Cave Creek Unified approves FY 2024-25 annual financial report; special-education costs rose

The Cave Creek Unified School District governing board on Oct. 14 approved the district's Annual Financial Report for fiscal year 2024-25 after a presentation from district finance staff that outlined revenues, expenditures and next steps for the budget.

Dr. Pletnick, the district finance presenter, told the board the AFR will be filed with the state the day after the meeting and described the district's revenue mix: "66% of our revenue was from that local tax base, 7% from the federal government ... and then 27% from the state." He said the district's actual spending for FY 2025 was just under $31,000,000, down from about $32,000,000 the prior year.

The presentation emphasized that instruction and related student support make up the largest portion of spending and that special-education costs increased. "We are seeing quite a bit of an increase" on the special-education side, Dr. Pletnick said, attributing much of that rise to purchase services such as contract teachers and tuition to outplacement schools; he said that increase totaled roughly $850,000 between FY24 and FY25.

Why this matters: the AFR is the official accounting of how public funds were spent last year and feeds into the district's budget capacity calculations. Officials said the AFR will produce a Budget 75 report from the state in November that will show how much the district can carry forward into the current year; the board was told a December budget revision will follow "if needed." In response to a board question, Dr. Pletnick gave a ballpark carry-forward estimate as "somewhere in the 3 millions." He also warned that reductions in federal grant funding could force more local maintenance-and-operations dollars to cover programs.

Board discussion focused on where revenue actually flows and the composition of spending. Member Walker asked whether the district's local tax receipts are partially shipped to the state under the qualifying tax rate; Dr. Pletnick explained that some tax revenue collected to meet budget capacity is remitted to the state under that mechanism. Board members also pressed on CTE (career and technical education) funding and the district's limits on using certain CTE funds for preexisting programs (what the presenter called "supplanting"). Dr. Pletnick said the district uses a CTE worksheet in the AFR to show how much is from district M&O money, federal and state grants and the designated CTE funds (the transcript referred to the ‘‘5.96' fund").

Action taken: the board voted to approve the AFR as presented. The motion was moved by administration and seconded; President Greer called for the vote and recorded all members present as voting in favor with none opposed. Four governing-board members were present for the action (one member, Jackie Ulmer, was absent): Member Moore, Member Walker, Member Fortney and President Greer.

What happened next: the presenters said the district will receive the state Budget 75 report in November and may perform a budget revision in December depending on carry-forward results and school-closure impacts.

Clarifying details: the presenter said the district's revenue shares were 66% local, 7% federal and 27% state; total expenditures reported for FY25 were just under $31,000,000 (down from about $32,000,000). The reported $850,000 increase in special-education purchase services accounted for much of the special-education cost growth. The carry-forward was given in the meeting as a ballpark "somewhere in the 3 millions."