Bolstered by an infusion of cash courtesy of a successful tax referendum in March 2004, Riverside Elementary School District 96 last week passed a budget for the 2005-06 school year that shows revenues exceeding expenditures in its education fund by a whopping $748,078. The education fund is the fund from which day-to-day operating expenses of the district, such as teachers’ salaries and benefits are paid.

The education fund is expected to take in $11.5 million, while expending $10.7 million. As a result, by the end of the 2005-06 school year, the fund is expected to show a balance of approximately $1.7 million. That contrasts dramatically with the fact that at the beginning of the 2003-04 school year the education fund was in the red by $540,000.

Overall, the district’s day-to-day spending in 2005-06 is predicted to go up just 1.3 percent over 2004-05 despite a 4 percent increase in enrollment in the district, said District 96 Superintendent Dr. Jonathan Lamberson.

Even with that, all our programs are intact and our class-size policy is totally funded,” Lamberson said. “Our revenues represent the tax increase due to the referendum, all of our funds are moving in a positive direction and we’re improving our fund balance position.”

While the district is increasing spending just 1.3 percent this year, spending has increased significantly since 2002-03. According to the district’s audited figures for that year, the district spent $8.9 million. This year’s total of $10.7 million represents a 20 percent increase over that number.

By the same token, principally because of the tax referendum, revenues have also increased sharply from the $7.4 million the district took in 2002-03. With expected revenues of roughly $11.5 million, district revenues are expected to jump 55 percent from the 2002-03 total.

Most of that new revenue is coming from local property taxes, although the district is expecting a bump in revenue this year from the federal government. District 96 expects $377,000 in federal money, described by Lamberson as “carryover funds from the No Child Left Behind consolidated grant.” In 2004-05, the federal government chipped in $131,000.

However, local tax revenue is actually slightly lower than last year, the first year the district took in new tax dollars from the 2004 referendum. And overall, revenues are expected to be down $51,000 from 2004-05. That trend will continue in coming years as new tax levies are capped at the level of the Consumer Price Index. The CPI for several years running has been lower than the 5 percent maximum hike allowed by the tax cap. The cap allows districts to extend the tax levy each year by 5 percent or the CPI, whichever is lower.

The district also expects to continue to have to refund money to commercial property owners as a result of decisions handed down by the Property Tax Appeals Board (PTAB). For 2005-06, Lamberson estimated the district would have to refund $200,000 due to PTAB appeals.

Bond referendum in future?

District 96 administrators and board members also find themselves in a position where they may have to ask for another referendum in two years. While the district’s general operating fund is sound for now, the district will lose revenue when a life safety bond issue retires in December 2007.

Back in 1997, the district issued $3.2 million in bonds to fund school renovations, which added 12 cents per $100 of equalized assessed value in taxes from each property owner in the district. When the bonds retire in 2007, the tax will vanish.

The district is currently finishing its next 10-year life safety study, which will target future building improvements. Unless the board seeks a referendum to issue new bonds, any improvements would have to funded through the general fund or working cash fund.

“If we need improvements, you may want to think about a funding mechanism,” Lamberson said. “But you need to address life safety expenses.”

Many districts have the authority to issue bonds up to a certain amount without having to go to voters for approval. District 96, however, moved to end that practice several years ago and would have to put a referendum on the ballot should they wish to issue any bonds in the future.