Garfield Re-2 discovers $4.48 million general fund surplus after presentation error
After fumbling the fund balance for the 2019-2020 fiscal year during a budget readopt presentation made to the Garfield Re-2 school board in January, the district’s finance department said there’s an additional $4.48 million in the budget.
The figure is now reflected in the 2020-2021 general fund beginning fund balance, at about $20.08 million.
“This slide presentation error was caught internally, corrected, and presented to the Board on February 22, 2021,” Re-2 Director of Communications Theresa Hamilton stated in a Wednesday email on behalf of chief financial officer David Trautenberg.
“Nothing was lost or misplaced,” she also told the Citizen Telegram. “The presentation reflected one number, their team recognized the error and came back in February and presented the accurate numbers.”
This ending fund balance includes the district’s $1.6 million required TABOR reserve and the board-mandated $8 million reserve, Hamilton further stated in the email.
“We did misread a number,” Trautenberg said during the Feb. 22 meeting.
Trautenberg, who eventually took over after chief financial officer Mike Rynkiewicz retired in February 2020, said the fix provides the district “increased flexibility to manage one-time expenses.” The substantial surplus marks the second in two years.
In February 2020, an audit revealed another $4 million surprise surplus. Neither the audit nor subsequent discussions by the board suggested anything improper.
The district also said mid-year modifications to the readopted budget were based on conservative projections in relation to student count and revenue per pupil.
“In addition, approximately $700,000 of unexpected revenue in the form of federally allocated Corona Relief Funds was realized during 2019-20, an amount unknown at the time of preparing the 2019-20 Budget,” Hamilton stated in the email. “The re-adopted budget is a better reflection of the District’s financial position because these numbers are now known.”
“We’re right in line where we should be on expenditures,” Trautenberg said on Feb. 22.
Trautenberg also said Re-2 does in fact have the “third best balance in western Colorado.”
“We are especially well-provisioned to meet any contingencies in managing out of this COVID problem,” he said. “I think it’s going to be a three-year work-out … to get to some kind of normalized level of funding that we can rely on from the state.”
Trautenberg said he is in the process of creating a five-year financial forecast for the district to get a handle on per-pupil revenue. He said he projects $7,984 revenue per pupil.
In other financial news, the board also spent the Feb. 22 meeting addressing how they’ll finance a major repair project at Cactus Valley Elementary School. The Silt school, built in 2007 for a price tag of $16.5 million, has encountered a number of issues related to slab settlement.
Slab settlement is caused when the soil underneath a building becomes less able to support it.
To help defray the estimated $5.6 million project, Trautenberg said the district should explore doing a certificate of participation. With this option, the board would essentially pledge an asset.
“I would strongly suggest to explore what it would look like to do a certificate of participation, given that we’re in a very low interest rate,” he said. “It is essentially an asset-backed financing, meaning you actually pledge an asset. It’s not like a general obligation bond financing, where it’s backed by the full-faith credit taxing authority of the school district.”
Taking this route would not hinder the district’s eligibility to apply for and receive a BEST grant, which would reduce project cost to the district by more $2 million.
Bidding for the possible project won’t begin until spring 2022.
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