The Unit 5 school board spent more than three hours Wednesday night digging into which stark cuts to potentially make — given the district’s $11 million deficit — if a tax hike referendum fails a second time in April.
Ideas range from ending field trips, shortening the school day, eliminating extracurricular activities such as seventh grade and ninth grade sports teams, to cutting the district’s fifth grade band and orchestra program, and even closing a school.
“This is hard. But this is our current reality,” said Superintendent Kristen Weikle.
The administration is drafting a proposal for the first phase of cuts, and will share it with the board during a special meeting on Jan. 31.
Last week, the board held a special session and unanimously agreed to place areferendum question on the April 4 ballot — just five months after voters rejected the same question — to give the district the authority to increase the education fund’s tax rate by 88 cents, bringing that fund's tax rate to $3.60 per $100 of equalized assessed value (EAV).
But district leaders say while the ed fund would go up, the district's overall tax rate eventually would be lower than the current $5.51 rate per $100 EAV.
As previous building bonds get paid off, Unit 5 taxpayers would see that overall tax rate remain level the next two years and then start to drop off significantly, according to Unit 5. By 2026, taxpayers would see the current rate go down nearly 11 percent, or roughly $355 for the average household.
Also at Wednesday’s meeting, the board OK’d spending about $254,000 on an energy-efficiency improvement tool for four grade schools.
With no additional revenue, cuts needed
If the referendum passes in April, providing more than $20 million to the district, it would change the dire outlook. But the board is moving forward, and planning for a scenario where that doesn’t happen.
“That’s just what we need to do,” said board member Jeremy DeHaai. “It’s upsetting to think about these cuts. But we need to act.”
Nearly everyone on the board said despite the pain it brings them, they’d recommend cutting all Schedule B activities for grade schools and junior high schools.
Barry Hitchins, board president, said he wasn’t sure he could support a proposal calling for a total removal of Schedule B next year — knowing how much of an impact those activities can have on a student’s school experience.
It pains all of us, said DeHaai, “But the reality is, we have an $11 million deficit.”
That debt that only is going to grow, added board member Amy Roser, saying, “So this list that we’ve shared is just a starting point of what needs to be cut in order to continue to balance the budget long term.”
Board member Alan Kalitzky said the district’s working cash will allow the administration to maintain the district’s current level of services for the next two years. But waiting to make cuts until then would result in a shock to the system.
“There’s a level of compassion that goes to this conversation of not pulling the rug out from people,” he said. “I use the ramp mentality because the alternative is a cliff.”
Weikle shared numerous possibilities for cuts, with some that could happen next year, and others that would be rolled out in upcoming years.
She said cutting extracurriculars and electives at junior high students, or eliminating the middle school team model are other options.
'22-23 budget update shows working cash ‘lifeboat’
Now halfway through fiscal 2022-23, Hickman shared a budget update with the board on Wednesday.
Using data collected from July through December, and combining that with a budget forecasting tool, he projects the $160 million operating budget adopted in September will see a roughly $1.4 million shortfall.
But if it wasn't for the district using about $10 million in borrowed money to cover the education fund’s structural deficit, Unit 5’s FY22-23 budget would be much deeper in the red, said Hickman.
“We are leveraging a significant amount of working cash in order to make those (funds) even, to get them into the black. And in some cases, we’re still not there,” Kalitzky noted.
Hickman said the district is in its fourth of six years using the borrowed money to keep the budget afloat. But he doesn’t recommend relying on this revenue method. In particular, he noted a rise in interest rates the district has to pay.
Kalitzky said “that working cash has been our lifeboat” to provide the level of services the community expects. But that money’s finite and will run out in a few years. So without a new revenue stream, that level of service won’t be possible, he said.
Hickman shared forecasts and trends for Unit 5’s three key funds — education, operations and maintenance, and transportation.
Education, the district’s largest fund, represents about two-thirds of Unit 5’s operating budget, and includes paying for employees and programming. That’s expected to come in around $128.7 million, near the adopted budget’s expectations.
The operations and maintenance fund is on target, at $12.4 million, he said. Part of that is thanks to a $240,000 working cash transfer to cover higher costs for a portable classroom at Normal Community High School.
The budget shortfall is found in the transportation fund: Although about $11.2 million was budgeted, higher spending paired with a shortage in state revenue means trouble.
The district has needed to spend about $800,000 more than budgeted in the fund. Hickman said that’s mostly due to adding eight special education bus routes and bus monitors.
Meanwhile, Unit 5 thought Illinois would fund about 80% of what the district is owed by the state, as has been the case for more than a decade. But the state paid even less this year: The million-dollar shortage turned out to be closer to $1.8 million.
“Are we able to recoup those costs that we were owed from the state for transportation?” asked board member Kelly Pyle.
The state’s never paid those prorated dollars, said Hickman.
Unit 5 really has no recourse in this area, said Weikle, noting some school districts have filed lawsuits against the state, but the courts dismissed them.
Pyle and Hickman said such prorating likely will get worse in years ahead, with rising transportation costs.
Modern optimizer brings energy savings
In another matter, the board approved spending about $254,000 with Alpha Controls for an energy efficiency campus optimizer to be used in four grade schools — Grove, Prairieland, Fox Creek and Towanda.
DeHaai, who sits on the board’s facilities’ committee, said the optimizer provides a type of artificial intelligence in buildings, taking into account weather patterns, temperatures and humidity as well as scheduled activities to provide more energy efficient functions.
Officials said that between rebate incentives and upcoming energy savings, the new optimizer will pay for itself in a few years. The district saved about $25,000 up front by using an Omnia Partners Cooperative agreement.
In other business, the board OK’d:
- A five-year, $26,500 lease for a color copier at Eugene Field Production Center.
- Amending and/or adopting nearly 20 new board policies and administrative procedures.
