Community Consolidated District 181 Board members approved a tentative 2020-21 budget that projects a $2.2 million surplus in the district’s operating fund as well as healthy balance sheets through 2025.
At Monday’s board meeting, Chief Financial Officer Mohsin Dada presented a budget of $71.3 million in revenue and $64.4 million in expenses. That compares with last year’s figures of $69.6 million and $65 million, respectively.
Of the $6.8 million excess in operating funds, $4.5 million will be transferred to other accounts. Capital projects will receive $2.1 million, debt service will receive $1.6 million and IMRF pension liability will receive $800,000.
Dada told board members that the proposed budget had been revised in recent weeks, in consultation with the district’s finance committee, as more information about the economic fallout from COVID-19 became known.
“In May we were looking at a very different prospect than in June,” remarked the retiring Dada, who was giving his final budget presentation.
Consequently, he said, the recommended budget was the “conservative” version of the three options considered. On the revenue side, the district expects $64.7 million, or 91 percent of total receipts, from local property taxes. As a district that is 95 percent residential, Dada explained, District 181’s tax base is fairly predictable. That is not true for its counterparts that are more reliant on commercial and industrial properties, for which the economic landscape is shifting.
The district also knows it can count on $2.82 million from the state, he said, an unusual and helpful factor this early in the budget planning process.
“There will not be a reduction compared to last year, which was really a big concern even before the corona(virus) challenge,” Dada said.
Looking at expenses, salaries and benefits combined comprise $52.7 million of the total. The amount is based on collective bargaining agreements with the district’s two unions, which Dada said worked collaboratively to keep increases manageable. Accuracy is a priority in calculating all costs, Dada underscored.
“We do not have the kind of margins we used to have in expenditures or in revenues anymore. We’re trying to be much more precise,” he said.
The consumer price index for 2019, used to calculate the district’s levy and shape the budget, is 2.3 percent. Going forward, Dada said he had to significantly lower his CPI assumptions.
“We are being a little more conservative on the low side and saying the CPI used for (fiscal year) 2022 is going to be zero,” he said. “If things bounce back, the CPI could be half a percent, but it’s not going to change that much.”
The $20 million forecast for FY22 in new construction, also used in calculating the annual levy request, continues a downward trend.
“Just two years ago, it was close to about $40 million plus. Last year it was $34 (million). This year it’s close to about $28, $29 (million),” he said. “So it’s coming down. We are a built-out school district.”
Board President Margie Kleber expressed concern that future budgets show transfers of $2.3 million and $2.4 million to the capital projects fund, above the $2 million annual amount that the board had directed. Dada responded that those numbers are estimates at this point and will be adjusted when actual bids are received. Kleber pressed for it to hew as close to $2 million as possible.
“I think it’s a little disingenuous to tell the community, which we have for a number of years, that our budget is $2 million a year, and then put in the budget $2.4 million,” Kleber said. “If the costs go up, then they go up. If they go down, they go down. But the budget is $2 million.”
Dada said he would adjust the five-year projected budgets to reflect that desire. The budget will go on public display Aug. 13, with a public hearing and final board approval scheduled for Sept. 14.
