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

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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

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Anticipated Year‐End Financial Position (at 6/30/20)

• Revenue projected to end unfavorably,

primarily due to property taxes, food service sales, and categorical aid payments

• Expenditures projected to end favorably

due primarily to salaries and benefits, supplies, capital outlay and purchased services‐due largely to the COVID‐19 closure

• The five‐year financial forecast has been

updated with anticipated year‐end financial projections

Revenue

All Funds FY20 Projected Year End All Funds FY20 Budget $ Fav/(Unfav) 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 Categorical Aid 5,066,000 6,880,000 (1,814,000) Federal Aid 8,059,000 7,716,000 343,000 Interest on Investments 2,745,000 2,719,000 26,000 Fees & Other 7,088,500 6,578,300 510,200 Food Service Sales 2,474,000 3,062,900 (588,900) Tuition 676,000 892,000 (216,000) Total Revenue: 264,742,500 266,103,200 (1,360,700)

Expenditures

Salaries 161,898,000 163,244,000 1,346,000 Benefits 42,782,000 44,287,200 1,505,200 Purchased Services 11,119,000 12,123,200 1,004,200 Supplies 7,303,000 8,014,900 711,900 Utilities 3,640,000 4,252,000 612,000 Capital Outlay 14,337,000 16,101,300 1,764,300 Non-capitalized Equip. 5,306,000 4,180,400 (1,125,600) Miscellaneous 739,000 1,027,800 288,800 Tuition 8,904,000 8,974,200 70,200 Debt Services

• Total Expenditures:

256,028,000 262,205,000 6,177,000

Surplus/(Deficiency)

Excess Revenue Over (Under) Expenditures 8,714,500 3,898,200 4,816,300 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

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CPI‐Levy‐Budget Year Relationship

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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

• perating 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

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Transfer Recommendation for Capital Improvement Projects

Transfer recommendation will be forthcoming at the June 18 Board of Education meeting

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UPDATED Five‐Year Financial Projection (using current assumptions)

Projection from March 2020 Updated Projection June 2020

CPI Assumption 2.1% 1.9% 2.3% 1.8% 1.8% 1.8% 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) 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% 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 $ 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% 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% 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%

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Permanent Budget Reductions

FY16 FY17 FY18 FY19 FY20 FY21 $1.5 mil $0.3 mil $0.3 mil $0.3 mil $0.3 mil $0 mil $1.5 mil $1.8 mil $0.5 mil $0.6 mil $0.5 mil TBD

*Staffing *Close summer school building *Health Insurance plan change *Staffing *Telecom. efficiencies *Copy Services *iPads *Purchasing Co‐op *Tax/ Rent on Purchased buildings *Staffing *Elimination of retiree health insurance coverage (1st 6 months) *Transportation efficiencies for special education students *Elimination

• f retiree

health insurance coverage (2nd 6 months) *Banking fees *Telecomm efficiencies through connection elimination and internet bid *Telecomm efficiencies through reduction of phone lines *Elimination

• f HMO‐IL

*Propane buses *Utility Pricing *Propane buses *Wellness program *Procurement efficiencies

Committed Actual Reduction Area

Preliminary

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2019 2nd Installment Property Tax Revenue

• Cook County ordinance approved to delay the date for which interest will accrue
• n 2nd 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 2nd installment tax revenue is not received until

October/November, but will remain above 33% by year end.

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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

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QUESTIONS?

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