Unit 5 Board OKs Budget; Looks at Historical Financial Trends
The Unit 5 school board Wednesday night adopted a $212.3 million budget for fiscal 2021-2022, and talked about historical budget trends that led to a deficit.
Marty Hickman, the district’s finance chief, said the budget’s biggest category —the education fund — covers nearly $121.4 million. The district reported that fund with a $329,000 surplus, using working cash bonds to cover a $12.5 million structural deficit.
The budget proposed Wednesday is the same as the tentative version outlined to the board during its Aug. 25 meeting.
The total budget deficit is $18.5 million, but that figure is misleading because it includes bonds issued in a separate year, said Hickman.
In reality, this year’s budget brings a $12.5 million structural deficit, all in the education fund, said Hickman. Even though the deficit is less than projected, the district needs to find ways to shrink that deficit, he added.
Board members encouraged the community to come together and find ways to increase the district’s revenue. Board member Amy Pyle acknowledged the board has difficult decisions ahead — in a climate of shrinking state funding, and slowed local revenue growth.
Some challenges facing the district include rising inflation, and state mandated wage increases, said Hickman.
“We’re seeing more and more inflation. We’re seeing supply chain issues for building materials, food, almost everything, including paper,” he said.
For the 2021-2022 operating budget — including the education, operations and maintenance, transportation, and tort funds — nearly 60 % of the district’s revenue comes from local property taxes. About 20% comes from state funding, and about 10% from federal funding.
About 65% of the operating budget’s expenditures are on salaries; and nearly 12% on employee benefits. About 11% goes toward purchased services, and 7% for supplies.
Historical budget trends
Hickman presented a report on historical budget trends over the past decade.
Looking at local revenue, he said in 2004, the district saw a 7% increase. But around 2010, and beyond, revenue growth was closer to 1%. He said it's too early to know whether increased housing sales in the area will result in more local tax revenue. Initially, a home purchased won’t affect a property’s estimated assessed value.
Hickman told board president Amy Roser he expects to learn more during an October meeting with the McLean County supervisor of assessments.
Also over the past decade, state funding to Unit 5 decreased, he said. Through the state prorating its contributions, an estimated $19 million due to Unit 5 was lost, said Hickman.
Meanwhile, expenditures over the past decade increased — most notably in the district hiring more personnel. Board member Barry Hitchens recalled high class sizes circa 2015 among reasons the district added teachers and other staff.
This past year, purchased services and supplies increased, especially as it related to COVID-19 mitigation.
As part of the trends report, Hickman showed the board where Unit 5 fits in with peer districts, and the state, on administrative spending, instructional spending, and other categories. Unit 5 spends about 60% of its operating budget on instructional funding — slightly higher than Champaign, Urbana, Bloomington, Peoria and Decatur. The state average is about 55%.
“The majority of our budget, especially comparative with our peers, is going directly back to our students,” said board member Alan Kalitsky. “it isn’t going to giant facilities-based projects or going toward (oversized) administrative salaries.”
Late buses update
In another matter, First Student general manager Chris Coyle updated the school board on the busing company’s efforts to improve on-time rates. The goal is for the rate to be 95% or better.
“It’s a very challenging situation we are dealing with,” said Coyle, noting since Sept. 13, the company has improved 4% — reaching an 89% on-time rate.
Board member Stan Gozer said given Unit 5’s focus on equity, district leaders should consider that these late buses might be negatively affecting some demographics more than others.
“Certain families don’t have multiple options” for transporting students to and from school, he said.
This fall, the company has struggled to hire enough drivers in the pandemic climate. On top of that, they've had to keep sick drivers home at times. “We really don’t want people with COVID symptoms to come to work,” said Coyle.
During public comments, Steven Dean, president of the bus drivers' union — AFSCME local 2608, said when it comes to this challenging time, the only way to solve the problem is to hire more drivers.
“We’re doubling and tripling ourselves” he said, to try to help improve the on-time rates for the district. “From the union standpoint, we’re working it as best we can,” he said.