Canyon City Schools reports midyear budget shortfall, board approves amendment

Heidi Anderson, chief financial officer for Canyon City Schools (Fremont Re-1), told the school board on Jan. 27 that a midyear revision to the district’s budget shows revenues of $39,915,287 and expenses of $40,576,315, producing a deficit spend of $661,028.

The midyear presentation, which Anderson said reflects a December/January “true up” from the Colorado Department of Education and audited prior-year numbers, flagged a net program reduction of $272,667 and changes in allocations and categoricals that increased state revenue slightly while reducing local revenue by about $1.3 million. "We have $39,915,287 for revenue, $40,576,315 in expense. And that deficit spend is $661,028," Anderson said.

The update explained two drivers: enrollment and accounting timing. Anderson presented 13 years of pupil-count data showing a decline of about 538 students compared with that earlier period and a funded pupil-count difference that affects state funding calculations. She also said a prior-period accounting adjustment — recognizing extra months of property tax revenue in a prior fiscal year — increased the district’s beginning fund balance by about $800,000 but is not new recurring revenue.

Nut graf: The board’s action on the midyear figures matters because the district is running a recurring-cost structure in which roughly 80% of expenditures are salaries and benefits. Anderson warned the current deficit and projected next-year reductions in state support could further eat into reserves.

Anderson told the board the district’s ending fund balance is approximately 25% of annual expenditures, which she described as “healthy,” but added that continued deficit spending would reduce that level. "That $8,955,000 means it's about a 25% fund balance," she said, adding the figure would be several percentage points lower without the prior-period adjustment.

Board members pressed staff on the nature of the deficit and on how long reserves would last if the district continued similar spending patterns. Anderson said the current fund balance represented roughly 90 days of operations and reiterated the district’s reliance on salary-and-benefit spending that now composes about four-fifths of the budget.

Following the presentation, the board voted to approve an amendment to the fiscal year 2024-25 budget as presented by Anderson. The motion passed on a roll-call vote in which all board members recorded aye votes.

Ending: Anderson and board members said staff will continue to hunt for one-time expense adjustments and monitor pending state-level proposals that would change how districts are funded. Anderson encouraged trustees to direct questions to her for more detailed line-item follow-up.