The financial impact of the coronavirus pandemic on Riverside-Brookfield High School could be nearly $1 million, school officials say.
On Sept. 8, the District 208 Board of Education unanimously approved a budget for the 2020-21 fiscal year that projects a roughly $1.6 million operating deficit. If that projection is correct, it would be the largest operating budget deficit for RBHS since 2011 when the school finished with a $1.8 million operating deficit.
That budget was approved after a tax increase referendum was defeated.
In March, before the pandemic hit with full force, Assistant Superintendent Kristin Smetana had projected an operating deficit of $640,880 for the 2020-21 fiscal year.
“I feel pretty confident that, without COVID, I could have gotten a budget for fiscal year ’21 around the $640,000 deficit,” Smetana said last week. “I think a lot of that million-dollar increase is due to COVID.”
The deficit could well be end up less than the projected $1.6 million, because Smetana, who prepared the budget, is making conservative revenue projections. The budget projects that only 97 percent of property tax dollars owed to the district will be collected this year compared to last year’s 99 percent collection rate.
The lower property tax collection projection accounts for roughly $400,000 of the deficit. Smetana is projecting a lower property tax collection rate because the financial impact of the pandemic on area households could cause some residents not to be able to pay their property tax bills this year.
RBHS traditionally has made very conservative revenue projections and actual budget results are typically better than the projections. Last year’s budget projected an operating deficit of $402,714 but when the final numbers were tallied this summer, RBHS finished with a surplus of $44,001.
Ironically, the shutdown of the school last March helped RBHS financially as the school saved on utility, athletic transportation, and substitute teacher costs while almost all of the property tax revenue had already been collected.
This year’s budget projects collecting $25,854,083 operating revenues, a 2.56 percent decrease from last year, while projecting expenses of $27,454,083, a 3.3 percent increase. Overall, revenues are projected to decrease by about $678,000 while expenses are projected to increase by about $877,000.
The impact of the pandemic is most felt in the loss of income from facility rentals, reduced athletic fees, lost gate attendance from cancelled or fan-free sporting events, the loss of commissions for providing hot lunches to other local school districts, and the loss of income from vending machines, since RBHS has opted for remote learning, for now.
Rental income is projected to essentially dry up, dropping by 94 percent to just $6,000 this year compared to $90,000 last year.
The loss of income from rentals and fees means that budget line item is projected to generate 28 percent less revenue than one year ago. Property tax revenue is projected to be essentially flat, increasing only by about $200,000.
Local property taxes account for 79 percent of District 208’s revenue. State aid is projected to be essentially flat, down about $17,000, and federal aid is projected to decrease by about $187,000. District 208 will receive about $116,000 in federal CARES act money.
Special education costs are projected to rise by $300,000 this year, further straining the budget as costs for incoming freshman are projected to be more than those of outgoing seniors. One student has also transferred to a more expensive placement.
Last year, special education expenses came in more than $150,000 over budget.
For this year only, RBHS also has reduced its pay-to-participate fees for student-athletes. The Illinois High School Athletic Association has issued a revised sports schedule this year that envisions four sports seasons this year instead of the normal three.
Fees to participate in clubs have also been cut this year. The activity fee for a non-competitive extracurricular activity has been reduced to $25 from $75. The cost to participate in a competitive activity has been reduced to $50 from $100.
“No organization or company feels good about a projected deficit budget,” said District 208 Superintendent Kevin Skinkis. “Unfortunately, the impact of the COVID-19 pandemic has almost doubled that [original] projection for District 208. I am hopeful that property tax collection and some of the other areas of decreased revenue will turn out better than we are anticipating.”
Despite the $1.6 million deficit projection, RBHS remains in a solid financial position with healthy cash reserves.
Even if the deficit comes in as projected, the operating fund reserve at the close of the fiscal year on June 30, 2021 will be either 42.95 percent or 53.51 percent of annual operating expenditures depending on whether $2.9 million in the working cash fund that has been reserved for property acquisition is counted in the operating budget or not.