Antelope Union High School District (District) is at high risk of not being able to operate within its budget constraints and cash resources for the third year in a row. As shown on the measure cards below, the District’s high-risk status is due to its operating budget limit reserve, General Fund operating reserve ratio, General Fund operating margin ratio, General Fund change in fund balance, capital monies redirected to operations, and receivership status.

From fiscal years (FY) 2018 through 2023, the District overspent its operating budget limit every year and overspent its capital budget limit in 4 of the 6 years. As a result, the Arizona State Board of Education appointed the District a financial receiver in June 2023, in accordance with Arizona Revised Statutes §15-103. While operating under the receiver, the District ended FYs 2024 and 2025 with positive operating and capital budget limit reserves, including increasing both its operating and capital budget limit reserves by over 100% between FYs 2024 and 2025. However, some risk still exists based on the District’s historical overspending practices. That risk will lessen each year the District continues to operate within its budget constraints.

The District redirected a substantial percentage of its capital monies to operational spending in FYs 2022 through 2024, which lessened its operating budget overspending in FYs 2022 and 2023, and contributed to its positive FY 2024 operating budget limit reserve. However, redirecting capital monies to operational spending reduces resources available for future capital needs and contributed to the District’s capital budget overspending in FY 2023. The District did not redirect any capital monies to operational spending in FYs 2025 and 2026, to date.

While the District’s budgetary risks are decreasing, the District continues to experience risk related to its cash resources. The District has incurred a deficit General Fund balance from FYs 2017 through 2023 due to its historical budgetary overspending in those years. Since operating under the financial receiver, the District has made some improvements to its General Fund measures. Specifically, FY 2024 revenues exceed expenditures by 5.4% (i.e., positive operating margin), which reduced the District’s General Fund deficit in that year.

However, the District’s FY 2025 General Fund measures appear worse as the result of a property tax judgment the District paid during the year. According to the District and confirmed by the Yuma County School Superintendent’s Office, the Yuma County Treasurer withheld a $1.2 million property tax judgment payment from the District’s FY 2025 revenues, resulting in FY 2025 spending exceeding available revenues (i.e., negative operating margin) and worsening the District’s deficit General Fund balance from $(302,117) to $(1,074,353), leaving less cash resources available for current and future needs. The District has already begun to recoup the tax judgment amounts that were withheld and in FY 2026, the District received $789,200 as a State aid payment adjustment. The District also assessed a special tax levy in FY 2026 to recoup the remaining tax judgment amount, which it will begin to receive in calendar year 2026.

Further, the District has registered warrants with the County Treasurer for several years to accommodate spending with its cash deficits, incurring balances of approximately $756,000 and $1,700,000 at the end of FYs 2024 and 2025, respectively, costing the District over $55,000 and $38,000, respectively, in related borrowing costs in those years. As of December 2025, the District has reduced its registered warrant balance to approximately $434,000.

While the District has stopped overspending its statutorily prescribed budget limits, it continues to exceed its available cash resources. The District must continue to identify and implement appropriate risk-mitigation measures to prevent future overspending and eliminate its General Fund deficit balance. See the District’s action plan below.