001Good evening and welcome to the St. Ray Valley Schools Board of Education study session. Thank you. Good evening members of the board. I'm pleased tonight to present the district's financial statements for the month of April. Tony can I take the role? Sure you bet. Mrs. Bads absent. Mr. Berthold. Present. Mrs. Gilligan. Here. Mrs. Horanek absent. Mr. Lechuga. Here. Mrs. Ragland. Here. Mrs. Weiss. Here. And this is not on Webex. This is just being recorded audio. Yeah. Okay great. Thank you Christy. Sorry about that. So I'm happy to present the district's financial statements. This is for the month ending April 2025. This is the 10th month of our 12-month fiscal year which ends June 30th. So we're about 83% of the way through the year here at 10-12. Wanted to talk about a few things that
002we've already heard about before but also we have for the first time some yellow triangles so we have some concerns that we want to talk about on our Nutrition Services Fund that we will I will touch on in just a little bit after I get done with some of the other funds. This dashboard as you've seen is passed out from members of the board to give a quick glance of the various statuses on each of the funds. The grayed out funds I won't be touching on tonight unless you have any specific questions you'd like me to talk about. All the ones that are highlighted in white I'll touch on those briefly especially the Nutrition Services concern that we're talking about. I'll start with the general fund. I'm going to go to the balance sheet for
003the general fund and for recording purposes any members of the public we have the financial statements they'll be posted on the website and they're in the board packet as well so I'm steering here at the point so the board members can see on their screens but these same pages are an integral part of the financial statements not just the dashboard and so I'm going to be going through and pointing out different items on each of the pages. So right now we're looking at page 6 which is the general fund balance sheet as of April 30th 2025. This represents a yearly comparison year over year so it's 2024 April 2024 compared to April 2025 and what we like to do in this circumstance is just highlight any large differences between the two columns just to point
004out what may be going on what's the the explanation there and so the first one you can see is cash investments. At this time last year we had about 84.8 million and this year we've got about 147.8 million dollars. It's a pretty big increase in our cash and investments that's due to a couple of things that we've talked about earlier so it should be no surprises here but the three primary drivers of that is number one the state changed their payment schedule for equalization. So remember our total program is funded both local property taxes and state equalization payments. The state actually accelerated those payments this year due to a new law to help with cash concerns for districts all across the state. We didn't have any of those cash concerns but we were still beneficiaries
005of those accelerated payments and so the state has sent us more this year comparatively than they have last year and so that's what that's why you're seeing that large increase in cash investments. That's the majority of it. By this time we would normally have only received 10 out of 12 payments but actually we've received all of our payments now the entirety of our equalization payments by this time this year because the rest of the year is going to be mostly from property tax receipts based on that cycle. So the cash investments increase is mostly due to that as well as the other two items that we talked about ad nauseam which was the reimbursement for the land sale as well as the iPad sale that happened at the beginning of the year that was a
006cash infusion that didn't happen last year. The next item I wanted to bring up was our decreases in taxes receivable here as well as the corresponding taxes on un-earned revenues. That is legitimately a straight-up decline in the amount of tax receipts that we're going to be getting from our community this year and that's because as you know we rode down that increased assessed valuation bubble from last year to this year. It was a pretty big decline it was expected it was from that oil and gas bubble that happened two years ago and so this year we're seeing the the effects of that because we held our mill levies steady for our community. We did not increase taxes and in fact as you can see taxes decreased from our community overall from last year this year
007across all of our different mill levies so that's our total program our mill levy, our mill levy override, as well as our debt service levy which isn't reflected here it's in our fund 31 but still applies so just wanted to point that out that is a that is a legitimate decline in our our tax receipts we think that that's Justin Patrone may introduce the budget for next year we'll talk about what our expected trends are for tax receipts next year. This other item right here you can see there was nothing there at this point last year and there is a 1.1 million dollar liability there this year that is a as a result of a payment from the Broomfield Urban Renewal Authority that they made to us in regards to an IGA that we had
008in place for them. It accounts for quite a few years of amounts that we believe they should have been paying and it's kind of a reconciliation for about 10 or 15 years of activity but the reason we have it in a liability account is because there still is some concern about whether or not the exact terms of the IGA are reflected in that payment and so we believe some of that actually is going to need to go back that they may have made us an overpayment so for the time being we put it on our balance sheet saying hey we're not going to recognize this entire thing as revenue yet we're going to recognize it once we figure out exactly how much they owe us and send the rest back to them so we've been
009in talks with them emails back and forth spreadsheets and trying to verify numbers and talking to their their team about the terms of that IGA to make sure that all the terms are clear that we can resolve this back payment and get the amount recognized that we want that we that is owed to the district get the amount back to the Bureau that's theirs and then make sure that we've got a good plan in place going forward so that we're getting consistent amounts each year. This seems like a kind of a large amount but remember this is a multi-year reconciliation Bureau or sorry Broomfield only accounts for about half a percent of our entire assessed valuation in the district and so it's a really really tiny sliver so based on the terms of this IGA
010going forward we'll probably only be seeing in the tens of thousands of dollars a year once everything's reconciled and they're they're adhering to those payments on an annual basis. You can see here at the bottom of the balance sheet we've got about a hundred and eighteen point five million dollars in our reserves as of April 30th 2025 so we've got two months left to get up to where our budgeted fund balance is expected to be. Our budgeted fund balance was I think about 160, it's on the next page, just so I'm not thinking from memory here I want to get the wrong number. Our budgeted fund balance was a hundred and sixty point one million right here and right now we're at one eighteen point five so that means that we're expecting to get at
011least forty one and a half million dollars in revenues in excess of our planned expenditures over the next two months and I think we're going to exceed that so typically we outperform our budget often between ten and fifteen million dollars and again Justin Patrone will talk a little bit later but our projected ending fund balance is actually closer to about 174 so we'll get that 41 plus another 14 or so in the next two months in excess of the expenditures that we're planning. Any questions on the balance sheet before I move on to the statement of revenues and expenditures? Alright so this is the general funds statement of revenues expenditures and changes in fund balance and it represents again similar to the last schedule a year-over-year comparison so this is July to April last year
012actuals and July to April this year actuals and then we take a look at any of the dollar variances and see if anything is unusual take a look at trends and try to explain any questions so we've highlighted a few items right off the bat that we know about first of all is the large increase in equalization and we I explained that earlier that's related to the timing change in the payment schedule from the state other items here are the preschool you can see there's a seven hundred and seventy one thousand dollar decrease in preschool revenues last year compared to this year and that's related to a change in how the UPK program reimburses us previously they were reimbursing us on an advanced basis and now they reimburses us on an arrears basis so they
013wait for us to certify the students and then send them a bill essentially and then they pay those amounts whereas previously they would pay us based on anticipated slots and so now we're operating in arrears you're going to see a year-over-year difference in the preschool revenues but we do expect to collect some additional amounts as we get those final payments and then as a result of our change in preschool programming for next year from four to five days we're seeing some increased enrollments and so I expect next year we're going to see and yet another increase in year-over-year preschool UPK revenues this next item was the build America bonds or Babs rebates this was from the 2010 B bond issuance that was incentivized by the build America bond program back then they actually send us
014a rebate based on the amount of interest that we have outstanding page here and so we get about 1.4 million to the general fund doesn't even need to go to the debt service fund goes right into the general fund for operations for us with that outstanding debt as that debt starts it gets paid down so will this reimbursement but for now we're getting about 1.4 million for at least another few years here and we get those payments in two equal installments as we submit our interest payment schedule which is every December and June and so you can see we've only received a half of that right now the other half will come later but the reason I want to point this out was because previously we had a discrepancy here because we were waiting on
015one of those IRS payments for the battery bait and that has been received now so now you're seeing no difference between year-over-year because we've received one payment this year this year this time last year as well as this time this year and then we expect to get another payment once they process that second return that we've submitted so that's just a resolution from a previous item that I've mentioned in some previous months and so I was happy to happy to point that out that we've finally received that other federal sources this difference is the timing of National Forest Service payments that we get they reimburse some amounts for the Pawnee grassland area in Weld County of which we are apart and so we get a share of that and that's related to a timing a
016timing difference from last year compared to this year in terms of how that was posted and recognized this decrease here of nine hundred and eighty one thousand dollars in supplies materials that would seem unusual because your prices are going up generally we're spending more on the same items due to inflation so we dug into that and the reason that you see that decline is actually a geography change in some of our county practices what we have to do now as a result of some new accounting rules is record what are called spit us which are subscription based information technology agreements what that is is like a license for the use of infinite campus for instance or the license for our use of infinite visions our accounting system all that stuff every time we go in
017turned into a multi-year agreement with those we the accounting rules stipulate that we need to treat them kind of like a lease because ultimately it's an obligation that we're gonna be paying those in future years and similar to how we have to record leases now when we enter into those agreements we have to record that as an expenditure in capital outlay as well as a other financing source so that's this line right here and so every time we see a new spitta or a lease you're gonna see a new hit for the entirety of the net present value of that transaction on to capital outlay as well as leasing sources those are anomalous to me I think they don't give a good helpful intuitive recording of our transactions our expenditures and so I'm gonna have
018to explain this sort of over the years as we go and say okay this is inflated because of these bidders every time we enter into a lease you know it's gonna sort of pop that number on a one-time basis a really good example of this is that if you see last year we had a financing source of 22.8 million dollars and this year it's only 3.2 million same with capital outlay 24.4 million versus 3.7 million if you recall last year one of the largest leases that we entered into was a new set of iPads for our students and due to this accounting rule we were required to again record the entirety of the net present value of that transaction last year but we didn't enter into a new iPad lease this year so it doesn't
019occur this year so it's frustrating accounting rule for me because it makes it a little less comparable a little less actionable data for you the public and for me and so that's something that I'll have to continue to explain so anyway back to this supplies materials some items in the previous year that would have been recorded as supplies are now being treated in this new fashion and so they're now occurring in this capital outlay line as well as this other financing source line and so that's what's happening there on to other so this other five hundred eighty four thousand that's a result of increased swap with holdings spoken of that earlier but that's also relayed directly related to the change in the equalization payment schedule because they take a little bit of swap funds out
020of our equalization each month and so it gets recorded here and then lastly you talked about this before this that 4.1 million dollar reimbursement from the building fund for the reimbursement of the land purchase so here's that one eighteen point five again we spoke before that's going to work its way up to 174 by the end of this year on to our current year budget to actual just a few things I'd like to highlight here number one is our investment income so we're about eighty three percent of the way through the year and we are now a little more cash heavy than we were last year because of the equalization payments and so we've already received about ninety two percent of our budgeted investment income which infers that we're a little on track to outperform
021that's going to make a little more investment income than we had planned which is welcome news and that's built into that 174 projected ending fund balance that I spoke to earlier one other thing here I wanted to mention was our equalization payments so you can see here we're over a hundred percent of our budgeted equalization payments the reason why that is is because as I mentioned earlier we've received all those payments but we actually have to still transfer a few of those amounts off to the risk management and capital reserve fund as you know we do that and fund those amounts and so the accounting team hasn't done that because they usually do that on a monthly basis so because equalization has been front-loaded a little bit we see we actually are over budget in
022terms of well better than our projected revenues by a little bit by about 2.4 million dollars and then by the end of the year we'll make those accounting adjustments do those allocations to risk management and cap reserve that number will come back into spec. Hey Tony. Yes. Is that equalization like expected to continue the accelerated payments? I think I may be asked this before but I'm just curious about. So what they did is they actually changed the law and unless someone were to come forward and change the law back you know repeal that particular statute those accelerated equalization payments are anticipated to continue and and what that does is remember we talked a lot about in previous years the interest-free loan program because of the tax cycle the property tax cycle what would happen is
023districts would be spending their reserves down down down down down they would get one-twelfth of equalization payments each month and by the time January or February rolled around they had run out of reserves in order to make other payments because taxes don't start coming in until the spring in February in March and then in May and June and so what they had to do was borrow from the interest-free loan program at the state level in order to make payroll and have the capital needs to provide for operations. St. Brand has been fortunate to have a higher fund balance so we haven't had to take advantage of the interest-free loan program but a lot of other districts I think have been helped out by this by this law and again I haven't heard any talk or
024any rumors about them repealing it. Thank you. I did want to talk a little bit about equalization excuse me not equalization our transfer to cap reserve and risk management in just a moment I did want to pause and ask if there were any questions on the general fund before I moved on. Okay great no other concerns from our standpoint in the general funds I'll move on to the risk management fund this is fund 18 a risk management fund year-to-date actual to actual you can see here a couple of little differences year-over-year number one is our our professional services are up a little bit that is where we put all of our our premiums so premiums for our liability insurance and workers comp and all that goes into here and that's just more expensive year-over-year there's
025no other way to say that however offsetting that a little bit is our claims our claims are down by about $685,000 that's related to timing as well as actually a better claims experience and I apologize I said the wrong label when I was mentioning this earlier I said professional services that is our self insurance pool line that's where those premiums lie one other item that you can see is different from last year is this right here this is back to another one of those spitas or subscription based information technology agreements established we established that in the general funds and due to a new software program that we're using for vendor management on to the capital reserve fund I'm on page 21 now this is again our year-to-date actual to actual for cap capital reserve a
026couple of differences here that I wanted to mention was this decrease from the general fund this is related to last year there being a couple of one-time projects that we funded by this time last year and this year those projects didn't weren't exist they weren't established or identified and so they got their normal formulaic allocation from the general fund and so all that is is just the absence of some one-time allocations to the cap reserve plan from last year the other thing I wanted to mention here is our expectations for next year so we're going to see this drop a little bit as a result of the board action item that I brought to the last right of the board meeting and with a one-time exemption of our board policy requiring the transfer of dollars
027from the general fund to the cap reserve fund we're going to reduce this number their formula allocation by about five and a half million dollars just as a one-time action to bolster the general funds spend down and support our programming there as well as our compensation expenditures in the general fund so so you'll see their formula their base for me allocation well usually is about nine million or that's actually going to decline by about five and a half just next year we've talked to Brian and his team they're still going to be fine being able to address all the capital capital cap reserve needs that they would normally spend out of this one and they're going to be very busy with building fund projects right for the bond and so so they they're they're set
028up and that will help bolster the general funds and then once again not to defer too much to Justin but he's going to touch on that as well as it's one of our revenue items in his his budget all right on to community education fund 25 so our actual actual here we can see a couple anomalies number one is this CS central office this is where in the prior year the community schools program recognized a child care development block grant that they received that has since sunset expired in the current year and so that's why there's fewer revenue dollars there this year the other item you can see is a three hundred forty eight thousand dollar increase compared to this time last year in community grants and awards and this is attributable to our great
029grants team where Sontag and team on going after our community partners and setting up some some great collaborations with them and them have helping with our AAA program our infinite excuse me our innovation center as well as a p-tech programming some great private and corporate foundations that are supporting those and this is where we track those those revenues is here in the community had fun all right it's like we've got about seven or eight minutes left and so I'm just going to jump down to our nutrition services fund as I mentioned earlier we have some yellow triangles and again this is as we indicated at the bottom in the legends matters of slight concern we're monitoring closely and as I alluded to previously our nutrition services fund is funded by three things primary is the
030right now is the healthy school meals for all program from the state the other is the national school lunch program and then the third is any meal charges that the students may maybe charge for ala cart items because right now all regular meals are free for our students and so any meal charges would be for additional food that the kids buy aside from their females they also get some commodities amounts from the federal government as well it's not a substantial source so one things I wanted to mention and this is the reason for the yellow triangle is that the healthy school meals for all program at this stage when it was originally identified and approved by the voters in Colorado had some projections in it for how much it would receive in revenues to fund
031the program as well as how much it would need to pay out in expenditures for participants in the program and unfortunately both of those were off a little bit the revenues were overestimated a little and the expenditures were underestimated a little bit as you know that's not them I like to do here with our same brain budget but unfortunately the actuals are coming to fruition at the state level and they don't have enough money to sustain healthy school meals for all so what the legislature did and when faced with this issue is decided to go out for an additional ballot measure this November asking voters to be able to retain some revenues that they are taking in for the program but have to normally return under the Tabor rule and be able to retain that
032to help bolster the program if that passes great we believe healthy school meals for all will maintain be maintained in its current form at least for a little while but if it doesn't pass then what happens is the healthy school meals for all program will continue but it won't be for all anymore it'll unfortunately only be for a certain subset of schools that meet a requirement called the community eligibility provision requirement or status at the federal level the community eligibility provision for a for school means that at least 40% of the students in that school qualify somehow as being under poverty free and reduced eligible Medicaid snap that kind of thing if they reach that threshold of 40% then that school will qualify under the community eligible eligibility provision it's those schools that will continue
033to be funded by the healthy school meals for all at the state level in other words the federal CEP will pay for this much and then healthy school meals for all will pay for the remainder amount so that those schools will be fully funded and allow all the students to continue to be fully free lunch eligible the rest of the schools however that don't qualify for the community eligibility provision at the federal level won't get funded by healthy school meals for all either necessitating potentially meal charges for those families so so that's something that's on the horizon right now and it's a to-be-determined that we will find out what happens in November 2025 at that point we'll have to have some conversations and we'll probably have some conversations before then about contingency plans what we
034want to do how we communicate with our community what our plan is for the mid-year change because that's what it would be if it does not pass it would be a mid-year change and then what we do for future years and how that affects our nutrition services funds so so that's the primary concern that's why we wanted to make sure we spent a little bit of time on that and that I could answer any questions that you have on that before I wrap up tonight. Carfame, if I'm wrong, you said before that we have eight schools that would qualify under the new provisions. Yes thank you I appreciate mentioning that I neglected to mention our team did some some research and it looks like all but I think it was nine just I think it
035was nine right I think it was nine school all but nine schools currently qualify under the community eligibility provision so that means only nine schools in the district would end up having to revert to the self-pay for meals and again students at those schools could still individually qualify for poverty and for and get free and reduced lunch that's not like all the kids would be it would only be the the families that don't qualify under the And so the way that that happens it's not because each of our each of the remaining schools all qualify for that 40% and what they allow us to do is some pooling of regions of schools and if when you include a group of schools they cross that 40% threshold they will become all qualified for CEP so I
036didn't want you to get the impression that we have the vast majority of our schools at 40% or higher of free reduced though we are close to that but I did want to make sure you understood that was pooled instead of school by school for the CEP qualification yeah thank you for mentioning that all but nine at this point again that could change in the future I've also heard some rumors about the federal government maybe changing the threshold for the community eligibility provision it was originally considering they were considering dropping that 40% to 25% which would make more schools qualify for it I've also heard some rumors about them considering increasing the percentage to say 60% which would be fewer qualify for it so what remains to be seen is if the voters don't approve
037that ballot measure in November what the lay of the land will be at that point and when they take into account all the current CEP schools will there be enough funds to make sure that that program is sustainable going forward and what our plan would be for our self-paying families well that's all I have for tonight unless there's any other questions thank you so much Tony thank you brings our study session to a conclusion this time I would ask for a motion to so move second all in favor