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D181 fiscal plan projects large surplus

As fund balances grow significantly, board members will have to decide how to respond

 

Last updated 9/16/2020 at 4:01pm | View PDF



The Community Consolid-ated District 181 Board has approved a balanced budget for the 2020-21 fiscal year that envisions a $6.7 million surplus in its operating budget.

Board members voted 6-0 Monday in favor of the financial plan calling for $64.5 million in operating expenses, less than the nearly $65 million in the 2019-20 budget, with projected revenue of $71.3 million. About $2.6 of the surplus will be used for transfers or debt certificates.

Assistant Superintendent of Business and Operations Rick Engstrom told board members the budget comes on the heels of a 2019-20 year in which unaudited operating expenses came in $4 million under predictions. The district realized significant savings in several areas, including just over $2 million in salaries and benefits due a lower pay increase in the last teachers contract than had been anticipated and $590,000 in unspent health insurance contingency funds. Other savings were related to the COVID-19 shutdown of school buildings in the spring, including $1 million in purchased services, $450,000 in classroom supplies and $225,000 in utilities.

The pandemic also compelled the district to defer the installation of new flooring at Clarendon Hills Middle School, Engstrom reported.

“Our (facility maintenance program), we kind of pushed some things off, and also some things came in under budget when we went out for bids, so that was another $1 million (saved),” he said.

Board member Nate Lucht said the surplus is a positive byproduct of the year’s events but requires a thoughtful response from the board.

“We’re in better financial shape then we thought we would be,” he said, citing the district’s fund balance that has grown from $31.6 million at the end of the 2018-19 fiscal year to a projected $42.8 million by the end of next June. “That number is dramatic. We have a very big increase in our fund balance.”

Lucht said that scenario obligates the board to make decisions about the money’s fate and how to craft the upcoming levy.

“Do we want to maybe lower the levy? Do we want to maybe increase the abatement? Or do we maybe want to use some of these funds to support something more strategic?” Lucht posed, listing the establishment of a permanent district administration center, full-day kindergarten or a world languages program among the possibilities. “There are real implications in what we’re going to be doing over the few months.”

Responding to Lucht’s question about why the $1 million earmarked for CHMS flooring wasn’t spent, board President Margie Kleber said it was a timing issue.

“When we were in the bid process, COVID hit,” she explained. “By the time we wanted to order it, we were afraid we wouldn’t meet the opening of school.”

The plan is to rebid the project this fall, Kleber said, and complete it on top of the $2 million in capital projects the district undertakes each year.

“So we’ll have essentially $3 million in projects, but $1 million of that will come from money that is already in the restricted reserve fund,” she said.

Lucht expressed concern that not all that money will be used this year. Board member Meeta Patel said the capital project schedule is designed to adapt to circumstances.

“Depending on what happens with bids, depending on where we land with final price, depending on timing, some of these projects may be moved up a year or six months,” she said, noting the complication of the calendar year straddling two fiscal years.

Superintendent Hector Garcia underscored the importance of conversations among district officials about the deployment of surplus funds.

“Certainly over the next couple of months it’s going to be critical to talk about those long-term commitments that we need to make, or we want to make, and how does that play into the levy,” Garcia said.

 
 

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