Dist. 15 projects $3.6 million budget deficit

Palatine Township Elementary District 15 plans to dip into its reserves to pay for a nearly $3.6 million deficit in the proposed 2014-2015 budget.

The school board is set to approve the $150 million spending plan in September. But board members Scott Herr and Manjula Sriram warned that the district is headed toward a "slippery slope" of deficit spending during a hearing on the tentative budget Wednesday night.

Herr said the district is undoing the "hard work" to rebound from a troubling financial outlook just a few years ago. Heading into the 2012-13 school year, the board approved budget cuts to fill an estimated $10 million gap.

"I think it's a slippery slope," Herr said. "If the board approves a deficit, it tells the administration it's OK to deficit spend."

Superintendent Scott Thompson said the district's fund balance can absorb the unexpected costs that financial planners blame in part for the shortfall.

The fund balance is expected to fall to $51.3 million, or about 34 percent of the district's operational budget, to cover the deficit. The board strives for a minimum of 30 percent, though there is no formal policy.

The district would face some tough choices - cutting staff and increasing class sizes - to balance the budget without using reserves, administrators say.

"It's not desirable for us to have a deficit," Thompson said. "But I think that the primary thing we have to do is focus on making sure the organization is operating at the highest level for kids and balance that with trying to keep finances in line."

In March, the district originally forecast a more modest deficit of $1.3 million in the approaching fiscal year. Officials also predict the district will continue to operate in the red instead of reaching modest surpluses expected to start in the 2015-2016 year.

Assistant Superintendent Mike Adamczyk attributed the reversal partly to less support from Springfield - including $390,000 in state cuts to transportation funding - and a $90,000 decrease in property tax revenue.

On the expense side, the budget also calls for $4.7 million in capital projects, up nearly $1.8 million from what the district typically spends each year. Some of the projects will make plumbing repairs to schools and bring bathrooms up to code.

"My goal is for us to look at this all over the course of next year to try to anticipate some of these changes," Thompson said. "But I think we've built up some fund balances to absorb some of these things from the state that we just have no control over."