“A good news – good news budget for Dist. 211”
A Guest Essay by Dr. Nancy Robb
Township High School District 211 Superintendent of Schools
The recent August 20, 2009 Board of Education meeting featured one of the most positive “Good News” budget stories ever presented to the District 211 Board of Education. Operating budgets are balanced, fund balances are healthy, and planned levy abatements in debt service represent positive “give backs” to our taxpayers. “All is well” with respect to the District’s financial position, however, the Daily Herald’s headline “A bad news – good news budget for Dist. 211” sends a conflicting message. Where is the “bad news?” From my review of the article, I can only assume that the “bad news” is the recognized $1.7 million deficit. While the Daily Herald was accurate in reporting that the overall 2009-2010 tentative budget reflected a $1.7 million deficit and that operating fund revenues exceeded expenditures, details of what accounted for this deficit were not provided. In reality, the reported deficit is planned, and it is, in fact, positive in nature.
The primary operating funds of the District include the Educational, Operations/Maintenance, Transportation, Municipal Retirement, and Working Cash Funds. These operating funds account for approximately 91% of our total budget. The District accounts for three (3) restrictive funds that include debt service, capital projects and life safety. Expenditures for these restrictive funds include payment of principal and interest on outstanding debt, ongoing construction and site improvement projects, and State-approved life safety work.
As presented to the Board on August 20, the $1.7 reported deficit is a cumulative sum of the total budget balances (revenue over expenditures) for all eight of the District’s recognized funds. As part of the “good news” presentation, the District’s primary operating funds maintain positive surplus balances for 2009-2010. Yet, the approved 2009-2010 tentative budget does reflect planned deficits in each of its three restricted funds, as follows:
Debt Service Fund – As part of a multi-year levy abatement strategy, the Board approved the abatement of $5.0 million as part of the 2009-2010 tentative budget. The $5.0 million abatement was approved as part of the 2008 levy adopted by the Board last December. The debt service abatement strategy provides for the ongoing transfer of monies from the Working Cash Fund to Debt Service to pay a portion of principal and interest on outstanding bonds, and subsequently, reducing the Debt Service levy by that same amount. The “good news” is that this results in a lower overall tax rate for taxpayers.
Capital Projects Fund –In 2009-2010, we are completing most of the planned construction projects and site improvements within the District. The reported deficit is due solely to the completion of these earmarked projects. This is a “good news” story, despite the necessary accounting for these planned construction projects.
Life Safety Fund – In 2002, the Board of Education sold life safety bonds ($26.9 million) to fund life safety amendments approved by the Illinois State Board of Education. Bond proceeds were receipted in this fund and have been used annually to meet these life safety project costs. Since 2002, the only revenue recognized in this fund is earned interest. The reported deficit represents the difference between interest earned and identified project costs during the budget year. Once again, this represents a “good news” report, as on-going life safety improvements help keep our facilities up to School Code, safe, and well-maintained.
Given these brief explanations, we believe the Board of Education is presenting a “Good News – Good News” budget for District 211.
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