| County: | Coconino County | |
| Operational peer group (FY 2021): | 2 | |
| Legislative district(s): | 6 and 7 | |
| FY 2020 | FY 2021 | |
| Students attending: | 9,080 | 8,483 |
| Number of schools: | 15 | 15 |
Analysis results
The District’s weighted student count (WSC) has declined 6.6 percent since fiscal year (FY) 2018, impacting its student-count-generated revenues and budget limits. As the District did not reduce spending, General Fund expenditures exceeded available revenues (i.e., negative operating margin) in FYs 2019 through 2021, reducing the District’s General Fund balance over 25 percent during FY 2021. Additionally, since FY 2018, the District has spent almost 90 percent of each of its operating and capital budget limit reserves. The District reported using more than $3.8 million from COVID-19 federal relief monies to maintain its operations in FY 2021. The District further reported it plans to spend 21.6 percent, or $3.7 million, 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. We first notified the District in November 2021 that it is one of the highest-risk districts based on the most recent financial and student count data. We will continue periodic meetings with the District throughout 2022 to discuss the actions it has taken or is evaluating to lessen its financial risk.
The Flagstaff Unified School District faced several financial challenges in FY 2021, including but not limited to, current year funding, declining enrollment, continued increases to minimum wage, and a distance learning adjustment.
The change in weighted student count is at the forefront of our budget decision making each year because we have been in a period of declining enrollment for several years. The strategy used to manage the budget has been to reduce staff through natural attrition. The initial projections for FY 2021 weighted student count were 10,701, but due to COVID-19 and the distance learning adjustment, the weighted student count was 9,702 on the final budget revision. Currently, the Group A weighted student count for FY 2022 is 10,409.
The operating budget limit reserve was much lower than in previous years. This was due to the distance learning adjustment of $2.4 million that would have been available for carryforward had the modification not been required.
The capital budget limit reserve was reduced due to a large planned renovation project at Mount Elden Middle School in the amount of $675,400. Also, this was the last year of the District Additional Assistance reduction in the amount of $709,327.
The General Fund Operating Margin Ratio for FY 2020 does not take into consideration carryforward balances totaling $17,784,520 amongst all the funds. Also, in FY 2020 the District entered into a capital lease agreement to upgrade equipment for energy conservation in the amount of $3,497,098 but the funding in the amount of $7,729,000 is not included in the calculation.
The General Fund Change in Fund Balance for FY 2021 combines five different funds; Maintenance and Operations, Auxiliary, Impact Aid, Indirect Cost and School Improvement. In the largest of these funds, Maintenance and Operations, a required distance learning adjustment reduction of $2.4 million had a significant impact on the ending fund balance amount for FY 2021. We do not anticipate having to make a similar adjustment for FY 2022.
The Flagstaff Unified School District is looking forward to working through this process with the Arizona Auditor General’s Office.
Change in weighted student count
| -3.6% | -6.6% |
|---|---|
| (2-year change) | (4-year change) |
| Fiscal year | Group A WSC |
|---|---|
| 2022 | 10,409 |
| 2021 | 9,702 |
| 2020 | 10,795 |
| 2019 | 10,897 |
| 2018 | 11,139 |
Operating budget limit reserve
| -85.5% | -88.1% |
|---|---|
| (1-year change) | (4-year change) |
| Fiscal year | Balance |
|---|---|
| 2021 | $368,375 |
| 2020 | $2,536,943 |
| 2019 | $2,595,392 |
| 2018 | $4,103,079 |
| 2017 | $3,096,466 |
Capital budget limit reserve
| -51.4% | -88.3% |
|---|---|
| (1-year change) | (4-year change) |
| Fiscal year | Balance |
|---|---|
| 2021 | $443,940 |
| 2020 | $913,607 |
| 2019 | $1,178,632 |
| 2018 | $1,482,297 |
| 2017 | $3,799,689 |
General fund operating reserve ratio
| 7.7% | 31.0% |
|---|---|
| FY 2021 unaudited | FY 2020 audited |
| Fiscal year | Balance | Expenditures |
|---|---|---|
| 2021 unaudited | $5,258,384 | $68,315,831 |
| 2020 audited | $25,506,526 | $82,323,123 |
General fund operating margin ratio
| -3.0% | -8.2% |
|---|---|
| FY 2021 unaudited | FY 2020 audited |
| Fiscal year | Revenue | Expenditures |
|---|---|---|
| 2021 unaudited | $66,302,979 | $68,315,831 |
| 2020 audited | $76,116,406 | $82,323,123 |
General fund change in fund balance
| -26.6% | 7.6% |
|---|---|
| FY 2020 to FY 2021 unaudited | FY 2019 to FY 2020 audited |
| Fiscal year | Change amount |
|---|---|
| 2020 to 2021 unaudited | ($1,905,799) |
| 2019 to 2020 audited | $1,792,888 |
Capital monies redirected to operations
| 0.0% | 0.0% |
|---|---|
| (FY 2022) | (5-year average) |
| Fiscal Year | Capital monies | Amount redirected |
|---|---|---|
| 2022 | $4,147,953 | $0 |
| 2021 | $3,702,763 | $0 |
| 2020 | $3,014,535 | $0 |
| 2019 | $1,607,188 | $0 |
| 2018 | $562,611 | $0 |
Small school budget limit adjustment
N/A - District is too large to be eligible for adjustment.
| Fiscal year | Adjustment |
|---|---|
| 2022 | $0 |
| 2021 | $0 |
| 2020 | $0 |
| 2019 | $0 |
| 2018 | $0 |
Frozen tax rate
District's primary property tax rate is not frozen.
Receivership
District is not in receivership.