At former business manager’s Sherry Reynolds Whitaker’s last appearance before the Lyons-Brookfield School District 103 Board of Education in June, she presented a tentative 2019-20 budget that projected a year-end surplus of $37,435.
But the budget that the District 103 school board approved by a 4 to 3 vote at a special meeting on Oct. 25 is forecasting an overall operating deficit of about $1.5 million, including a deficit of slightly more than $1.6 million in its education fund, which pays for the day-to-day expenses of the school district, including staff salaries and benefits.
Why the big difference?
No one seems to have a complete answer, but Superintendent Kristopher Rivera said it appears that Whitaker vastly underestimated the district’s health insurance costs.
“There was a discrepancy on the insurance numbers,” Rivera said.
School board President Jorge Torres claimed the numbers presented by Whitaker were “fictitious,” without elaborating.
Another big difference was that Whitaker forecast that the district’s property tax revenue would increase by 4.9 percent, while the budget approved last week assumed no increase in property tax revenue.
The budget adopted Oct. 25, nearly a month after the state deadline, was prepared largely by the district’s auditing firm, Baker Tilly. While it projects an operating deficit of $1,507,400, the ultimate deficit likely will be less than that.
Baker Tilly partner and accountant Nick Cavaliere, who largely prepared the budget, said he used very conservative revenue assumptions, because he didn’t have a lot of time to work on the document. Cavaliere told the school board last week that he just plugged in last year’s property tax revenue numbers into this year’s budget.
According to the budget form the district submitted to the state, the district projects direct revenues of $34,439,438 and direct expenses of $35,946,898. The district is projected to end the fiscal year on June 30, 2020 with cash reserves of just under $8 million.
“We’ll have dip into our fund balance a little bit there and just do some internal auditing on staffing and class size and things of that nature, supplies and the more flexible spending that we have,” said Rivera.
Rivera said that given the deficit projection the he and new interim business manager Martin McConahay will have to look for savings the future.
“It’s certainly not something that you enjoy to see as a superintendent,” Rivera said. “We have to address it.”
McConahay was also hired on Oct. 25 and played no role in developing the budget.
In 2019-20 the district’s education fund is projected to run a deficit of a little more than $1.6 million and the district’s operations and maintenance fund is projected to run a deficit of about $400,000 while the district’s transportation fund is projected to run a surplus of nearly $400,000, according to the budget form the district submitted the state.
The budget vote broke along familiar lines with Torres and allies Vito Campanile, Olivia Quintero and Winfred Rodriguez voting to adopt the budget while board members Sharon Anderson, Marge Hubacek and Shannon Johnson voted to reject it.
Hubacek said that she voted against the budget because board members had no input into the preparation of the budget and because the district was without a business manager for the past four months.
“I had said months ago that I wasn’t going to approve a deficit budget,” Hubacek said.
Campanile said that the board majority elected last spring wasn’t responsible for the projected deficit. He wants the district to pursue grants more aggressively and said that he would like to use his background as an electrical contractor to review the district’s maintenance spending.
“We’re not the ones who created all the payroll, but it’s necessary, that’s our single biggest cost,” Campanile said after the Oct. 25 meeting. “As I discussed with Superintendent Rivera and I just discussed with our new business manager we need to start looking for grants, we need to revamp maybe our maintenance department which is a big chunk of the [operations and maintenance].”