At its regular meeting held on May 14, the Archuleta School District Board of Education (BOE) heard an update on its finances and upcoming budget, in addition to approving the renewal of the district’s health insurance plan, among other things.
Finance Director Mike Hodgson provided a third-quarter financial and investment report for the district, along with a budget update for the upcoming year.
The third-quarter financial report looks at spending and revenues beginning in January lasting through the end of March, along with year-to-date totals, Hodgson noted.
He explained that the district has received approximately 60 percent of its revenues for the year, with a large portion of the remaining 40 percent being property taxes.
Hodgson indicated that the property taxes were received in April, at about $3.8 million, but that is not reflected in the third-quarter report.
“So, that brings that number substantially up,” he said.
Hodgson explained that the district has received a total of $13.8 million in revenues year to date, with about $10.7 million still to be collected.
He also noted that there is approximately 36 percent left available in the general fund to be spent.
Hodgson mentioned that the district has spent approximately $15.3 million so far this fiscal year.
“So, we’re in pretty good shape right now given where we are and the majority of our revenue is still coming in,” he said.
BOE president Bob Lynch commented that the district is “tracking as projected.”
Hodgson also provided the board with an investment report, highlighting that the district was able to move funds into accounts that offer higher interest rates than what the district was previously receiving.
He explained that the district had six certificates that all had an interest rate under 1 percent, which the district redeemed in February due to delays in getting their first round of property taxes.
He mentioned that “actually was a good thing” because the district was able to make it to mid-March before receiving its first payment of property taxes.
Hodgson explained the district was able to reinvest those funds into accounts that offer 5.4 and 5.5 percent interest rates.
“It was a fortunate thing,” he added.
“Well done,” said Lynch.
Hodgson noted that the total investment received for the third quarter was approximately $64,500, with a year-to-date total of $257,000, and that the district should finish the year with more than $300,000 in interest revenue.
Lynch noted that those figures are “significant compared to all the years of zero interest rates.”
Hodgson expressed that his only concern with the district’s current investment accounts is that the district has about 85 percent of those funds in a COLOTRUST account.
During the meeting, a request was made and approved unanimously by the board to allow the district to invest some of those funds in another institution called the Bank of Oklahoma (BOK).
Hodgson explained that the bank is offering interest rates of 5.37 percent that are locked in, meaning that rate will not go down.
Lynch commented in favor of diversifying the district’s investment accounts.
Hodgson noted that BOK has a “long list of clients” throughout the state of Colorado.
He went on to provide a budget update as well, noting that staff is about halfway through its process of preparing the budget for next fiscal year, and have been working with the schools to see how their requests can be accommodated.
“For the first time since I’ve been in Colorado they did something for the following year — passed legislation for 25-26 and a proposal that extends through a six-year phase in period for a new funding formula,” Hodgson said, adding, “It appears that this year we will have $925,000 of new money.”
On April 29, Gov. Jared Polis signed a bipartisan budget bill to fully fund Colorado schools.
According to a press release from the governor’s office, this will invest a total of $525.8 million “to provide Colorado students of all ages and teachers the tools they need to thrive.”
This includes a 6.9 percent increase in per-pupil funding, or approximately $16,000 more per classroom, the press release notes.
Hodgson also noted that the state is projecting the district to lose 25 students this next year.
The state provides $10,000 of funding per student, he noted.
He explained that the state will only pay out the first six months initially and then reassess in October once the district has updated enrollment numbers.
Hodgson went on to explain that the district is looking at an upcoming “fiscal cliff” with COVID funds ending in September.
He mentioned the district has about five positions currently being funded through those COVID funds “that we’ll have to figure out what to do with.”
He noted there are also some other grants expiring in the next two years.
Hodgson explained that he and his staff have been meeting with a teachers committee over a proposed salary increase.
“I think we’re all assuming that we’re going to do a step increase,” he said, but they are currently unsure what to do beyond that as far as adding more positions or introducing more raises.
Hodgson also mentioned the district will be having a facility assessment plan which will likely have an impact on the long-range budget plan, which the district intends to address in the master plan.
Health insurance
At the same meeting, the BOE voted unanimously to approve a renewal of the district’s health insurance plan and for a new ancillary insurance plan.
“Health care cost was a big surprise to us,” said Hodgson.
He explained that the initial renewal notice from Cigna included a 26.6 percent increase in costs, and that due to “some delays in getting that info we moved to a new insurance broker.”
He mentioned that once the district switched brokers, the district received a new offer from Cigna that included only a 7 percent increase.
Hodgson indicated that left the district with about $228,000 to “come up with,” and his staff “found enough money to absorb this.”
“So, we appreciate their hard work,” he added.
The renewal is for a six-month plan, which will give the district time to reevaluate its options without causing any significant changes in coverage in the meantime, he explained.
According to Hodgson, none of the district’s employees will see a change in their benefits, deductibles or amounts remaining on their cards.
“No one will be out money,” he added.
Hodgson also talked about how district staff met with a group of more than 20 district employees in regard to the six-month renewal plan and that “there was not a single person” in objection to the option.
“We will attack with a vengeance come the fall,” he said in regard to finding a long-term solution for the district.
Superintendent Rick Holt commented that he is pleased to have “found a safe place to land, with no change in benefits,” with the opportunity to find a better plan come this fall.
Hodgson noted that the initial renewal notice with a 26.6 percent increase would have caused at least a $100 per month increase for six different plan groups.
“We just thought that was too much,” he said, explaining that the district did not want to make any major changes in coverage options before getting input from staff. “We need to hear what they say.”
Hodgson noted that open enrollment for health insurance begins the last two weeks of the school year.
He further mentioned that the increase is due to “some really higher claims this year” than ever before.
The BOE also approved a new ancillary insurance plan which provides coverage for all other insurance benefits besides health insurance.
According to documentation included in the meeting’s agenda, this includes dental, vision, life, EAD and disabilities.
Hodgson explained that the district has “had some problems” in terms of billing and providers that are in town are not accepting the district’s current insurance.
The new plan, through a company called Guardian, will bring all the ancillary insurance benefits under one provider, Hodgson explained.
“The cost of the renewal will be at a 6.8 percent increase over the current cost, but will be 1.5 percent lower than the four existing companies proposed for the renewal costs,” according to the agenda documentation.
clayton@pagosasun.com
