Alone among area school districts, Riverside Elementary School District 96 is now completely debt-free.

On Nov. 1, the district made its final payment of a little more than $1.1 million to pay off the nearly $10 million it borrowed in 2011 in the form of debt certificates to fund renovations completed in 2012 and 2013 in the district’s five schools.

“We’re very appreciative of the strong fiscal management that this district has managed over time and it feels good to be debt free,” said Superintendent Martha Ryan-Toye. “Of course, we continue to think about what are the future needs of the district.”

District 96 has been on a strong financial footing ever since voters approved an education fund referendum raising their tax rate in 2004. The district’s financial position is so strong that it didn’t borrow any money to pay just over $19.1 million over the past two years to build additions at Ames, Blythe Park and Hollywood schools and fund construction of a new multipurpose room, elevator and sprinkler system at Central School.  

District 96 has also spent nearly $1.3 million on real estate purchases over the last five years. The district purchased two homes adjacent to Ames School to make space for the addition and a new playground at Ames School. 

It also paid $600,000 to buy an office building at 3340 S. Harlem Ave. to house the district offices, which used to be in the basement of Central School. The old district office space at Central School is now a new multipurpose room.

Few districts could spend more than $20 million for construction, renovation and land acquisition in a short period of time without borrowing money. But District 96 just spent down its ample reserves, essentially just writing checks from its account.  

“I can’t name one school district that did that,” said District 96 school board member David Barsotti, who chairs the school board’s finance committee.

Other than last year, District 96 has been running annual operating surpluses of about $2 million a year for the last five years according to Jim Fitton, the district’s director of finance and operations.

Even after spending approximately $20 million on construction and property acquisition in the last few years, District 96 still has reserves that most other school districts can only look upon with envy. 

Fitton is projecting that the district will have $18.8 million in reserve at the end of the current fiscal year, which ends June 30, 2022. That is 64 percent of the projected annual operating expenditures of a little more than $29.3 million in the current fiscal year. 

District policy calls for maintaining cash reserves of at least 40 percent of annual operating expenditures. Generally, school districts are considered in good financial condition if they have reserves equal to 33 percent of their annual operating expenses. Projections indicate that reserves will remain above 40 percent of annual operating expenditures until 2030.

Very few school districts are completely debt-free. Most districts routinely borrow for construction expenses. In 2020, Komarek School District 94 borrowed $20.8 million to pay for an addition and renovation at the school. 

Brookfield-LaGrange Park District 95, which recently completed major additions at both its schools, has a little more than $31.1 million in outstanding debt and pays $3.3 million annually to service that debt. 

Riverside-Brookfield High School has just over $27.8 million in outstanding debt and pays just over $5.6 million annually in debt service. Lyons-Brookfield School District 103 is carrying approximately $7.1 million in debt.

Being debt-free means all the revenue that District 96 collects can go to fund current operations or add to reserves.

District 96 officials are not ruling out borrowing money in the future to fund capital projects, perhaps for outdoor work on the Central-Hauser campus and work to revamp the auditorium at Blythe Park School into a large learning space.

“Debt is primarily used for long-term capital projects,” Barsotti said. “It’s something that we should consider, or at the very least explore going forward, because that is what the purpose of debt is. It’s not used for operations.”