New state money not enough to lift Highland school budget out of deficit

The state’s new education funding formula could bode well for the Highland.

Estimates are that the new formula could mean an extra $100,000 to the district, according to Tim Bair, the district’s business manager.

“The big thing about that is, you have to have the kids to support it,” Bair said.

Bair said the formula will be based off of the number of students, and the district’s enrollment has been on a steady decline for the last 10 years. But for the last couple of years, Bair said that the number of students leaving has leveled out.

But even if predictions on the new state money are spot on, it still will not be enough to cover the $2.2 million deficit projected in the district’s $32.9 million budget for this year.

The budget

This year’s budget, which was approved by the Board of Education during their meeting on Sept. 25, is pretty consistent with last year’s spending plan. It calls for a little less than $1 million extra over last year’s spending.

The majority of the deficit is in the Capital Projects Fund. This fund is budgeted for an estimated $2.4 million for projects indentified in the district’s 10-year health/life safety plan, which outlined about $9 million worth of projects to be completed over several years. Many have already been completed, but there are a few left.

“We’re over the hump, obviously,” Bair said.

The board approved the issuing of the district’s remaining of life/safety bonds in July, giving the district about $5.6 million. Bair said those bonds will be used to offset this year’s deficit.

“We did issue more debt this year, but we did not extend the time with which we need to pay that debt off,” Bair said. “So we did not add any years to our debt schedule, which is really positive, and we will still accomplish what we need to within the 10 years we have currently on the schedule.”

The district’s Education Fund also reflects a notable deficit.

Last year, the district was able to balance the Education Fund at $19.7 million in expenses. But this year, the district projects $19.8 million in expenses, and a deficit of $84,558.

The Education Fund takes up about 60 percent of the district’s budget. The fund pays for teacher and administrator salaries and instruction materials. The budget reflects that salaries and benefits take up 85 percent of the Education Fund, and 60 percent of the overall budget.

“Pretty much everything that makes a school, a school is taken care of out of the Education Fund,” Bair said.

The Education Fund’s revenue is projected to increase by approximately $309,900. Bair said is because of an increase in some school fees, increased property taxes, a transfer from the district’s Transportation Fund, and reimbursement from private facility students. But Bair said the district is expecting a sizable increase of expenditures in the Education Fund.

This year, three additional teaching positions and a psychologist position were added, increasing the cost of salaries and benefits. There’s also impending salary increases as part of negotiated retirement buyouts for several employees next year. Overall, the expenditures added to the budget from salaries and benefits equals about $470, 466.

Bair said that Education Fund deficit will be bridged by two transfers, a $3,500 transfer from the Debt Services Fund and a $115,000 transfer from the Transportation Fund.

“And normally we don’t do that,” he said. “But at the end of last year, the state wasn’t making payments to our Transportation Fund, and so we needed cash flow. So we diverted some of our general state aid money into transportation to allow us to do that. So this year, we are moving that money back into the Education Fund.”

Last year, the Transportation Fund showed a deficit of about $200,000, because the district only received 69 percent of of what the state was supposed to provide. This year, Bair said the state has decided to allow 84 percent funding, which has will help to reduce the deficit this year to $102,862. If the state later decides to give schools 100 percent of this money, Bair said it will provide the district with an extra $150,000-$250,000, which will help to basically eliminate the deficit in the fund.

“We’re going to keep an eye on that and see how it goes,” Bair said.

The budget also reflects a $106,300 deficit in the Debt Services Fund. Bair said that amount is still a large deficit for the Debt Services Fund. But the district will be able to offset that deficit with some recuperated costs in the proceeds of the district’s new bonds, totaling $88,775.

“So it’s not a significant deficit, and we hope that we can make that up maybe with some better rate of return and maybe the tax collections.” Bair said. “Usually, the Debt Services takes care of itself.”

Even with the budget deficit, Bair said the financial status of the district is looking up.

“I think overall, the budget is improving,” Bair said. “Our financial condition is improving.”

Bair also said another good indicator of financial stabilization is the district’s equalized assessed valuation has been increasing for the last three years.

“We hope that this year is the fourth and it continues to go up,” Bair said. “Hopefully, that’s the sign of a slowly recovering economy.”

Turf committee report

Aaron Schuster and Robert Miller briefed board members that they are still analyzing the matter of proposed stadium upgrades and artificial turf installation. They planned on meeting with the former athletic director Steve Lanxon to exchange ideas, get more specifics on his proposal, and discuss possible issues of concern.

Donor recognition discussion

The board had a brief discussion pertaining to recognizing the donors of large sums of money on the Highland High School and Highland Middle School campuses.

Board member Rene Friedel was assigned to compiling a tier based plan that the district can provide to business owners or donors wanting to give funds to the schools. Friedel compiled a list of possible options for these projects, but nothing has been decided. Friedel was instructed by the board to continue researching and brainstorming. She will present her new ideas and findings at the next board meeting.

Overnight trips

The board was made aware of two upcoming overnight trips. From Oct. 20 to Oct. 23, students from Highland Middle School will have a trip to Washington DC. Highland High School students in the Future Farmers of America will be traveling to Indianapolis for the National FFA Convention from Oct. 25 to Oct. 28.

Personnel

The board approved the retirement of Dianna Cricelli, who is a secretary for transportation and insurance for the district. She will be retiring at the end of December.

The board approved the resignation Cheryl Noll, a purchasing and accounts receivable clerk, effective as of Sept. 8.

The board also approved hiring Amanda Meier as a new program assistant at Highland High School.

Approval of resolution designating approved depository

The board approved a resolution designated list of banks as approved depositories for the district.

The banks approved by the district at The Stearns Bank NA, Farmers and Merchants Union Bank and Illinois School District Liquid Asset Fund Plus. According to the resolution the amount deposited by the district in these banks cannot exceed 75 percent of the capital stock and surplus of the bank.

This story was originally published October 12, 2017 at 8:02 AM with the headline "New state money not enough to lift Highland school budget out of deficit."