District financial snapshot: $23.8M M&O budget, capital reserves, and state court ruling on school facilities funding noted

The district presented its first monthly financial report for the year. Miss Davis reported the district’s maintenance and operations (M&O) budget at $23,800,000 with year-to-date actual expenditures of about $2,800,000 and encumbrances of about $11,700,000, leaving a current budget balance of roughly $9,200,000. Miss Davis noted encumbrances represent obligated but not yet spent funds, principally salaries and benefits. She said the adopted budget did not include a 2% inflation allocation the legislature passed after June 30; a revised budget will be prepared by December to reflect that change.

The district’s DAA (capital) budget is $3,100,000. Administrators reported $588,000 in actual expenditures, $680,000 in encumbrances and a remaining balance of about $1,800,000, funds intended primarily for facilities repairs and maintenance. Miss Davis and other administrators said they had purchased a special education bus recently and are planning a bus-replacement schedule amid tight capital funding.

Administrators also reported that a state court this summer found Arizona negligent regarding capital finance for school facilities. The superintendent and staff said the ruling came after an eight-year legal battle and that the legislature is likely to appeal; administrators noted an estimated shortfall of roughly $137,000,000 above what the state allocated for the year and said school facilities funding will remain constrained.

Miss Davis said she will prepare the Annual Financial Report (AFR) and bring it to the board on Oct. 2 and that the district anticipates a meaningful carryforward in both M&O and capital funds. Board members asked that transportation replacement schedules and the capital plan be shared when available.

No board action was required at this item; the report was informational.