The Indian Prairie School District 204 Board of Education voted Monday to amend this year’s budget to reflect nearly $15 million in additional revenue earmarked for facility improvements.
This additional cash flow is the result of the district’s successful bond referendum in the November election. In December, the district sold the first round of bonds to generate almost $15 million in capital funds for this year, with future bond sales to come, said Matthew Shipley, the district’s chief school business official.
The district is spending about $28 million on capital projects this fiscal year, according to its budget, using bond sale funds along with generated revenue and some money from its existing capital fund balance.
For a series of projects taking place over the summer and into next fall, the district intends to spend around $40 million across this fiscal year and the next, Shipley told The Beacon-News on Tuesday. The next bond issuance is set for this summer, and is likely to be over $100 million, which will be factored into next year’s budget.
The board already approved a series of capital projects in early February amounting to more than $7 million. Included in these projects – slated to be completed this summer – are flooring replacements, paving work, roofing and gutter repairs and the installation of several new playgrounds. The funds for these projects are coming from the 2024 and 2025 budgets, since they will be taking place over two fiscal years.
In August, the board approved a $435 million budget for this year. That was before residents voted to approve the sale of $420 million in bonds for the district to pay for capital projects. The 2024-25 budget approved over the summer did not originally account for those funds, which is why the district had to amend the budget mid-year.
The funds from the November referendum are set to go for improvements over the next several years to school safety, maintenance projects that have been deferred and making operations more efficient, according to past reporting. Had the referendum question not passed, the district would have had to cut the equivalent of 50 full-time positions, district officials previously said.
The bonds are being paid for by continuing an existing 37-cent property tax per $100 of equalized assessed value that was otherwise set to expire in 2026, according to past reporting, meaning the tax rate for residents in terms of their contribution to capital projects would effectively stay the same.
The $420 million in bonds are to be issued through 2029 to fund projects through 2032, according to a presentation by Shipley on Monday. Bond payments are expected to continue for 12 to 15 years after all the projects are completed.
But the bond sales are not a permanent fix, Shipley said on Monday. After the $420 million is used up, the district will need to find a way to generate $10 million per year for ongoing capital needs for existing buildings. They wouldn’t be in a position to issue more bonds to pay for it, however, because they’d still be paying off the old ones, Shipley explained.
“That’s really the environment we’re coming out of, where we built a significant number of schools through the ’90s and 2000s, had to repay the bonds to build those schools, and as a result really have very limited capital funding to address needs as they occur and just deal with … routine maintenance and capital reinvestment that’s needed,” Shipley said on Tuesday. “We’re trying to think about how we make sure that that doesn’t happen again.”
But, while the district now has the green light for a number of capital projects, Shipley said budget issues are still on the horizon for day-to-day operating costs as expenses for the district continue to trend higher.
While the district has promised the passage of the bond sale referendum question will not raise property taxes for residents, the operating tax levy – which was OK’d by the board in December – can increase, but only at the rate of the Consumer Price Index or less.
Shipley said on Monday that fuel costs and driver wages for school transportation and electricity costs for the district are among the expenses increasing beyond the rate of inflation, thereby driving up the district’s expenditures.
The bond sales can only go toward funding capital projects, so the funds can’t be used in the event of an operational shortfall, though district officials have emphasized that the bond sales could free up money in the operating budget, according to past reporting.
To balance the 2024-25 budget, the district cut the equivalent of eight full-time positions. School officials attributed the cuts to the district receiving less federal pandemic-era relief funding, according to past reporting. At the time, Shipley warned that more cuts were coming in the next few years.
On Monday, the district said they’d have to cut the net equivalent of 19 positions for next year to balance the budget, accounting for a few added staff positions serving English learners and factoring in an expected increase in enrollment. While the exact number of cuts could change by the time next year’s budget is approved, Shipley said he anticipates at least some cuts being needed.
To avoid further cuts, the district has floated the idea of a 5% increase in registration fees.
Shipley also noted that the district is gradually ramping down some offerings in the district that were paid for by pandemic-era relief funds that will no longer be available – amounting to about $4 million annually.
That was an expected funding loss, Shipley said, but the district remains uncertain about how possible federal funding cuts from the Trump administration and Department of Education policies will affect its financial outlook.
But continuing to build up its fund balance and making cautious fiscal decisions should help the district weather the financial uncertainty, Shipley said on Tuesday.
“We do our best to … maintain a budget that’s balanced, so that … if the environment does change suddenly, we have the financial means to, you know, deal with it,” Shipley said on Tuesday. “At this time, we’re not taking any specific measures or actions based on what we’re seeing.”
District 204 relies heavily on property taxes to operate as state contributions continue to fall, Shipley said on Monday. About 80% of its funds come from property taxes, with the remainder coming from the federal and state governments, according to past reporting.
The tax burden has shifted more toward homeowners because of rising home prices and the quadrennial reassessment, Shipley previously said. Furthermore, the area has seen significant residential growth, Shipley said, which increases property tax revenue, but also adds students to the district, offsetting the revenue it generates.
There is expected to be one more wave of work planned for the summer that will be voted on at the next board meeting on March 10. It would include improving security at 11 elementary schools’ front entrances and renovating Waubonsie Valley High School’s auditorium, according to past reporting. Capital improvements for this year have already begun, according to Shipley.
Going forward, the district plans to provide a budget update at the board’s May 5 meeting, along with an update on June 16 on some of the projects funded by the referendum.
mmorrow@chicagotribune.com