School district financial risk analysisDecember 2020

District

Demographic information

Less common revenues

County: Pinal County
Operational peer group (FY 2020): 6
Legislative district(s): 8
FY 2019 FY 2020
Students attending: 596 560
Number of Schools: 2 2
FY 2020
Desegregation
0
Federal impact aid
0
Small school adjustment
0
Voter-approved budget overrides
0
Total less common revenues per pupil
0

Analysis results

Summary of risks identified:

The District’s weighted student count has declined 25 percent since fiscal year (FY) 2017, reducing its student-count-generated revenues and budget limits. By not cutting spending below available revenues (i.e., negative operating margin), the District diminished its General Fund balance while also reducing its operating budget limit reserve. In each of FY 2019 and 2020, the District’s General Fund balance decreased by more than 35 percent. In FYs 2018 and 2019, the District’s operating budget limit reserve decreased 61 percent. In FYs 2019 and 2020, the District redirected 100 percent and 57 percent, respectively, of its capital monies to operational spending to avoid overspending its FY 2019 operating budget limit and help replenish its FY 2020 operating budget limit reserve. However, those redirected monies have contributed to a 48 percent reduction in its capital budget limit reserve since FY 2019. In addition, the District’s primary property tax rate has been frozen since FY 2019, leaving the District vulnerable to future unfunded budget limits.

District response:

The Mammoth-San Manuel area used to be a thriving community with many small businesses in addition to the mine. Since 1999 when the BHP mine closed the school district has slowly dropped in enrollment with more low income families and retirees moving into town. The Mammoth-San Manuel USD has over the past few years consolidated to one school building, Mammoth-San Manuel Prek-12. The District Governing Board closed Gardner Middle School in 2000, Avenue B Elementary closed in 2009, Mammoth Elementary closed 2018, and lastly First Avenue Elementary closed in 2019 when we felt our enrollment had finally stabilized to a number that was not going to increase given the lack of industry in our community. We have closed 4 of the 5 school buildings in our town leaving the town looking even more desolate. The district still in possession of these buildings has to maintain the buildings and its grounds, which requires man power. This is in addition to the inoperable town’s community swimming pool which we inherited from BHP. We are currently working with the county elections to pass a vote in 2021 to sell our unused buildings. Given the location of the town on a dead end road, the marketing of these buildings will be difficult, but the attempt is there.

In 2018 we had to begin working on the one district school building we were not closing to make it appropriate for all ages and to accommodate the needs of all students moving into the building. Capital money had to be spent in this area and because of the enrollment loss we also had to move money to make up for the loss of students; $180,409 last year and so far, this year we have had to find $120,000 to move in our budget with more to come. We have cut back on our administration expenses and with less students we have less teachers. We do however have to meet the increased adaptive education students in our district, increased minimum wage, and the need to continue to be competitive with other larger districts to recruit teachers to our area where we are the only industry in town; it has become increasingly more difficult. The loss of federal funding has also exacerbated the budgeting issue. Since 2013-14 we have had a loss of $316,821 in Title and IDEA funds . To add to our problems we are maintaining an older building (1956) which is taking more and more work.

We have worked on making our Community Schools and Food Service Departments more self-sufficient so the district is not pushing money in that direction, we have applied to more grants given we have lost money in our Federal grants. We have also worked with energy management programs and installed solar power to help reduce our energy costs. It doesn’t help that the Arizona Tax Commission has frozen the tax rate leaving us at a disadvantage. We can’t raise taxes to generate property tax revenue and BHP Copper Mine took the tax base with them when they left. With low income families moving into the area the likelihood of passing a bond or override is non-existent.

We have been awarded, through ASBO and the GFOA the financial award, Certificate of Excellence in Financial Reporting. We have always carried money over for the next year and not had to borrow money to run our schools.

Change in weighted student count
-8.0% -24.5%
(1-year) (4-year)
Fiscal year Group A WSC
2021 686
2020 746
2019 790
2018 889
2017 909
Operating budget limit reserve
64.5% -53.3%
(1-year change) (3-year change)
Fiscal year Balance
2020 $209,878
2019 $127,567
2018 $327,215
2017 $449,737
Capital budget limit reserve
-48.2% -47.4%
(1-year change) (3-year change)
Fiscal year Balance
2020 $90,298
2019 $174,169
2018 $301,567
2017 $171,557
General Fund operating reserve ratio
6.6% 18.7%
FY 2020 unaudited 2019 audited
Fiscal year Balance Expenditures
2020 unaudited $313,685 $4,737,945
2019 audited $982,918 $5,258,800
General Fund operating margin ratio
-4.2% -13.4%
FY 2020 unaudited 2019 audited
Fiscal year Revenue Expenditures
2020 unaudited $4,548,872 $4,737,945
2019 audited $4,639,076 $5,258,800
General Fund change in fund balance
-35.4% -36.9%
FY 2019 to FY 2020 unaudited 2018 to 2019 audited
Fiscal year Change amount
2019 to 2020 unaudited ($171,816)
2018 to 2019 audited ($574,612)
Capital monies redirected to operations
0.0% 46.6%
(FY 2021) (5-year average)
Fiscal Year Capital monies Amount redirected
2021 $299,707 $0
2020 $315,789 $180,409
2019 $356,415 $356,415
2018 $260,858 $0
2017 $264,188 $200,000
Small school budget limit adjustment

N/A - District is too large to be eligible for adjustment.

Fiscal year Adjustment
2021 $0
2020 $0
2019 $0
2018 $0
2017 $0
Frozen tax rate

District's primary property tax rate has been frozen since FY 2019.

Receivership

District is not in receivership.