Members of the Riverside Elementary School District 96 Board of Education are taking a deep breath and reassessing their plans for improvements to the district’s four elementary schools after receiving a sobering five-year financial forecast from the district’s finance director.
James Fitton, the district’s director of finance and operations, presented the forecast to the board at its Feb. 20 board meeting. It shows that under current plans, the district could spend nearly $22 million in the next couple years on additions and improvements to its school buildings and campuses.
That spending, as well as budget projections showing deficit spending in the next five years would cause the district’s cash reserves to fall from the current $30.5 million to $10.28 million by 2025.
While $10.28 million in reserves in 2024 would represent 32.8 percent of the district’s projected operating budget, a level generally considered adequate, District 96 board members, accustomed to having very healthy reserves, expressed reservations at the level of spending and don’t want to draw their reserves down to that level.
At the least, board members seemed to agree that it is not a good idea to try to do additions on each of its elementary schools in the summer of 2020, as had originally been anticipated.
“I don’t think everything should happen all at once,” said board member Lynda Murphy.
“Nobody looks at this chart and goes, ‘Let’s spend $22 million the next two years.’ That would be ridiculous.”
The school board finance committee chairman, Rich Regan, who serves with Murphy on the district’s facilities advisory committee, which recommended plans for expanding three of the district’s schools, also said that board should reconsider its options given the financial forecast.
“My reaction is to slow down and take a look at what’s proposed,” Regan said.
Current projections, which are still preliminary because no final building plans have been approved, estimate that a large addition at Ames School would cost about $11.2 million, small additions at Blythe Park and Hollywood schools would cost about $2.4 million each, and improvements and renovations at Central School would cost about $3.8 million.
Improvements to the Hauser Junior High campus to separate play areas from parking are estimated to cost about $1 million.
“There are a lot of unknowns in these cost projections but invariably they go up, they don’t go down,” said board member Joel Marhoul.
Board members want to their architect to look for ways to cut costs, perhaps by eliminating a planned elevator for Central School.
“Maybe we’ll have to pare down our solutions,” Murphy said.
Marhoul said the district should focus on needs, not wants.
“We should be challenging our architect to provide the most cost-effective solutions,” Marhoul said.
Board member David Barsotti expressed concern about spending so much money on the large addition at Ames that there wouldn’t be enough money left over to do the recommended work at Blythe Park and Hollywood.
“I don’t want us tying our hands and not being able to do the other schools,” Barsotti said.
Board President Jeff Miller suggested that the board set an amount they are willing to spend on physical improvements to the schools.
That led to a discussion about what level of cash reserves the board wants to maintain. All board members agreed that the district can spend down a large part of the district’s current high level of reserve, which stood at $31.22 million, or 120.5 percent of the district’s operating budget as of June 30, 2018.
District 96 has been racking up operating surpluses ever since a tax referendum was approved in 2004, but that will change in coming years, Fitton said. The district has spent significantly in recent years to upgrade its curriculum.
Murphy and Barsotti said that they would be comfortable maintaining reserves at around 40 percent of the annual operating budget, while Miller was even more cautious, saying that he preferred keeping reserves at about 60 percent to preserve financial flexibility. Miller said that he was concerned about spending the majority of the district’s reserves over the next decade.
“Many things could happen in the next decade that could affect our financial future,” said Miller.
Board member Shari Klyber also wanted to maintain very strong reserves.
“It may seem like we’re saving too much, but I don’t want to have to cut programs,” Klyber said.
Murphy said she was comfortable with a reserves of 40 percent of the operating budget, a level considered very healthy by most school districts.
“I want to make sure we’re not overly cautious,” Murphy said.