| County: | Cochise County | |
| Operational peer group (FY 2021): | 12 | |
| Legislative district(s): | 14 | |
| FY 2020 | FY 2021 | |
| Students attending: | 101 | 84 |
| Number of schools: | 1 | 1 |
Analysis results
The District is among the highest-risk districts for the second year in a row. The District’s weighted student count (WSC) decreased 22.2 percent since fiscal year (FY) 2018, impacting its student-count-generated revenues and budget limits. The District reduced its General Fund spending to be within available revenues in FY 2021, improving its operating margin. However, its spending reductions were not enough to fully compensate for prior years’ negative operating margins, as the District reported a FY 2021 deficit General Fund balance of just over $266,000. The District’s primary property tax rate has been frozen since FY 2014, and the District has not decreased its small school adjustment to stay within the revenue it will generate based on its frozen tax rate. As a result, its annual budget capacity has been partially unfunded for several years, leaving its FY 2021 operating budget limit reserve more than $75,000 unfunded. If the District continues to spend based on budget capacity, using lines of credit or other borrowing to accommodate its cash deficit, the District’s General Fund deficit will worsen. Additionally, the District reported FYs 2020 and 2021 deficits of more than $110,000 in its Food Service Fund from overspending available food service revenues in recent years. That spending should have been included in the General Fund, increasing its deficit. On average since FY 2018, the District redirected 48.3 percent of its capital monies to operational spending, including 71.3 percent in FY 2021, which helped to avoid overspending its operating budget limit, as it did in FYs 2018 through 2020. The District continued to redirect 66.1 percent of its capital monies to operations in FY 2022, while it ended FY 2021 with less than $1,500 in capital reserve. The District reported using over $235,000 from COVID-19 federal relief monies to maintain its operations through June 30, 2021. The District further reported it plans to spend 93.4 percent, or over $144,000, of its remaining relief monies to maintain operations. As these are one-time monies, to avoid future financial risk and to ensure it will be able to spend within its available cash resources and budget capacity when these relief monies are no longer available to spend after September 30, 2024, the District should plan how it will adjust its spending in areas where its remaining monies are used.
The District has improved several aspects of the financial risk areas. Although, we know that we have not improved enough to get out of being high risk in those areas, we are making progress. There was a limited possibility that the school was going to be able to get out of all the high risk areas during the year.
However, the COVID relief monies have made quite an impact in the school both budgetary wise and infrastructure wise. The District used their COVID relief monies in a variety of ways. The District spent $290,364.10 in COVID relief monies in the FY 21 year. Although a great deal of the monies went to salaries, the district also purchased technology to improve 1:1 computer ratios, plexiglass, masks, cleaning supplies to aide in keeping the school clean for students, repairs to HVAC systems, an outside cleaning company to keep the school clean, and an aide to help with health scanning students who are riding the bus.
In the FY 22 school year, the district has increased their student count over the FY 21 student counts.
For the first time in several years, the district has paid off their registered warrants for a short period of time most recently. For several years, the district had a credit line however, JP Morgan decided to no longer allow the district to have a credit line. Now the district has a registered warrant status. In February 2021, that amount was 164,031.48. On November 3, 2021, the district did not have a credit line or registered warrants. We are striving to not have a registered warrant status at the end of FY 22 by ensuring that the district calls down grant monies monthly and that we do not spend more money than our revenues allow. The COVID relief monies have had a substantial impact upon this registered warrant status as well as the district applying for A.R.S. 15-980 monies for delinquent taxes. Additionally, the district did not have an over expenditure on our FY 21 budget!
District continues to have a catering agreement with Valley Union High School for food services. At this time, it appears that this is a break even item for the district. This is ensuring that the food service account does not continue to get worse. The district moved any additional expenditures it had that were attributed to the food service account to the M&O, as allowable. As budget permits, we may continue to try to move money into that account to reduce negative cash balances.
District entered into a Superintendent sharing agreement with Pearce Elementary School District and this is also a break-even item for the district. The district pays $50,000 to Pearce Elementary but receives $50,000 from Valley Union High School for a IGA that includes sharing of business department, transportation supervisor, facilities, etc. The following changes were also possible due to this agreement.
- District no longer contracts with a business manager consultant which resulted in a $6550 decrease in expenditures.
- District moved previous superintendent back to special education director position and moved into a superintendent sharing agreement, saving the district approximately $30,000.
- District reduced business manager salary due to the employee’s duties being adjusted due to shared business office arrangement with Valley Union High School, a savings of $15,000.
District hired a long term sub to fill a FY 22 vacant teaching position, a savings of approximately $40,000. This saving comes from paying a sub a daily rate opposed to a salary along with the cost savings from the long term sub not receiving benefits such as the health insurance stipend. With our average teacher salary being $42,954, the cost to the district is quite close to $60,000 for a teacher. A long term sub costs the district roughly $20,000 per year.
District capped health insurance for employees at $8,000 per staff member, a savings of approximately $3,000 per employee or $36,000.
The District Superintendent and Business Manager will continue to monitor spending and with the Governing Board, will make decisions that will lead to outcomes in the best interest of staff and students. The District Superintendent and Business Manager monitor all spending each month with a goal of approximately $60,000 a month for total of yearly expenditures around $720,000. Our adopted budget capacity is $913,781 and in FY 21 we received 889,199 in revenues. The goal of $720,000 puts us under both areas but also allows us a little flexibility in the event that things happen. The District continues to look at ways to increase student population as well as potential staffing changes.
Change in weighted student count
| -9.2% | -22.0% |
|---|---|
| (2-year change) | (4-year change) |
| Fiscal year | Group A WSC |
|---|---|
| 2022 | 128 |
| 2021 | 115 |
| 2020 | 141 |
| 2019 | 147 |
| 2018 | 164 |
Operating budget limit reserve
| 100.0% | 23.0% |
|---|---|
| (1-year change) | (4-year change) |
| Fiscal year | Balance |
|---|---|
| 2021 | $44,608 |
| 2020 | ($52,573) |
| 2019 | ($46,068) |
| 2018 | ($11,272) |
| 2017 | $36,261 |
Capital budget limit reserve
| 100.0% | -46.0% |
|---|---|
| (1-year change) | (4-year change) |
| Fiscal year | Balance |
|---|---|
| 2021 | $1,452 |
| 2020 | ($664) |
| 2019 | $21 |
| 2018 | ($6,445) |
| 2017 | $2,689 |
General fund operating reserve ratio
| -33.9% | -20.7% |
|---|---|
| FY 2021 unaudited | FY 2020 audited |
| Fiscal year | Balance | Expenditures |
|---|---|---|
| 2021 unaudited | ($266,575) | $786,193 |
| 2020 audited | ($218,272) | $1,052,003 |
General fund operating margin ratio
| 11.6% | -1.4% |
|---|---|
| FY 2021 unaudited | FY 2020 audited |
| Fiscal year | Revenue | Expenditures |
|---|---|---|
| 2021 unaudited | $889,324 | $786,193 |
| 2020 audited | $1,037,052 | $1,052,003 |
General fund change in fund balance
| 7.4% | -5.8% |
|---|---|
| FY 2020 to FY 2021 unaudited | FY 2019 to FY 2020 audited |
| Fiscal year | Change amount |
|---|---|
| 2020 to 2021 unaudited | $21,321 |
| 2019 to 2020 audited | ($12,015) |
Capital monies redirected to operations
| 66.1% | 48.3% |
|---|---|
| (FY 2022) | (5-year average) |
| Fiscal Year | Capital monies | Amount redirected |
|---|---|---|
| 2022 | $45,373 | $30,000 |
| 2021 | $58,896 | $42,000 |
| 2020 | $59,049 | $19,533 |
| 2019 | $66,178 | $24,753 |
| 2018 | $42,950 | $14,442 |
Small school budget limit adjustment
District's small school budget adjustment is not fully funded because of a frozen tax rate.
| Fiscal year | Adjustment |
|---|---|
| 2022 | $180,760 |
| 2021 | $180,760 |
| 2020 | $219,000 |
| 2019 | $180,760 |
| 2018 | $219,000 |
Frozen tax rate
District's primary property tax rate has been frozen since FY 2014.
Receivership
District is not in receivership.