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School District 202 held a budget hearing on Sept. 7 at which administrators reported that the District will have a balanced budget for FY 2011 despite a now-familiar litany of financial challenges: late and reduced State payments, virtually non-existent interest payments on investments and proposed delayed property tax bills.
Chief Financial Officer William Stafford said that the proposed FY 2011 budget is $74,206,050, which represents an increase of about 2.1 percent over the previous year. The increase, he reported, is mainly from capital improvements, which will likely be funded by Qualified Zone Academy Bonds (QZAB).
QZAB bonds have been issued by the federal government as part of the stimulus package. The administration will present a full capital improvement plan for the Board’s consideration later in the fall, Mr. Stafford added.
The education fund and the operations and maintenance fund, which together make up 84 percent of the total District expenditures, are projected to be slightly less this year than last year.
“This is the first budget decrease in over five years,” reported Mr. Stafford. “It reflects the over $1.5 million reductions the District has made to the budget,” he added.
“We are very fortunate to have the financial management we have in this District,” commented President Rachel Hayman, “to have a balanced budget in these difficult times.”
According to the U.S. Department of Education website, Qualified Zone Academy Bonds are “a relatively new financing instrument that can be used to carry out much-needed school renovations and repairs as well as other improvements (any use except new construction).
The federal government covers, on average, all of the interest on these bonds, thus enabling schools to save up to 50 percent of the costs of these construction/other projects.
The interest payment is actually a tax credit, in lieu of cash, provided to financial institutions that hold the bonds. In effect, when a school district issues a QZAB, it is like getting 50 percent of the funds as a grant.”
The website also says that school districts where at least 35 percent of the students qualify for free or reduced-price lunch can qualify for the bonds.
The proceeds from QZABs can be used for such purposes as renovating and repairing buildings, investing in equipment and up-to-date technology, developing challenging curricula, or training quality teachers.
Superintendent Eric Witherspoon said that, although the exact figures have yet to be confirmed, it appears as if 46-47 percent of ETHS students may now qualify for free or reduced-fee lunch.
This represents a significant increase from last year’s figures, which he said were closser to 40 percent.