FIVE YEAR FINANCIAL FORECAST UPDATE Board of Education Meeting June - PowerPoint PPT Presentation

FIVE ‐ YEAR FINANCIAL FORECAST UPDATE Board of Education Meeting June 18, 2020 1

D211 Current Financial Position  Sustained quality instructional programs  Balanced budget in Operating Funds  Debt ‐ free  Use of reserves to make additional contributions toward IMRF liabilities (FY20)  Major capital improvement plan funded through the annual budget  Life Safety projects funded through the annual budget  Controlled overall expenditure budgets to align with revenue  $5 million in budget reductions since FY16 2

Anticipated Year ‐ End Financial All Funds FY20 Projected Year All Funds FY20 Revenue End Budget $ Fav/(Unfav) Position (at 6/30/20) Local Taxes 222,847,000 223,110,000 (263,000) Corporate P.P.R. Tax 3,636,000 3,000,000 636,000 Evidence Based Funding 12,151,000 12,145,000 6,000 • Revenue projected to end unfavorably, Categorical Aid 5,066,000 6,880,000 (1,814,000) Federal Aid 8,059,000 7,716,000 343,000 primarily due to property taxes, food Interest on Investments 2,745,000 2,719,000 26,000 Fees & Other 7,088,500 6,578,300 510,200 service sales, and categorical aid Food Service Sales 2,474,000 3,062,900 (588,900) payments Tuition 676,000 892,000 (216,000) Total Revenue: 264,742,500 266,103,200 (1,360,700) Expenditures • Expenditures projected to end favorably Salaries 161,898,000 163,244,000 1,346,000 Benefits 42,782,000 44,287,200 1,505,200 due primarily to salaries and benefits, Purchased Services 11,119,000 12,123,200 1,004,200 supplies, capital outlay and purchased Supplies 7,303,000 8,014,900 711,900 Utilities 3,640,000 4,252,000 612,000 services ‐ due largely to the COVID ‐ 19 Capital Outlay 14,337,000 16,101,300 1,764,300 Non-capitalized Equip. 5,306,000 4,180,400 (1,125,600) closure Miscellaneous 739,000 1,027,800 288,800 Tuition 8,904,000 8,974,200 70,200 Debt Services - - 0 • The five ‐ year financial forecast has been Total Expenditures: 256,028,000 262,205,000 6,177,000 Surplus/(Deficiency) updated with anticipated year ‐ end Excess Revenue Over 8,714,500 3,898,200 4,816,300 financial projections (Under) Expenditures 3

Revised Five ‐ Year Financial Forecast Assumptions CPI ‐ 2.3% (levy year 2020); 0% (levy 2021), 1.7% with new property growth/TIF roll ‐ ons (levy years 2022 ‐ 2024) Reduced levy collection rates to 97% Stable Federal Funding and State Aid; $1.1 million ESSR Funding through CARES Act Salaries and benefits account for regular work schedules, align with collective bargaining agreements/ predicted trends Land Sale proceeds of $17 million in FY21; $7 million allocated to future capital projects Remain debt free; utilize annual budget to fund capital improvement and life/safety projects Continuation of the 1 ‐ to ‐ 1 program and other technology initiatives 4

CPI ‐ Levy ‐ Budget Year Relationship 5

2020 ‐ 2021 Budget Development Considerations  Maintain a balanced budget in accordance with the School Code (105 ILCS 5/17 ‐ 1)  Allocate costs associated with achieving District academic goals  Allocate staffing costs based on enrollment, instructional programs, and negotiated contracts – current tentative budget assumes regular operations  Safeguard a minimum 33.3% fund balance within our Educational Fund and our combined operating funds  Allocate benefit and insurance costs based on projections developed in coordination with the District’s consultant, HUB, International  Allocate an estimated $4.0 million in the Operations and Maintenance Fund for approved Life Safety projects through an interfund transfer from the Working Cash Fund.  Utilize fund balance and the current year budget to complete $9.25 million for capital improvement projects in the Operations and Maintenance Fund  Continue the one ‐ to ‐ one program with a portion of new iPad devices purchased in the 2020 ‐ 2021 fiscal year  Revenue projections based upon approved 2019 levy 6

Transfer Recommendation for Capital Improvement Projects Transfer recommendation will be forthcoming at the June 18 Board of Education meeting 7

UPDATED Five ‐ Year Financial Projection (using current assumptions) CPI Assumption 2.1% 1.9% 2.3% 0.0% 1.7% 1.7% All Fund Summary Budget % Inc Projection % Inc Projection % Inc Projection % Inc Projection % Inc Projection % Inc FY 2020 (Dcr) FY 2021 (Dcr) FY 2022 (Dcr) FY 2023 (Dcr) FY 2024 (Dcr) FY 2025 (Dcr) Beginning Fund Balance $ 114,906,731 $ 118,621,231 $ 129,731,931 $ 125,685,431 $ 117,915,531 $ 112,751,631 Updated TOTAL REVENUE 264,742,500 0.5% 265,954,000 0.5% 282,289,500 6.1% 276,394,400 -2.1% 286,926,400 3.8% 290,916,000 1.4% Projection TOTAL EXPENDITURES 256,028,000 -1.8% 272,543,300 6.5% 286,336,000 5.1% 284,164,300 -0.8% 292,090,300 2.8% 296,985,300 1.7% June 2020 Budget Surplus/(Deficit) 8,714,500 (6,589,300) (4,046,500) (7,769,900) (5,163,900) (6,069,300) Transfers, net - - - - - - Additional IMRF Payment (5,000,000) - - - - - Land Sale Proceeds - 17,700,000 - - - - Ending Fund Balance $ 118,621,231 $ 129,731,931 $ 125,685,431 $ 117,915,531 $ 112,751,631 $ 106,682,331 Total Fund Balance % 43.5% 45.3% 44.2% 40.4% 38.0% 35.1% Ed Fund Balance % 39.6% 37.5% 39.8% 38.5% 38.7% 38.1% CPI Assumption 2.1% 1.9% 2.3% 1.8% 1.8% 1.8% Projection All Fund Summary Budget % Inc Projection % Inc Projection % Inc Projection % Inc Projection % Inc Projection % Inc FY 2020 (Dcr) FY 2021 (Dcr) FY 2022 (Dcr) FY 2023 (Dcr) FY 2024 (Dcr) FY 2025 (Dcr) from March 2020 Total Fund Balance % 48.5% 46.9% 45.3% 44.3% 44.1% 43.5% Ed Fund Balance % 37.3% 37.7% 38.2% 37.8% 38.1% 37.5% 8

Permanent Budget Reductions Preliminary FY16 FY17 FY18 FY19 FY20 FY21 Committed $1.5 mil $0.3 mil $0.3 mil $0.3 mil $0.3 mil $0 mil Actual $1.5 mil $1.8 mil $0.5 mil $0.6 mil $0.5 mil TBD *Staffing *Staffing *Staffing *Elimination *Telecomm *Utility Pricing Reduction *Close *Telecom. *Elimination of of retiree efficiencies *Propane Area summer efficiencies retiree health health through buses school *Copy insurance insurance reduction of *Wellness coverage (1 st 6 building Services coverage phone lines program (2 nd 6 *Health *iPads months) *Elimination *Procurement Insurance *Purchasing *Transportation months) of HMO ‐ IL efficiencies plan change Co ‐ op efficiencies for *Banking *Propane *Tax/ Rent on special fees buses Purchased education *Telecomm buildings students efficiencies through connection elimination and internet bid 9

2019 2 nd Installment Property Tax Revenue • Cook County ordinance approved to delay the date for which interest will accrue on 2 nd installment taxes. Taxes due August 3 will not incur interest charges until after October 1. • June is one of the lowest cash points for the District in a given year. • A delay in property tax revenue by two months will require the District to utilize reserve fund balance to pay for expenditures until tax revenue is received in October/November. Fund balance reserves could drop by 15+% if 2 nd installment tax revenue is not received until • October/November, but will remain above 33% by year end. 10

Tentative Budget Development Sequence by Fund Budget Sequence Anticipated Date of Review Review Capital/Life Safety budgets March 5 and March 19, 2020 Review IMRF/Soc. Sec Fund June 4 and June 18, 2020 Review Working Cash Fund June 4 and June 18, 2020 Review Transportation Fund June 4 and June 18, 2020 Review O&M and Educational Fund August 6 and August 13, 2020 Review Tentative Budget as a Whole August 6 and August 13, 2020 Hearing on Tentative Budget September 17, 2020 Approve Budget September 17, 2020* *Must be approved by September 30 11

QUESTIONS? 12