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posted: 8/14/2017 5:30 AM

District 211 budget paves way for debt-free future

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  • Palatine-Schaumburg High School District 211's tentative annual budget charts the course for a debt-free future beginning Dec. 31.

      Palatine-Schaumburg High School District 211's tentative annual budget charts the course for a debt-free future beginning Dec. 31.
    Eric Peterson | Staff Photographer, 2015

  • Dan Cates

    Dan Cates

 
 

As classes resume this week, Palatine-Schaumburg High School District 211 finds its financial situation in a year of historic highs and lows.

On the positive side, the tentative annual budget school board members will consider Thursday is poised to make the district debt-free for the first time.

But the past year brought stress to the revenue side from a record $9 million in property tax refunds due to successful appeals, considerably above the recent annual average of $5.5 million.

To the best the district can determine, this was likely the result of a concerted effort by the state to clear a backlog of appeals and may not necessarily represent a new normal, Chief Operating Officer Lauren Hummel said.

All things considered, however, the situation shows the result of years of work to put the district in position to handle many of the unknowns that may lie ahead, officials said.

"We are extremely confident we can maintain the quality of our education programs and financial stability moving forward," Controller and Treasurer Barbara Peterson said.

By using a portion of reserves to pay off the last $3.1 million of bond debt by the end of 2017, District 211 will be debt-free for the first time in its history

"It's a financial highlight for any school district or community," Superintendent Dan Cates said.

The next goal will be to stay that way as long as possible.

A lack of interest payments for debt on capital projects -- instead using savings to pay for the projects -- will lower the property taxes the district will need to levy each December, Cates said.

That sends a message that the district is mindful of the same financial pressures its taxpayers face, Cates said.

Though District 211 officials could not say how common being debt-free is among school districts in the region, it's a goal one of its feeder districts, Schaumburg Township Elementary District 54, reached in 2011.

The tentative District 211 budget's $249.3 million in revenue is based largely on last December's levy, which saw a 0.3 percent increase -- only a sixth of what the district had the legal authority to raise, he said.

The tentative budget's total expenditures are $268 million, continuing a recent practice of having deliberate deficits as the district whittles its reserves, Hummel said.

Over the past four years, the district has reduced its reserves by 20 percent but remains mindful that at least $80 million -- a third of annual expenditures -- should be maintained as a safety cushion.

As per law, the district's tentative operating budget is in the black with its expenditures at $241.2 million. The budgeted $8.2 million surplus in the operating budget would be retained for future capital improvements.

This summer saw extensive renovations of Schaumburg High School's cafeteria and 14 bathrooms, as well as the reconstruction and relocation of Fremd High School's athletic fields.

Though budget approval is when money is set aside for such projects, next summer's specific projects won't be determined until later.

"We don't want to prematurely commit to large projects," Cates said.

The tentative budget calls for transfers of $23 million in operating reserves for capital improvements, $500,000 in working cash reserves for life-safety projects, and $2 million in the district's Illinois Municipal Retirement Fund reserves for an additional payment toward its unfunded pension liability.

State law requires school districts to approve an annual budget by Sept. 30 after a tentative budget has been on public display at least 30 days.

District 211 board members will consider approving the tentative budget for display at 7:30 p.m. Thursday, Aug. 17, at the administration building, 1750 S. Roselle Road in Palatine.

They would then consider approval of a final budget on Sept. 28.

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