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On Aug. 11, the Finance Committee of the District 65 School Board decided to recommend that the Board approve a tentative budget for its fiscal year ending June 30, 2015 (FY’15). Operating revenues are projected at $106.5 million, down 0.8% from the prior year. Operating expenses are projected at $106.4 million, down 0.7% from the prior year.
The operating budget for FY’15 has a surplus of $152,762, said Kathy Zalewski, business manager for the District.
On the revenue side, the District is projecting that the property tax revenues it collects for operations in FY‘15 will be $82.3 million, up only 0.04% over the prior year. The District is limited in raising property taxes by State tax caps which limit the increase to the lesser of 5% or the increase in the Consumer Price Index. For FY’15, which spans two calendar years, the applicable CPI rates are 1.7% and 1.5%. Property taxes make up about 77 percent of the District’s operating revenues. ADD
State and federal grants, which account for 15 percent of the District’s operating revenues, are expected to be about $17.8 million, about 7 percent less than last year. Most of the decrease is attributable to an assumption that the State will make only three of the four categorical payments due in FY’15 on a timely basis. Other local revenues are expected to increase by about $500,000.
On the expense side, salaries are pegged at $76.5 million, up 3.6% over last year; and employee benefits are projected to be $12.5 million, a reduction from last year, said Ms. Zalewski.
The cost of medical insurance which is a major part of employee benefits is projected to decrease by seven percent and the cost of life insurance is projected to decrease by 50% as a result of shifting insurance to the Educational Benefit Cooperative, a self-funded cooperative that consists of 90 school districts, said Ms. Zalewski. This is the second year in a row in which insurance premiums have been reduced, she said.
Salaries and benefits, together, account for 83 percent of the District’s operating expenses.
Some key assumptions that impact salary and benefit expenses are: 1) the District’s enrollment will increase by 118 students to 7,234 students (not including Park and Rice schools or pre-K students), and 2) staff will increase by 6.4 teaching positions, one special services supervisor, two math specialists, two Digital Promise coaches and one informational services support staff position.
Five of the new teachers will be special education teachers who will staff additional classrooms and support centers necessary to provide additional supports to children with more severe disabilities and who might need a smaller setting or more attention in programming.
Board member Claudia Garrison suggested that the Board consider whether to continue offering an early retirement option because the District was losing many of its more experienced teachers. Candance Chow asked that adminstrators analyze how District 65’s ratio of instructional expenses to total expenses compared to other high achieving school districts. Administrators said they would take a look at both of these requests.
Closing Out FY‘14
Ms. Zalewski said the District is projecting that it will finish the year ending June 30, 2014, with an operating surplus of about $296,236. The surplus would have been larger, but administrators decided to use a portion of the potential surplus to prepay over $1 million toward property liability, medical, and workers’ compensation insurance premiums that are attributable to FY ’15 and to address building repairs and maintenance. This increased expenses by more than $1 million in FY’14, but reduced them by more than $1 million in FY’15.
The ending cash balance in the District’s operating funds at June 30, 2014, is $21.5 million, or about 73 days of operating expenses.
The Board is scheduled to approve, after a public hearing, a final budget in September.