The Hinsdalean - Community journalism the way it was meant to be

D181 to spend down fund balances

Permanent administrative office space top target, pension paydown considered

 

Last updated 10/19/2022 at 4pm | View PDF



The Community Consolidated District 181 Board affirmed its fund balance strategy this week, directing money to shore up medical self-insurance reserves and for a new administrative center.

At Monday’s board meeting, Rick Engstrom, assistant superintendent of business and operations, reviewed the strategy, which seeks to maintain a reasonable fund balance to mitigate current and future financial risks, pursue projects and abate property taxes.

“We look at the possible revenue reductions and district initiatives in October, and then we come back in February with projections,” stated Engstrom, detailing the two-phase review process. “Anything greater than 50 percent (of total expenditures) in our funds, we make adjustments to that levy abatement amount.”

District 181 and other local taxing districts are required to file a levy, or request for property tax revenue, with the county each December. In the spring, the board can instruct the county clerk to abate, or not collect, any portion of its taxes.

In January the board decided to allot $7 million in surplus funds for a new administrative center. The board reiterated that vote Monday, setting aside $5.5 million in the current budget and $1.5 million in next year’s fiscal plan. Officials are in the process of identifying potential sites for the center.

Members also approved putting $1.3 million toward restricted medical self-insurance and $234,000 toward the restricted activity account.

Engstrom noted some potential threats to future revenue, including state-level proposals for a property tax freeze and the shift of teacher pension costs to local districts. But Engstrom did not expect those to be factors in the coming year.

Superintendent Hector Garcia said revisiting the matter is important for transparency.

“We wanted to make sure that we continued to bring up this abatement strategy so that we keep everyone informed of the progress that we’re making,” Garcia said.

Later in the meeting the board heard a presentation on using fund balances to pay down the district’s unfunded liability with the Illinois Municipal Retirement Fund, the pension fund for noncertified district staff including administrative assistants, custodians, nurses and instructional assistants. As of the end of last year, the district’s unfunded liability was $4.6 million.

Caitlin Norton, the district’s director of financial services, said paying down the unfunded amount would reduce the district’s contribution rate while also earning interest on IMRF assets.

“The amount fluctuates based on actuarial assumptions, demographics of employees and earnings from the value of D181 IMRF assets,” she reported.

Engstrom said urgent action was not required but that the district could realize savings with the measure, from about $18,000 for a $250,000 contribution to $71,000 for a $1 million contribution.

“This probably is a viable option to utilize our fund balances to offset our unfunded portion,” he said, adding it would be part of the annual fund balance review.

Board President Michael Martin praised the overall approach to use of district reserves.

“I think the fund balance strategy that past boards put us on several years ago has been a model to emulate,” he said.

Author Bio

Ken Knutson is associate editor of The Hinsdalean

Email: [email protected]
Phone: 630-323-4422, ext 103

 
 

Powered by ROAR Online Publication Software from Lions Light Corporation
© Copyright 2022