2024-2025 3.F Financial Planning and Budgeting

Executive Limitation

3.F Financial Planning and Budgeting

To: Board of Education

From: Will Pierce, Superintendent of Schools 

Re: Expectations of the Board through 3.F Financial Planning and Budgeting

 

I hereby present my Expectations of the Board through 3.F Financial Planning and Budgeting, Executive Limitation, in accordance with the monitoring schedule as set forth in Board policy. I certify the information in this report is true.

 

 

Signed:

 

Will Pierce

Superintendent, School District 27J

Date: June 11, 2025

COLORADO SCHOOL DISTRICT 27J

GOVERNING POLICY OF THE BOARD OF EDUCATION

Policy 3.F – FINANCIAL PLANNING & BUDGETING

Date Adopted/Last Revised: January 27, 2009 Management Limitations

Monitoring Date: June 11, 2025

Financial planning for any fiscal year or the remaining part of any fiscal year will not deviate materially from the Board’s End priority, risk financial jeopardy, or fail to be derived from a multi-year plan.

Data Reported:

Financial Planning:

Projections from Governor Polis’ Colorado state budget indicated a volatile state and federal outlook. Colorado was facing a $1.2 Billion shortfall. In 2024, HB24-1448 passed introducing a new funding formula to help increase funding for K-12. It was to be implemented over 6 years with the first year of implementation being FY 2025-26 at 18%. The Governor made a counterproposal to the new funding formula during the most recent legislative session. It was proposed to eliminate the five-year enrollment averaging, increase the implementation from 6 to 7 years and to decrease from 18% to 10% in the first year. Legislation was able to come to a middle ground and passed HB25-1320. This bill increased the implementation of the new finance formula from 6 to 7 years with 15% implementation in the first year. It implemented a phase out schedule of enrollment averaging and updated the hold harmless amounts to being FY 2024-25 actual amounts for the next two years. FY 2025-26, the District’s per pupil revenue is expected to increase by $372 per student.

The Executive Budget Committee convened in February 2025 and during weekly meetings developed various budget options for consideration. In addition to the Executive Budget Committee, the Chief Financial Officer presented the most current information on revenue forecasts, additional expense allocations and the planned use of fund balance to District Leadership, the Brighton Education Association and the Colorado Classified School Employees’ Association between December 2024 and April 2025 (Global Executive Limitation 3.0, and C.R.S. 22-7-105). The Proposed Budget was presented to the Board of Education at the May 2025 meeting.

Upon final Board approval, and after the submission and acceptance of the Expectations of the Board, finance staff will load the budget detail into the District’s financial system for the new fiscal year. State law allows for districts to modify their Adopted Budget to reflect the certified results of the October pupil count. If the district so elects, a revised financial plan will be adopted no later than January 31, 2026. The chart below demonstrates the Planning Department’s ability to project student enrollment with significant accuracy. The accuracy of this data is critical as it impacts the District’s financial planning strategy as it relates to teacher hiring, operational expenditure plans and constructing buildings to accommodate student growth.

Graph showing Planning Projection, Actual, Actual Over/(Under) Projection, and % Over or Under for years 2009-2025

Year	Planning Projection	Actual	Actual Over/(Under) Projection	% Over or Under
2009	13,884	13,912	28	0.20%
2010	14,676	14,502	(174)	-1.20%
2011	15,029	15,092	63	0.42%
2012	16,354	16,163	(191)	-1.18%
2013	16,697	16,698	1	0.01%
2014	17,351	17,103	(248)	-1.45%
2015	17,610	17,042	(568)	-3.33%
2016	17,366	17,115	(251)	-1.47%
2017	17,485	17,883	398	2.23%
2018	17,564	18,025	461	2.56%
2019	18,644	18,532	(112)	-0.60%
2020	19,006	18,657	(349)	-1.87%
2021	19,440	19,612	172	0.88%
2022	20,372	20,138	(234)	-1.16%
2023	20,164	19,976	(188)	-0.94%
2024	22,480	22,344	(136)	-0.61%
2025	22,918	23,220	302	1.30%
Total	307,040	306,014	-1,026	-6.23%

Fiscal planning and monitoring occur throughout the year. In order to incrementally monitor compliance, financial reports are generated and emailed to principals, department managers and executive leadership by the 10th business day of each month. In addition to the monthly financial reports, the Chief Financial Officer presented the Expectations of the Board regarding financial condition and activities to the Board of Education in October and January.

Fiscal Jeopardy:

Concerning the issues of fiscal jeopardy, the Board and administration have established and monitor against the following superintendent policies via internal and external (auditor) review:

Abbreviation	Definition
DB	Annual Budget
DBC	Budget Planning Preparation and Schedules
DBE	Budget Hearing Reviews Dissemination
DBH	Fiscal Emergencies
DBJ	Budget Transfers
DDA	Grant Reimbursement Procedures
DFA	Revenues from Investments
DG	Depository of Funds
DH	Bonded Employees and Officers
DI	Fiscal Accounting Reporting
DIC	Financial Reports and Statements
DID	Inventories
DIE	Audits
DJE	Bidding Requirements
DK	Payment Procedures

In addition to the policies above, the Board of Education employs an external auditor, RubinBrown LLP that conducts a yearly financial and A-133 audit. The auditors presented their comments and observations of the FY 2024 audit at the December 11, 2024 Board Meeting. Their management letter stated no audit findings.

Board’s End Priority:

The information below provides evidence of the continued strategic investment into schools to support the Board’s Global Ends at all levels of the organization. Developing these traits will be the focus of all school and district performance improvement efforts going forward. All school improvement planning and accountability reporting will be driven by the expectation that all students will increasingly demonstrate these traits. To maximize focus on these traits, state and federal statutory requirements are integrated to the extent possible into this system. The investment of fiscal resources shown below demonstrates the District’s focus on expenditures that directly impact students in support of the Board of Education Global Ends.

FY 2025-2026 Adoped Budget
General Fund

Item	Amount	Percentage
In-District Schools	$130,388,242	34.8%
Board of Education	$1,008,457	no content
Office of the Superintendent	$1,094,465	no content
Communications	$1,089,643	no content
Special Education/Pupil Support	$37,642,181	no content
Academic Support	$7,749,507	no content
Human Resources	$1,778,336	no content
Operatioons	$894,060	no content
Facility Services	$18,762,878	no content
Fiscal and Internal Services	$3,105,957	no content
Information Technology	$9,374,035	no content
District-wide Services	$60,991,415	no content
Central/Support Services Expenditures	$143,490,934	38.2%
Charter Allocation/Service Charges	$77,338,083	no content
Transfers to Other Funds	$12,271,907	no content
Transfer to Transportation	$11,679,078	no content
Total Allocations/Transfers	$101,289,068	27%
Total	$375,168,244	no content

Multi-Year Plan:

The chart below provides additional evidence of the five-year budget projection impacts. This information is constructed with the use of the student enrollment data previously mentioned and takes into account foreseeable issues with funding from the School Finance Act in upcoming fiscal years. Knowing that we will be deficit spending, it is clear the district will be spending down its current fund balance and will anticipate no additional expenditures starting in FY 28-29 and budget cuts being necessary in FY 29-30 (reflected in salary and benefits). While the plan does present a balanced budget through FY 29-20, including full funding of the TABOR and Board of Education Emergency reserves (Executive Limitation 3. D.1c), it should be noted that numerous significant variables are used in its preparation.

Five-Year General Fund Budget Projection

Item	2025/2026 Estimated	2026/2027 Estimated	2027/2028 Estimated	2028/2029 Estimated	2029/2030 Estimated
Base Data: Planning Dept Enrollment (K-12)	23,857	24,207	24,707	25,207	25,707
Base Data: Charter School FTE	6,887	7,094	7,306	7,526	7,751
Base Data: District FTE without Charter	16,970	17,113	17,401	17,681	17,956
Base Data: School Finance Act - Per Pupil	$11,628	$12,093	$12,577	$13,080	$13,603
Base Data: Beginning Fund Balance	$82,037,844	$79,083,989	$73,126,585	$57,011,105	$34,439,782
Revenue: School Finance Act Funding	266,817,352	274,821,873	283,066,529	291,558,525	300,305,280
Revenue: Mill Levy Override	26,438,787	27,231,951	28,048,909	28,890,376	29,757,088
Revenue: Other State and Local Revenue	12,763,684	13,146,595	13,540,992	13,947,222	14,365,639
Total Revenue	306,019,823	315,200,418	324,656,430	334,396,123	344,428,007
Total Resources	$388,057,667	$394,284,407	$397,783,015	$391,407,228	$378,867,789
Expenditures, Allocations and Reserves: Employee Salaries	154,129,148	158,753,022	163,515,613	163,515,613	151,560,744
Expenditures, Allocations and Reserves: Employee Benefits	61,035,558	62,866,625	64,752,623	64,752,623	61,481,951
Expenditures, Allocations and Reserves: Purchased Services	17,981,244	18,520,681	19,076,302	19,648,591	19,648,591
Expenditures, Allocations and Reserves: Supplies and Materials	12,972,853	13,362,039	13,362,039	13,362,039	13,362,039
Expenditures, Allocations and Reserves: Property	310,372	319,683	329,274	329,274	329,274
Expenditures, Allocations and Reserves: Other Expenditures	1,581,214	1,628,650	1,677,510	1,677,510	1,677,510
Expenditures, Allocations and Reserves: Total Expenditures	248,010,389	255,450,701	263,114,222	263,686,511	248,460,970
Allocation to Charter Schools	77,338,083	79,658,225	82,047,972	84,509,411	87,044,694
Other Allocations & Transfers	23,950,985	24,669,515	25,409,600	26,171,888	26,957,045
TABOR Reserve	6,188,352	8,283,606	8,535,715	8,459,709	8,142,540
Board of Education Reserve	6,547,724	8,403,606	8,655,715	8,579,709	8,262,540
Other Reserves	26,022,134	17,818,753	10,019,792	no content	no content
Total Expenditures, Allocation, and Reserves	$388,057,667	$394,284,407	$397,783,015	$391,407,228	$378,867,789

Conclusion: I report compliance.

1. Risks incurring those situations or conditions described as unacceptable in the “Financial Conditions and Activities” Board policy.

   I interpret this to mean fiscal planning provides for consistent compliance with Policies 3.D and 3.F, which assures the money is strategically invested toward the achievement of the Board’s End, reserves are maintained with no less than 6% fund balance including allowance for variations in the business cycle resulting in the receipt of property tax collections in the months of February through June, plans are made for expenditures associated with student enrollment growth, and fiscal jeopardy is avoided by observing sound, conservative fiscal management practices. This is reasonable because external mandates from the Colorado Department of Education and applicable state law, established operational limits as defined in Executive Limitation Policy 3.F, and staff experience and knowledge are all used in the budgeting process.

   Data Reported:

   Financial planning and budgeting under this Policy 3.F for the detailed FY 2025-2026 budget plan is undertaken and executed in a manner such that compliance with Policy 3.D, Financial Condition & Activities, is not violated. This is confirmed with the annual submission of the Expectations of the Board on Policy 3.D, last submitted to the Board of Education on January 25, 2025. During the District’s planning process, the 3% TABOR reserve and the 3% Board reserve were secured to be able to handle any shortfalls in revenues due to a state rescission or an October count, which is less than was projected, prior to further expenditure discussions. These same reserves are included in future fiscal year projected budgets.

   The following schedule shows General Fund month-end cash balances for July 2024 through May 2025. While cash balances do not represent a complete picture of financial condition, they do provide an indication of liquidity since the General Fund is a “current fund” with no long-term assets or liabilities.

   Table showing general fund cash balance by month

   Month	General Fund Cash Balance
   July 2024	$109,514,443
   August 2024	$107,622,609
   September 2024	$104,057,228
   October 2024	$94,627,608
   November	$92,662,414
   December 2024	$88,805,463
   January 2025	$84,546,632
   February 2025	$86,546,632
   March 2025	$93,981,662
   April 2025	$87,025,618
   May 2025	$111,898,278

   Conclusion: I report compliance.

   Accordingly, the Superintendent will not allow budgeting that:

2. Omits credible projection of revenues and expenses, separation of capital and operational items, cash flow projections, and disclosure of planning assumptions.

   I interpret omit credible projections to mean: not using District planning department enrollment projections which have proven to be reasonable and accurate to plus or minus 3.3% over the last five years.

   I interpret revenues to mean: either new or recurring financial resources. Revenue predictions are based on the Colorado Department of Education’s and other state agencies’ projections, current legislation impacting School Finance Act Revenue, interest rates on forecasts from ColoTrust money market funds, historical trends for specific ownership taxes and various economic news releases. Additionally, the District periodically analyzes future needs to be funded through voter-approved override provisions included in the Colorado School Finance Act. This is reasonable, as these revenue sources have proven reliable.

   I interpret expenditures to mean: organizational internal investment cost needs of the District, including adjustment for compensation and inflation, are analyzed and addressed through available funds including enrollment growth, budget realignment and periodic program evaluation. These are reasonable as we have experience in adjusting expenditures with consideration of the following factors: analyzing non-instructional versus instructional expenses, class size adjustments, program effectiveness and efficiency studies.

   I interpret separation of capital and operational items to mean: that capital items, including land, buildings, improvements to buildings, and equipment having a unit value of greater than $5,000 are maintained in funds and accounts separate from operational items. This is reasonable as the District utilizes the Colorado Department of Education standard chart of accounts, which requires all purchases to be categorized.

   I interpret disclosure of planning assumptions to mean: the compilation of theories of action used to determine the overall revenue available to the District to address identified expenditure needs and compliance components. This is reasonable as these assumptions encompass all major revenue and expenditure categories. Additionally, these assumptions are reasonable because external mandates such as new legislation have been considered, outside resources such as the Colorado Department of Education have been utilized and input based on staff knowledge has been incorporated.

Data Reported:

Revenues:

The primary revenue source to the District is provided through the enrollment-based Colorado School Finance Act (SFA), with resulting payments from state equalization and property tax. The use and availability of accurate enrollment projections in application of the SFA is discussed in the previous section (Financial Planning) of this monitoring report.

The state funding portion and economic conditions related to the state is also discussed extensively in the following section of this monitoring report. The remaining SFA revenue is provided through property tax, 36.97%, specific ownership tax, 2.82% and other revenue, 0.60%.

Property tax:

Property tax revenue is the second highest source of revenue to the District. The following table shows 15-year historical data demonstrating that tax collections are, on average, 100.20% of amounts levied. Accordingly, it is reasonable to use this data to predict this second highest source of revenue to the District. Due to the prior three years’ actual collection rates, the budgets presented to the Board this year do not assume an allowance for uncollected taxes or potential additional property tax abatements processed during the fiscal year.

Assessed property values in Colorado are impacted by the Gallagher Amendment, which limits the portion of residential property value that is subject to tax.

Table demonstrating how property assessment rates have decreased over time

Levy/ Collection Year	Total	% Increase/ Decrease	Total Tax Levy	Total Tax Collection	% of Total Tax Collection to Levy
2010/2011	$781,026,806	-3.37%	$35,694,935	$35,530,346	99.54%
2011/2012	$777,457,975	-0.46%	$35,474,631	$35,487,961	100.04%
2012/2013	$807,657,362	3.88%	$36,852,598	$36,888,996	100.10%
2013/2014	$827,221,900	2.42%	$37,745,309	$37,894,838	100.40%
2014/2015	$839,221,900	1.45%	$39,980,940	$40,083,954	100.26%
2015/2016	$1,017,602,217	21.26%	$50,227,828	$50,674,804	100.89%
2016/2017	$993,233,062	-2.39%	$48,983,274	$48,994,155	100.02%
2017/2018	$1,174,718,227	18.27%	$57,753,847	$57,905,537	100.26%
2018/2019	$1,291,185,562	9.91%	$63,298,250	$63,867,785	100.90%
2019/2020	$1,707,154,026	32.22%	$83,326,188	$83,321,935	99.99%
2020/2021	$2,063,372,875	20.87%	$100,579,112	$106,648,039	106.03%
2021/2022	$2,014,317,326	-2.38%	$100,445,945	$105,813,437	105.34%
2022/2023	$2,433,624,931	20.82%	$148,374,238	$137,330,465	92.56%
2023/2024	$3,025,047,529	24.30%	$170,279,926	$168,444,590	98.92%

Property assessment rates have decreased significantly over time, dropping from a peak of 16.00% in 1988 to 7.15% following reductions made during the 2019 Legislative Session.

The workings of the Gallagher Amendment, along with the TABOR Amendment have worked to keep residential property taxes relatively low in Colorado.

The District is allowed to increase property taxes at the local level to support its general operations through the referendum process. This process, referred to as the “Mill Levy Override” in the SFA, is the only viable option the District has available to provide additional operating resources.

The District currently receives $26.4 million, approximately $1,144 per pupil based on the District’s FY 2024-2025 funded pupil count, through this override process. The SFA limits the amount a district is allowed to receive through this process to 25% of its SFA calculated funding amount. For School District 27J in FY 2024-25, that amount is approximately $67.1 million, or about $2,890 per funded pupil.

As documented on the Colorado Department of Education website per funded pupil amounts currently received (FY2024-25) by neighboring Adams County districts are:

Table showing Per Funded Pupil Mill Levy Override by District

District	Per Funded Pupil Mill Levy Override
Mapleton	$3,126
Adams 12	$2,968
Adams 14	$3,298
Westminster	$3,367
District 27J	$1,144

Specific Ownership Tax (SOT):

The remaining 3.42% of SFA revenue comes from specific ownership tax, 2.82% and other revenue, 0.60%. SOT is the tax assessed on vehicle registrations. This revenue source is expected to provide approximately $8.62 million for the General Fund. Over the last few years, collections have increased so it is reasonable to anticipate regular collection of this revenue source. Other revenue is primarily from state categorical funding such as special education, vocational and transportation.

 

Pie chart showing general fund revenue sources with State Equalization accounting for 56.5%, Property Taxes accounting for 37%, SOT accounting for 2.8%, Special Education accounting for 2%, Transportation accounting for 1.1%, and Misc accounting for 0.6%.

Expenditures:

Expenditure needs of the District, including adjustments for changes in compensation, benefits and inflation, are analyzed and addressed through available funds including per-pupil revenue, budget realignment and periodic program evaluation. These are reasonable as the District has experience in adjusting expenditures with consideration of the following factors: analyzing non-instructional versus instructional expenses, class size adjustments, program effectiveness and impact on students. District expenditures are coded to accurately reflect operations according to use of the required Colorado Department of Education’s Chart of Accounts, including classification of capital items to ensure separation from operational items. This is reasonable as account classification is verified through transmission of District expenditures by account to CDE through the “Automated Data Exchange” process and verified by the District’s independent auditors.

General Fund expenditure categories are shown in the following chart

Key Budget assumptions for each fund appear below:

Fund	Revenue	Expenditures
General	The beginning fund balance is estimated at $82,037,844.	Compensation increases for all employees (3.69%) and the additional budget adds to support SPED, UPK and technology investments are the main drivers in the increase in expenditures.
Capital Reserve	The beginning fund balance is estimated to be $6,011,304. The District estimates a transfer of $2,145,729 from the General Fund.	The FY 25-26 Adopted Budget details out the specific projects associated with the Capital Reserve Funds. Some examples are purchase of equipment, costs of repairs and maintenance or construction of capital facilities. A maintenance reserve was added in FY 24-25.
Risk Management	The District is maintaining a reserve of $1,172,154 for our RMR insurance and program purposes. The District estimates a transfer of $4,061,782 from the General Fund.	Premiums for worker’s compensation, liability and property are paid from this source. An increase of $299K was added to our premiums for FY 25-26
Universal Preschool	The beginning fund balance is estimated to be $596,248, which is carryover from the Universal Preschool program. Estimated revenue from the state is $4,691,261 and an estimated transfer of $4,624,504 from the General Fund.	All preschool staff salary and benefits will now be paid from this fund. In prior years, SPED staff was partially paid for by the General Fund. UPK estimates opening new classrooms in FY25-26.
Governmental Grants	State and Federal Grants. The decrease in revenue is due to the elimination of several state grants as well as a reduction in revenue allocation for Federal grants.	Expenditures must be used in conformity with the grant and cannot exceed the amount of the grant. Most grant funding is used for salaries and benefits.
Pupil Activity	The beginning fund balance is estimated to be $4,858,010. Revenues are collected from through student fees and fundraisers. The District estimates a transfer of $944,756 from the General Fund.	Expenditures are to be used for activities and programs that benefit the programs and students directly.
Transportation	Revenue is derived from fees collected from students and reimbursement from CDE. The District estimates a transfer of $11,679,078 from the General Fund.	Salaries, benefits and other operating costs associated with running a transportation system for the District. The increase of expenditures is partly due to salary increases and the opening of the North Terminal in FY25- 26. The district also approved “transportation for all” which would allow students who are currently on a wait list to be transported.
Other Special Programs	Revenue is derived from charges for programs including; detention center, tuition-based preschool, summer school, credit recovery, oil and gas leases and local grants.	Expenditures are for salaries, benefits and program costs.
Bond Redemption	The beginning fund balance is estimated to be $91,898,458. Revenues are generated from a voter-approved bond election.	Interest and principal on payments are based on fixed payments due in December and June of each year. In addition, the fund pays fees for the paying agent.
Building	Resources due to 2015 and 2021 bond sale proceeds, premiums and interest.	Approved expenditures for acquisition or construction of major capital facilities and other capital assets. In FY25-26, the major projects are the construction of Talon Ridge Middle School and Rocky Vista High School.
Print Shop	Revenue is derived from charges for printing services to district schools and departments as well as out-of-district customers.	Expenditures are for salaries, benefits and program costs.
Nutrition Services	The beginning fund balance is estimated to be $6,028,372. The District will continue to participate in the Healthy Meals for All program so long as it remains an option. Revenue will be in the form of Federal reimbursements.	Salaries benefits and the cost of meals and supplies are the major expenditures of the program. Increase of expenses are due to increased costs in food and equipment. Salary increases are also included.
Child Care Program	Revenue is derived from charges for before- and after-school programs. In addition, revenue is generated by full-day Monday care and summer and holiday break programs.	Expenditures are for salaries, benefits and program costs such as field trips and snacks.
Dental Insurance	The beginning fund balance is estimated to be $698,036. Dental premiums are provided from the District to fund this self-insured program.	Expenditures are for dental claims and administrative costs to run the program.
Trust	The beginning fund balance is estimated to be $33,540.	Scholarships are awarded to high school students.

Conclusion: I report compliance.

Accordingly, the Superintendent will not allow budgeting that:

• Plans the expenditure in any fiscal year of more funds than are conservatively projected to be received.
• I interpret plans the expenditure in any fiscal year to mean: organizational investment strategies that reasonably use historical data points cross correlated with projections during a specified period of time from July 1 through June 30.
• I interpret conservatively projected to be received to mean: revenue projections conceived by the incorporation of historical data points and legislative decisions to provide foreseeable fiscal guidance.

Data reported:

The District provides services through the use of 15 separate and distinct funds. A fund is a separate set of self-balancing accounts including assets, liabilities, fund balance, revenues and expenditures. Each fund is established under Colorado Law or by District practices where segregation of revenues and expenditures is desired for reporting or compliance purposes. The funds used by the District comply with the Colorado Department of Education’s Chart of Accounts and Generally Accepted Accounting Principles (GAAP), as verified annually in the District’s audited Annual Comprehensive Financial Report.

The District funds for FY 2025-26, with beginning fund balance, revenues, expenditures and ending fund balance are shown below (these summary amounts have been extracted from the budget).

Fund	Beginning Balance	Revenues	Expenditures/ Transfer/ Allocations	Ending Fund Balance and Reserves
General Fund	82,037,844	306,019,823	349,299,457	38,758,210
Capital Reserve Fund	6,011,304	2,264,028	3,780,409	4,494,923
Risk Management	Insurance Fund	1,406,338	4,096,782	4,207,568	1,295,552
Universal Preschool Program Fund	596,248	9,315,765	9,649,371	262,642
Governmental Designated Grants Fund	590,456	17,575,920	18,166,376	no content
Pupil Activity Fund	4,858,010	4,561,556	9,419,566	no content
Transportation Fund	no content	14,195,900	14,195,900	no content
Other Special Programs Fund	5,581,775	2,716,155	8,297,930	no content
Bond Redemption Fund	91,898,458	95,046,122	91,141,242	95,803,338
Building Fund	346,363,011	15,277,093	361,640,104	no content
Nutrition Services Fund	6,028,372	10,608,256	16,636,628	no content
Child Care Program Fund	732,747	1,990,052	2,722,799	no content
Printshop Fund	no content	167,880	167,880	no content
Dental Insurance Fund	698,036	1,091,448	1,789,484	no content
Trust Fund	33,540	2,337	35,877	no content
Total ($)	484,929,117	546,836,139	891,150,591	140,614,665

All of the funds except the General Fund are established for a specific purpose and report revenues and expenditures only associated with that purpose. Expenditures for these funds are budgeted based on available funds which may vary significantly from year to year such as the Governmental Designated Grants Fund, determined by specific grants awarded to the District, and the Building Fund, where spending is based on the availability of bond funds. Accordingly, budgeting for these funds use processes that identify currently available resources that can be determined with significant accuracy, and not the more detailed process used for the General Fund as described below.

General Fund:

The General Fund records all financial activities of the District not required to be accounted for in any of the specific purpose funds. Accordingly, it is the fund that accounts for the general operation of the District. Budgeting for the General Fund relies heavily on historical data, current economic conditions, inflationary trends, state legislation, district professionals and other information. Key elements of revenue and expenditure forecasting follow.

Revenue Forecasting

Revenue forecasting for the General Fund is primarily based on two factors:

1. Student enrollment
2. Funding under the Colorado School Finance Act (SFA) as annually modified by the State Legislature

Student enrollment:

Enrollment projections are provided by the District’s planning staff using professional forecasting tools, observation of construction activities and other means. Historical enrollment projections have been, on average, accurate to within -0.37% over the last 15 years (see historical enrollment numbers earlier in this report under Financial Planning).

The General Fund budget for FY 2025-26 and projections for fiscal years through FY 2030-31 are based on the following enrollment data:

Colorado SFA Funding:

Funding under the SFA is formula-based using student enrollment as the primary input. Finance analysts at the Colorado Department of Education (CDE) begin early projections of expected funding to Colorado school districts, using preliminary enrollment, property valuation, state economic conditions and other information. This information is then made available to the Colorado legislature, which begins its session in January. The District monitors the information from CDE and the legislature and upon finalization, enters appropriate numbers in the SFA formula. Amounts are subsequently modified when actual District enrollment is determined in October, usually resulting in adjustments to the District’s budget.

Approximately 96.28% of General Fund revenue is derived from the above described SFA formula process. Revenue sources resulting from the formula process are:

• State Equalization 56.49% or $172,866,896 for FY 2025-26
• Local Property Tax 36.97% or $113,138,443 for FY 2025-26
• Local Specific Ownership Tax 2.82% or $8,621,939 for FY 2025-26

Historical SFA funding increases and decreases:

Inflation and economic conditions in the State are the primary factors that drive SFA funding changes. The following graph shows the percentage changes for the previous five years and the upcoming FY 2025-26. Percentage changes are expressed as changes in Per-Pupil Revenue (PPR).

Other revenue:

• The remaining 3.72% of General Fund revenue is comprised of a combination of State categorical sources (Vocational Education and Special Education) and local sources (fees, rental, tuition, indirect cost recovery, etc.).
• These other revenue sources can be predicted with reasonable accuracy using information from CDE, District staff that administer tuition, fee, rental and other programs, and prior-year trends.

Other factors impacting revenues:

The projection of the fiscal health of Colorado is critical to the District’s ability to anticipate future funding. This is strategically important in Colorado due to state mandates to limit the District’s general operating levy to 27 mills. With this limit in place, the state has the responsibility to “back-fill” SFA program revenues. The District maintains some of the previously implemented cost containment efforts as well as a planned use of fund balance in order to produce a balanced budget for FY 2025-26.

Conclusion: I report compliance.

Accordingly, the Superintendent will not allow budgeting that:

Provides less for Board activities during the year than is set forth in the Cost of Governance policy (see policy in Governance Process).

I Interpret Board activities to mean: the collective means that the Board of Education has identified to achieve the prescribed end.

I interpret cost of governance policy to mean: funds allocated per policy 2.J as approved by the Board of Education on April 27, 2010.

Data Reported:

The amount budgeted for Policy Governance totaling $44,000 in FY 2025-26. Additionally, $100,000 has been budgeted for the annual independent fiscal audit as required under Policy 2.J.1.b.

Conclusion: I report compliance.