normally in previous years would have been reported since supplies materials because due to some accounting rules, it got moved down. And now we have some additional increases here and then some associated amounts here. What happened, you've heard me explain this before, but I can say it just a few times to make sure that we've all got it. Because when there are certain lease arrangements or subscription based technology arrangements that are multiple years, accounting rules dictate that we post the inception, the entire net value of the inception of all those payments once we enter into the lease. And that all goes right here on capital outlay is one big
021chunk of an expense. That isn't real money. That's not real dollars that we're paying anybody yet. That's just an accounting adjustment. It hits here and then it hits down here in this other purchase lease financing arrangements. Those two sort of net each other out. So they have kind of an offsetting effect, but nonetheless, accounting rules dictate that we need to post that. What is an actual outlay is our payments on those subscription based technology arrangements and leases. And those payments come out of this account right here. Now in previous years, before this accounting rule came out, those types of expenditures would have all just lived right here on this line. And that's why this is lower compared to prior years. And these numbers are higher. They're not higher in exact proportions because we do different
022activities in different years. We enter different into different leases and different arrangements. So they're not a one for one, but that's generally why you're seeing a large decrease in our supplies materials and a large increase in our capital outlay and debt service year here. And then as we said, like all throughout the year last year, we talked about the blip of the 4.3 million for the land, gotten the whole land last year. Well, now that didn't happen this year compared to last year. And so the entire year we're going to see this as a difference when we're looking at our year over year. All right. On to budget actual, we don't need to spend too much time on budget actual. We just want to make sure, hey, we're halfway through the year. Are our level
023loaded salaries and expenditures, excuse me, salary and benefit expenditures, are they within that 50% through the year metric? And they are. So we don't have any concerns here. We're running well within our anticipated budget outflows for salaries and benefits. All right. So with 10 minutes left, I'm going to skip down to Nutrition Services Fund. So we have a second to talk about that one. And then I'll go back up if we've got enough time and talk about Nutrition Services, Building Fund, Cap Reserve, which are all nominal. But again, we're happy to chat about them. So Nutrition Services down on page 34. All right. So what we're looking at here is are there balance sheet items? So basically it's the amount that's posted as of December 31st, 2025 and 2024. 2024 is here, 2025 is here.
024So if you look at their total assets as of December 31st last year, this is Nutrition Services, they had about $4.8 million that was spread out between their grants receivable. So it would be like the amounts they're expecting from the federal government and from Healthy School Meals for All, as well as their inventories and then a little bit in their cash investments. This year you can see their grants receivable are about the same and their inventories are just a little lower. Their cash those is they don't have any cash investments on hand. So they have to borrow from the general fund to make payments for all their purchases for salaries and benefits and for any purchases of food. And so you can see that their total assets are a little lower this year, this time
025compared to last year. So $4.8 compared to $4.0, about $8 million lower. So that might be okay if their anticipated expenditures were also lower. But if you look here, their liabilities of the amount they had to borrow from the general fund at this time this year compared to last year is not quite, but it's almost double. So last December 31, 2024, they owed about $1.4 million to the general fund, which is totally fine because both of the grants, the federal government and the state grant for nutrition services operate on a reimbursement basis. So that means they have to front the cash. If they don't have enough in their reserves, then they have to borrow from the general fund. So this isn't worrisome on its own that they borrow from the general fund at all. What
026the problem is is the magnitude. So you can see that the amount that they're having to borrow from the general fund for their operations went up significantly. So what this means is that the amount that they owe to their liabilities in comparison to the amount that they have on hand, which is their assets, is a lot higher this year compared to their assets. So it means that their position, their use of their reserves is significantly lower compared to this time last year. So this is something that we're keeping an eye on because we talk about nutrition services as a self-sustaining fund, right? They are supposed to be able to pay for all of their expenditures, all their food purchases, all of their salaries and benefits through meal charges and through the reimbursements from the federal
027government for meals and through the state healthy school meals for all for their meals. They don't have that much discretion to charge amounts for meals. Those amounts are prescribed by the federal government. The federal government says here's how much one meal is worth and how much we're going to pay you. And then if we have eligible kiddos for those funds, that's what the federal government sends to us. And then any remaining amounts that we have to pay for comes from healthy school meals for all over the state. But still, all of that is keyed off of that predetermined amount per meal. So in other words, Katie Cosette doesn't really have that much discretion to generate more revenue. It's not like we can increase the amount that we charge for meals because those are already prescribed
028for us. There are some other opportunities that they can reach out for revenue purposes. One being Alicarte meals. Alicarte, you know, they're selling things for additional costs that the students just pay for out of pocket that's not included in part of the regular meal. In addition, I know she's working on some vending, do some vending machines and put some healthy snacks and things in that they're paid for by the students. And then I know that she's worked out some arrangements with I think a local charter school to service their school food authority. And she can charge a fee, administration fee, and do the work for them. And she is able to generate some revenue through that. But that's all the her relief files on the revenue side. On the expenditure side is where we have
029to do some of the hard work. And so right now we have meetings planned, meetings scheduled with Dr. Cushion, with Brian Laimer, who oversees nutrition services, with Katie, and then my team and my budget team to really put our heads together to address the future prospects of the nutrition services fund and make sure that we're prepared, they're okay in terms of their financial position. So if you go forward here to our budget to actual, so this is our current year budget to actual, you can see that they're starting the year with $1.8 million in their reserves. And they're budgeted to spend that down to 800,000, 900,000. So about half it. So cut it in half. And that rate of burn is unsustainable, right? You obviously can't do that for another year. You don't have a
030million dollars in the bank to be able to spend down. And so that's the plan that we have to really put our heads together and make sure that the nutrition services fund is sustainable. And so I guess news will be forthcoming. I will be coming back to the board in our future financial statement reports to the board, and tell you about our plans and what we plan to do to address those. But you'll see this, and this will probably be highlighted every subsequent report to the board from here on for the rest of the year, just to let you know where we're going, what our plan is, and how to make sure that they're sustainable. Any questions? Just for more context, I want to show last year's their budget. So they were budgeted to spend
031down about 94,000. So their fund balance would be 4.2 down to 4.1. What actually happened was they spent down about a million dollars. So they went from 4.2 to 3. And so that was the, excuse me, that was the mid-year position, but they actually spent down for the full year, they spent down to this 1.8. So there was a pretty big cash burn last year, and so we're again working with them to make sure that we pull out of the decline with nutrition services. Have we been in touch with surrounding districts about this issue and if it's an issue that's facing other nearby districts, or is this uniquely something we're facing? I don't think it's unique. I know that some other districts, they had to do some real careful cost containment measures and make sure
032that their cash burn, they decrease that. Some other school districts, they had to be temporarily bolstered from, you know, other funds, like the general fund would kick in some money or something to keep them going. That hasn't been our expectation or our intent is to start bolstering nutrition services from the general fund. We already have some belt tightening in the general fund to do, let alone be able to support our other funds. Traditionally, nutrition services is self-sustaining, and so I've been, I've just sort of informally reached out to some fellow CFOs, some of my peers, and see what they're doing. But for the most part, it's cost containment and searching out other revenue prospects. But again, you know, it's up to the federal government to come and say, look, we recognize that costs are going
033up, both on the salaries and benefits side, as well as the food cost side, and that's a big burden to bear, and we need them to increase the rate of reimbursement. But again, what that would do is squeeze their budget, right? That would squeeze the federal government's budget. They'd have to kick in more for that higher cost increase, and then, accordingly, the healthy school meals for all would have to kick in the increase as well for the remainder. And as you know, the state is encountering a billion dollar budget shortfall that they're trying to address this legislative session, so they would have a hard time addressing that as well. So we're seeing the squeeze and keeping an eye on the numbers and talking about strategies and what we can do to, you know, one thing
034we can't do is spend money that's not there, and so we'll make sure that we address the burn, the cash burn is what I've been calling it. We only have a minute left. Is there any other funds that you'd like me to touch on before I wrap up? I apologize for skipping some of the other ones, but I did want to make sure we talked about Nutrition Services. One that I always like to see, unless you have questions on something else, is our Fund 41 building fund. So this is our current year budget to actual. Now, as a reminder, tonight, the board is being presented with the adoption of the amended FY26 budget by Justin Petrone. And so all of these budgeted numbers that you see in this particular report is the adopted budget, not
035the amended budget. All these numbers are going to update on the budget side after the adoption of the budget tonight. And so next year, the January one will be changed. And the reason I mentioned that is because you can see for FY26 adopted that we're projected to spend our building funds, resources by about $155 million. We've been working with Brian Lamber and Brian Zwissler from construction, and they're actually running ahead of schedule, which is great. That means they're really cooking on some of their projects. And so this budget is going to be amended tonight, reflecting that. We're planning on spending down into the $50 million or even less range because we're looking at actually doing a second issuance for our bond projects this fall, which again, more details will be forthcoming. We'll be having conversations
036with the board about those plans. That second tranche to help Brian and his team maintain that fast speed in their construction projects in those buildings, that's what we're going to be working on, and that's going to be reflected here in this budget. So any other questions? Great. I appreciate your time tonight. Happy to answer any questions here or at the regular board meeting after this. And again, at which time we'll do sort of an abbreviated overview of what we talked about just tonight. Thank you. Thank you, Tony. I guess with that, I'll request a motion to adjourn. So moved. Second. All in favor? Aye.