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CFO proposes building-and-land fund, pledges 25% of capital outlay revenue to facilities
Summary
Rapid City Area School District finance staff recommended creating a dedicated building-and-land subfund and directing 25% of ongoing capital outlay revenue to direct facility projects, with roughly 35% capacity earmarked for future debt service.
Chief Financial Officer Koi Sassy presented the Rapid City Area School District board with a proposed long-range approach to capital outlay budgeting intended to align facility spending with the district's strategic and master plans.
Sassy said finance and facilities committee discussions led to three recommended guidelines for fiscal year 2026 budgeting: dedicate 25% of ongoing capital outlay revenue annually to direct facility projects; earmark approximately 35% of capital outlay revenue capacity for future debt service; and pledge any annual capital outlay surplus (beyond a 25% cash-reserve target) to a new building-and-land fund.
Under the draft plan presented at the meeting, the district's projected FY26 capital outlay revenue would allow roughly $8 million to flow into direct facility projects and an estimated $7 million into the proposed building-and-land fund, Sassy said. He noted an asterisk: the surplus projection is atypical and shaped by cyclical capital revenues and lower-than-normal requests in the projected year.
Sassy said proceeds from property sales or other "extraneous funding" could be injected into the building-and-land fund when appropriate. He also said that, depending on the scope and timing of the Rapid Valley expansion project, the building-and-land fund surplus could cover an estimated 60% to 70% of that project's cash needs without tapping existing reserves.
Board members asked clarifying questions. One asked whether proceeds from land sales would automatically go to the building-and-land fund; Sassy said that was the likely treatment but that policy language should make the process explicit. Another board member asked about the Blackhawk HVAC project cost; Sassy said it was approximately $3.2 million.
Sassy emphasized that the proposal is intended to move the district away from short-term, piecemeal capital decisions and toward a predictable, multi-year funding strategy that safeguards assets and prepares for future debt service needs.
No final board vote on the proposal took place at the meeting; Sassy presented the draft to the board for review and invited further feedback.
