For the first time in seven years Riverside-Brookfield High School will run a substantial operating deficit in the coming fiscal year.
The tentative budget presented at the July 11 meeting of the District 208 school projects an operating deficit of $576,685 for the 2017-18 fiscal year, although Superintendent Kevin Skinkis said he expects the projected budget deficit to be lower when the when the budget is approved in September.
“I think it will be close to $400,000,” Skinkis said.
Skinkis said that the administration will have more clarity about the state of some major property tax appeal cases by then. State aid, which was projected at 90 percent of last year’s state aid in the tentative budget, could also be clearer by September.
If the governor and state legislature can agree on a school funding formula, District 208 should get at least the same amount of state aid as it received last year, which would cut the projected deficit by about $90,000.
Teacher salary increases are the biggest factor in the budget deficit, District 208 Chief Financial Officer Scott Beranek told the school board.
“The biggest driver is the increase in salary for certified employees,” Beranek said.
All full-time teachers with 20 years or less experience will get raises of $3,800 next year under the terms of the union contract. Teachers with more than 20 years of experience will receive raises of $2,100.
Teacher salaries will increase by nearly 4 percent, while state tax cap laws limited the increase in property taxes to just 0.7 percent. Beranek is projecting that the district will pay about $380,000 more in teacher salaries this coming year than it did last year.
Final teacher staffing levels have not been determined, but the budget projects a net increase of two positions, which will cost the district about $140,000 including salary and benefits.
Health insurance cost are projected to increase by 5 percent next year, while administrative salaries are projected to increase by about 2.6 percent.
Total operating revenue is projected to be a little more than $24 million while operating expenditures are projected to be about $24.6 million.
The operating deficit excludes a planned transfer of $425,000 from the working cash fund to the capital projects fund to help pay for improvement such as the new parking lot and tennis courts.
In the fiscal year that ended June 30, District 208 finished with a surplus of about $200,000 after projecting a surplus of only $10,000.
School board member Tim Walsh questioned the budget projections.
“Every year we underestimate revenue and overestimate expenditures,” Walsh said.
But that is best practice for conservative budgeting, according to Skinkis.
“We try to be as accurate as we can, but it’s a moving target,” Skinkis said.
The tentative budget will on display at the school’s business office and on the district’s website until the final budget is approved at the September 12 board meeting.
“This is a working tool for people to see,” said school board President Garry Gryczan.
The administration is recommending refinancing bonds that were issued following a referendum in 2006 to fund a major renovation and addition project. Interest rates are now lower than they were issued in 2007, so there’s an opportunity to save the district, and taxpayers, money, school officials said.
Skinkis is recommending that the school board consider using the interest savings on the refinancing to issue as much as $5 million dollars of new debt, probably divided between life-safety bonds and working cash bonds to pay for facilities improvements and to give the district more financial flexibility.
“The goal is little to no impact on the taxpayer,” Skinkis said.
Skinkis said that the district wants to take advantage of its high credit rating (AA+) and the low interest rate environment.
Skinkis also said he would like to reopen discussions with Cook County about a proposal to have the school enter a long-term lease to use the playing fields just north of the school without the Brookfield Zoo using the fields for overflow parking.
A few years ago, Skinkis offered to pay the cost of paving over a gravel parking lot just inside the Brookfield Zoo’s entrance if the zoo would agree not to park cars on the playing fields next to RBHS.
If the school had exclusive use of the fields, it could play home softball games on the field next to the school instead of off campus. Underclass football practices could also be moved back to the RB campus from an off-campus locations.
Skinkis is hoping that Cook County’s financial problems may make county officials more receptive to his idea than they have been in the past.
Additional financial flexibility would also be helpful, because one element of the recent state budget agreement is expected to eventually shift more of the employer portion of teacher pension contributions to local school districts from the state of Illinois.
District 208 currently has just over $11 million in reserve, which amounts to a healthy fund balance of about 45 percent of operating expenditures.
“We’re over the 33 percent fund balance [goal], but we’re not exactly flush with cash,” Skinkis said.