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The District 65 School Board unanimously approved a budget for the District’s fiscal year ending June 30, 2021. The final budget pegs operating revenues at about $139.3 million, operating expenses at about $139 million, and projects that the District will operate at a surplus of $344,726.
Property tax revenues, which account for 79% of the District’s operating revenues, are budgeted at about $110.0 million. This is about $1.5 million less than the amount collected in FY’20. Kathy Zalewski, Business Manager, said the District is assuming the collection rate of property taxes will be 96%, rather than the historic collection rate of close to 99% due to the impact the pandemic is having on property owners.
Salaries and benefits, which account for 80% of the District’s revenues, are budgeted at about $111.7 million. The District is adding, on a net basis, 10.3 new positions.
Overall, operating revenues are expected to decrease by 0.8%, and operating expenses to increase by 3.5% from last year’s unaudited actuals.
Given the pandemic, the shift to remote learning, and the uncertainty around when the District will return to in-person learning, there are many uncertainties that could impact the budget this and next year.
The RoundTable previously posted an in depth article on the tentative budget and the proposed final budget which are available through the links below.
Projected Deficits for FY’21 to FY’26
At the Sept. 21 Board meeting, Ms. Ms. Zalewski presented updated financial projections that project the District will operate at a surplus of $67,243 in FY’22, and then deficits of $3.4 million in FY’23; $6.6 million in FY’24; $9.6 million in FY’ 25; and $12.4 million in FY’26.
The projections estimate that the District will have sufficient amounts in the Referendum Fund to cover the deficits through FY’25 and have about $10.5 million to apply toward the projected $12.4 million deficit in FY’26. There would be no amounts left in the Referendum Fund to cover any subsequent deficits. See above chart.
Ms. Zalewski said that while the projections showed a surplus of $67,243 for FY’22, it was “very tentative” in light of the potential impact the pandemic might have on the economy.
Ms. Zalewski added, “Of course, we’re going to take steps to reduce expenditures. That’s really the only portion of our budget that we have control over. We don’t have a lot of control over our revenues.”
Raphael Obafemi, Chief Financial Officer, said, “Even though the financials look bad, the plan of the administration is not for this to come to pass. We are going to change trajectory, we’re going to look at our cost options, things we can do to lower expenditures to make sure that the deficit shown in the projections never comes to pass.”
“This administration’s commitment is to budget in a fiscally responsible way whereby our revenue’s match up with our expenditures,” Mr. Obafemi said. “I know we have reserves to help us during rainy days. But our plan is we do not anticipate nor do we plan to rely on reserves to be able to carry the day. What we are planning on doing going forward is to make sure whatever we budget matches up to the revenues that we get that year. That’s a truly balanced budget, and that’s the goal of this administration to balance the budget. Revenue matches up with expenditure. Only in a rare case and an emergency will we consider using reserves to balance our day to day budget.”
Board President Anya Tanyavutti said the Finance Committee has scheduled meetings to discuss how to address the projected deficits this fall.
Special Finance Committee meetings have been scheduled for Nov. 19 and Dec. 9.