School district financial risk analysisDecember 2020
District
Demographic information 
Less common revenues
| County: | Cochise County | |
| Operational peer group (FY 2020): | 11 | |
| Legislative district(s): | 14 | |
| FY 2019 | FY 2020 | |
| Students attending: | 105 | 101 |
| Number of Schools: | 1 | 1 |
| FY 2020 | |
|---|---|
Desegregation |
0 |
Federal impact aid |
0 |
Small school adjustment |
219,000 |
Voter-approved budget overrides |
0 |
| Total less common revenues per pupil | 2,168 |
Analysis results
The District’s weighted student count has fluctuated since fiscal year (FY) 2017, declining 27 percent since FY 2018, reducing its student-count-generated revenues and budget limits. By not cutting spending below available revenues (i.e., negative operating margin), the District incurred a deficit General Fund balance of over $287,000 by June 30, 2020. The District also overspent its operating budget limit in FYs 2018 through 2020 by more than $100,000. Additionally, the District reported FYs 2019 and 2020 deficits of more than $90,000 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. If the District continues to overspend its allowed budget capacity and food service revenues, using lines of credit or other borrowing to accommodate its cash deficit, the District’s General Fund deficit may worsen. On average since FY 2017, the District redirected 37 percent of its capital monies to operational spending, including 82 percent in FY 2021, to lessen the operating budget overspending. Those redirected monies contributed to the District overspending its capital budget limit in FYs 2018 and 2020. The District’s primary property tax rate has been frozen since FY 2014, limiting the District’s ability to levy to fund its deficit.
The analysis performed shows that in school years 18, 19 and 20, there was over expenditure on our budgets. The District has put into place specific measures to mitigate the negative trends. Following are measures the District currently has in place as well as the amount that is saved because of these actions:
- The District no longer runs a cafeteria. Instead there is a Catering Agreement with Valley Union High School food services. Comparing the amount of money spent by this time last year to this year – FY20 $38,558 and FY21 $18,932.
- The district also has an IGA with Valley Union for use of their gym and their use of our Transportation/Maintenance Supervisor. The District receives $21,000 per year, which pays approximately 37% of the Transportation/Maintenance Supervisor’s salary. This is an ongoing IGA that has been in place for several years.
- The District contracts with a business manager consultant. In FY20, she was paid $18,200. This fiscal year, she will be paid approximately $6,000.00.
- The District did not rehire the paraprofessional position that became vacant this year. The amount of savings is $20,113.00.
- The District reduced the Business Manager’s salary by $3,000.00.
- The District eliminated all stipends given to employees for extracurricular activities. The amount saved is $10,250.00.
- The District is comprised of one K-8 school with one teacher per grade level. At this point, all teachers are certified, which is a difficult task to accomplish in a rural district. However, because of monetary issues, the District will consider combining grade levels which will save the District approximately $54,596.00, without capping the insurance benefits. At this time, it is unclear whether the District is considering collapsing one or more certified positions. It will depend on enrollment numbers projected for FY22.
- Although capping medical insurance is taking the one tangible benefit from the employees, the District will consider capping the amount the District will pay for employees’ insurance. The savings to the District will be dependent upon the cost of the medical insurance in FY22. If the District caps the medical insurance at $7,000.00, it is roughly a $4,000.00 savings per employee. At this time 12 employees who take the health insurance, which would be a $48,000.00 savings in FY22.
- The District will continue the IGA with Valley Union High School to continue to receive $21,000 per year.
- The District will continue the Catering Agreement with Valley Union High School to reduce the cost of food service.
It is difficult for the District to predict whether it will be over or under budget for FY21, although with the District’s budget capacity it will be unlikely it will be under budget.
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.
Change in weighted student count
| -15.6% | -22.7% |
|---|---|
| (1-year) | (4-year) |
| Fiscal year | Group A WSC |
|---|---|
| 2021 | 119 |
| 2020 | 141 |
| 2019 | 147 |
| 2018 | 164 |
| 2017 | 154 |
Operating budget limit reserve
| -14.1% | -100.0% |
|---|---|
| (1-year change) | (3-year change) |
| Fiscal year | Balance |
|---|---|
| 2020 | ($52,573) |
| 2019 | ($46,068) |
| 2018 | ($11,272) |
| 2017 | $36,261 |
Capital budget limit reserve
| -100.0% | -100.0% |
|---|---|
| (1-year change) | (3-year change) |
| Fiscal year | Balance |
|---|---|
| 2020 | ($664) |
| 2019 | $21 |
| 2018 | ($6,445) |
| 2017 | $2,689 |
General Fund operating reserve ratio
| -27.8% | -19.5% |
|---|---|
| FY 2020 unaudited | 2019 audited |
| Fiscal year | Balance | Expenditures |
|---|---|---|
| 2020 unaudited | ($287,896) | $1,033,944 |
| 2019 audited | ($206,257) | $1,055,565 |
General Fund operating margin ratio
| -3.2% | -10.6% |
|---|---|
| FY 2020 unaudited | 2019 audited |
| Fiscal year | Revenue | Expenditures |
|---|---|---|
| 2020 unaudited | $1,002,114 | $1,033,944 |
| 2019 audited | $954,516 | $1,055,565 |
General Fund change in fund balance
| 5.2% | -88.8% |
|---|---|
| FY 2019 to FY 2020 unaudited | 2018 to 2019 audited |
| Fiscal year | Change amount |
|---|---|
| 2019 to 2020 unaudited | $15,754 |
| 2018 to 2019 audited | ($97,015) |
Capital monies redirected to operations
| 81.8% | 37.1% |
|---|---|
| (FY 2021) | (5-year average) |
| Fiscal Year | Capital monies | Amount redirected |
|---|---|---|
| 2021 | $54,751 | $44,807 |
| 2020 | $59,479 | $19,533 |
| 2019 | $66,178 | $24,753 |
| 2018 | $42,950 | $14,442 |
| 2017 | $45,913 | $0 |
Small school budget limit adjustment
District is currently increasing its budget limit with a small school adjustment; see data for adjustment amounts.
| Fiscal year | Adjustment |
|---|---|
| 2021 | $180,760 |
| 2020 | $219,000 |
| 2019 | $180,760 |
| 2018 | $219,000 |
| 2017 | $219,000 |
Frozen tax rate
District's primary property tax rate has been frozen since FY 2014.
Receivership
District is not in receivership.