Last year the Riverside-Brookfield High School District 208 Board of Education approved a budget that projected a deficit, but the school managed to finish the year with a substantial surplus. Could it happen again?
RBHS traditionally budgets conservatively, often underestimating revenue and overestimating expenses. Last year’s budget projected an operating deficit of about $231,400 but the school actually finished the year with an operating surplus of about $530,300.
Last month, the District 208 Board of Education approved a budget for the 2019-20 fiscal year that projects an even larger operating deficit — $402,714 — a deficit that is already more than $400,000 less than what had been projected a few months ago.
This is the first budget prepared by Assistant Superintendent Kristin Smetana, who was promoted to the new position last summer after serving as the principal for the past five years.
Smetana said the projected deficit has shrunk because the school is receiving about $200,000 more in state aid under the state’s new two-tier, evidence-based funding formula than had been anticipated.
She said the school district is also receiving more revenue from the corporate personal property replacement tax than had been originally predicted.
This year, operating expenditures are projected to increase by 6.18 percent to $26,926,037. Staffing has slightly increased at RBHS this year with the addition of nearly two full-time teaching positions, including an additional science teacher.
The increase in spending is the largest in at least five years, while operating revenues are projected to increase by 2.26 percent this year to 26,523,323.
When capital projects and debt service are included, the deficit jumps to nearly $1.4 million, mostly due to spending $950,000 on life-safety projects to improve infrastructure at the school. Including capital projects, the school is projecting revenues of about $32.2 million and expenses of about $33.6 million.
Despite the projected deficit, RBHS should end the school year next summer with healthy cash reserves. Officials estimate that the school will have an operating fund balance of about $19.5 million on June 30, 2020, which is just over 48 percent of annual operating expenses. The school district also maintains $2.9 million in the working cash fund, which is set aside by the Board of Education for land acquisition.
If the working cash fund is counted as part of the total, cash reserves increase to 58.74 percent of annual operating expenditures.
About 58 percent of the spending at RBHS goes toward general education and 20 percent to special education. About 9 percent is budgeted for operations and maintenance, 7 percent for administration and 3 percent each for athletics and transportation, according Smetana’s budget presentation.
Roughly 77 percent of the RBHS revenues are projected to come from local property taxes with another 10 percent each coming from state aid and other local revenue sources. Federal aid accounts for 3 percent of the district’s revenues.
Small surplus for LTHS budget
At Lyons Township High School, a small budget surplus is being projected for the 2019-20 school year.
The 2019-20 budget that the LTHS District 204 Board of Education approved on Sept. 16 projects an operating budget surplus of $18,502. Direct revenues are projected to be about $77,136,000 while direct expenses are projected to be $77,118,000.
“It is cutting it pretty close,” said LTHS Business Manager Brian Stachacz, who added that a budget is only a projection of the year’s revenues and expenses.
Stachacz said that the budget also contains $300,000 in unallocated capital expenses for projects that could begin next summer.
LTHS is expected to run a nearly $382,000 deficit in its education fund this year, but that deficit is projected to be more than made up by in surpluses in the operations and maintenance fund and the working cash fund. LTHS has very strong cash reserves and is expected to finish the 2019-20 fiscal year on June 30, 2020 with cash reserves of just over $39.5 million.
Stachacz said that LTHS likely ended up with a surplus in 2018-19 fiscal year, but he said he does not yet have final numbers from the district’s auditing firm.
“I expect it to be a surplus,” Stachacz said.