The financial condition of Riverside Brookfield High School is projected to gradually worsen in the next few years. That was the message delivered to the District 208 school board on Dec. 9 by the district’s financial advisor, Howard Crouse of the PMA Financial Network.
For the 2014-15 school year, District 208 is projecting a tiny budget surplus of $7,118 in its operating fund, but that could be the last operating surplus the district runs in the immediate future.
“The days of running a surplus or balanced budgets for this district is going to be tough going forward, which means we’re going to start tapping into working cash,” District 208 Superintendent Kevin Skinkis told the school board during Crouse’s presentation to the board.
Crouse projected that the district would run a deficit of nearly $573,000 in 2015-16, and he projected that the district’s deficit would balloon to approximately $1.8 million by 2020.
The district currently has ample fund balances, but Crouse’s projected that the district’s fund balance would decrease from 56.41 percent of expenditures this year to just 15.39 percent of expenditures in 2020. A fund balance of 33 percent of annual expenditures is generally considered healthy.
RBHS’ current cash reserves give the district time to consider how to deal with its predicted decline in financial condition.
“We should have a good three to four fiscal years of OK fund balances to give us some time to figure this stuff out,” Skinkis said.
Skinkis said he is concerned the state will shift the cost of funding the employer portion of teacher pension contributions to local school districts. This would make the district’s financial picture much worse.
Board members expressed concern about Crouse’s forecast.
“We sort of are going to have to reevaluate constantly about what’s worth keeping or not,” said board member John Keen. “I’m really nervous about any sort of deficit spending. It bothers me.”
Board member Garry Gryczan said that the board would have to look everywhere to figure out ways to cut spending or bring in more revenue. Gryczan suggested the board consider raising the pay-to-participate fee for football, which he said is the most expensive sport to run.
“It kind of shocked me that the amount of dollars that football contributed is very little and they’re the costliest sport that we have,” Gryczan said, noting that about 30 percent of football players qualified for the waiver of the $200 pay-to-participate fee. “I think it is something that needs to be discussed.”
Board member Tim Walsh complained about the rising cost of special education, especially the cost of out-of-district tuition. Crouse projected that out-of-district special education costs are increasing at a rate of about 10 percent.
Laura Hruska said that the board might have to reevaluate the School of Environmental Education (SEE Team) program for freshmen and see if there might be less costly ways of achieving the same goal. Enrollment in the SEE Team has dropped in recent years.
“Our SEE program, while it’s very valuable, possibly those same goals could be done or those classes could be taught in a different way where they’re not as costly as they are now,” Hruska said. “Maybe there are some other curricular restructurings so that we continue to minimize classes with less than 20.”
Crouse said RBHS remains healthier financially than many other districts.
He also projected that enrollment at RBHS would increase by a small amount next year and then level off before eventually decreasing slightly in 2019 and 2020. Staffing is expected to increase by nearly two teaching positions next year as the district tries to lower class sizes.
Skinkis said he hoped to keep staffing fairly level even when enrollment starts to decrease a bit so that class sizes can be lowered in junior and senior classes in coming years.
Each new full-time teacher costs the district about $80,000 per year when salary and benefits are taken into account, Skinkis said.
“Decreasing class size obviously costs money,” Keen said.
Skinkis said the district may try to save some money by refinancing some debt to take advantage of current low interest rates.
A tax rate increase, which would require passing a referendum, could be an option at some point in the future, though Skinkis said the subject has not been broached at the board level.
“There has been no talk at the board level about a referendum,” Skinkis wrote in an email in response to an inquiry from the Landmark on Monday. “I have not made any recommendation to the board in regard to a referendum. Our current financial status provides the district some time to review all of its options.”