Roaring Fork schools finance leaders urge caution on dipping below fund-balance minimum

Roaring Fork School District No. Re-1 officials warned Tuesday that tapping reserves below the district's board-set minimum would heighten financial risk and could force the district to borrow substantially more under Colorado's interest-free state cash-flow loan program.

Superintendent Dr. Anna Cole introduced a fund-balance presentation and said the district will not recommend drawing below the minimum balance required by board policy and state law. "You are not going to see that as part of our recommended solutions," Cole said as she described the supplemental-budget work underway to address midyear shortfalls.

Chief Financial Officer Christy Chicoine and Anthony Singh, an RBC Capital Markets administrator who oversees the state's cash-flow loan program, presented how a lower starting cash balance increases the size and frequency of state loans the district must take to cover payroll and operations between major local property-tax disbursements.

"School districts get paid effectively three times a year," Singh said, describing the timing mismatch districts must float from July payroll to March property-tax receipts. He and Chicoine showed that because of timing and revenue shifts, a smaller starting balance multiplies, rather than linearly increases, the amount the district must borrow through the state program.

Chicoine walked the board through the district's calculation for the minimum fund balance: 10% of adopted general fund revenues plus the TABOR (Taxpayer's Bill of Rights) emergency reserve. Using the district's budget figures, the policy minimum is roughly $12.11 million. Chicoine said audited balances put the district's available general fund cash near $12.57 million for June 30, 2025 (excluding carryovers), and that planned uses for self-insurance and supplemental items are expected to reduce that amount.

Board members questioned how large borrowing might become if the district continued to spend down reserves. Singh said a hypothetical continuation of current spend-down patterns could increase the district's estimated state loan need from about $15 million to as much as $35 million in a future year, which would place the district among the program's largest borrowers. He warned that larger, repeated borrowing could attract rating-agency scrutiny and raise borrowing costs for future capital financing.

Board members pressed for clarifications about TABOR, loan repayment timing and the effect on bond ratings. Chicoine and Singh said the TABOR reserve (3% set aside by the Colorado Taxpayers' Bill of Rights) is not normally touched and that loan repayments are expected when property-tax payments arrive in March, May and June. Singh said the loan program has existed in similar form for decades and that districts in the program have repaid loans in past recessions, but cautioned against assuming the program's terms are immutable.

The superintendent and CFO recommended not changing the district's fund-balance policy now and instead using the supplemental budget and next year's general budget to stabilize reserves. Chicoine said the district will bring a fuller policy review in early 2026, including discussion of whether to benchmark reserves to expenses rather than revenues.

Board members and staff also flagged operational consequences of low fund balances: reduced flexibility for unforeseen capital or self-insurance needs, staff time consumed by borrowing and monitoring, and lower anticipated investment earnings.

The board did not take final policy action at the meeting; the presentation served as information and background for the supplemental-budget decisions discussed later in the session.

Ending: The district plans to continue monthly monitoring with RBC Capital Markets, complete the supplemental budget work to avoid dipping below policy minimums this fiscal year and schedule a policy review in the first half of fiscal 2026 to consider alternative reserve benchmarks.