001Good evening and welcome to the St. Grave Valley School Board of Education's study session on December 3rd 2025. We will be hearing a financials from Tony. Welcome Tony. Thank you. Oh sorry you need to um. Mrs. Babs? Present. Mr. Berthold? Present. Mrs. Gilligan? Present. Mrs. Horanek? Here. Mr. Lechuga? Absent. Mrs. Raglin? Here. Mrs. Weiss? Here. Back to you Tony. Thank you President Raglin, members of the board. I appreciate the opportunity tonight to go over our first quarter financials for FY26. It's the current fiscal year which we are operating right now. First quarter for fiscal year 26 because we are a fiscal year instead of a calendar year basis encompasses the the months of July, August, and September and so this is those three months combined. Any balance sheet or current balance amounts that you might
002see are as of September 30th and then any revenue or expenditure accounts are the accumulation of activity for those three months in total. We are as typical operating from a dashboard that's prepared by our accounting and reporting team that you have on your desk there. We use the typical green, yellow, and red stoplight system to bring about or alert the board to any anomalies or things that we need to take a look at and thankfully we're all greens at this stage. I'll spend the majority of the time I'm going over the general fund balance sheet and actual to actuals and then I'll also touch on some other funds that you'll see that are in white on the dashboard. The items in gray in the interest of time we do skip over those funds. There's no
003particular items that we want to highlight but if you have any questions I can pop into those if you'd like. The board tonight because of some scheduling changes has the enviable position of hearing this before the Finance Noddy Committee and so Finance Noddy Committee meets next Monday which typically before the regular the first regular board meeting but because of the schedule change you guys get to hear it first and so I will be able to present the same information next Monday to the Finance Noddy Committee or at the Business Services Center. So I'd like to start with the general fund balance sheet so these are assets liabilities and reserves balances as of September 30th of 2026 excuse me of 2025 so 2024 is displayed in the left column you can see and then September 30th
004of 2025 is in the right column so this is just the end of last September. What we'd like to do is just do a comparison between the two look for any anomalies or large differences and try to highlight why what's going on and then point out any things that we thought may be relevant to make sure the board is aware of. One of the things that we always touch on is our current cash investments balance and you can see that's just a little bit higher that's within specs that's well within our anticipated expectations our equalization amounts are a little higher because if you were calling I'll mention this a little later is that our transfer to our cap reserve fund which we normally do each year per board policy we did a one-time exception in
005FY26 and withheld 5.5 million dollars to help bolster the general funds fund balance make sure it doesn't go down too fast well when we do that that transfer looks like a reverse of equalization so it's like a negative equalization negative revenue and what that does in this situation is it retains additional cash in the general fund compared to last year and so that's partially what you're seeing here and then of course simply because equalization did go up just a little bit year over year and we get those month-to-month equalization payments from the state we would naturally see a little bit of an increase in our cash investment balance all other things being equal. This next item here that's due from other funds this is the the amount that we really usually extend to our nutrition
006services fund as you know as you know the nutrition services fund is self-sustaining so the revenues need to support all of their expenditures but because they operate on a reimbursement basis both from the federal government and from the Healthy School Meals for All the state government reimbursement they spend money and then they have to put in a request to get that money paid back. Well that means a use of capital that would use up their reserves or if they don't have those reserves they would need to borrow from the general fund and that's what this is. Now you can see it went up year over year this 1.2 to 2.6 the majority of that is represented because the nutrition services reserve balances are a little lower so they don't have that many reserves to draw
007on to provide for those capitalization needs so they need to borrow from the general fund a little bit more so that's what's happening year over year. Now just enough to touch on the nutrition services fund simply because we're talking about it now I do have some items to talk about on it later but as you know the Healthy School Meals for All was approved by voters to continue so the additional ballot measures that were put on for the November election did pass and so the Healthy School Meals for All program is being continued to be funded but some dynamics just so the board is aware of how that works is the way that the law is written in order to provide for funding for all of our student meals is that it is our obligation
008to go after all federal funding first so any any students who are eligible for free reduced meals from the federal government for the National School Lunch Program we have to go after those resources first then any difference between what we can get for those eligible kids and what we would need to pay for the rest of the kids that's what we can go to the state and request a reimbursement for but what that means is that we're still limited to a prescribed amount per meal that we can collect whether from the federal government or the state government we don't have the flexibility to charge more if our costs are going up so if our if our salary benefits go up if the cost for food goes up if they're not going up in proportion to
009the amount that we can raise from the healthy the National School Lunch Program and the Healthy School Meals for All program then there's going to be a use of reserves or we need to do some cost tightening some some cost controls some organizational stuff so so those are all conversations that I think that that we'll bring to the board make sure that you guys are apprised of but yeah I have a quick question regarding that because you said you have to basically seek federal funds first is there a timeline in which you would have to wonder when a district would have to do that and if so are they is the state suggesting certain it didn't sound like a certain amount but what what are some of the criteria Katie Kozak could probably give you
010more details but the the details that I'm apprised of which is a little bit more broad is that the Healthy School Meals for All program uses the federal reimbursement lunch reimbursement rate they also do for the for the breakfast as well and so so let's say and I don't know the numbers I apologize but the numbers but let's say that the the reimbursement rate for a meal is $2.50 what we would get from both combined federal and state funding would be $2.50 per meal so it wouldn't be more so it's not like the state is saying well even though the federal government recognizes a meal as only being $2.50 we know accounts are more so we're going to give you a little bit more $2.75 or $3 they're only going to go up to that
011prescribed amount per meal and so all they're doing is filling that difference between who's eligible for federal and who's eligible for state and and and giving us that difference and so it's going to be the same regardless of the funding source federal or state we're only getting that $2.50 per meal with that general understanding do you are you watching I mean we always watch it pretty closely but are you watching this closely for those increasing costs because that that when you were saying that that was my thought process because we know food cost goes up exactly every year yep and that's why I'm bringing it up right now is because it is definitely a item that we are paying close attention to right now so our team of Justin here behind me and the budget
012team has been working with Katie and her team to keep an eye on the long-term time horizon on that because we did spend down some nutrition services fund reserves in 2024 and we have done in 2025 were projected to in 2026 and so that cannot continue that's not that's not sustainable because reserves are going to eventually run out and so either some additional revenue needs to be identified some operational changes need to be adjusted or in a case that we don't have control over the reimbursement rates need to go up thank you sure all right so that's what this do from other funds that's 2.6 million dollars is represented by the general fund and that comes down as they get the reimbursement from the federal government and state government and then repays the general fund
013this grants receivable right here the six hundred and sixty eight thousand dollars it's also related to this due to other funds you can see in your dashboard that little block of text there on the starting on the third line it is really the most of it is the building excellent schools today or best grand dollars that we actually passing on to one of our charter schools because we're a pastor we're the authorizer and so CDE only works with us they don't fund this charter schools directly so that's really a pastor so what this represents is at as of september 30th those are amounts that we've received and need to pass on to the charter school which we did there's also some additional smaller dollars in there but the vast majority of us is that is
014that those best dollars all right we'll keep going here this three hundred and where is it here this three hundred ninety thousand dollars last year that doesn't exist this year that is amounts related to our expanded learning opportunity grant so we have some partnership districts that we apply to in partnership with for this yellow grant and but we're the primary fiscal agent and so in a similar vein to the best grant we get paid and then we have to pay those partner districts and so at this time last year that was that amount that we owe to those partner districts that doesn't exist this year this p card clearing account this is going to fluctuate month to month as of the timing of our when we when our our employees swipe the p card that
015amount comes out of a bank account we put it in this clearing account so that it's reflected in our ledger as soon as possible and then the work goes through to make sure it is posted to the expenditure account and so this goes fluctuates up and down as our accounting reporting team record those expenditures and remove this p card clearing account so it's really important that we're able to make sure that we're able to make sure that we're able to make sure that we're really just a holding place it's like it's like your desktop on your computer where you put stuff temporarily and then you clear it off as you work and so this is always going to fluctuate up and down no cause for alarm or any concerns at all actually it represents a
016lot of work that our team's doing to make sure our expenditures are reported appropriately All right and then this unearned revenue number that was $291,000 last year and doesn't exist this year that relates to the child care development block grant that was being tracked in the general fund and doesn't exist this year and so that's why there's a difference between those two years but those are the largest differences when we look at our balances from again this time last year versus this past September 30th and right now you can see that our reserves are just a little higher than they were at this point last year and that's again within expectations any questions before I move on to our actual actual revenues expenditures you guys can see what I'm pointing at right okay good I
017usually try to make sure I double check that I want to make sure that we're not I'm not narrating blind here so this statement is our statement of revenues expenditures and changes in fund balance so the last statement was a balance as of a certain date this records activity that occurred over multiple dates in this case July through September 2025 and so you can see here things like our property taxes at this point last year we had received $572,000 from our counties this year it's 955,000 so it went up about 382 well you might ask why now let me explain this because this is a very very very small sample size so I'll use an example I remember a predecessor talking about expulsion rates and they say well okay if you have one kid who
018was expelled in a year and then the next year you had two kids that were expelled someone could point to that and say that went up 100% your expulsion rate doubled that's really really bad when you're only talking about two kids right that's a really really minor amount so you have a small sample size those percentages can look larger whereas if there's another district that has 200 kids and the next year doubled to 400 kids well that would be the same statistic someone could say that doubled that went up 100% but that's a lot more worrying than going from one to two versus 200 to 400 that's what we're seeing here when you see this property taxes line go up by 66% year over year that's because at this stage we have received 0.6% of
019our anticipated property taxes so when you see just a tiny bit of volatility year over year which you are going to naturally it looks like a large percentage when in fact it's really not so when we start paying attention to this percent variance with regard to property taxes starts in about March because that's when our property tax payment starts coming in and that's when we really start to pay attention to hey why are we seeing any kind of large variability year over year and when that starts happening you'll see that percent variance drop significantly so I would anticipate seeing this number in the pretty high percentages for the next few reports that I give you and again not a concern at all but if you see a 66% come next April I'll be pointing that
020out as a concern okay in fact if it's 66% up that's not a concern that's really good for us so we're not going to see a 66% increase in property taxes that means we over collected maybe we need to send some money back so all right so with that said I did want to point out a few things that we do notice year over year one is this equalization number that comes from the state that's our monthly payments from for total program from the state of Colorado it went up 17 million and that is a bigger jump than we would expect and that's because the aforementioned equalization payment that we send to cap reserve is not happening as a result of that one-time board action that we talked about so there's 5.5 million that we
021are withholding from the cap reserve that we would normally transfer and that happens on a monthly basis so this represents oh probably two and a half maybe million two million or so that would that would that would contribute to this variance all right this next one current increase or decrease in investment income so that dropped about 18% that's in line with our expectations as the Fed drops there the Fed reserve you know the Fed funds rate everyone's talking about go up a quarter percent goes down a quarter percent what's going on it's a very sometimes political conversation but our local government investment pool rates that we get on our investments track in proportion to that Fed funds rate so when that goes down our rate of return also goes down and so we anticipated this
022we expected it's budgeted and so this is in line with expectations it's not a concern but it is reality all right this number right here you can see drop 74% I know that you have heard about this iPad sale for a year now and I we got to keep talking about it because last year it was a variance from the year before that I talked about and now it's a variance this year compared to last year we because it didn't happen and so now we're saying well the reason why you see a three million dollar drop in other local source revenue is because we did not sell three million dollars of iPads this year while we did last year sorry for the small gaps in silence here I'm just looking back down at small type
023I got to get down to my the line that we're talking about preschool six hundred and thirty three thousand dollar decrease that's related to timing and reimbursements for the universal preschool program that always just results in some volatility between the mechanism that they pay us with and how we request the reimbursements for the UPK program you know the number of kids enrolled and and some timing differences there they're still working out cakes to make sure that becomes really systematic it's just not quite fully systematic particularly that's why we see some variability there but that's some not a representative of a decrease in our preschool participation in fact we did see an increase in preschool participation this year compared to last all right down to expenditures we're seeing an increase in salaries of about three percent
024and an increase in benefits of about five point eight percent these also track with expectations the reason why you see benefits going up a little more percentage wise compared to salaries is because salaries maybe go up in a percentage basis but benefits go up hard dollar amounts based on our our renewals with our insurance broker they help us manage how much we need to send over to our self insurance fund and if you recall last year last last year's renewal which affects this calendar year we didn't pass on any employee premium increases right so that means a larger burden on the employer costs so you were going to see a little bit more of an increase by taking on that burden and shielding our employees from deductions from their paychecks okay some other adjustments you
025can see here supplies materials went down about three point seven million and that is related to some larger expenditures that happened by this time last year related to technology and some curriculum purchases finally the other two anomalies that you see which resulted some really big percentages maybe look concerning but when you talk about the denominator and the increase that you're seeing it really makes sense this eight point six million and four point seven million there are kind of related if you recall this relates to the inception of new leases or subscription arrangements and this is an accounting role we've talked about a few times and I'll just keep mentioning it to reinforce that we'll see this every year now whenever we enter into a new subscription or a new lease we have to recognize the
026entirety of the some accounting terms here the net present value of that entire cost and so in this situation we subscribed to some new curriculum and we subscribe to some firewall tech some technology it's in firewall subscriptions and maintenance agreement and so all of that hits our expenditure account in this capital outline at that inception then as we pay on those because they're multi-year arrangements that we pay each year those are going to hit this debt service line so these are related this is really the cash impact this is an accounting impact this number down here is also directly related to this one that's kind of a net zero when we put us when we put the accounting entry on for those lease and subscription arrangements those hundred percent expenditures to capital outlay and a
027hundred percent to lease lease purchases there's some other capital outlay in here that's why they're not exactly the same but but this number is really the cash impact that we're actually paying money out the door to these companies all right so with that we have a net change in fund balance as of this time as of September 30th 13.7 million or so versus 22.6 and again similarly our ending reserves are about 161 so a little bit higher than the 156 from this time last year all right any questions before I move on to budget actual really quick on budget actual nothing concerning here we just like to take a look at these two percentages because they are the ones that are level loaded if you recall we were talking about rates we are three months
028through the year that's 25% so we want to make sure that our if we're exceeding that 25% in our anticipated level loaded expenditures like salary benefits that we want to know why and we investigate that you can see it we're 18% on each of those which means we are outperforming our anticipated salary and benefit expenditure run rate all right any questions on general fund before I move on I recognize that I only have about six minutes I'll jump through these next yeah sorry Jim were you asking okay sorry again all right on to the risk management fund we're gonna look to actual to actual just a few things here you can see claims went up that's a timing difference from this point last year to this point this year just sometimes they don't have many
029claims that get processed through our risk management that's Heather Keith she does a great job over there but sometimes she doesn't have too much to do that's a blessing sometimes there's some large claims that they have to process and that's all you're seeing here another thing is these two numbers right here are exactly the same mechanism that I was describing earlier they had a they entered into a subscription arrangement for an emergency alert system and so they had to write on a capital outlay expenditure as well as a corresponding financing arrangement and then this debt service represents payments for that as well as some other subscription arrangements that they have in place on to the building fun which is always a great thing to look at due to the excellent activity that's been going on
030there and that Brian construction team have been managing as you know they are working like crazy to get big sky online for next year that's awesome so if you look here our current year budget actual it's been about 24 million dollars of an anticipated 130 million we're keeping a close eye on their run rate remember we have two issuances at least we've already only done the first issuance of about 370 million we did that last December and of the 370th and 379 we are down to about 297 I just ran the numbers before about 21% through that first issuance as of September 30th and so they still are they still have plenty of cash to maintain their work that will accelerate as they approach spring and summer which is when they really are going to
031go crazy to finish up all their projects in time for next fall we will keep the board apprised we're working with municipal advisors on financing on the timing of when we need to go for a second issuance we don't expect that to happen until 2027 and so but we'll let you know in the timing of that we'll start talking about all the paperwork and all the factors that go into that decision okay a few more minutes here let me let me skip down to our nutrition services fund we already talked a little bit about this so I won't go into it in depth and you can see here same with expenditures we're still under that 25% so we're ahead of the anticipated run rate though nutrition services is a little less level loaded than the
032general fund because the majority of their staff are aligned with the school calendar rather than a full fiscal year so consider most of them are paid as they worked which is during the school year and so we would expect them to be just a little bit ahead anyway since we wouldn't be paying those folks in July a couple other things in the nutrition services fund if you look at the actual to actual you can see their supplies and materials went down just a little bit which is good when their commodities entitlement which is the federal government sort of like direct food allocation that they don't have to pay but we still have to recognize went up a little bit in a proportionate amount so that's a good thing that we're seeing there okay student activity
033fund we will look at this here so one thing to note and we'll probably see this a few times especially the next one if there's a little bit of geography change here so in previous years we would strictly limit revenue presentation to athletic activities co-curricular pupil activities and PTO gift activities separately right but the reality is is that we would get PTO or gift activities like from booster clubs that were for athletics and we would get PTO gift activities that were for co-curricular pupil activities right so there was sort of a crossing of which bucket should it go into and so what we did was change the presentation a little bit so it was more clear when we received funds from a PTO booster club or gift that was for athletic activities we would put
034it in this category here so it was still recognized as support from a PTO or booster club but it was for athletic activities same here it was still recognized as PTO booster support but it was for co-curricular purposes instead of just generic PTO gift activities so you can see here this number also went up which is great that recognizes all the support that we're getting from our parent organizations but this is unaffiliated with athletics or co-curricular this is sort of like things that go straight to schools or straight to district purposes but but for some of those subcategories we now have extra presentation just to give us a little more insight as to when some of those PTO parent organization donations are made for specific purposes you can see net year-over-year if you add this
035up this up and this up that that relates to the 175,000 that you see in the note under the student activity on the dashboard all right finally the self-insurance fund go down to fund 65 and again this is the fund that tracks our health insurance program for the umr choice and the umr direct care that we talked about at a previous study session this is our unit actual actual and you can see our premiums went up by about 953 and again i just wanted to make a little correction here under the note you can see the increase was due to increased employee share of premiums that should be er employee or share because like i said earlier the district board the 2025 increases for insurance premiums and didn't pass any on to the employee so
036there weren't any employee impacts so this represents amounts that the the district that we saw on the other page that i showed you that we went up five percent instead of three percent that amount came from general fund as well as any other funds that have salaries and benefits those amounts were paid to the self-insurance fund and that represents an increase in revenue for that fund as well here so that's all i've got i know just one minute over but i want to make sure i answered any questions that you have for me before i wrap up last thing about that employee so is that just a matter of rewarding in under revenue and it doesn't impact numbers in some other field or category uh so if if i'm understanding your question correctly go rephrase
037again let me rephrase so under revenue you said it should be employer versus employee that that particular line item that number that's in that line item uh in that line item it won't change it won't affect something somewhere else because of the name it'll it'll it should match everywhere else am i correct correct so this um as presented is correct so it's labeled correctly here on this particular um statement because this number this 8.4 million dollars represents revenue by the self-insurance fund for both employers and employee um uh uh premiums combined the correction that i was mentioning was on the dashboard i'm just going to pop up the dashboard and point that out down here under self-insurance it says current year premiums increased due to increased ee share of premiums ee represents employee that should
038be er which means it comes from an increase in employer share premiums and so the amount on the financial statement is correct and it's also labeled correctly because it it it it represents the combined amount both from employee and employer it's just the note that we had on the dashboard you said ee and it should have said er because again the the district for that increase entirely there wasn't an increase on employees for the games i just thought when you were talking about it i thought you were referencing that line i apologize for the confusion thank you that's all i've got thank you for your time tonight thank you so much tony at this time i would entertain a motion to adjourn suddenly second all in favor