Business administrator details bond spending and capital reserves; district cites truth‑in‑taxation notice error that blocked tax certification

The district’s business administrator, Lark Reynolds, presented the district’s annual financial statements, a bond‑proceeds update and a capital projects fund analysis, and described implications after the district’s proposed property tax rate was not certified because of a truth‑in‑taxation advertising requirement the district missed.

Financial summary and bond proceeds: - Reynolds told the board the district has posted annual financial reports to the state system and distributed traditional two‑page fund statements. He said the general fund recorded a surplus in the last fiscal year and the district’s unassigned general‑fund balance was about $24.4 million as of June 30, 2025. - On bond proceeds, Reynolds reported roughly $731,000 in bond proceeds remained unspent at fiscal year end but that the district had otherwise expended the school construction bond proceeds and had since spent an additional approximately $9 million on projects.

Capital projects fund analysis and reserves: - Reynolds presented a working spreadsheet that breaks the capital projects balance into non‑spendable items, amounts restricted for debt service, and funds available for capital outlay. Using the figures in the spreadsheet and the district’s adopted plan, Reynolds said the district would need to use roughly $21.5 million of capital fund balance this fiscal year under the adopted capital budget and that, after additional restrictions the board discussed, the district’s available capital funds equated to about seven years of current capital spending (a 7.15 years estimate was presented contingent on assumptions in the spreadsheet). - Reynolds noted the analysis is sensitive to assumptions (for example, state one‑time revenues, interest earnings and which costs are treated as capital vs. ongoing). He provided the board a digital version of the spreadsheet to test scenarios (for example, removing one‑time state revenues or moving technology costs between funds) and said staff will use the tool in future budget planning discussions.

Truth‑in‑taxation notice change and tax certification: Reynolds explained the district failed to include a specific element required under a change to the truth‑in‑taxation notice rules enacted two years prior: the law now requires entities to advertise the dates of other affected taxing‑entity hearings. He said the omission was a procedural error (the district had held its public hearing) and that the county/tax commission subsequently declined to certify the district’s tax rate. The district sought review and assistance but the certification was not granted. Reynolds said staff will tighten internal checks so the omission does not recur and that administrators will evaluate the budget options, which may include returning to truth‑in‑taxation next year, using reserves, or changing the timing/structure of capital spending.

Board questions and next steps: Board members asked about options if the district does not raise property taxes next year; Reynolds and others said options include using reserves, shifting some technology or leased‑vehicle costs back into the general fund, and reevaluating the capital plan. Reynolds said he would return with more detailed scenarios and that the board will need to weigh district priorities against the available capital balance.

Ending: Reynolds asked board members to review the provided spreadsheet and prepare questions; staff said they will present refined scenarios at future work sessions and recommended the board consider policy guidance on minimum reserve targets for capital funds.