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Fountain Hills board adopts revised 2024–25 budget after discussion of encumbrances and transfers
Summary
The Fountain Hills Unified School District board approved a revised 2024–25 budget 3–1 after a presentation from district finance staff explaining encumbrances, an anticipated ADM uptick and a planned $350,000 transfer from capital to maintenance and operations to cover year-to-date encumbrances.
The Fountain Hills Unified School District governing board voted 3–1 to adopt its 2024–25 revised budget on the night they held a public hearing and heard a detailed finance presentation. Finance staff said the revision reconciles adopted projections with actual average daily membership and outstanding encumbrances and shifts funds to cover immediate M&O needs.
Tyler, the district’s finance presenter, told the board the revision reflects updated average daily membership (ADM) figures — roughly 32 students above the adopted projection as of Nov. 15 — and multiple encumbrances that affect how fund balances appear. "We're looking at transferring additional capital dollars to M&O to help support some of the encumbrances right now," Tyler said, identifying a $350,000 transfer from capital that produces a net M&O increase of about $206,000.
The presentation noted several drivers: fewer group-B weights (special education and English-language learners) than budgeted, a $145,000 reduction in budget-balance carryforward versus the adopted plan, and large encumbered SPED costs. Staff explained that some apparent deficits are presentation artifacts tied to encumbrances rather than immediate cash shortages; Impact Aid and other reimbursable grants are expected to provide revenue later in the fiscal year.
Board members asked how to avoid repeated transfers from capital to cover M&O and whether money being moved to cover "band-aid" repairs would be better used for replacements. One board member said she would vote no unless a plan for planned replacements and capital-to-M&O policy was developed; the motion still carried 3–1.
The board also heard that the district must file budget revisions when variances exceed ADE thresholds and that another revision will follow the 100-day ADM reconciliation in May. The action takes effect with the adopted revisions, and staff said they will continue to refine encumbrance cleanup and pursue reimbursements for eligible SPED costs.
Next steps: staff will return with the 100-day ADM reconciliation and continue work on a longer-term fiscal plan for capital/maintenance prioritization.
