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: 90 107
Number of Schools: 1 1
FY 2020
Desegregation
0
Federal impact aid
0
Small school adjustment
551,102
Voter-approved budget overrides
0
Total less common revenues per pupil
5,150

Analysis results

Summary of risks identified:

The District’s weighted student count has declined 10 percent since fiscal year (FY) 2017, including a 9.3 percent decline since FY 2020. These declines reduced its student-count-generated revenues and budget limits. By not cutting spending below available revenues in each year (i.e., negative operating margin), the District incurred a deficit General Fund balance of over $130,000 in FY 2017, and the deficit grew to over $417,000 at the end of FY 2019. While the District’s unaudited FY 2020 annual financial report included an increase in its General Fund balance, it still reported a deficit balance of over $300,000. The District’s primary property tax rate has been frozen since FY 2014, in part due to levying for its small school budget limit adjustment. That adjustment has allowed the District to spend, using lines of credit and other borrowing, without reporting any budgetary overspending, but that spending has left its nearly $150,000 reported operating budget limit reserve completely unfunded. If the District continues to spend up to its legally allowed budget capacity, without related revenues, its General Fund deficit may worsen, and it may exceed its borrowing capability.

District response:

The District was not required to provide a response to its identified financial risks as we notified the District of its highest-risk designation in November 2020 based on the most recent financial and student count data. We will begin periodic meetings with the District in early 2021 to discuss more about the actions they have taken or are evaluating to lessen their financial risk. If the District remains in the highest-risk category, we will require a response when this analysis is updated.

Change in weighted student count
-9.3% -10.0%
(1-year) (4-year)
Fiscal year Group A WSC
2021 117
2020 129
2019 117
2018 111
2017 130
Operating budget limit reserve
-4.6% 100.0%
(1-year change) (3-year change)
Fiscal year Balance
2020 $148,624
2019 $155,858
2018 $18,503
2017 $60,277
Capital budget limit reserve
-3.0% 100.0%
(1-year change) (3-year change)
Fiscal year Balance
2020 $120,608
2019 $124,279
2018 $4,935
2017 $10,742
General Fund operating reserve ratio
-31.3% -36.9%
FY 2020 unaudited 2019 audited
Fiscal year Balance Expenditures
2020 unaudited ($338,184) $1,079,670
2019 audited ($417,590) $1,130,856
General Fund operating margin ratio
12.7% -6.8%
FY 2020 unaudited 2019 audited
Fiscal year Revenue Expenditures
2020 unaudited $1,236,595 $1,079,670
2019 audited $1,058,733 $1,130,856
General Fund change in fund balance
31.2% -26.0%
FY 2019 to FY 2020 unaudited 2018 to 2019 audited
Fiscal year Change amount
2019 to 2020 unaudited $153,092
2018 to 2019 audited ($86,262)
Capital monies redirected to operations
0.0% 0.0%
(FY 2021) (5-year average)
Fiscal Year Capital monies Amount redirected
2021 $52,840 $0
2020 $49,490 $0
2019 $42,764 $0
2018 $40,387 $0
2017 $39,853 $0
Small school budget limit adjustment

District's small school budget adjustment is not fully funded because of a frozen tax rate.

Fiscal year Adjustment
2021 $551,102
2020 $551,102
2019 $551,102
2018 $551,102
2017 $551,102
Frozen tax rate

District's primary property tax rate has been frozen since FY 2014.

Receivership

District is not in receivership.